Thursday, September 17, 2015

Petrobras PBR Hits Record Production Amid Brazil Crisis; Stock Climbs More Than 7%

  • Shares of Petroleo Brasileiro SA - Petrobras (ADR) PBR  rose more than 7 percent on Wednesday trading.
  • The surge was triggered by the announcement that the company had hit record production in August.
  • Most of the oil and gas was produced in Brazil; however, the company also extracted resources from the Gulf of Mexico.
  • Brazil’s state-controlled Petrobras said, on Wednesday, that its average production of oil and natural gas (both in Brazil and overseas) had reached 2.88 million barrels of oil equivalent per day (boed) in August.
    This compares to the 2.8 million boed produced on average in July and implies a 3.1 percent surge, month-over-month.
    Moreover, the company assured, this is a new output record, surpassing the last high of 2.86 million boed set in December 2014. Year-over-year, production saw a 4.5 percent boost – from the 2.76 million boed registered in August 2014.

    Corruption Scandal

    The news came as a surprise to many investors and analysts, as the company is going through a massive corruption scandal that involves high ranked politicians and public servants.
    Despite the turbulence, the company explained that it had managed to hit a new record on the back of the commencement of operation of the FPSO Cidade de ItaguaĆ­ on July 31. This platform is anchored in Iracema Norte, in the northwest section of the Lula field, and can process 150 thousand barrels of oil and 8 million cubic meters of gas each day.

    Brazil's Production Numbers

    In Brazil, the company disclosed production of 2.69 million boed, meaning that most of the oil and gas came from within the country. Moreover, if the company’s partners’ production is taken into account, Petrobras’ total production in the country reached 3.01 boed.

    Stocks To Watch: BBRY, AMDA, BV, JUNO, ATHX

    BlackBerry Ltd (NASDAQ:BBRY) displayed some impressive relative strength with a 2.27% gain. The area comprehended between 7.70 and 7.85 represents a strong resistance. The power of today's move suggests an upward breakout that could impulse the stock to test the July highs at 8.16. Indicators are turning up. The RSI crossed above 50 and +DI crossed above -DI today indicating renewed buying pressure.

    Amedica Corporation (NASDAQ:AMDA) has had a rough time over the past weeks but today’s bounce could be the first move to recovery. I'm using 51c as resistance for this upside move. If the stock can break through this level, we should see a reversal of this down trend. On watch.

    Bazaarvoice Inc (NASDAQ:BV) broke and closed above its 20-day exp moving average with high volume. Short-term technical indicators are improving and the MACD rising. If the stock can break Wednesday’s high, we should see a strong follow through move. BV will move very quickly, so keep a very close eye on the stock.

    Juno Therapeutics Inc (NASDAQ:JUNO) Break out watch over $42.08 with volume. Technicals look Bullish to me.

    If Athersys, Inc. (NASDAQ:ATHX) can close above $1.33 this week, there should be some nice momentum in the stock. The RSI analysis is signaling a bullish outlook which can be further confirming in MACD and ADX charts.

    Target (NYSE: TGT) Is A Buy

    When it comes to big-box retailers, no rivalry is greater than the one between Target (NYSE: TGT) and Wal-Mart (NYSE: WMT).
    In the latest chapter of the Target vs. Wal-Mart story, Target’s most recent earnings report far exceeded analyst expectations while Wal-Mart’s most recent earnings report left much to be desired.
    While Target is growing average transaction sizes and increasing store traffic, Wal-Mart seems to be struggling under the weight of its controversial wage increases, theft and issues with its pharmacy business.  (more)

    Trade of the Day: Buy $IBB for a Double-Digit Run Into Year End

    iShares NASDAQ Biotechnology Index (ETF) (IBB) — This ETF tracks the NASDAQ Biotechnology Index, investing 90% of its assets in stocks of the index and the remainder in futures, options and swap contracts of those securities.

    The top 10 holdings in IBB are Celgene Corporation (CELG), Amgen, Inc. (AMGN), Gilead Sciences, Inc. (GILD), Regeneron Pharmaceuticals Inc (REGN), Biogen Inc (BIIB), Alexion Pharmaceuticals, Inc. (ALXN), Vertex Pharmaceuticals Incorporated (VRTX), Illumina, Inc. (ILMN), Incyte Corporation (INCY) and BioMarin Pharmaceutical Inc. (BMRN).

    Biotech has been one of the most successful sectors of the past few years, outperforming the broader market by a wide margin. In the past year, IBB is up 34% while the S&P 500 is down 0.3%.

    IBB completed a head-and-shoulders intermediate top when it fell from a closing high at $398 and crossed under the neckline at $360. Following the breakdown, it achieved the pattern’s downside target of $322 in just three trading sessions, falling to a low of $284.16 before staging a dramatic reversal.

    IBB is currently consolidating in an ascending wedge pattern after slicing through the 200-day moving average at $346, which is now the near-term support line. MACD has issued a strong buy signal.

    Since the overall formation is bullish, try to buy IBB under $350 with a trading target of $400 for a gain of 14% in 60 days. IBB is also a good investment for buyers with a longer time horizon since the biotechnology sector is traditionally a strong performer and the recent correction provides an excellent entry point.