What’s happening in the market?
High-value Burgundy wines have seen active trade this week, with Domaine de la Romanée-Conti and Prieure Roch coming in as the top-traded producers overall. Burgundy has now overtaken Bordeaux as the leader of the market (in terms of traded value).
Still, Bordeaux has remained popular, with several vintages of Château Lafite Rothschild trading alongside rarer wines such as Château Latour 1982 and Le Pin 2010.
Today’s deep dive: Vega Sicilia Unico, the outperforming underdog
Over the course of the year, Vega Sicilia Unico has seen a steep increase in demand. More than triple the total litre volume traded in 2023 has already traded so far this year. Unico now accounts for 39.3% of Spanish wine traded (by value) in 2024. Though our recent technical analyses have not necessarily spelled good news for the likes of DRC, Petrus and the First Growths, the outlook for Vega Sicilia is somewhat rosier.
The Vega Sicilia index has been navigating a bearish phase amidst its long-term bullish trend, breaking below its accelerated trendline earlier this year. However, prices rebounded in August and September, completing the formation of a ‘double bottom’. Having broken through the 457 threshold (represented by the dotted red line), technical analysis indicates the likelihood of a bullish trend reversal.
Reaching 465 basis points at the end of September, the index now sits above the upward sloping SMA7 (453.4) and the flattening SMA20 (458). These two trendlines are acting as the next available supports. If the SMA7 crosses above the SMA20, this will complete the formation of a ‘golden cross’, which indicates the likelihood of a long-term bull market emerging.
The Relative Strength Index (RSI) has hovered around the 50 line since the start of the year, reflecting market indecision. This indecision is similarly observed in other measures of market sentiment. The bid-to-offer ratio for Unico so far for October sits at 0.42, down from 0.45 in September and 0.60 in August. This may indicate a slight dip in market sentiment for Unico, but this ratio is still substantially higher than that of any of Liv-ex’s major indices.
The RSI’s SMA20 is currently downward sloping, while the RSI itself is trending upwards. Should the RSI break through the SMA20 from underneath, this is likely to create some bullish momentum in the index – a pattern observed in 2013, 2016 and 2020.
As observed through the recent narrowing of both the upper and lower Bollinger Bands, the index’s volatility has decreased slightly – another positive, though not certain, sign that the bearish phase is over. If the SMA20 and SMA7 successfully support the index, we can expect prices to continue moving upward on the accelerated trendline.
Amidst the broader market’s continuing decline, there may yet be hope for Vega Sicilia Unico. While less popular than the leading wines of Bordeaux and Tuscany, it receives comparable scores, typically between 94-98 points (Wine Advocate), and is less expensive than many. Increasingly, buyers are becoming aware of Unico as a serious option. Searches for the 2005 and 2008 vintages, for example, were both up 49% in September on August. Buyers from the USA are particularly dominant in the Unico market, consistently accounting for around 60% of purchases over the past three years. In September, this figure rose to 82.2%.
Liv-ex analysis is drawn from the world’s most comprehensive database of fine wine prices. The data reflects the real-time activity of Liv-ex’s 620+ merchant members from across the globe. Together they represent the largest pool of liquidity in the world – currently £100m of bids and offers across 20,000 wines.
