Monday, August 22, 2016

Post Olympics what to expect from Brazil!

Olympic Games Rio 2016 comes to an end with US, UK, China at the top rank of the table and India managing to get 2 medals – definitely a proud moment for the country.

It is said and believed that Olympics results into lot of economic activity around the country and helps in stimulating country’s economic growth led by tourism and other technological development to manage the entire event.

Let us try to look at Brazilian equity market and see if the event indeed resulted into a stand apart movement on stock market or the overall movement has continued as per the ongoing trend for many years.

Below chart of Bovespa (Brazil) was published in our monthly research report on 6th August 2016. This clearly represents that irrespective of the event the stock market has continued to move within the blue channel and prices reversed on upside in early 2016 which coincided with lows formed in a few of the Emerging equity markets like India.

So was it really Olympics that helped Brazilian stock market in 2016? It seems more like a coincidence to me!

Figure 5: Bovespa (Brazil) weekly chart

Below is part of the research from “The Financial Waves Monthly update”

Brazil stock market index - BOVESPA  shows that after forming a top in early 2008 this index has still failed to cross above that highs and has corrected substantially. Later after topping out in late 2010, this index has continued to move in downward sloping blue channel and has now arrived near the resistance. It will be crucial to see if the same can be broken this time or prices again reverse back on downside. Brazil had not been preferred destination and the correction that started in 2008 is still ongoing.

Out of the BRIC nations it seems only Indian markets have lived upto the expectations to some extent post 2008 and rest other nations have failed miserably. This is another reason why we think the ………..

Olympic Games Rio 2016 now comes to an end. Let us see if the blue channel that has worked so well for Bovespa continues to act as resistance irrespective of the event!

“The Financial Waves short term update” and “The Financial Waves Monthly update” provides indepth research using technical analysis concepts like Elliott wave, Time cycle analysis, Indicators – RSI, Channels and lot more. Get access to these reports along with detailed Elliott wave charts and analysis on Nifty, Bank Nifty, stocks and Global markets. Visit Pricing page for subscription options or Contact US on or on +91 22 28831358 / +91 9920422202 for any queries.

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