EWZ trade ideas
Brazil - Post election longDuring the weekend, presidential elections concluded with the re-election of Dilma Rousseff. This was perceived as bad news for the BOVESPA, but after gaping strongly on Monday, the Brazilian stock market has been rising strongly.
A double bullish divergence on the MACD histogram on a triple bottom formation, with extreme volume bars and climactic action on the Weis Wave.
I expect this ETF to go at least to 50$.
The daily chart offered almost a perfect buying signal. A daily bullish divergence with a very bullish weekly chart
$EWZ - daily chartfull disclosure: I'm long the Dec19'14 puts @ $50
both the 13 (blue) and 34 (pink) Bollinger Bands have flattened out.
the 50 day MA is rising and the 200 day MA is relatively unchanged since late June.
the daily Williams %R is at -70; this indicates that pressure might turn negative.
based on these observations, $EWZ could see more losses in the near term.
upside levels to watch: $51.85, $55.51
downside levels to watch: ~$50, $48.37, $46.44
Premature enormous potential in Brazil Will be monitoring $EWZ over the next few weeks to see if this 3.5 year shit show is turning a new leaf with the recent break of a major downtrend line (2 variations drawn) on a positive divergence in RSI, and a slowly uptrending MACD that crossed the zero line and is at levels not seen since early 2012. The downtrend line of momentum on a weekly relative basis vs. the S&P has also been captured while putting in a higher low. While things are definitely looking interesting, I would want to see the downtrend line from early 2008 as well as the 200 day moving average captured before going long.
World Cup's Winning Trade On Brazil's EWZ Millions of soccer fans around the world await the most important global sporting event, the 2014 FIFA World Cup. Many media outlets have already started to hype different stocks, as well as statistics about the event. This brings about a question for us traders, who is going to win and how can we profit? As technical traders, who study and trade from the charts, we are one step ahead of the news, and possibly even the game! With that in mind, lets look to the iShares MSCI Brazil Index (ETF) (NYSEARCA:EWZ) to help us pick the winning nation by analyzing the chart.
We can clearly see the iShares MSCI Brazil Index (ETF)(NYSEARCA:EWZ) is retesting a major trendline break out, with the 200 day moving average just below the trendline. This could serve as minor short term support. However, the chart has begun to consolidate right at the line, without getting any significant bounce, as of now. The longer price remains around this level, the more likely the iShares MSCI Brazil Index (ETF) (NYSEARCA:EWZ) are to break down.
If this trendline is broken the iShares MSCI Brazil Index (ETF)(NYSEARCA:EWZ) will fall quickly. A major support level where the shares will find buyers is $42.49.
If the level mentioned ($42.49) happens to be hit towards the end of the World Cup, and Brazil is still in the tournament, then the EWZ will rally (among other factors) in part as a result of Brazil winning the 2014 FIFA World Cup from this level of support.
That is my prediction based on the charts... please feel free to comment and make your own predictions, let us know if another chart is telling you who will win the 2014 FIFA World Cup! I would love to hear your thoughts, feel free to comment on our google+ page, our facebook fan page or tweet at me. As always, myself and the other Pro Traders of the Elite Round Table will be providing our members with the detailed trades, live when they happen... join us now!
Kiliam Lopez
Elite Round Table, Pro Trader
Tweet at me @kiliamLopez
SPY vs. BRIC & MINT BRIC ( Brazil, Russia, India, China)
MINT ( Mexico, Indonesia,Nigeria, Turkey)
The BRIC and MINT concept was introduced by former Goldman Sach economist Jim O'Neill. Mr. O'Neill recently said that BRIC and MINTs countries would shape the world's economy in the next decade, and they would be the best places for investments.
Although I don't disagree with Mr. O'Neill 's statement, one must be aware of the geopolitical risks in this group of countries and how it would affect their investments. Russia with the annexation of Crimea and Turkey and Nigeria have bee n a political mess for the past year.
I use the above chart to monitor the performance of that group against the SPY. As you can, the SPY clearly outperforms the groups,whether this is the result of QE or not.
Cheers
Algo
BRAZIL UPDATEThis clearly failed to reverse, i took some time to post this because i was looking for a double bottom, but i think this rather breaks lower.
!!!FIFA World Cup long-term play!!! (Maybe a bit early lol)Price seems to have found support at the long-term monthly trendline for now.
Bullish Thesis:
Brazil is a resource and an emerging market play for my portfolio. Considering I missed the recent gains in commodity stocks (steel,coal), I believe long-term EWZ should rise too provided the overall trend in commodity stocks is confirmed bullish. Consolidation of the recent gains would be nice to see and would provide chance to add.
World Cup should provide the obvious benefits but I feel the market has't correctly priced in much premium for it yet.
EWZ is in a falling wedge pattern (mostly bullish) and there is Bullish Divergence in the Fisher transform. Out of the BRICS, Brazil isn't the strongest but has a good risk-reward to trade off. Indian Stocks are already at yearly highs so hard to initiate any kind of longs there now.
I have a Tier 1 size long position bought between $46-$47. I will add more size to this position if we get a deeper pullback or if there is a good pattern on the daily to trade off. Breakout from this wedge pattern + MA crossover confirmation would be very bullish from hereon.
I currently don't have a hard stop on this position as I am considering it as 12 month long-term play (Stop not based on specific price but on certain events)
!Events!- Brazilian Inflation rising; 1/2 size off if SPY loses and close below 50 day MA and 1/2 off it loses 100 day MA; Commodity Stocks start a bearish trend again.
EWZ is a 2009 levels.EWZ, the Brazil ETN , is at 2009 levels. Very troubling, as most resources that Brazil exports , are 2 to 5 times higher in price than in 2009.
Looking to align with broader dollar strengthLooking for alignment with other markets, I am considering a long at the target of the short outlined. Liking the channel intersection and breakdown of the stock. Currently watching how this sets up.
Beauty Goes @Benzinga / #BenzingaPROYou'll Never Guess What The Best LatAm ETF Is
When it comes to single-country, large-cap focused ETFs offering exposure to Latin American nations, there are six somewhat large funds: The iShares MSCI Brazil Capped ETF (NYSE: EWZ), the iShares MSCI Chile Capped ETF (NYSE: ECH), the iShares MSCI All Peru Capped ETF (NYSE: EPU), the iShares MSCI Mexico Capped ETF (NYSE: EWW), the Global X FTSE Colombia 20 ETF (NYSE: GXG) and the Global X FTSE Argentina 20 ETF (NYSE: ARGT).
Chances are most investors would not be able to guess which one of those ETFs has been the best performer this year. Hint: It is the only one of the group that is up year-to-date. Hint: It is the one that many investors would least expect.
Brazil's long list of woes ensure EWZ is not the answer. Falling industrial and precious metals prices do the same for ECH and EPU. Long story short, the Global X FTSE Argentina ETF is the best performing single-country Latin America ETF this year.
In the past month alone, ARGT has surged 14.4 percent and that run comes after the ETF was reverse split 1-for-3 in May.
ARGT's new found upside represents a stunning reversal of fortune from 2012 when the ETF was hammered on fears the South American nation was flirting with its second sovereign debt default this century. Argentina's anti-free market government and the possibility of a second sovereign default are among the reasons index providers MSCI (NYSE: MSCI) and FTSE have previously warned the country could lose its frontier market status and be relegated to "stand alone."
Related: Argentina's Rally May be Short-Lived.
Although ARGT has jumped 6.5 percent this year as the aforementioned LatAm ETFs have all traded lower, the overhang of a bond default is not gone. The country is viewed as the least creditworthy borrower in the developing world and has the highest probability of default among emerging nations.
Last year, a U.S. appeals court ruled Argentina cannot make payments on its overseas debt until it pays holdout investors from its previous default. Those investors include U.S. hedge fund Elliott Management. Last month, amid opposition from the U.S., the International Monetary Fund scrapped a proposal to support Argentina in the bond fight.
Citigroup estimates by the end of 2015, the central bank's net reserves, which exclude dollar deposits, could fall to $12.5 billion and cover just two months of import demand and Citi says the likelihood Argentina will restructure the 2015 bonds is now 37.5 percent, according to Bloomberg.
Still, there is hope for regime change in Argentina, a catalyst that could buoy ARGT's fortunes going forward. Yields on the country's 15-year sovereign bonds were spotted around 9.45 percent earlier this week (those yields had previously flirted with 12 percent in the past year) following local elections.
Those elections showed voters' patience with President Cristina Kirchner's ruling party have worn thin. That party's candidates drew barely more than 26 percent of the vote, but voters have to wait another two years before getting a chance to oust Kirchner.
Aside from the bond flap and local politics, investors need to keep an eye on oil services firm Tenaris (NYSE: TS), e-commerce firm Mercadolibre (NASDAQ: MELI) and McDonald's franchisor Arcos Dorados (NYSE: ARCO) as those stocks combine for 48.4 percent of ARGT's weight.
Sincerely, Beauty ( courtesy of BenzingaPRO )
