Forecast for the week November 13th through November 17th:
In the middle of the previous week Bitcoin set new historical high, after that we observed profit taking on longs. On Friday we saw strong capital outflow away from risk assets, to which belongs the cryptocurrency. Will correction last long? I don't think so. First of all, Bitcoin differs from all the other risk assets (shares, goods, currencies), as it has limited supply. Price decline will boost cryptocurrency demand as it happened many times before. Bitcoin has some peculiarities that encourage new price records. Second of all, American stock exchange CME hasn't launched Bitcoin futures yet, it means that interest to this instrument will remain at least till the end of this year. Correction is a perfect opportunity to trade trend instruments. Trading signals: Buy 6500/6000 and take profit 7300.
On the previous week on oil market there were negative signals that could have sent oil into knockout. Firstly, USA reported increase in oil output to 9.62 million of barrels, which is the highest for the last fifteen months. Secondly, investors got rid of risk assets and turned to safe assets, such as euro and yen. Usually, that will be enough to ensure nice downtrend but oil ignored all the negative factors. So we may conclude that right now there are many buyers in the market, who ramp up their positions on the slight drawdowns. Now investors are likely to buy oil up to the OPEC meeting held on November 30th, and only after that we are likely to see oil correction. It's OPEC that strongly supports oil right now – investors wait for new actions of oil cartel to reduce world's inventories of oil products. Another good news for bulls is American dollar correction. Trading signals: Buy 63,10/62,05 and take profit 64,53.
On the previous week we offered to buy VTB Bank shares, as strong growth could have been expected due to positive nine-month report. VTB met all the expectations and reached stated goals. Currently we have another interesting report of Russian Sberbank. Preliminary Russian Standards report showed increase of net profit by 31%. Of course, it's not much compared to VTB (by 160%) but it's a great result. We are likely to see the same reaction of the market as on the previous week: growth of Sberbank shares. Trading signals: Buy 215/211 and take profit 218.