This downside gap was a reaction to the ex-president Lula accepting the invite to become a Minister to escape justice, the market does not like it at all. Basically it means we will see a little more of Dilma Roussef's ideas and believes - which are the same as Lula - to live a little longer, making the economy struggle.
So it could could be an overreaction,...
Bullish divergence followed by a 50% retrace on price. Set entry on key level and waiting for the next resistance touch. Stop losses @3%, Take Profit @10%
Together with my last chart about the BVSP, this is more of a Swing-Trade leveraged position against this active (BOV11 in IBovespa and BVSP in NYSE), considering the following fundamental key points:
* The main stocks are being hammered, some of them: Petrobras, Vale, Sabesp.
* Brasil fiscal efforts to keep a good spending balance showed some ugly side effects...
There are a lot of fundamentals together with this trade. VALE is deeply connected to china, which faces slow industry growth rates right now, plus the brazilian market is getting frozen with the recent political events, new fiscal rates, etc.
I'd expect a 20% value loss, so shorting all the way.
Safe trading!
So far, the long term Weekly chart indicates maintenance of the short position. Price action is now far from D point (short entry postions) so profits should have been taken along the way and protective stops should be now placed "tight".
During the weekend, presidential elections concluded with the re-election of Dilma Rousseff. This was perceived as bad news for the BOVESPA, but after gaping strongly on Monday, the Brazilian stock market has been rising strongly.
A double bullish divergence on the MACD histogram on a triple bottom formation, with extreme volume bars and climactic action on the...
