NEW DIRECTIONAL CALL PLAYS
Petroleo Brasileiro SA - PBR - close 37.10 change +1.00 stop 35.45
Petroleo Brasileiro S.A. (Petrobras) is an integrated oil and gas company. The Company operates in five segments: exploration and production; refining, transportation and marketing; distribution; gas and power, and international. The exploration and production segment includes oil and gas exploration, development and production in Brazil. The refining, transportation and marketing segment includes downstream activities in Brazil, including refining, logistics, transportation, oil products and crude oil exports and imports, petrochemicals and fertilizers. The distribution segment includes distribution of oil products through the BR retail network in Brazil. The gas and power segment includes gas transportation and distribution, electric power generation using natural gas and renewable energy sources. The international segment includes exploration and production, refining, transportation and marketing, distribution and gas and power operations outside of Brazil.
Target(s): 39.25, 39.95
Key Support/Resistance Areas: 37.45, 36.25
Time Frame: 1 week
Why We Like It:
PBR is has been forming an ascending triangle on its hourly and daily chart since June 1st. The pattern could also be considered a bull flag. I believe the stock is poised to break out to the upside for a quick profitable trade. I suggest readers use a trigger to enter long positions if PBR trades up $37.52 which would be a breakout of the triangle. More aggressive traders could initiate positions at current levels or on weakness and use a tight stop if it fails. Our stop is $35.45 which is below the low where the ascending triangle begins. Investors are treating oil and gas stocks like they will never be able to drill oil again and I believe they are poised to bounce from here. In addition, PBR shouldn't be affected more than it already has from the domestic headline risk in the US.
Suggested Position: Buy July $37.00 CALL, current ask $2.22, estimated ask at entry $2.37
Entry on June xx
Earnings Date 8/13/10 (unconfirmed)
Average Daily Volume: 19.6 million
Listed on 6/8/10
NEW DIRECTIONAL PUT PLAYS
Toronto Dominion Bank - TD - close 66.50 change +0.92 stop 69.90
The Toronto-Dominion Bank is a Canadian bank. The Bank and its subsidiaries are collectively known as TD Bank Financial Group (TDBFG). The Bank serves approximately 17 million customers in four segments: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse and an investment in TD AMERITRADE Holding Corporation (TD Ameritrade); U.S. Personal and Commercial Banking, including TD Bank, America's Most Convenient Bank, and Wholesale Banking, including TD Securities. The Bank also acts as online financial services firm, with more than 5.5 million online customers.
Target(s): 64.50, 62.20, 60.50
Key Support/Resistance Areas: 69.15, 68.00, 66.50, 65.50, 64.50, 63.00
Time Frame: 1 to 2 weeks
Why We Like It:
TD is in a downtrend and I am looking for the stock to bounce up to its secondary downtrend line to make a lower high in the coming days. The stock is also forming a descending triangle with the base near $64.50, which is also a prior resistance area from the fall of 2009. Buyers have stepped in to support the stock, but I believe they will wane and this level will break. The stock has barely been hanging on to its 200-day SMA and I expect BNS to eventually break that too and trade down to new lows. I suggest readers use $67.80 to initiate short positions. Our stop is $69.90 which is above the highest closing price since May 14th. Readers may also consider initiating short positions at current levels but this is a decision to be made intraday depending on market conditions.
Suggested Position: Buy July $65.00 PUT if TD trades up near $67.80, current ask $2.60, estimated ask at entry $2.10.
Entry on June xx
Earnings 9/2/2010 (unconfirmed)
Average Daily Volume: 1.4 million
Listed on June 8, 2010