Petroleo Brasileiro (ADR) (NYSE:PBR) is breaking out ahead of US oil equities, e.g. Exxon (NYSE:XOM). After a -26% downward slope over the past 50+ days, the technicals show a potential on the upside to $12.87, based on option analysis for DEC (14) 100 Call Strike 12 with a $.30 premium. The IV rank has been re-calibrated from 66% to 38%, that gives us some room to move north. PBR's traits - typically outperforms in a "mixed market" but quickly loses faith in a down market.
Granted the Delta is around 29, and break even is $12.87; one cal option leg down the premium is $.68, with a break even at $11.89. I'd rather risk the $.30+ as risk aversion.
Fundamentals: Rumblings from OPEC to start limiting supply and PBR's opening up a new offshore drilling platform makes one take this one seriously as a bread winner. If we get a signal from Brent Crude on Monday's opening bell to go bullish, then PBR is favored because it' has been amassing shares for two weeks. The unusually high volume on November 21st is typically signals a seven day trend either way.
Stop Loss is set below 34 EMA. PBR is in play as I bought shares Friday morning, going into the weekend with a profitable buffer. I'm not relying on IV ranking as my Fuzzy Logic Greeks show it's skewed.
Considering we're entering the last chance 12th round option cycle of 2014, Madison Square goes wild on New Year's Eve, it time to focus on lucrative paying sectors that are oversold. Oil is at the top of my list.
Sentiment: The underlying motive for oil to reverse its down trend is the Saudi's ATMs are running out of gold coins.
Granted the Delta is around 29, and break even is $12.87; one cal option leg down the premium is $.68, with a break even at $11.89. I'd rather risk the $.30+ as risk aversion.
Fundamentals: Rumblings from OPEC to start limiting supply and PBR's opening up a new offshore drilling platform makes one take this one seriously as a bread winner. If we get a signal from Brent Crude on Monday's opening bell to go bullish, then PBR is favored because it' has been amassing shares for two weeks. The unusually high volume on November 21st is typically signals a seven day trend either way.
Stop Loss is set below 34 EMA. PBR is in play as I bought shares Friday morning, going into the weekend with a profitable buffer. I'm not relying on IV ranking as my Fuzzy Logic Greeks show it's skewed.
Considering we're entering the last chance 12th round option cycle of 2014, Madison Square goes wild on New Year's Eve, it time to focus on lucrative paying sectors that are oversold. Oil is at the top of my list.
Sentiment: The underlying motive for oil to reverse its down trend is the Saudi's ATMs are running out of gold coins.