Brazilian oil giant Petrobras held its ground yesterday, and the
bulls are looking for a rally.
optionMONSTER's monitoring systems detected the purchase of about
16,000 October 24 calls for $0.14 to $0.18. Volume was more than 5
times open interest at the strike, indicating that new long
positions were initiated.
locks in the purchase price for the stock, so they can generate
some nice leverage in the event of a rally. However, they will
expire worthless if the stock doesn't move. (See our
PBR fell more than 4 percent early in the session after reporting
its first quarterly loss in 13 years. Management later assured
investors that costs would ease, causing the shares to close with a
0.54 percent gain at $20.44.
The stock has lost more than one-quarter of its value in the last
year amid concerns about the global economy and negativity toward
Brazil. In the last two weeks, however, it's been consolidating
above its 50-day moving average, which could be leading some chart
watchers to believe that it will now rebound.
While investors have been aggressively targeting energy names
recently, most of those trades have focused on smaller U.S.
companies. That makes the PBR activity especially noteworthy.
Overall option volume was quadruple the daily average yesterday,
with calls outnumbering puts by 3 to 1.
(A version of this post appeared on