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MSCI Brazil: THE "BRAZILIAN TRAIN" ON COURSE TO DOUBLE IN PRICEThe MSCI Brazil ETF (EWZ, "total return" format) is once again encountering its historical flat resistance. But this time, the Brazilian market is facing an uptrend, high real rates, and slowly but surely increasing de-dollarization, diversification and de-americanization. Technical picture of The "Brazilian Train" The quarterly chart of AMEX:EWZ clearly shows the wide sideways trend from 2008 to 2026, where the $40-$42 zone served as flat resistance, from which the price had previously reversed for almost two decades. The lower boundary of the corridor, located around $17-$18, forms a symmetrical range, within which an ascending sloping channel with a series of higher lows has emerged in recent years. The RSI has been holding above neutral for quarters, signaling medium-term buyer dominance but not extreme overbought conditions, leaving room for a final impulse. In fact, we are witnessing a rare case for EM: an ETF that, in terms of total return (price plus reinvested dividends), has almost aligned with its all-time highs. From a technical perspective, a sustained breakout of this flat resistance, supported by the strength of the rising trend at the quarterly close, would signal the final shift from the nearly two-decade-old regime to a new trend cycle, where the former ceiling becomes a supporting "trampoline" for the next wave of growth. The Structure of the AMEX:EWZ and The "Brazilian Locomotives" The MSCI Brazil AMEX:EWZ fund is a concentrated bet on Brazilian megacaps: mining giants, oil and gas, banks, and fintech, which together account for the lion's share of the weighting. The top ten is dominated by Vale, Petrobras, Itaú Unibanco, Nu Holdings, and other systemically important issuers, whose dynamics essentially create the candlesticks on the chart. This concentration makes AMEX:EWZ something between an index ETF and the good old "five-idea portfolio," where two or three stories determine the fate of the entire product. The commoditized nature of Brazil's economy—iron ore, oil, and agriculture—turns AMEX:EWZ into a derivative on the global commodity cycle. As soon as the market begins to price in a scenario of prolonged high commodity prices, the "Brazilian Train" gains additional momentum, despite the political news noise. High real rates as insurance Brazil remains one of the few major markets where real rates—that is, the difference between the key Selic and current inflation—look impressively positive. Forecasts for the Selic (Brazil's benchmark interest rate) through 2026 remain in the double digits, while inflation expectations have stabilized near the official target, creating a substantial real coupon for local bonds and a relatively comfortable backdrop for FX. For equity investors, this means that the discount factor remains severe, but the EM risk premium is partially offset by strict monetary discipline. It is precisely this mix—high real rates plus a stable current account—that has historically created a safety net for emerging currencies, reducing the likelihood of sudden collapses, which in the past have crushed the AMEX:EWZ charts to zero in one or two quarters. De-dollarization and global debt markets The global narrative of de-dollarization, de-Americanization, and currency diversification, as we discussed earlier, is not about the "sudden death of the dollar," but rather about the gradual redistribution of reserves and flows toward gold, commodity currencies, and regional blocs. Central banks are increasing their gold holdings, and the total value of these reserves has already equaled official holdings in US Treasuries, symbolically marking a turning point in the global asset structure. For stories like AMEX:EWZ , this means the potential for a greater weighting in global portfolios as investors gradually reassess their US exposure and seek liquid alternatives in EM. In this configuration, Brazil acts as a kind of "regional hub" for Latin America, offering a relatively developed capital market, deep FX, and a benchmark ETF recognized by global index providers. If the dollar continues to weaken structurally against the EM basket, even a moderate strengthening of the real will act as an additional boost to the AMEX:EWZ Geopolitics: Hormuz, Inflation, and Agricultural Shock The closure or even partial blockade of the Strait of Hormuz is a classic "black swan" event for the oil market, instantly raising the risk premium in Brent crude and producing a secondary inflationary shock. For Brazil, a major exporter of agricultural products and raw materials, this configuration could paradoxically prove beneficial: the world is overpaying for energy while simultaneously seeking reliable sources of food and fertilizer. Problems with sulfur and urea supplies from the Gulf countries, coupled with the blockade of Hormuz, paint a much less rosy picture for the global agricultural supply chain. Rising fertilizer prices are hitting farmers' margins and potentially squeezing global food supply, further fueling inflation and pushing real rates even higher—thus increasing the appeal of EM currencies where the central bank is prepared to respond aggressively, as in Brazil. Key Breakout: Scenario for AMEX:EWZ In summary, we have a structure where the technical factor—a test of flat resistance in the $40-$42 region within a rising wedge—is superimposed on a macro backdrop favorable for commodity-EM currencies. A sustained breakout above the historical range, confirmed by volume and quarterly closes, transforms AMEX:EWZ from a candidate, into a mid-term trend leader with a potential target of $70+, especially if the commodity cycle continues to heat up. A failed breakout attempt and a return below the horizontal, on the other hand, could return the market to the good old range-bound sandbox, where AMEX:EWZ previously became a "mean reversion" tool for those eager to sell "Darling Brazil" and buy back another crisis trough. However, given the de-dollarization cushion, high real rates, and geopolitical pressure, the current approach to resistance looks like a much more serious candidate for a change of era than another random bounce—and that's precisely why this chart deserves a spot on the front page of our @PandorraResearch Team as "The Brazilian Train" bet that goes to double in price. -- Best wishes, @PandorraResearch Team
AMEX:EWZ
by PandorraResearch
Update: EWZ December 2026 32 Covered CallHere, starting to break my EWZ position (See Post Below) into its constituent pieces. The first piece involves shares I acquired way back at 31.65/share. (Ugh). Rather than go back and calculate trade to date break even, I'm going out far in duration to sell the short call at or above my break even. Sometimes, you have to go way longer dated than you'd like, but I'm fine with devoting some buying power to this, particularly since EWZ pays a fairly decently dividend, albeit only twice a year. The remaining legs are the January 17th 26 short put -- on which I'm pretty sure I'll be assigned shares, and the January 17th 23 short put, which is in-the-money by .50 or so. On assignment, I'll look to sell the call at the strike at which I was assigned and go from there ... .
AMEX:EWZLong
by NaughtyPines
Opening (IRA): EWZ Oct 17th 26/45 Short Call Vertical... for a 1.13 credit. Comments: I'm fairly certain that I'm going to be assigned on my January 17th 26 short put, so am going out to October to sell a spread with the short leg at the 26 strike that pays at least 1.00. The reason I do this (sell a call for at least 1.00), is that this enables me to roll the short call down a strike by 1.00 without giving up profit potential if I need to. The 26 short call aspect of this spread will become the short call aspect of an October 17th 26 covered call, with the covered call setup having a break even of the strike at which I was assigned (26) minus the 1.13 in credit I got paid for this spread or 24.87. Because I haven't been assigned shares yet and short calls are generally verboten in a cash secured account like an IRA, I've had to pay a few bones (.05 to be exact), to define the risk of the short call. I also had to pay a debit that is equal to the width of the spread (19.00) minus the credit received of 1.13 or 17.87 for the spread. I'm fine with this, since this buying power will eventually free up when I get assigned. Naturally, the October expiry is extremely long-dated. I'm fine with this here, since EWZ pays a fairly decent dividend, albeit only in June and December.
AMEX:EWZShort
by NaughtyPines
Opening (IRA): EWZ July 19th 31 Monied Covered Call... for a 30.31 debit. Comments: Decent 30-day IV at 34.0%, but I'm primarily looking to position myself to grab the June dividend. IV is skewed to the put side in this underlying, so the general go-to would be short put, but to grab the dividend, you have to be in stock. Because I want the extrinsic in the short call to exceed any dividend, I'm basically going at-the-money/slightly monied with the short call and will look to manage the position after the dividend drops. Unfortunately, the distribution has been wildly variant, so it's hard to tell how much extrinsic to keep in the short call to diminish the prospect of being called away early due to some dick exercising their long call early to grab the dividend. Metrics (Sans Dividend): Break Even/Buying Power Effect: 30.31 Max Profit: .69 ROC at Max: 2.28% ROC at 50% Max: 1.14%
AMEX:EWZLong
by NaughtyPines
EWZ setting up multi-year breakout Brazil boasts a strong investment case compared to an overvalued US market, which is historically trading at depressed multiples. The global scenario is looking positive for emerging market equities, like ewz and small cap brf with slower GDP deceleration, resilient commodity prices, and inflation control. Higher commodity exports are generally positive for Brazil’s currency (BRL) and equities. The technical set up is straight forward, from the 2020 high and low the price is consolidating ready to break above the descending trendline. If the fib retrace holds and the price can move past the high volume node which coincides with the breakout of the trendline around 32 we may see the start of a multi-year advance.
AMEX:EWZLong
by ronin-strat
Opening (IRA): EWZ Sept 20th 25 Short Put... for a .53 credit. Comments: In for a penny ... . In for a pound. With the July 19th 28 short put looking ripe for assignment (it's still got time, so you never know), adding a rung here out in Sept (there is no August monthly yet). The current position is a Dec 20th 29 Covered Call with a 28.44 break even, a July 19th 28 short put, and a Sept 20th 25 short put. I'll look to add a rung in August once it becomes available, assuming I can get in at strikes better than what I currently have on ... .
AMEX:EWZLong
by NaughtyPines