“While it might be tempting to call a bottom and play for a rebound up to the 36 level, for those of us that trade with the trend, signs point to further headwinds for the Brazilian ETF,” adds Cilella.
EWZ’s less-than-inspiring technical situation is equaled by a gloomy fundamental outlook.
“There is going to be a period of difficulty and, before we can see any pick-up, we think 2015, in growth terms, is going to be a horrible year. It is going to be one of the worst for a long time because of the problems it has been having political,” said Jose Cuervo, Santander Asset Management’s head of Latin America equities, in an interview with Citywire Global.
Investors appear unwilling to bet against that assessment. Through Feb. 10, nearly $276 million had been yanked from EWZ. That is more than the combined outflows from the Global X MSCI Argentina ETF (NYSEArca: ARGT), Global X FTSE Colombia 20 ETF (NYSEArca: GXG), iShares MSCI Chile Capped ETF (NYSEArca: ECH) and the iShares MSCI All Peru Capped ETF (NYSEArca: EPU). [Don’t Expect Much from LatAm ETFs in 2015]
ETF Trends editorial contributed to this post.