Published On: Tue, Mar 14th, 2017

Russia-focused RSX ETF could be poised for bounce

InstaForex

Medium term

/

Buy

Trade view / Yesterday at 22:28 GMT

Product Manager Futures and Options / Saxo Bank

Denmark

Instrument:RSX:arcx

Price target:$ 21

Market price:$ 19.89

Background


Increasing speculation that the Trump administration could lift the current economic embargo and stable oil prices could help Russian equities in 2017. This of course may take some more “tweeting” and meetings with Russian and European officials. The first such official meeting could be the G-20 finance ministers meeting, scheduled for March 17-18 in Baden Baden. 

Technically, the shares of the exchange-traded fund (RSX) seem to have a good bid today as the price is up over 2% in US trading. Shares seem to have found short-term support near $ 19 after a consolidation from its 52-week high of $ 22.19. The level near $ 19 was previously a multi-month resistance – an important technical level. 

Source: Saxo Bank

Management and risk description

We are using a long vertical call spread, a limited risk strategy.

Parameters


Underlying price:
$ 19.89.

Status: opening trade.

Trade: Buy  + 2 19 MAY 2017 19/21 Call at $ 1.04.

Maximum gain: $ 0.96.

Maximum loss: $ 1.04.

Break-even: $ 20.04.

Entry

Source: Saxo Trader

Stop: no stop, don’t risk more than 1%.

Target: $ 21 or above.

Time horizon: 30-40 days.

– Edited by Gayle Bryant

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