Brazil ETF (EWZ) gets bearish signal while hitting downward sloped trend line
Over the last four months, the Brazilian stock market has been trading in a different rhythm from the rest of the world’s markets. It has been trending lower since late January/early February while most of the others have been moving higher with the exception of the last month.
The iShares MSCI Brazil Capped ETF (NYSE: EWZ) peaked on January 31 and then again on March 19. Connecting these two peaks creates a downward sloped trend line and the ETF just hit that trend line on June 4. The fund turned lower the next day and looks like it might be heading lower once again.
The overbought/oversold indicators were both hitting overbought territory before the stock turned lower. The daily stochastic readings made a bearish crossover on June 5 indicating that another leg lower was possible.
The Tickeron Trend Prediction Engine generated a bearish signal for the EWZ on June 4 and the signal showed a confidence level of 88%. The signal calls for a decline in the ETF of at least 4% over the coming month. Previous predictions on the EWZ have been successful 91% of the time.
Brazil’s economy has been struggling after the election of pro-business President Jair Bolsonaro. Initially, the Brazilian market was outperforming the majority of world markets, but that outperformance has come to a screeching halt.
EWZ's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for EWZ turned positive on June 27, 2025. Looking at past instances where EWZ's MACD turned positive, the stock continued to rise in of 50 cases over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on June 11, 2025. You may want to consider a long position or call options on EWZ as a result. In of 83 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where EWZ advanced for three days, in of 308 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 194 cases where EWZ Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 3 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 3 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where EWZ declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
EWZ broke above its upper Bollinger Band on July 03, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
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General Information
Category LatinAmericaStock
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