“As price approaches it’s 50-day MA and it’s declining trend line, this could be a place for price to do battle. Bulls will want to push EWZ above this trend line as well as the Moving Average and hopefully get a test and a break of the prior lower low of $38,” adds Thrasher.
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
Chart Courtesy: Andrew Thrasher