New York, January 31st (TradersHuddle.com) - Shares of Petroleo Brasileiro S.A. (NYSE:PBR) closed the trading session at $18.57 below calculated support at $19.11. The stock broke long setups, prompting the bulls to worry that this move might give the bears the upper hand.
Petroleo Brasileiro S.A. (NYSE:PBR) also known as Petrobras, explores for and produces oil and natural gas. The Company refines, markets, and supplies oil products. The Company is based in Brazil and operates in South America and elsewhere around the world.
Petrobras' stock was trading in a well defined range with support at $19.11 and resistance at $20.19; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.
From a technical perspective, it can be expected that previous support becomes resistance, as the new range gets defined. However, $19.11 will remain in focus as Petrobras' price action places the stock near the broken support. Traders will be waiting to see if it can bounce back and return to its previous range.
Traders wanting to establish a short position in Petrobras can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $19.11. However, if traders want to build a long position, the best entry point to do so is when the price action takes the stock back to calculated support.