All Eyes On Brazil's Bolsonaro
Brazil stocks have been rallying since Bolsonaro’s presidential victory in October last year.
While the global equity markets tanked in the fourth quarter, the Brazil’s Bovespa index gained 11% in the final quarter of 2018. Brazil’s economy has struggled for growth in recent years. Brazil also has massive pension issues. For example, Brazil’s current retirement age is 60 for men and 55 for women which has has put a strain on the system. But global investors think Bolsonaro will make the changes necessary to help and grow the country’s economy again.
The most popular Brazilian ETF, iShares MSCI Brazil, EWZ, rose 13.3% in the fourth quarter of 2018. And EWZ is off to a strong start in 2019 as well, rising 12% year to date. So can the EWZ go higher, lets go to the charts to find out?
Monthly Chart (Curve Timeframe) - Monthly demand is at $27 and monthly supply is at $56.
Weekly Chart (Trend Timeframe) – the trend is sideways, can you see it?
What about now?
The downtrend ended once a new higher high was established, but for a new uptrend to be established, price needs to take out the higher high.
Daily Chart (Entry) – the current momentum is up, so a pull back to the daily demand zone at $40.50, suggests price can continue to rise until $48.50.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
The new President will have troubles in the short term as weeding out the years of inefficiencies and even corruption will take a toll as it transitions. Interesting to see the Real fiat being relatively weak when compared to the last political cycle and other currencies out there.
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Agree, it will take years to fix the issues. I don't trade the Brazilian currency, but worth me looking at it.