More good news
Petroleo Brasileiro (PBR)
UBS downgraded Brazilian state-run oil company Petroleo Brasileiro SA (PBR) to "neutral" from "buy" on Tuesday. Analysts attributed the rating change to higher company spending as the firm "develops the local supply chain and invests in non-core areas," according to a note. They also cited uncertainty related to recent statements from the company's chief financial officer on the valuation of oil.
Options players jumped on the security yesterday, as more than 66,000 contracts changed hands. This surge in volume was more than double the stock's average daily trading volume of 32,388 contracts, according to data from WhatsTrading.com. Furthermore, traders had a slight preference for calls, as 66% of the volume changed hands on the call side.
The ISE has witnessed an increase in call trading over the last 10 trading sessions, as more than two calls have been purchased to open for every one put purchased to open. This ratio of calls to puts is higher than 77% of all those taken during the past year, pointing to a rising optimism.
Furthermore, the SOIR for PBR stands at 0.76, which is lower than 83% of all those taken during the past year. In other words, short-term options players have been more optimistically aligned toward the shares only 17% of the time during the past 12 months.
There is still room for additional downgrades. According to Zacks, the stock has been awarded six "buy" ratings and four "holds."
Technically speaking, the shares of PBR are struggling, as the equity has dropped more than 18% since the beginning of 2010. The equity has been pressured lower by resistance at its 10-week and 20-week moving averages since December 2009.
