Area 537-542 rubles – the main goal of reducing Rosneft shares

Trading results

Rosneft shares fell 3.47% in the last trading session. The closing price was 543.9 rubles. The paper traded worse than the market. Trading volume amounted to 4.6 billion rubles.

Short-term picture

On Monday, trading opened with a gap, quotes were declining along with the market. Within the day, the support area 551.5–554.5 was broken – it is also the daily level, and the weekly level is at 556. The formed impulses on the daily chart indicate the main targets of decline in the area of ​​537–542, yesterday the first target of 546 was reached …

It is necessary to take into account the breakdown of the 551.5–554.5 zone: it is a risk for the medium-term achievement of growth targets. The technical picture allows to go up to 537-542, then a rebound to the nearest resistance area 554-556 is needed. Level 564 is the location of the gap. Buyers control zone 532-538: as long as the price is higher than it, the growth targets in the region of 595-600 are relevant.

The first manifestation of strength from the side of buyers will be on the rise above the resistance zone 554–556. Buyers will seize the initiative when the price fixes above the level of 572, in this case we expect a movement towards medium-term targets.

On the 4-hour chart, the RSI curve is located in the oversold zone at around 29 p. There are no divergences from the chart on the RSI indicator. On the 4-hour chart, the price is below the 200 and 50-day moving average. Technical indicators point to the weakness of buyers and the removal of overheating in the securities. First of all, you need to monitor the price fixation on the daily chart above or below the levels: 556 and 532 to determine the scenario for the further movement of shares.

What to do? For open medium-term long positions, the first target to sell is in the 595-600 zone. This area will be interesting for shorting long positions. The priority is to achieve growth targets until the price falls below the buyers’ zone 532-538.

To exit the position earlier, you need to wait for the next weekly candlestick to consolidate below the 554–556 area. In this case, there will be a risk of continued decline, you can reduce the position by 50%, depending on your strategy.

  • Resistances: 554/564/572
  • Supports: 542/538/532

External background

The external background is neutral in the morning. S&P 500 index futures are trading near 0. Asian indices are trading in the red. Brent crude is up 0.1%. The opening of trading in Rosneft shares will take place near the close of Monday.

Long-term picture

Rosneft is the first oil company to return to levels seen before the February-March sale. From the lows of November 2020, Rosneft quotes have risen by 69%.

The last weekly candlestick consolidated above the level of 558, which indicates a possible resumption of growth towards medium-term targets of 595-600. There is still a global growth target of 620-650. Buyers need to stay above the 538 level to maintain the initiative.

If the weekly candlestick falls below 538, there is a likelihood that the decline will continue to the weekly support levels of 490-510, then the uptrend will resume. This scenario is not a priority until the price breaks the 526 support level.

In a long-term picture, you need to look at the close of the weekly candle at the end of Friday’s trading.

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