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RSX: Great Play on Russia’s Improving Economy

Russian Stock Market great long term buy

The market sell-off that started in 2014, has provided astute investors with a once in a lifetime opportunity to open up positions in blue-chip Russian Corporations. You now have the option of purchasing many stocks for pennies on the dollar.   Mass psychology states that you should buy when the crowd is panicking and sell when the crowd is euphoric.  The masses have panicked and dumped their holding right at the bottom; this is what they always do. Sell at the bottom and buy at the top.   The experts are pessimistic in terms of Russias’s long term prospects so all the ingredients are in place for a strong rally.

One easy way to play the Russian Market is via ETFS such as RUSL, RSX, ERUS, etc. Today we will look at RSX

Background information on RSX

The investment seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors® Russia Index. The fund normally invests at least 80% of its total assets in securities that comprise the fund's benchmark index. The Russia Index is comprised of securities of Russian companies. A company is generally considered to be a Russian company if it is incorporated in Russia or is incorporated outside of Russia but generates at least 50% of its revenues (or, in certain circumstances, has at least 50% of its assets) in Russia. It is non-diversified

RSX Top 10 Holdings 

 

Technical outlook

 

Game plan

It will face resistance in the 16.00-16.50 ranges, so it would make sense to wait for a pullback to the 13.50-14.00 ranges before committing new funds.  If you are looking for stock plays, MBT and YNDX would be a good place to start at.

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