A contrarian view of Petrobras would indicate the aforementioned selling by professional investors could be a sign of capitulation, which, if true, would be good news for EWZ. On the other hand, Soros still owned 2 million shares of Petrobras at the end of last year while BlackRock Fund Advisors owned 89.2 million shares, according to the Journal, indicating that another raft of institutional selling could hit the stock in the future.

For the moment, departures in EWZ have abated. The ETF’s 2015 outflows as of Feb. 10 were nearly $276 million. While 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), EWZ has not seen additional outflows since that date. [Giving up on Brazil ETFs]

There is also a valuation case for Brazilian equities. The current cyclically-adjusted P/E ratio, or CAPE, on Brazilian stocks is 8, below the historical average CAPE of 8.6.

iShares MSCI Brazil Capped ETF