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.
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where EWZ declined for three days, in of 262 cases, the price declined further within the following month. The odds of a continued downward trend are .
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 4 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Aroon Indicator for EWZ entered a downward trend on April 12, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where EWZ's RSI Oscillator exited the oversold zone, of 28 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on April 26, 2024. You may want to consider a long position or call options on EWZ as a result. In of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for EWZ just turned positive on April 26, 2024. Looking at past instances where EWZ's MACD turned positive, the stock continued to rise in of 45 cases over the following month. The odds of a continued upward trend are .
EWZ moved above its 50-day moving average on May 03, 2024 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where EWZ advanced for three days, in of 310 cases, the price rose further within the following month. The odds of a continued upward trend are .
EWZ may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Category LatinAmericaStock