BullBear Trading: Stock and Financial Market Technical Analysis

Olympics End, Brazilian Stock Market To Fall Hard, Cash In With These ETF's

The Olympics have come to a close. Two weeks of trials and tribulations for the best athletes in the world. Overall, Brazil did a solid job of hosting the games but now they are over. The Brazilian ETF iShares MSCI Brazil Index (NYSEARCA:EWZ) is likely to fall hard. After running up on anticipation of the billions likely to be spent, there will be a major sell as buyers cease and sellers take over. The chart confirms this based on a rounded top pattern during the Olympics. A rounded top pattern is created as sellers start to equal buyers at the highs of a stock chart. The stock chart slowly flattens then starts to turn slightly down. This makes total sense as amateur investors would be buying during the Olympics but smart investors would be selling. The EWZ has risen dramatically over the months prior to the Olympics. In January 2016 it traded as low as $17.25 before hitting $35.00 a week into the Olympics. This is a 100%+ move. The void of the Olympics being over will start to drop the $EWZ. Downside on this ETF is likely more than 25% in the coming month.

 

Another way to play the decline in the Brazilian stock market would be to buy the Direxion Shares Exchange Traded Fund Trust (NYSEARCA:EDZ).

By Pro-Trader

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