The embattled iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) jumped 2.3% on volume that was 78% above the daily average Thursday.

EWZ, the largest Brazil ETF, was helped to the upside by 6.2% gain on more than double the average turnover from Petrobras (NYSE: PBR), one of EWZ’s largest holdings.  With Thursday’s pop, EWZ is up more than 3% in the past month, but that is not enough to prevent the ETF from being a laggard among single-country funds. [Brazil ETFs Continue to Struggle]

Some traders are betting on more downside for EWZ despite the ETF’s recent rally.

After forming a bearish, six week base at the lows, EWZ is poised to resume its downtrend soon, especially if the price action is unable to push through the declining 50-day moving average,” according to Deron Wagner of Morpheus Trading Group.

“EWZ’s bearish reversal candle now offers a low-risk entry point on the short side,” added Wagner. However, the ETF’s close above $41 Thursday could be damaging to the near-term short thesis. A look at EWZ’s daily chart indicates that with the close above $41, the ETF could run to $44, where its 200-day moving average rests, before encountering its next stiff bout with resistance.

Still, some traders are not fussed on EWZ. Earlier this week, CNBC reported that options on EWZ traded 2.5 times the average daily volume with most of the action seen in buying of the April 39 puts, indicating some traders are betting on further downside for the fund.

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