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LivestreamMenuBrazil’s stock market stands out as a tactical trading opportunity in a world where commodity prices are stabilizing. The iShares MSCI Brazil ETF (EWZ) has a constructive technical setup that suggests its recent corrective phase is maturing. And while the rebound in crude oil prices is a potential tailwind, the investment case extends beyond energy, with large financial stocks also showing improving technical chart action. In the second quarter, EWZ saw a significant correction unfold within the context of its long-term uptrend. However, stabilization over the past few weeks has allowed for an oversold upturn in the weekly stochastics and consecutive weeks of improving momentum, which increases the likelihood that EWZ has established a low. Similar oversold upturns in the past have marked important lows, and the current signal supports upside follow-through over the next several weeks. Despite its correction, EWZ remains in a cyclical bull trend as defined by the weekly cloud model, denoted by the shaded area on the chart, which provides support for the uptrend aligned with former resistance near $34. The cloud rises into October, providing a bullish outlook for the third quarter. Next major resistance is near $42, which goes back to the 2021 peak. The daily chart of EWZ provides added confidence that the correction in Brazilian equities has matured. Friday’s gap higher allowed the ETF to reclaim its 200-day moving average (MA) and short-term momentum has improved notably. The daily stochastics point higher in overbought territory, which differs from previous failed bounces. EWZ is testing resistance from the 50-day MA and daily cloud model, near $36, which looks surmountable. Increased energy exposure is one reason why Brazil looks attractive, and Petroleo Brasileiro S.A. (ADR: PBR is an important part of that theme as the largest publicly-traded company in Brazil. We featured PBR as a long idea in last week’s Fairlead Strategies Idea Generator , and the chart continues to support that view. PBR has recovered off a deep oversold condition with notable improvement in short-term momentum. A breakout above the 50-day MA would give PBR room to reach resistance near $19.80 from a Fibonacci retracement level. Support is well defined near $16.00. ITUB , an ADR representing Brazil’s largest bank, is also emerging from a correction. After a brief shakeout below the 200-day moving average, ITUB has seen a swift recovery, with last Friday’s gap higher allowing it to pull away from its 50-day MA. Like EWZ, ITUB has seen meaningful improvement in its weekly stochastics and MACD, suggesting the rally has staying power. ITUB has trading range resistance near $9.60, while a confluence of support is near $8.00. These charts suggest Brazil has established a corrective low, with improving momentum following deeply oversold conditions. A rebound in crude oil and other commodities should provide an additional tailwind, though strength appears broad enough to support other sectors as well. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: None All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. 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