PBR-A breaks back above 20-day moving average
Petroleo Brasileiro S.A.- Petrobras American Depositary Shares (PBR-A) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
PBR-A ended Wednesday at 8.32 gaining $0.12 (1.46%), strongly outperforming the S&P 500 (-0.46%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (PBR-A as at Sep 16, 2020):
Wednesday's trading range has been $0.22 (2.67%), that's slightly below the last trading month's daily average range of $0.23. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for PBR-A.
After moving lower in the previous session, the stock managed to close higher but below the prior day's open, forming a bullish Harami Candle. The last time this candlestick pattern showed up on June 25th, PBR-A actually lost -5.09% on the following trading day.
Petroleo Brasileiro managed to close back above the 20-day moving average at 8.29 for the first time since September 10th.
Although the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the nearby swing high at 8.62 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 8.07 where further sell stops could get activated. As prices are trading close to September's high at 8.76, upside momentum might accelerate should the share mark new highs for the month. Further selling could move prices lower should the market test August's nearby low at 7.85.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Petroleo Brasileiro. Out of 181 times, PBR-A closed lower 54.70% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after nine trading days, showing a win rate of 51.38% with an average market move of 0.30%.