Last week, many of the major stock indexes around the world came under selling pressure. It seems that all of the global money printing by the central banks could not keep the major global stock indexes buoyant. In this weeks report, we shall examine the support levels for one of the highly followed BRIC nations, Brazil.
First, lets start with the Brazilian markets, using the iShares MSCI Brazil Capped Index (NYSEARCA:EWZ). On February 22, 2013, the EWZ finished the week lower closing at $54.82 a share. This index had a loss of $1.28 for the week. There is still some short term support around the $54.00 area, so a near term bounce should not be ruled out early next week. Should the $54.00 level fail to hold as support on the daily chart then the EWZ will be vulnerable to further declines. The near term support levels are $53.25, $52.29, and then more support around the November 2012 double bottom low of $50.49. Please understand, these are just near term support levels for the EWZ. The larger time frames are not bullish and could possibly be setting up for further declines later this year.
Some Brazilian stocks that will usually follow the EWZ include Vale S.A. (NYSE:VALE), Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), Companhia Siderurgica Nacional (ADR) (NYSE:SID), and Itau Unibanco Holding SA (ADR) (NYSE:ITUB). While these stocks are certainly effected by the overall Brazilian market, they should be viewed on an individual basis.