8/9 Thursday – After Close

ok so this is long term bullish set up.  it could take up to a month or even more, depending on the market.

So here is the what i propose.  If you look at the past behavior of $PBR, you can see that uptrend line from mid 2008 has been very strong.  It has been consistently trading around that uptrend line.

It goes up and down and up and down hitting that uptrend line.

So this is where my trade set up comes in.

We found some solid support at $18 area and we were trading for some time now.

We broke out of that sideways movement (consolidation period) breaking that $20.50 area short term resistance.

And we closed above $21.50 major pivot area (also lines up with 100 SMA) and today we tested that support and just sitting on it with a Spinning Top candle.

$21.50 is a major pivot because that’s where $PBR REVERSED on early Oct 2011. or you can go all the back to 2006 and 2007 where it was respected as major pivot.

So here is my set up.

Bullish entry at around $22.10.

And my stop is at around $20

Target is $26-$25 in about a month.

I am buying Oct. options to be safe.

you see that yellow line there at around $24?   That’s going to act is short-term resistance and we probably stay there for a while trying to break it.

My stop is actually pretty strategic.   Obviously around $21 is a major pivot it must break before going bearish.

$20.70 area has been pretty strong resistance last three months! it tried to break that resistance about 4 times.

$20.20 area also served as resistance last three months. about 3 times it has been solid resistance.

So my stop is just below that last resistance of $20.20.

And we all know that old resistance becomes NEW SUPPORT.

$PBR must break all three supports before getting into my stop.  Pretty good strategy if you asked me! =p

Found support at around $18 with bullish hammer reversal and added to that two bullish engulfing patterns in WEEKLY CHART.

So looking at it in a long term, we got GOOD bullish strength behind us.

Moving averages are crossing very nicely!

It is supporting the idea that bullish strength is gathering up and fueling.

Great sign that we closed above 100SMA yesterday and today we tested that as a support and was able to hold.

200 SMA is coming up there.. it might be a problem for our target being just little above 200 SMA.

We have to watch out for that as we get close to our target.  it’s could become as solid resistance but for now we will worry about it later.

NICE BOLLINGERBANDS breakout/expansion is happening also supporting this bullish move!

As the bands continues to separate, the move will continue upwards.

ADX is a strength indicator.

I love when ADX is completely reset and that’s exactly what we are seeing right now.

It has been completely reset and been resting.  It has so much room to go.

And the best part of it is, ADX is starting to point up which means, we are starting to find some bullish momentum for $PBR.

Conclusion

$PBR is very bullish at this moment.  Only worry i have is the market as a whole.

Including all indexes and many BIG PLAYER stocks are at it’s pivot.

If market starts to roll over next week or even come into consolidation period for a while, that’s is going to slow things down for $PBR.

We had some great volume last several days really supporting the move and fueling this thing and with so much indication and sentiment of bullishness we have on $PBR, I think this is going to be a good trade for us.

Watch tomorrow and early next week to make sure $21.50 support holds.

8/15 Wednesday : POWER OF ADX

I absolutely love ADX strength/momentum indicator.  I regularly use ADX to see where the stock is at regarding its strength and its momentum!

As you can see back in April 2011 through today that when ADX goes above that 20 line, this thing tends to BUILD huge strength and momentum.

Aug2011, Jan 2012, Mar 2012, we can see that when it goes above that 20 line, this thing shoots up.

So the caution is that ADX is below that 20 line and that 20 line could act as resistance and slow us down and even reverse..  but the good news is that WE ARE heading towards to 20 line with good rate and the angle of that thing is PRETTY SOLID.

Looks like we are forming a Stairstep continuation pattern here.  This is bullish continuation pattern.

Generally in this consolidation period, you are going to the declining of volume so nothing to worry there

My stop is still the same and the target is still the same.

Again I got in with October options and this thing could take a while.

8/16 Thursday Later Afternoon

So like I’ve been saying, we’ve been in that Bullish Continuation pattern and looks like we are breaking out.  I want to see this close to confirm the break out..

Only thing is though, the candle doesn’t look very strong right now.  its still very small size so we might see this thing goes back into that stair-step pattern (rectangle) tomorrow so keep an eye on it.  Also I wanted to see some big spike of volume but didn’t happen.. we still have declining volume which is a concern.

My stop is still the same, if we start to see some good bullish momentum next week, I will probably move up my stop but not yet.

8/24 Friday – Tightened my stop

That uptrend line has been on POINT! my stop is just below that uptrend line.

$26 still is my target and since I bought October Options, I have enough time.