Brazil currently has the top performing stock market of any country in the world in 2016.  After starting the year with a dip lower, the iShares MSCI Brazil ETF is now up 50% from its low!  Below is a two-year chart of EWZ.  The most recent move higher broke the ETF above a 15-month downtrend that had been in place, and it now has another support level that formed from its late 2015 highs.  Things appear to be looking up for Brazilian stocks.

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Before getting gung-ho bullish on EWZ, however, we’ve seen this pattern before.  Below is a five-year chart of EWZ that shows an even longer downtrend channel.  Back in mid-2014, the ETF broke above the top of a multi-year downtrend channel and moved above key resistance before completely breaking down once again by the end of that year!

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