On Monday we featured a bullish piece on Brazil by Money Map Report editor Horacio Marquez. Since then, the iShares MSCI Brazil Index ETF (NYSE: EWZ ) he called a “screaming buy” has gained as much as 31%. Here, William Patalon III provides an update on some of the reasons to be investing in Brazil right now.
The iShares MSCI Brazil Index (NYSE: EWZ ), an exchange-traded fund (ETF) that was the topic of the popular “Buy, Sell or Hold” feature on Monday , surged as much as 31% in the first three days of this week.
"The acronym 'BRIC-standing for Brazil, Russia, India, and China-is in vogue as shorthand for the emergence of the developing world.
"But we're herewith proposing an emended version: 'BRAC'-standing for Brazil, Russia, Australia, and Canada.
"That's because these four countries are the ones most brimming over with essential natural resource, with each one a net exporter of fuels and other natural products. In a world where resource shortages will only get wors
"The currencies of countries rich in essential resources—oil and other fuels, metals, agricultural products—are in strong demand," says long-standing market expert Stephen Leeb.
The editor of The Complete Investor explains, "Brazil, Russia, Australia, and Canada are awash in natural resources. And in a world of growing shortages, these countries can't miss."
"The acronym 'BRIC—standing for Brazil, Russia, India, and China—is in vogue as shorthand for the emergence of the developing world.
"But we’re herewith proposing an emended version: 'BRAC'—standing for Brazil, Russia, Australia, and Cana
I bought 500 shares of EWZ at $90.06.
Setup: Oversold bounce setup. I had a buy stop set above $90. Volume was great today, and the highs held, unlike that of the Dow.
Risk: My stop is set under the recent lows. Target is the $94-95 range. I chose the Brazilian ETF over the US markets for obvious reasons. EWZ is technically more sound and has reacted better as a bounce play.
Concerns:
I bought 200 shares of EWZ at $95.21.
Setup: Breakout and Trend Pullback. A low volume orderly pullback to the 20 day moving average. Strong obv and stochastics have reached extremely oversold levels.
Risk: My intial target is the recent high at $100. I would likely take partial profits, move my stop up to my buy price, and hold the rest into new highs. My stop is just under the 50 day
"Some 20,000 or more million-dollar block trades are made each day," says Peter Way in Block Traders ETF Monitor, which assesses the activity of these trades. Here's some current top "big block" bets.
"Since it's these big dollar pressures that move markets, we want to know what they are likely to do next. Our analysis determines what the pros' expectations are for the coming prices of stocks, from the way they protect investments they have or are making.
EWZ provides exposure to Vale and Petrobras since they form the major holdings of this ETF.While there is a chance that this position will suffer from high volatility going forward as this theme is well known by now,I believe that will provide opportunity to average down my cost of purchase.
Upside is probably limited by $100, but downward correction can be quick and bloody.
Warren Buffett bought Brazil real half an year ago (?), so i guess his bet is that Brazil will do better than expected. on the other hand Buffett bought PIR three years ago. There are no perfect stock pickers.
I am going to short the ETF when RSI touches 80 again (if happens).
Great entry point to add to a position or jump in if you sold off previously, EWZ continues to show strong growth with Brazilian export leaps and a growing Brazilian economy. With the emerging market's distribution almost complete, it'll be a great opportunity to start accumulating a larger position for continued global growth regardless as natural resource revenue and profits will continue to grow with its resilience against the US recession.
China is increasingly having to go as far ashore as Latin America in its quest for raw materials. Brazil is an iron ore powerhouse. RIO, which makes up nearly 10% of the holdings of this ETF, is one of the world's largest diversified metals and mining companies. The ETF also has a large stake in PBR, Brazil's leading energy company.
EZW is great way to get broad exposure to the growth surge in Brazil. This is an iShares ETF that tracks the MSCI Brazil index. 1 year NAV growth 96% and ytd 57%! Main reason has been doing so well is b/c 40% of portfolio holdings are in preferred stock and ADR shares of Companhia Vale do Rio better know as RIO (Cramer says "RIO is brio") and Petoleo Brasileiro Petrobas (the Brazilian Exxon). Those familiar with RIO know what I'm talking about.
So IMO this is a lower risk play than the rocketing RIO or any individual Brazil sector stock. See www.etfconnect.com
EWZ is a Brazilian ETF from iShares. Ventruing in to an emeriging ETF has its own disadvantages, you can either win big or lose big. The only reason for lose big scenario can be with the political situation. Brazil looks like a great prospect. If the political situation in Brazil remains the same, this ETF will have some good future ahead.
I'm giving this stock a relatively short leash. It has done great during the last 200 days, as evidenced by this chart and it looks like it can keep going as long as the US dollar keeps weakening, even if it doesn't Brazil has a built in hedge with some commodities built into the ETF, with aluminum mining, petroleum and the another ultra hot area telecommunications. Low expense ratio .74%
I think this stock is moderately safe pick during the course of the Bush administration. Having much to do with the way the administration chooses to conduct the nations finances.
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EWZ
About iMSCI Brazil Index Fund
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"The currencies of countries rich in essential resources—oil and other fuels, metals, agricultural products—are in strong demand," says long-standing market expert 
