As emerging markets stocks and exchange traded funds have regained momentum this year, previously lagging Brazilian equities have gotten in on the fun.
Over the past 90 days, the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) is up 18%, more than double the returns offered by the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) and the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO), the two largest emerging markets ETFs by assets, over the same period.
Among the four major single-country ETFs tracking the BRIC nations, only the WisdomTree India Earnings Fund (NYSArca: EPI) has topped EWZ over the past three months. [Elections Could Lift India ETFs]
EWZ’s almost parabolic rise from goat to hero could scare off some investors that have missed the ETF’s recent surge. However, there are signs there could be more to come for the largest ETF tracking Latin America’s largest economy.
“The price chart is trying to break out of a bullish symmetrical triangle, which is typical of a continuation pattern. Usually the move if it comes, will equal the move from the start of the recent advance to the top of the triangle. If it happens, it would suggest a move to the 57 area would not be out of the cards,” according to Captain John Charts.
Down 1.2% Wednesday, EWZ is flirting with $46.70 at this writing, meaning if the ETF does climb to $57, the upside from current levels is 22%.
There are fundamental factors to buoy EWZ’s appealing technical picture. “According to a survey by local polling firm MDA, 37.0 percent of those surveyed said they intend to vote for Rousseff, compared to 43.7 percent in February,” Reuters reported.