As any other stock PETROBRAS is trading in very volatile environment at the moment. The stocks lost ~18% this year already despite very positive news including the discover of an offshore area holding approx. 4,5 bln bbl of oil and a second discover in the Potiguar Well. On top of this Petrobras reported a quarterly rise in profit of 23% on Friday after markets closed. Net income rose to 7.73 billion Reais ($4.3 billion), or 88 centavos a share, from 6.29 billion Reais, or 72 centavos, in the year-earlier period. All together very positive fundamentals which should give the stock some upwards potential next week providing markets (including crude oil) can stabilize.

Technically the stock continued its downtrend from the last few months this week marking a new low at 28,30 (03/05/2010).

PETR4 DAILY

The support at 29,80 is given further strength with the Hammer formed on Friday. The 100 MA turned into a downwards trend while 10 and 30 MA distracted further. The ADX currently far above 50 indicates a trend change, at least short-term.

The weekly chart however reveals an interesting mid-term scenario for PETR4:

PETR4 WEEKLY TRIANGLE

Should the support at 29,80 hold and the stock could gain momentum to break through the resistances at 32,60 and 36,00 this would the final stage of a Symmetrical Triangle which marks a consolidation period before continuing after the breakout at around 36,00.
However, in the current environment investors will have to monitor the stock closely in order to identify the direction of a possible breakout. An upwards breakout would be indicated by a strong increase in volume.

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