BRIC Theme for year 2019 - Brazil Bovespa Stock Index Chart Analysis

Brazil Bovespa Index is part of BRIC emerging market theme that has seen a sell off rout in year 2018 on the backdrop of rising US dollar, rising Treasury yields and emerging markets BRIC and VISTA had their currencies weakening, and stock indexes steep correction.

Brazil Bovespa Stock Index had been plague by corruption, political instability and high US dollar denominated debts.

https://www.marketwatch.com/story/strong-dollar-puts-these-emerging-markets-in-danger-of-following-turkeys-slide-2018-08-23

Emerging markets theme BRIC comprising Brazil, Russia, India and China while Frontier markets VISTA theme comprising Vietnam, Indonesia, South Africa, Turkey and Argentina.

With post G20 meeting hosted by Argentina concluded on 30 November to 1 December, it was a successful meeting between USA and China where they had implement trade war tariff truce for 90 days.

https://www.msn.com/en-ca/news/world/a-look-at-what-happened-at-the-g-20-summit-in-argentina/ar-BBQo4La?li=AAgfIYZ

Let us take a look at the charts of BRIC theme attached is Brazil Bovespa Stock Index.

We are still at 50th percentile of the bullish market which had many more years to go. Charts display bullish strength where Brazil Bovespa Stock Index is trading at 91200 points high (all time highI in December 2018 after Brazil post presidential election taking place in late October 2018 seen Mr. Bolsonaro appointing as the next President of Brazil. Brazilean Real trading against US dollar at recent low of 3.64301 in 29 October now seen price rise and its currency weakening to 3.91714 high in 15 December 2018. All time high for Brazilian Real trading against US dollar is 4.17768 in 24 September 2015, recent high reach 4.17291 seen in 10 September 2018.

With the recent emerging markets technical correction of over 20% enter into a technical bear market, lots of financial analyst expert are calling for a full blown financial crisis bear market to take place in year 2019.

So are we going to see a financial crisis taking place soon?

Brazil Bovespa Stock Index Monthly Chart Historical 13 Dec 2018

Brazil Bovespa Stoock Index Monthly Chart Historical 13 Dec 2018 with Technical Analysis

Based on above Chart Technical Analysis, Brazil Bovespa Stock Index is probably the weakest stock market globally that hit all time high in year 2018 is 91,200 points, the only emerging stock market index that breaks all time high despite emerging market selloff in year 2018. Above Chart display bullish signals that Brazil Bovespa Stock index reach 87,500 points in February 2018 had seen a correction retracement to around 70,000 points in mid June 2018, a whopping 20% correction, classified a technical bear market taking place and price had seen rising till date. Are we in a bear market proclaimed by all the investment experts which is schedule to hit in year 2019 a full blown financial crisis. The above technical chart display a symmetric triangle drawn in light blue color lines. trend had indeed reverse for Brazil financial markets after breaking above the downtrend line in upper blue color that connects all the peaks, act as a resistance line. Red color lines drawn refers to the Classical neckline that connects all the peaks and troughs which forms a support and resistance.

iShares MSCI Brazil Index 14 Dec 2018

iShares MSCI Brazil Index 14 Dec 2018 with Technical Analysis

Above Technical Analysis chart display bullish chart formation.
1) Big Falling wedge in blue color lines.
2) Symmetric Triangle upper blue color line couple with green color uptrending support line
3) Ascending Triangle upper purple color line couple with green color  uptrending support line.

All time high in year 2008 is 101.40 (overvalue), 101.40 / 2 = 50.7 (Fair Value) and 50.7/2 = 25.35 (undervalue), price seen hit 17.37 low in year 2016 and had price risen till date last traded at 38.33 in 13 December 2018. All time low is register at 5.49 in year 2003.

Swing price setup is using price difference between 47.42 high in Jan 2018 - 17.37 (low in 2016) = 30.05 + 30.66 (June 2018 low) = 60.71.

UsdBrazilianReal 23 December Monthly Historical Chart 2018

UsdBrazilianReal 23 December Monthly Historical Chart 2018 with Technical Analysis

Technical Analysis for UsdBrazilianReal is very bullish with most chart pattern that display 
1) Ascending Triangle blue color line couple with red color line
2) Rounding bottom green color line, possible inverted head and shoulder chart pattern. 
3) Cup and handle chart pattern on chart 2.

But i stay with the bearish setup of a swing to retest red color support line and ultimately retest purple color line classical support line that connect all the peaks and troughs as the next critical support. 






Disclaimer: All news, information and charts shared is purely by my research and personal views only. This is not a trading recommendation or advice but on the basis of sharing information and educating the investment community. Different traders and investors adopt different trading strategies and risk management approach hence if in doubt please approach or seek clarifications with your Financial Adviser, Broker and Banker.