Brazil Bovespa. April, 04, 2016
The Brazilian equity market index has moved close to the trendline that extends since September 2014, boosted by the recent bullishness for risky assets caused by a more dovish Fed.
Nevertheless, it has developed a bearish setup conformed by 1) a bearish divergence, marked by higher highs in price action not followed by the RSI index that is forming lower highs at an overbought level, 2) confluence with the 61.8% retracement of the last swing started on May 2015, and 3) an evening star in the direction of the long term and medium term trends.
Based on these facts we are looking to be sellers at market with a price target around 45,168 and a stop loss at 52,416 as depicted in the daily chart for a reward to risk of 2:1.
Analyst: Victor Campos, CFA.
Source: LATAMPM with Tradingview.com data. Prices as of April, 1, 2016.
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