PBR has had a long bear market this year, falling from over $32 to under $18 along with a massive slide in the Brazilian stock market. PBR is a major element of the Brazilian stock market.
The sellers have knocked down the price of PBR to bargain-basement levels, but it has been like a falling safe.
What has happened to the shares over the past three months is a base-formation has formed. Although we are at the top end of that base formation, the key is that the base formation seems solid. The downtrend was violated (see the ) and the base has been formed (notice the lower , on average, in the down days) and now we can project up quite a ways for a rally.
Be prepared for some as the stock can move 10% in the course of three days. Keep position size down. I will build into a position over a period of days and will leave stock to buy in 5% corrections.
Tim West, 5:00PM EST, Monday, July 30, 2012
All the best, Tim