Brazil ETF Could Be Breaking OutThe iShares MSCI Brazil ETF has squeezed into a tight range since the coronavirus pandemic, but now it could be nearing a breakout.
Today’s chart uses two-week candles to display the price action since 2016.
First consider the falling trendline since December 2019, along the highs of 2021, 2022 and earlier this year. EWZ jumped above the line last week after cooler-than-expected inflation sank the U.S. dollar. Traders may watch to see whether EWZ can hold these levels or add to the gains.
Second is the gradually rising trendline since 2016. Notice how the ETF made a higher low at the end of September above the support. That may reflect an accelerating uptrend.
Third, prices bounced around $25 in July 2022 and March 2023. That double bottom may confirm the presence of lurking buyers.
Fourth, the recent price compression (highlighted by Bollinger Bandwidth) may give way to price expansion .
Finally, investors could focus on valuations and the macro environment as the New Year approaches. EWZ trades for less than half the P/E ratio of the S&P 500. Investors may also see opportunities in global assets if the Federal Reserve is done hiking rates and the U.S. dollar continues to weaken.
Standardized Performances for ETF mentioned above:
iShares MSCI Brazil ETF (EWZ):
1-year: -8.88%
5-years: -25.85%
10-years: -40.65%
(As of Oct. 31, 2023)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
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