Gazprom: General analysis

On Wednesday major indices of Russian stock market were in the bear power; MICEX lost 2.60%, while losses of RTS amounted to 2.79%. Sale was caused by negative news from China and Europe.

IMF has lowered forecast for economic growth in China from 8 to 7.75%. Forecast of slowdown in Chinese economy made oil traders reduce their positions and in the result crude oil Brent declined by 0.5%, which has a negative impact on dynamics of Russian shares. It also became known that agency Moody’s had revised rating of Italian regions such as Campania, Lazio and Sicily and downgraded the rating by two notches to Ba2. Obviously, European crisis is far from completion despite statements of some officials that EU managed to weather hard times.
The data on Russian economy is not very optimistic either: as per AECD forecast of GDP growth in 2014 was lowered to the level of 3.6% against previous figure of 4.6%.

Therefore, at the end of the day Gazprom shares fell by 1.85%. On the daily chart the lowest price was recorded at the level of 118.28. This level is a support level and probably the price will push off from this level and after that technical correction will follow. It is recommended to open long positions at the level of 119 with protective orders near 118.88 and a target of 120.92.