Eoin Treacy's view
Eastern Europe - In the eyes of investors Eastern Europe tends to be overshadowed by the majority of the Eurozone on its western flank and Russia to the east. The region has not been immune from the Eurozone's debt crisis, not least because Euro denominated mortgages were popular before the credit crisis. However, a number of countries, particularly in the Baltic area have been notable for their aggressive response to debt issues. The improvement they are now experiencing can be seen in the performance of their respective stock markets.
Lithuania broke out of a two-month range today to challenge the 2011 peak and a clear downward dynamic would be required to question potential for further upside. Estonia has held a progression of higher reaction lows for two years and a sustained move below 800 would be required to question the trend's consistency. Latvia has at least partially unwound its overbought condition relative to the 200-day MA and found support last week near 450.
Poland has bounced back impressively from the one-day deterioration at the beginning of the month and is now retesting the 2011 peaks. Romania also broke out of a short-term range today to challenge its 2010 and 2011 peaks. Hungary is bouncing from the lower side of a two-year range while Czech Republic continues to consolidate in the region of its 200-day MA, within a lengthy medium-term range.
Turkey had been a regional leader but has experienced quite considerable trend deterioration. The Index has rallied back to test the region of the 200-day MA and will need to hold above 70,000 if the benefit of the doubt is to be given to support building.
Russia's Ruble denominated MICEX Index has bounced back from the lower side of a two-year range and a sustained move below 1400 would be required to question potential for continued higher to lateral ranging.
Eoin Treacy's view