Stocks: Testing Support At 1,725

August 2008 | Market Strategy

The benchmark Russian RTS equity index (RTSI) has continued its downtrend, hitting our short-term target of 1,725 on August 11. Recent downside momentum owing to tightening local credit conditions and weakening global energy prices has been reinforced by deteriorating foreign investor confidence alongside the escalation of military conflict between Russian and Georgian forces in Georgia. The index is now testing a medium-term support level at 1,725, a firm breach of which would be suggestive of renewed losses toward the next key support level at 1,400.

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