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 saw its Stochastic Oscillator recovers from the overbought zone
The Stochastic Oscillator for EWZ moved out of overbought territory on July 17, 2026. This could be a bearish sign for the stock and investors may want to consider selling or taking a defensive position. A.I.dvisor looked at 54 similar instances where the indicator exited the overbought zone. In of the 54 cases the stock moved lower. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
EWZ moved below its 50-day moving average on July 16, 2026 date and that indicates a change from an upward trend to a downward trend.
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 14, 2026. 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.
Bullish Trend Analysis
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 25 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 July 02, 2026. You may want to consider a long position or call options on EWZ as a result. In of 77 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 June 12, 2026. 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 .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where EWZ advanced for three days, in of 307 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 219 cases where EWZ Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
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