This Brazilian Oil stock is close to blowing its stack. Let’s look at PBR

I want to look at Petrobras ( NYSE:PBR ). This looks like a beautiful stock if you’ve been short. This thing’s just been trending down, lower highs lower lows; time to sell this thing, right? Maybe not so fast, look, the weekly chart here shows the stock has been consolidating. The blue line here, that’s the 40-week or 200-day moving average, and the last several times it’s hit this blue line, it didn’t even make it there and here.

So we’ve got 3, 4 times, 5, a bunch of times this thing hits the 200-day moving average and keeps moving lower. So the idea is, when that pattern breaks you’ve got to start looking for a bottom; we could have that here. You can see this stock sold off here on heavier than average volume. Since that time it’s been trending higher, it actually looks a little bit like Cliffs Natural Resources used to look. So today this stock has finally closed above the 200-day moving average on really solid volume.

So my suggestion is this; I think this stock moves higher, you look at the volatility squeeze here, very, very tight Bollinger Bands, that absolutely works, so I think you can buy some stock right here. If this stock pulls back to say 15.50 or so I’d want to buy that as well. Just keep a line right around here a little bit below the 50-day moving average and I think you can actually buy this pretty aggressively. Now you can buy it aggressively because you are containing your loss right there. If you’re not willing to contain your loss there then don’t buy it aggressively. But I think here you’re good to go, my bet is Petrobras ( NYSE:PBR ) moves higher.