Petroleo Brasileiro SA Petrobras (PBR) Is Today's Roof Leaker Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Petroleo Brasileiro SA Petrobras ( PBR) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Petroleo Brasileiro SA Petrobras as such a stock due to the following factors:

  • PBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $504.0 million.
  • PBR has traded 28.2 million shares today.
  • PBR is trading at 2.13 times the normal volume for the stock at this time of day.
  • PBR crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on PBR:

Petroleo Brasileiro S.A. - Petrobras operates as an integrated oil and gas company in Brazil and internationally. The stock currently has a dividend yield of 0.7%. PBR has a PE ratio of 9.7. Currently there are 3 analysts that rate Petroleo Brasileiro SA Petrobras a buy, no analysts rate it a sell, and 6 rate it a hold.

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