When oil is on the move, place bets on oil. This was my advice when waving off the thesis that solar stocks are oil plays. Indeed, over the past two days that oil has surged, most solar stocks have sold off alongside the stock market. And while I sold my latest trading position in USO into Tuesday’s spike, I still hold my position in Petroleo Brasileiro SA (PBR), Brazil’s major oil company. PBR surged over 5% on Wednesday and has formed a fresh breakout pattern.
*Chart created using TeleChart:
While I remain “cautious” on EWZ, the iShares MSCI Brazil Index Fund ETF, until it completes at least a 20% correction from recent highs, I remain bullish on PBR. Over the “long-term”, I see plenty of further upside. I am targeting at least the 2009 highs around $54.
Be careful out there!
Full disclosure: long PBR