Interesting charts March 2nd 2016
Estonia broke out last week to a new six-year high and improved on that performance today. A sustained move below the trend mean would be required to question medium-term scope for continued upside.
Lithuania hit a new six-month high today and a clear downward dynamic would be required to question potential for additional upside.
The performance of Latvia’s Index is heavily influenced by a small number of shares but it continues to trend consistently higher.
Hungary continues to bounce from the region of the 200-day MA and a sustained move below 22,500 would be required to question medium-term scope for additional upside. Meanwhile the Forint has been reasonably steady against the Euro.
I pointed out the relative strength of a number of the smaller Eastern European country indices in early January. One of the reasons they are outperforming is because they had been among the most aggressive in implementing fiscal reform among Eurozone countries and are now reaping the benefits.
An additional reason is because these are relatively difficult markets to invest in because the vast majority of funds are market cap weighted which means they are dominated by Russia shares. There are fewer leveraged traders in these markets so they did not experience the same declines and have subsequently exhibited relative outperformance.