Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24
THE GLOBAL WARMING CLIMATE CHANGE MEGA-TREND IS THE INFLATION MEGA-TREND! - 3rd May 24
Banxe Reviews: Revolutionising Financial Transactions with Innovative Solutions - 3rd May 24
MRNA - The beginning of the end of cancer? - 3rd May 24
The Future of Gaming: What's Coming Next? - 3rd May 24
What is A Split Capital Investment Trust? - 3rd May 24
AI Tech Stocks Earnings Season Stock Market Correction Opportunities - 29th Apr 24
The Federal Reserve's $34.5 Trillion Problem - 29th Apr 24
Inflation Still Runs Hot, Gold and Silver Prices Stabilize - 29th Apr 24
GOLD, OIL and WHEAT STOCKS - 29th Apr 24
Is Bitcoin Still an Asymmetric Opportunity? - 29th Apr 24
AI Tech Stocks Earnings Season Opportunities - 28th Apr 24
S&P Stock Market Detailed Trend Forecast Into End 2024 - 25th Apr 24
US Presidential Election Year Equity Performance in the Presence of an Inverted Yield Curve- 25th Apr 24
Stock Market "Bullish Buzz" Reaches Highest Level in 53 Years - 25th Apr 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Brazillian Bovespa Stock Market Set To Rally

Stock-Markets / Brazil Jan 15, 2016 - 07:51 AM GMT

By: Austin_Galt

Stock-Markets

The Brazillian stock index, the Bovespa, has generally been trading exactly as outlined back in May 2015 and I believe we now have the final low at hand with today's low of 38459.

Let's analyse the technicals using the daily and monthly charts.


Bovespa Daily Chart

Bovespa Daily Chart

We can see today's candle was a bullish reversal and while it is only one candle it is in the previously projected zone for low which we will come to shortly.

The recent price action shows a capitulation move down which gained momentum after breaking below the August 2015 low which is denoted by the lower horizontal line.

The Bollinger Band show price clinging to the lower band and leaving this band will likely mean the downtrend has indeed finished.

I have drawn a bearish Fibonacci Fan from the May 2015 high to first lower low and this shows some nice symmetry with price. The August 2015 low was right at support from the 38.2% angle, while the October 2015 reaction high and subsequent lower highs were right around resistance from the 76.4% angle. Breaking above this angle now would look very bullish in my opinion.

The RSI is well oversold and it is not out of the question for price to trade marginally lower over the coming days and set up a bullish divergence although I have my doubts about that. We'll know either way shortly.

The Stochastic indicator has just made a bullish crossover while the MACD indicator looks to be threatening one.

Breaking above the October 2015 high of 49759 will confirm a new bull trend is in play.

Let's move on to the monthly chart.

Bovespa Monthly Chart

Bovespa Monthly Chart

I have added Fibonacci retracement levels of the move up from 2008 low to 2010 high and in previous analysis back in May 2015 I outlined my expectation for the final low to nudge a bit lower than the 76.4% level which stands at 39741. Today's low of 38459 looks to be the bingo number!

The Bollinger Bands show price back at the lower band. Does price bounce back up off this band or continue down the lower band? Obviously, I favour a bounce.

I have drawn two trend lines which I believe to be forming a triangle shaped consolidation zone and my expectation now is for price to head back up towards the trend line originating from the 2008 high and connecting the 2010 high.

This low sets up a triple bullish divergence on the RSI which often leads to a significant rise and that is my expectation here.

Both the Stochastic and MACD indicators are bearish but both conditions are looking long in the tooth and a nice price rise would see both make bullish crossovers in the near future.

Summing up, I believe conditions are right to change the bias from bearish to bullish.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

Email - info@thevoodooanalyst.com 

My website is www.thevoodooanalyst.com 

© 2016 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Austin Galt Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in