Will iShares MSCI Brazil recover?

ewz New York, June 17th (TradersHuddle.com) - Shares of iShares MSCI Brazil Index Fund (NYSE:EWZ) closed the trading session at $70.57 below calculated support at $71.69 breaking the stock technically, raising concerns by investors, as the move might trigger more selling.

iShares MSCI Brazil Index Fund (NYSE:EWZ) is an ETF that corresponds to the price and yield performance, before fees and expenses, of equities traded publicly on the Brazilian market, as measured by the MSCI Brazil Index. The underlying index attempts to gauge the performance of the Brazilian equities market by looking at 85% of the public market cap.

iShares MSCI Brazil's stock was trading in a well defined range with support at $71.69 and resistance at $75.34; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that iShares MSCI Brazil's stock is still near the broken support, traders will be focusing on $71.69 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in iShares MSCI Brazil can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $71.69. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position.

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