Gazprom Neft shares look overbought
Bidding results
At the previous trading session Gazprom Neft shares fell by 0.44%, closing at 307.25 rubles. The securities looked at the level of the market. The volume of trades amounted to more than Rb 673.2 mln.
Short-term picture
For the last 10 trading sessions, Gazprom Neft shares have been showing growth, closing above the opening level - a good signal of buyer strength. However, the Bears and Bulls power oscillators have begun to signal declining buyer strength. The price is sandwiched between the 50- and 200-day moving averages, whose curves are gradually beginning to reverse upward.
The RSI curve on the daily chart has started to turn downward and is near the lower boundary of the overbought zone. Growth of shares falls on gradual recovery oil prices. Gazprom Neft now looks overbought. The external background is negative this morning, which may support sellers. The price is likely to move towards 300 rubles if the external background does not improve during the day.
A breakdown of Rb 300 from above downwards will serve as a negative signal, which may lead to a further decline to Rb 295 and below. Such a scenario is still not excluded, as the oil market as a whole is under pressure.
If the environment is favorable, the shares may continue to grow, especially after the correction. This will require overcoming 315 rubles from bottom to top. This will open the way to the levels above 325 rubles, where there is now a powerful technical resistance in the form of 200-day moving average.
- Resistance levels: 315 / 325 / 333
- Support levels: 300 / 290 / 285
External Background
The external background is moderately negative this morning. American indices corrected downward after the close of our day session on Monday. Asian markets are trading mostly in the positive territory. Futures on S&P 500 Index are down 0.8% since morning, Brent crude contracts are down 1.25% and are near the $41.9 level.
Long term picture
Gazprom Neft shares have been moving in a steep uptrend since 2016. The rise in quotations was accompanied by two correction waves in 2017 and 2018.
In 2020, the impact of the coronavirus on global markets and oil prices led to a breakdown of Gazprom Neft's upward trend, with shares losing more than half of their value from historical highs. At the same time, the potential for a return to an upward trend remains if the impact of the coronavirus diminishes and demand for energy resources recovers.
On the weekly chart, the price is below the 50- and 200-week moving averages. RSI indicator is directed upwards and is slightly below the neutral point (50). MACD curves tend to cross - a signal of a possible trend change.
Recently, quotations have been positively influenced by the growth of oil prices. It is important for buyers to gain a foothold above RUB 315, which will open the way to levels above RUB 325. The 50- and 200-week moving averages are located in these areas. Their overcoming may signal an uptrend. However, risks around the pandemic remain, and this may have a negative impact on Gazprom Neft quotations.
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