Bullish on Brazilian Banks (w/ Guy Cerundolo) | Stock Trade Ideas

TL;DR

Guy Cerundolo of Cerundolo Investment Research suggests buying the iShares MSCI Brazil ETF (EWZ) and specific stocks like Itau and Banco Bradesco for bullish trading opportunities in Brazil's market.

Transcript

JUSTINE UNDERHILL: Welcome to Real Vision's Trade Ideas. Today we're sitting down with Guy Cerundolo of Cerundolo Investment Research. It is great to have you back. GUY CERUNDOLO: Great to be back. Thank you. JUSTINE UNDERHILL: So, could you take us through what it is you're looking at right now in the markets? GUY CERUNDOLO: Sure. Brazil. JUSTINE ... Read More

Key Insights

• 🙃 Brazil's market has shown a significant breakout from a long-term base, indicating potential upside opportunities.
• 🤑 Cerundolo's proprietary model combines long-term patterns, money flow analysis, and price action to identify trading signals.
• 🙃 The EWZ ETF and specific stocks like Itau and Banco Bradesco show positive indicators and have potential for further upside.
• 📈 The use of log scale charts allows for better analysis of long-term trends and percentage moves.
• 🧑‍🏭 Cerundolo's focus on technical analysis means political factors are not considered, as he measures the market's demand and supply dynamics.

Questions & Answers

Q: What is the basis for Guy Cerundolo's bullish view on Brazil's market?

Cerundolo sees Brazil's market emerging from a long-term base and showing strong uptrend momentum. He also uses his proprietary model to analyze long-term trends, money flow units, and price action.

Q: How does Cerundolo evaluate the EWZ ETF and individual stocks in Brazil's market?

Cerundolo ranks the components of the EWZ ETF using a multi-factor model that considers their relative performance, price trend, and momentum. For individual stocks like Itau and Banco Bradesco, he analyzes regression trend channels and moving averages.

Q: What are the suggested entry points and upside targets for the recommended trades?

Cerundolo suggests buying the EWZ ETF at current levels, with an initial target at $54 and a longer-term target at $66. For Itau, the initial target is $10.50 and the longer-term target is $12. For Banco Bradesco, the initial target is $11.75 and the longer-term target is $14.

Q: Is there a stop-loss level for these trades?

Cerundolo suggests that a break of the 2016 low, around $37-$38 for the EWZ ETF, would negate the bullish call. For Itau and Banco Bradesco, he recommends using the 200-day moving average as a stop-loss level.

Summary & Key Takeaways

• Brazil's market has emerged from a long-term base and is currently in a strong uptrend, presenting favorable trading opportunities.

• Cerundolo uses a proprietary model that looks at long-term trends, money flow units, and price action to gauge supply and demand dynamics.

• The EWZ ETF and stocks like Itau and Banco Bradesco show positive indicators and have potential upside targets.