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Rise of Retail Investors Against Wall Street Stock Trader’s Diary


Change of indices for the week:
RTS Index: 1367.64 (-3.6%)
Moc Index Exchange: 3277.08 (-3.1%)
Dollar to ruble rate: 75.76 (+ 0.6%)
Brent crude: 55.08 (-0.3%)
DOW JONES Index: 29880.50 (-3.3%)

• Despite the difficult news background, the Russian stock market at the end of last week, with a decline of 3.1% on the IMOEX index, was no worse than the DOW (-3.3%), although given the historical beta at 2, it should was down 6%.

• The focus is on the market anomaly, the essence of which is that mania began to spread like an epidemic around the world, when small retail investors pool themselves and start purposefully bullish in low-liquid stocks. This strategy is often based on the idea: let’s see what positions the professional investors and hedge funds have, and do the opposite. Abnormally, the shares of companies with fundamental business problems, such as GameStop, Koss, AMC Entertainment, and others, rose by hundreds of percent in January.
• Directional speculative bullish play in silver, has led to a rise in its quotes by 15% from Wednesday to half-year highs, to $ 28.99 per ounce. Several silver mining companies such as Argent Minerals, Boab Metals and Investigator Resources jumped more than 15%. This happened after messages began to circulate on forums such as Reddit urging users to buy metal and raise prices for it.
• Insanity grows stronger. The retail investor revolt against Wall Street is gaining momentum. News came out today on Reuters that South Korean traders also intercepted the GameStop mania and went further – they signed a petition addressed to the regulator, and held a demonstration in the center of Seoul calling to ban short selling (shorts) on an ongoing basis. Reuters …
• Wall Street expects market chaos and crowd frenzy to spread to other assets this week.
• But there is another view: – The continued growth of stock markets around the world may be the result of growing hopes for an economic recovery and does not necessarily mean that prices are overpriced. Claes Noth, member of the European Central Bank’s governing board, said Sunday.

• At the beginning of the day on Monday, in general, there is a positive news background.

Recommendations

• Day traders / speculators: From purchases of futures on the RTS index.
• Positional: no positions.
• For long-term investment purposes, purchase
Bonds: OFZ-IN of issues 52001, 52002, 52003.
Shares: Polymetal, Severstal, MMK, NLMK, RusAl, Acron, PhosAgro, VSMPO Avisma, Moscow Exchange, Yandex, Mail.ru, AFK Sistema, Surgutneftegaz, Surgutneftegaz prev., NOVATEK, Magnit, Lenta, Gazpromneft, Petropavlovsk (POGR) Mosenergo, RusGiro, Unipro, InterRAO, Rostelecom.

RTS and MICEX indices.
Dow Jones Index.

The technical analysis was prepared in the XTick Professional system.

To be continued …



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