Brazilian ETF: Descending Triangle for Latin American Nation
Global stocks had a nice bounce in early June, outperforming the S&P 500 by a wide margin as the “reopening” trade took hold and the Federal Reserve kept the spigots of easy money flowing.
The MSCI Brazil ETF (EWZ) rode that wave higher at the time but has fallen flat more recently. Weakening of energy prices and a spreading coronavirus outbreak in the Latin American nation has also made matters worse.
This has produced a descending triangle for the ETF, with a series of lower highs since June 8. Downside support is around $28.50.
This creates the potential for bearish continuation if the lower price level is broken. Timing is unclear, and there could be some tests above $29.50 to the falling trendline.
However, the overall setup could be interesting because EWZ has potential downside toward the low $20s if the current support level breaks.
The MSCI Brazil ETF (EWZ) rode that wave higher at the time but has fallen flat more recently. Weakening of energy prices and a spreading coronavirus outbreak in the Latin American nation has also made matters worse.
This has produced a descending triangle for the ETF, with a series of lower highs since June 8. Downside support is around $28.50.
This creates the potential for bearish continuation if the lower price level is broken. Timing is unclear, and there could be some tests above $29.50 to the falling trendline.
However, the overall setup could be interesting because EWZ has potential downside toward the low $20s if the current support level breaks.