Petroleo Brasileiro Petrobras SA (NYSE: PBR)

Petróleo Brasileiro S.A. Petrobras operates as an integrated oil and gas company in Brazil and internationally. As of December 31, 2013, the company had proved developed oil and gas reserves of 7,605.8 million barrels of oil equivalent (mmboe) and proved undeveloped reserves of 4,934.5 mmboe in Brazil. Petróleo Brasileiro S.A. – Petrobras was founded in 1953 and is headquartered in Rio de Janeiro, Brazil.
Take a look at the 1-year chart of Petróleo (NYSE: PBR) below with added notations:

After a consistent decline in December, PBR has been trading sideways over the last 2 months. During the sideways move the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
PBR’s rectangle pattern has formed a resistance just below $8 (blue) and a $6 support (red). At some point the stock will have to break one of the two levels.

The Tale of the Tape: PBR is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $6 or on a breakout above $8. The ideal short opportunities would be on either a break below $6 or on a rally back up to $8.
Please share this article