Brazil: Once in a decade long term low risk entry point
The Brazil sell off appears to largely be over and the decline has been insane. AT the moment I think brazil is offering a major low risk entry point with a tight risk profile where donwside can easily be set at 52 week low of 25.68~. here are some reason I think brazil sell off is over.
1. this ETF is trading at 2009 prices?!?! what ?!?! The amount of fear in 2009 was crazy, and it also offered the best entry point for many markets ever. The fact we are currently trading at those prices makes me execesively bullish and also means my downside is limited. Brazil's GDP has increased many times over from those times as well. Tons of potential.
2. Long term decline + short term sell off = massive low risk entry for inflection point. This last sell off created a waterfall decline in an already long term oversold environment. Downside risk is now defined at 52 week low, where I would probably sell and wait for next sell off. Everyone wants to wait till trend changes. but if you wait for trend change+ a confirmation you miss out on the big cheese. buying long term bear+ short term massive sell offs in midst of fear can assure you get in on the big cheese. march 2009 anyone?
3. commodity prices have stabilized and might be rising. last few weeks coffee and sugar have been on a rampage, and brazil is the largest exporter of both by a fair margin.
4. world cup sentiment hasn't been in news lately. I think once the news start ciruclating brazil story again and how far they've come there could be a massive boost from these oversold conditions.
conclusion: technically brazil is offering a super low risk entry point with a long term bear market and waterfall sell off recently. Any fears about brazil have already been priced in and there is massive support at 52 week low area. this long term grueling decline has also given investors and hot money plenty of time to exist positions, meaning there is probably very little resistance if volume comesback. Lastly commodity prices have began to break out in a massive way from long term declines, and brazil is a massive exporter of both coffee and sugar. This etf is particular is also trading at 2009 prices. Thus unless brazil has some sort of revolution I really can't see this becoming worthless.
Target 35+ stop 52 week low, wait for next short term sell off or 4 week+ consolidation for re entry.
1. this ETF is trading at 2009 prices?!?! what ?!?! The amount of fear in 2009 was crazy, and it also offered the best entry point for many markets ever. The fact we are currently trading at those prices makes me execesively bullish and also means my downside is limited. Brazil's GDP has increased many times over from those times as well. Tons of potential.
2. Long term decline + short term sell off = massive low risk entry for inflection point. This last sell off created a waterfall decline in an already long term oversold environment. Downside risk is now defined at 52 week low, where I would probably sell and wait for next sell off. Everyone wants to wait till trend changes. but if you wait for trend change+ a confirmation you miss out on the big cheese. buying long term bear+ short term massive sell offs in midst of fear can assure you get in on the big cheese. march 2009 anyone?
3. commodity prices have stabilized and might be rising. last few weeks coffee and sugar have been on a rampage, and brazil is the largest exporter of both by a fair margin.
4. world cup sentiment hasn't been in news lately. I think once the news start ciruclating brazil story again and how far they've come there could be a massive boost from these oversold conditions.
conclusion: technically brazil is offering a super low risk entry point with a long term bear market and waterfall sell off recently. Any fears about brazil have already been priced in and there is massive support at 52 week low area. this long term grueling decline has also given investors and hot money plenty of time to exist positions, meaning there is probably very little resistance if volume comesback. Lastly commodity prices have began to break out in a massive way from long term declines, and brazil is a massive exporter of both coffee and sugar. This etf is particular is also trading at 2009 prices. Thus unless brazil has some sort of revolution I really can't see this becoming worthless.
Target 35+ stop 52 week low, wait for next short term sell off or 4 week+ consolidation for re entry.