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- 📈 Resilient Trader Trade Idea: The Brazil Bull Market is Just Getting Started (EWZ)
📈 Resilient Trader Trade Idea: The Brazil Bull Market is Just Getting Started (EWZ)
Resilient Trader
October 15, 2025
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Resilient Trader is where smart traders come for vetted ideas.
Every week, we cut through the noise and surface opportunities that institutions are already eyeing - but with strategies tailored for retail traders. Today’s setup? An emerging market ETF that looks poised for a major breakout as global macro trends align in its favor.
We’ll cover:
Why EWZ (iShares MSCI Brazil ETF) is a strong buy at current levels.
How to take advantage with a defined-risk options trade for leveraged upside.
🧭 Trade Thesis: EWZ is a Macro Trade on Commodities, a Weaker Dollar, and Deep Value
On the surface, EWZ doesn’t exactly look like a long-term star. Over the last 5 years, it’s basically gone nowhere in price terms. But we’re not talking about the past, we’re talking about a macro turning point.
Here’s why $EWZ ( ▲ 0.81% ) could be a strong investment going forward even though its backward-looking chart looks meh:
🇧🇷 Brazil is a commodity powerhouse: It’s a classic “late-cycle rotation” winner when capital flows from US tech to real assets and emerging markets.
⛏️ Clean Exposure to Commodities + FX Tailwind: Top holdings are dominated by commodity giants like Vale (iron ore, copper) and Petrobras (oil).
💸 Dirt Cheap Valuations: Trading at a single-digit P/E ratio while paying a hefty dividend.
📈 Local Market Breakout: Brazil’s local stock market (IBOV) is already hitting all-time highs, but EWZ hasn’t caught up yet.
📊 The Fundamentals: Strong and Improving
Let’s break down the numbers:
💰 YTD Performance: +29.35% (as of Oct 10, 2025)
📦 Top Holdings: Vale (9.4%), Petrobras (11.2% combined), Itau Unibanco (8.8%), and Nu Holdings (12.3%)
🧮 Dividend Yield: 5.19% (12-month trailing)
💵 Net Assets: $5.56 Billion
📐 Valuation: A Generational Bargain
EWZ is priced for a crisis, not a recovery:
⚖️ P/E Ratio: 9.97x (compared to the S&P 500 at 22x)
🏷️ P/B Ratio: 1.62
💎 Deep Value: You are buying world-class resource companies at a fraction of the price of their developed market peers.
🧭 Technicals Agree: The Chart is Coiling for a Breakout
✅ Above key moving averages: Trading above its 50, 100, and 200-day moving averages, a sign of a healthy long-term uptrend.
✅ Oversold Bounce: The 14-day Stochastic is at 10.13%, indicating the recent pullback is overdone and a bounce is likely.
✅ Current price: $29.20
🎯 Targets: $33 (initial), $35 (intermediate)
💥 Trade of the Week: Defined-Risk Call Option
We’re combining a stock purchase with a defined-risk options trade for leveraged upside.
🟢 Trade Setup
Buy EWZ at $29.20
🛡️ Options Play
Buy the June 18th, 2026 $31 Calls for $1.79
Strike: $31
Premium: $1.79
Delta: 41
Expiration: 248 days
📈 Risk-Reward
Max Risk: $179 per contract
Breakeven: $32.79
Risk-Reward Ratio: Excellent, with potential for 100%+ returns if EWZ breaks out.
🛑 Risk Management Tip
Set a stop-loss on your stock position at $27.50 to protect against a breakdown below the 100-day moving average.
🚀 Catalysts on the Horizon
Keep your eyes on:
Fed Easing: A weaker US dollar is a major tailwind for Brazilian assets.
Commodity Prices: Continued strength in iron ore and copper will boost earnings for Vale and other miners.
Capital Rotation: A shift from overvalued US tech into cheap emerging markets.
Technical Breakout: A move above $31.50 could trigger accelerated buying.
🧠 Final Thoughts
EWZ is a classic macro trade. The bull case isn’t “steady growth for 20 years,” it’s: “We’re at the start of a commodity + EM bull cycle, and Brazil is one of the cleanest ways to express that with leverage and yield.”
✅ Buy EWZ at $29.20
💸 Buy the June 18th, 2026 $31 Calls for $1.79
We'll be watching this one closely.
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Disclaimer: This publication is for educational purposes only and is not investment advice. Options involve risk and are not suitable for all investors. Do your own research and consider consulting a licensed financial professional.
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