Earlier this week we showed how our bearish Elliott wave forecast was working for the Italian stocks ETF. Here we offer a corresponding update to our work on the iShares MSCI Brazil Capped ETF (NYSEARCA: EWZ).

Readers here may remember that in January we reviewed the successful forecast that had foretold of a strong bounce in EWZ. We updated that forecast in April to note the main resistance areas to watch for the next sizable decline.

With resistance for the ‘b’ wave being tested, price looks almost ready to embark on a strong downward ‘c’ wave. Such a move would represent the counterpart to wave ‘a’ that moved the fund down so quickly during the first half of 2018.

Cover photo: Iguazu Falls, located near the border between Brazil and Argentina

Price has already tested and overcome resistance at 43.35 and 44.91, but those levels are still relevant for traders who want confirmation of the downward breakout. Meanwhile the resistance at 47.85 looks very attractive, and 50.96 could serve as a backup area to watch for the end of wave ‘b’ of (b).

Note also how the Lomb periodogram is solidly in the reversal zone. A price reversal from near 47.85 would imply preliminary support targets near 36.69 and 30.17. Declining wave ‘c’ of (b) might even reach 25.51 or 19.62.

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