Bovespa (Brazil): Elliott Wave Analysis

The Bovespa Index (Portuguese: Índice Bovespa) is an index of about 50 stocks that are traded on the São Paulo Stock, Mercantile & Futures Exchange (Bovespa: BOlsa deValores do Estado de São PAulo).

The index is composed by a theoretical portfolio with the stocks that accounted for 80% of the volume traded in the last 12 months and that were traded at least on 80% of the trading days. It's revised quarterly, in order to keep its representativeness of the volume traded and in average the components of Ibovespa represent 70% of the all the stock value traded.

IBOVESPA is an accumulation index. Its index number represents the present value of a portfolio begun on 2 January 1968, with a starting value of 100 and taking into account share price increases plus the reinvestment of all dividends, subscription rights and bonus stocks received.

As per Elliott Wave theory, prices after making the high of 53393 levels in the month of April 2014, it then started moving down in a corrective fashion. Seeing the structure of wave a which started from 44968 and completed at 53393, the current seems to be wave b which is also corrective. In wave b prices have completed wave a and wave b in flat pattern and wave c on the downside is pending which can start soon.

In short, Bovespa can move down from current levels, testing the previous pivot lows which is around 49800-49500 levels.


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