The crisis in Russia has played in many ways and effected many assets: Crude Oil, the Ruble, and the Russian ETF (RSX). But when a ball is held under water too long (i.e. too many shorts), that ball can rise quite quickly… even if it is just a short-covering relief rally.
Check out the chart of the Russian ETF (RSX) below. It rallied 6.98% today, over 3 times the gains in the US equity indexes (whoa!). The deep hammer candle in mid-December was a sign of panic and likely offered some fuel to the recent rally.
Note that it also posted a near 20 RSI on the weekly chart below which highlights this deep stress. The breakdown occurred from around the $20 per share area – although that may be a stretch near-term, it does highlight how much room RSX has to rally if it sees follow through buying (and/or short covering) over the coming weeks.
RSX – Weekly Chart
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No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.