EWZ ETF: Brazil’s Stock Market at a Crossroads

This week, we’re diving into EWZ, the Brazilian ETF representing Brazil’s broader stock market. By analyzing its weekly and daily charts, we’ll uncover some intriguing patterns that may indicate a potential bounce. If you’re exploring global markets or ETFs, this is worth a closer look.

Weekly Chart Analysis: A History of Support and Rebounds

Looking at EWZ’s weekly chart from 2022 onward, we notice a consistent theme. The ETF has encountered support at red trendlines on several occasions. Each time it approached these lines, the ETF rebounded strongly, creating a pattern of upward movement.

Currently, EWZ is sitting between these same red trendlines. This area could act as a support zone again, potentially leading to another bounce. While no market movement is guaranteed, past behavior hints at this possibility.

Daily Chart Analysis: A Wedge Pattern Emerges

Zooming in on the daily chart, EWZ has experienced a decline over the past few months. This downward movement is defined by orange trendlines sloping downward, which have acted as resistance. These lines, combined with the red support trendlines, form a wedge pattern.

Wedge patterns often signal that a significant price move could be on the horizon. For EWZ, this could mean breaking out of its current range. If support holds, there’s potential for the ETF to aim for its December 2020 high—around 20% higher than its current level.

Patience is Key

Patterns like these take time to develop. While it’s tempting to anticipate immediate moves, the next few weeks will be crucial for EWZ’s trajectory. Investors should monitor whether the ETF finds support and if it can push past the resistance trendlines.

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