Brazil's Petrobras has soared this year, but one technician thinks the oil giant's run is about to end.
On a weekly chart of Petrobras, Rich Ross of Evercore ISI drew what he saw as a "well-defined downtrend" that shows the semipublic Brazilian oil company falling for the past eight years.
Also troubling, according to Ross, is that the relative strength indicator (RSI), which essentially measures how overbought a stock is, has reached highs unseen since October 2007 before Petrobras came crashing down.
"We have some symmetry here, which is troubling for a stock that has rallied 300 percent off its lows and is up 200 percent year to date," Ross said Wednesday on CNBC's "Trading Nation."
So not only is Petrobras falling in line with what he sees as a downtrend, but Ross also believes that the Brazilian oil company has been overbought. Couple this with the recent drop in crude prices and Ross sees trouble ahead for Brazil's jewel oil producer.
Petrobras also accounts for 10 percent of the Brazilian stock market, which has risen 46 percent year to date as the country's main oil company has also surged. In other words, Brazil's Ibovespa could see a big drop should Petrobras tank.
