Brazil stock market Bovespa is all set to fall . My stat arbs and technical analysis have indicated weakness in the market.
Stat arbs have forecasted Bovespa to trade 45000 in the next 3 months. This is also inline with the H&S formation on monthlies and weeklies . First of all the right shoulder of the H&S has tested a major 4 year trendline coinciding with a 75% Fibonacci resistance. The failed test has resulted a reversal from 58000 to the current price 53000. The H&S neckline rests at 45,000.
From fundamental perspective Brazilian interest rate are relatively high for a sustainable economy and the currency is at a multi year low against the USD. The global market sentiment doesn't support Brazil either with continued risk due to Greece.
Short Brazil (Bovespa) 53000 for 45000 in 3 months time i.e looking for min 15% selloff.
Stat arbs have forecasted Bovespa to trade 45000 in the next 3 months. This is also inline with the H&S formation on monthlies and weeklies . First of all the right shoulder of the H&S has tested a major 4 year trendline coinciding with a 75% Fibonacci resistance. The failed test has resulted a reversal from 58000 to the current price 53000. The H&S neckline rests at 45,000.
From fundamental perspective Brazilian interest rate are relatively high for a sustainable economy and the currency is at a multi year low against the USD. The global market sentiment doesn't support Brazil either with continued risk due to Greece.
Short Brazil (Bovespa) 53000 for 45000 in 3 months time i.e looking for min 15% selloff.
