PetroBras chart shows this monster may be consolidating

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PetroBras ( PBR , quote ) chart shows this monster may be consolidating at the 200 day moving average after a 30% spike off the March lows.

[caption id="attachment_70733" align="alignright" width="300" caption="Petrobras oil rig off the Brazilian coast"] Image courtesy Agencia Petrobras [/caption]

I have been a proponent of shorting this stock at the 200 day moving average where there is major resistance which also includes a 6 month mean high at $19.50.  Yesterday the stock closed at $19.17.

But after 8 trading sessions PetroBras  is holding this level and news that the company is seeing falling borrowing costs (who Isn't) is giving hope to free cash flow (FCF) generation.

While nothing has really changed in the wasteful way the company operates, they are getting a boost from the global rate environment and can point to 2 tariff price hikes this year.

Be careful of yesterday's trade which was to fade any pop in PBR. While sideways in this trade after 8 trading sessions, the price action tells me this stock may find new mojo.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks


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