Latin America ETFs look poised for rallies
Latin American markets really tumbled in the first half of November and that caused the iShares MSCI Brazil Capped ETF (NYSE: EWZ) and the iShares Latin America 40 ETF (NYSE: ILF) to drop over 5% from November 4 through November 14. Both funds jumped sharply on the 15th and look poised to rally based on a number of different indicators.
First, let's look at the EWZ. We see that the fund has been trending higher since the end of August and a trend channel has formed during this time. The ETF just bounced off of the lower rail of the channel this past week before the bounce on Friday.
The daily stochastic readings are in overbought territory, but they performed a bullish crossover on Friday. The jump also caused the stock to move back above its 50-day moving average, which indicates a change from a downtrend to an uptrend. Accoriding to Tickeron's statistics, in 34 of 39 similar backtested cases where EWZ's price crossed above its 50-day moving average, its price rose further within the subsequent month. The odds of a continued uptrend are 87%.
In addition to the move back above the 50-day, the 50-day just crossed back above its 200-day moving average earlier in November. This indicates a buy signal, due to the trend repositioning higher. In 3 of 3 cases where EWZ's 50-day moving average crossed above its 200-day moving average, its price rose further within the subsequent month. The odds of a continued uptrend are 90%.
Yet another indicator that is pointing to a rally is the Bollinger Bands. The fund fell below the lower Bollinger Band on November 13 and a price increase is expected as the ticker heads toward the middle band. In 40 of 46 cases where EWZ's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued uptrend are 87%.
Turning our attention to the ILF, we see similar patterns and statistics. While the ILF includes stocks outside of Brazil, the fund is heavily populated with Brazilian companies. Like we saw with the EWZ, the ILF has been trending higher since late August and a trend channel has formed. The fund just bounced off the lower rail of the channel and the daily stochastic readings just made a bullish crossover.
The ILF also moved back above its 50-day moving average on November 15 and according to Tickeron's stats, in 42 of 46 cases where ILF's price crossed above its 50-day moving average, its price rose further within the subsequent month. The odds of a continued uptrend are 90%.
The ILF also dropped below its lower Bollinger Band on November 13 and the stats for this fund show increases in the stock price in 36 of 40 cases. The odds of a continued uptrend are 90%.
Obviously there is some overlap between these two funds and they will move in tandem with one another a great deal of time, but they can and will de-couple from time to time. The EWZ has performed a little better over the past year than the ILF, but because the ILF is a little more diversified beyond Brazilian stocks, it tends to be a little less volatile at times.
EWZ saw its Stochastic Oscillator peaks and leaves the overbought zone
The Stochastic Oscillator for EWZ moved out of overbought territory on June 23, 2025. 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 57 similar instances where the indicator exited the overbought zone. In of the 57 cases the stock moved lower. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for EWZ moved out of overbought territory on June 17, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 37 similar instances where the indicator moved out of overbought territory. In of the 37 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
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 June 16, 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.
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 .
The Moving Average Convergence Divergence (MACD) for EWZ just turned positive on June 13, 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 .
The 50-day moving average for EWZ moved above the 200-day moving average on May 19, 2025. This could be a long-term bullish signal for the stock as the stock shifts 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 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 189 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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