BRF Soars 9.36% on Trade Rebound Hopes: Can This Momentum Hold?

Summary
• BRF’s stock surges 9.35% intraday, breaking above $3.74 amid trade reopening optimism
• CEO Miguel Gularte signals inventory normalization as China and Europe lift bird flu restrictions
• Sector peers like Tyson Foods lag with 0.99% gains, underscoring BRF’s outperformance

BRF SA (BRFS) has ignited a dramatic 9.35% rally in late trading, driven by news of China and Europe resuming chicken imports after a bird flu-induced trade ban. The stock’s surge from $3.51 to $3.75 reflects renewed confidence in Brazil’s poultry giant, which redirected exports during the crisis. With inventories set to normalize and grain prices falling, investors are betting on margin expansion. The move starkly outpaces the broader poultry sector, where Tyson Foods (TSN) trails with a modest 0.99% gain.

Trade Rebound Fuels BRF's Sharp Rally
BRF’s explosive 9.35% gain stems from its announcement that China and Europe will resume chicken imports within days or weeks, reversing trade restrictions imposed after a bird flu outbreak. CEO Miguel Gularte emphasized that inventory levels, which had swelled due to export halts, will return to normal as these markets reopen. The company also highlighted redirected sales to Saudi Arabia and Chile, with poultry exports down only 5% compared to Brazil’s 15% sector-wide decline. Goldman Sachs and Genial Investimentos praised the results, noting EBITDA and margin resilience despite challenges. Lower corn prices further position BRF for cost savings in Q3 and Q4, amplifying near-term optimism.

Poultry Sector Gains Momentum as BRF Outperforms
The poultry sector is showing mixed momentum, with BRF’s 9.35% surge dwarfing Tyson Foods’ 0.99% gain. While BRF benefits from trade normalization and cost tailwinds, broader sector news remains neutral. The Poultry Site and Meat+Poultry reports highlight global chicken price declines in Brazil and USDA reorganization plans, but these have yet to translate into sector-wide gains. BRF’s outperformance reflects its strategic agility in redirecting exports and its leadership in Brazil’s poultry market, which accounts for 10% of global exports. However, sector-wide risks like avian flu monitoring and trade policy shifts remain critical watchpoints.

Options and ETFs to Watch in BRF's Volatile Move
• RSI: 32.29 (oversold)
• MACD: -0.0648 (bearish), Signal Line: -0.0450 (bearish), Histogram: -0.0198 (diverging)
• Bollinger Bands: 3.92 (upper), 3.63 (middle), 3.34 (lower)
• 200-day MA: 3.77 (above current price)

BRF’s technicals suggest a short-term rebound but long-term bearish bias. The stock is trading near its 200-day MA at $3.77, with RSI signaling oversold conditions. However, MACD divergence and a bearish histogram indicate caution. Key support/resistance levels at $3.68–$3.70 and $3.58–$3.61 will test the rally’s sustainability. For options, the BRFS20251219C5 call (strike $5, expiring 2025-12-19) stands out with 47.16% implied volatility, 41.44% leverage, and a delta of 0.18. A 5% upside to $3.93 would yield a payoff of $0.93 per contract. The BRFS20251017C5 call (strike $5, expiring 2025-10-17) offers 34.53% IV and 746% leverage but has zero turnover, limiting liquidity. Aggressive bulls may consider BRFS20251219C5 into a bounce above $3.75.

Backtest BRF Stock Performance
The backtest of BRFS's performance after a 9% intraday surge shows mixed results. While the stock experienced a positive return in the short term, the overall win rate and returns over longer periods are moderate. This suggests that while a significant intraday gain can be followed by further gains, the stock's performance in the days following the surge is somewhat muted.

BRF's Trade-Driven Rally: Time to Act on the Breakout?
BRF’s 9.35% surge hinges on its ability to capitalize on trade normalization and cost tailwinds. While technicals remain bearish, the stock’s proximity to key support/resistance levels and oversold RSI suggest a short-term bounce. Investors should monitor the 200-day MA at $3.77 and watch for a break above $3.92 to validate the rally. The sector leader Tyson Foods (TSN) gained 0.99%, underscoring BRF’s outperformance. For now, the BRFS20251219C5 call offers high leverage for a bullish breakout, but caution is warranted given the MACD divergence. Watch for $3.75 retests and trade flow clarity in China and Europe.