The Brazilian stock market has been in a strong uptrend with great momentum after it emerged from a multi-year base about a year ago, Cerundolo Investment Research’s Guy Cerundolo told viewers of Real Vision’s Trade Ideas.
“Even a one-eyed technician with a crooked ruler can see that the IBOVESPA [the benchmark index of about 60 stocks that are traded on the Brazilian stock exchange] has a phenomenal long-term base and a great trend coming out of it,” he told Real Vision’s Justine Underhill.
First off, Cerundolo likes the iShares MSCI Brazil ETF (EWZ), which has broken out of an almost 10-year downtrend. He likes buying it at current levels with an initial target at $54, which is 18% from here, and a stop-loss of $38. Cerundolo’s longer term target for EWZ is 66%.
He expects the trade to play out over six to months.
Cerundolo also suggests buying ticker symbol BBD at current levels with an initial target price of $11.75 and a secondary target of $14. His stop-loss for the trade would also be at the 200 day moving average.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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