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PRIME STOCK NEWSLETTER FOR MAY 4rd, 2010

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Position Statement: In our Prime Recommendation Letter we attempt to identify the recommendation with the highest probability of moving higher.  We recommend that stop orders be placed at the time of purchase,  and once the position has moved profitable we recommend a stop be placed a minimum of $0.375 above the purchase price and moved higher as the position moves higher.

Today's Comments: The overall market finished Monday sharply lower in a broad based move that saw almost every sector index I track move lower on the day. What is key about yesterday's move is that the Dow closed below several recently established support levels. This is a bearish signal, and indicates the Dow could most likely continue to move lower.



Recommendation: Sell/Short

Petroleo Brasileiro, SA. 'PBR'

Company: Petroleo Brasileiro, SA. Symbol: 'PBR'

Closing Price: $41.00

Web: www.petrpnras.com.br/en/

YH: $53.46 YL: $34.00 EPS: $2.86 P/E: 13.4

Shares Outstanding: 4.39 Billion

Forecasted EPS: N/A Market Cap.: $168 Billion
Dividend: $0.15 Yield: 0.39% Aver. Daily Trading Volume: 15 Million Shares  
Price Targets:  $38.20 and then $35.44 Upside Stop:  $41.63/share
Options Rec.: May 43 Puts @ $2.58/contract Options Symbol: PBR Q 43

Additional information on Petoleo Brasileiro, SA. 'PBR' can be found (here)

Company Description: Petroleo Brasileiro SA-Petrobras is an integrated oil and gas company. During the year ended December 31, 2008, the Company’s average domestic daily hydrocarbons production was 2,176 thousand barrels of oil equivalent per day (mboe/d). Approximately 84% of its proved reserves are in fields in the offshore Campos Basin. The Company operates the refining capacity in Brazil. The Company’s domestic refining capacity is 1,942 thousand barrels per day (mbbl/d). Its domestic refining production is 1,787 mbbl/d and sales of oil products to domestic markets is 1,748 mbbl/d. The Company is also involved in the production of petrochemicals and fertilizers. The Company distributes oil products through its own BR network of retailers and to wholesalers. During 2008, it increased its stake in the Sierra Chata and Parva Negra blocks to 45.55% and 100%, respectively, and acquired a 13.72% stake in the El Tordillo and La Tapera-Puesto Quiroga blocks. In November 2009, it acquired Chevron Chile SAC..

Chart for Mosaic Company

Chart updates daily

Recent News: 05/03 Petrobras to use public offer in capital plan--report at Reuters (Mon, May 3)
  04/30 Petrobras hopes to set oil value with Brazil govt at Reuters 
  04/29 ADR Report-Brazilian shares up after rate increase at Reuters (Thu, Apr 29)

A full list of the news headlines for Petroleo Brasieiro, SA. 'PBR' can be found (here)

Our Analysis: The shares of Petroleo Brasileiro, SA. 'PBR' gapped lower on the open of trading yesterday morning. They finished the day sharply lower on heavier than normal trading volume. In the process they closed below a recently established downside support level. This is a bearish trading signal. The shares of 'PBR' should continue to move lower and test $38.20/share, the point from which they gapped higher on the open of trading on February 9th of this year. If the shares of 'PBR' close below that level, then they should continue to move lower and test $35.44/share, a point of downside support established on July 8th of 2009. I see upside resistance on the shares of 'PBR' @ $41.24/share, and have set my stops accordingly @ $41.63/share.


Stocks Looking Higher

BYI, BRY, SLXP, ITMN, PXD, DHR, MVC, UPS, BVF, DISH

Stocks Looking Lower

EVERYTHING ELSE.


Yesterday's Edition of the Prime Stock Newsletter
The Sterling Investment series of newsletters is produced by Sterling Investment Services, Inc.  If you would like to receive a chart on any index or stock mentioned in this report please contact us at the below mentioned numbers.  We also offer custom research reports on any stock investment that you may desire information on.  To receive further information on these services please visit our web page at:  www.sterlinginvestments.com   If you would like to contact us our # is 800-275-6901,  fax # (404)-816-8830  Email address is: enelson@sterlinginvestments.com  Sterling Investment Services may hold positions in the securities recommended or may be providing consulting services to the companies mentioned within this report.
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