<This stock should be making new highs the way the oil market is going. It's not. Not good.>
And that is just half the story. Brent crude is at $122, and the Real is at 1.58. Those are both near all time highs, and PBR's all time high was 72 or so. Yet PBR is 50% off its all time highs. People who are hoping this stock hits $50 or $60 anytime soon on dreaming.
What is more realistic: the Real going to 1:1 to the dollar or 2:1 to the dollar? If you say 1:1, you are smoking whacky weed.
What is more likely: oil going to $244 a barrel or back down to $61? Again, you are smoking something if you think $244.
So you would have to be a fool to think that oil is going much higher or the dollar much lower.
Seemingly all the matters is the federal reserve these days. Given that they are busy beating down the dollar to fend off deflation, it is easy to see what they are interested in manipulating. Dollar lower and Real/Euro higher? Yes, they would do that. Oil higher and dollar lower? Yes, they want oil higher but not so much so that it jeapordizes Obama's re-election.
As for PBR, the fed has no interest so it doesn't bounce like oil and the Real nor sink like the dollar.
In addition, this stock market rally was a low volume one. Take out HFT, and stock buying and selling is even more anemic than anyone could imagine. So to me, that means this whole rally is fed induced AKA fixed.
Fundamental analysis is dead at this point and will be until near next year's election. Sorry to keep beating a dead horse, but if the fed doesn't want your stock/asset class to go up, it isn't going up. PBR got some indirect benefit from the lower dollar and higher oil, but that ship has sailed. The fed can't push oil higher and beat the dollar down lower anymore given today's inflation rates.
There is no reason to be bullish on the stock in the near term.
As usual doc... can't disagree with much of what you posted.
I am not initiating any new long positions other than day trades, and close to the few positions on the long side I've been holding. I do plan to hang on to TTM until it show more weakness since TTM already encountered a healthy pullback in Dec. & Jan
I'm not just ready to jump in short yet, the market needs become more clear which direction it's headed, but the SNP failed at a new high. I'd call it a double top as of now.
I'm taking a wait and see approach, even daytraders like me need to beware of this market.
Furthermore, we are not far away from the time for "sell in May and go away". Not a good time to already be buried in a stock.
One good thing about PBR is I don't think they export enough oil to crush them. A big price drop in crude oil shouldn't hurt them that bad.
I hope the US dollar index can hang on to $74. Six months ago I would not have expected to find it this low.
Let's see if PBR turns back up here.
Either something is seriously wrong with this stock, or... MM's were taking opportunity to close gap left under $38.
A few days more of trading should tell us. If it's technical... the share price should bounce.