By Doug Busch
With geopolitical tensions flaring in the Middle East over the weekend, investors may want to pay attention to markets closer to home.
Last week, I ran technical analysis on how crude might respond to an escalation in Iran. So far the market has played out as expected. That said, oil price spikes rarely sustain themselves. I recommend that anyone who took that trade consider reducing or exiting exposure after the roughly 10% advance.
Energy importing countries may be particularly vulnerable to sustained conflict, but it also makes sense to look at countries least exposed to disruptions in regional oil supply. Canada comes to mind, as do major producers to the south, including Brazil and Mexico. From a technical perspective, these markets were already showing relative strength before the weekend's events, and that outperformance is worth respecting as investors assess risk and opportunity.
The technical setup for the benchmark ETFs tracking Brazil and Mexico is more bullish than it is for Canada's. Our attention will therefore focus on iShares MSCI Brazil ETF and iShares MSCI Mexico ETF.
The Brazilian index, heavily weighted in materials, financials, and energy, is already up 20% year to date and offers a 4% dividend yield, a rare combination of price appreciation and income. Its top holding, Vale, has doubled off the April lows and hasn't posted consecutive weekly losses since last July.
Looking at the weekly chart, the fund ended a nine-week winning streak last week, falling 1.6%. It now trades 4% off its 52-week high and has outperformed the S&P 500 since the start of 2025, as seen on the ratio chart. Volume has been strong in 2026, highlighted by the week ending Jan. 23, when it jumped over 10%, breaking above a cup with handle pivot at $34.90, its best weekly return since October 2022. A bullish golden cross occurred a few weeks ago when the 50-week moving average crossed above the 200-week simple moving average. While EWZ has hit resistance at the $40 level, this should be temporary. A pullback near $37 would be an attractive entry, with potential to reach $48 by year-end, a 30% gain from current prices. Remain bullish above $35. EWZ was trading around $38 Monday.
The Mexico ETF has also been a standout in the region, up 58% over the past year, and offering a 3% dividend yield. The EWW ETF trades just 2% below its all-time high from February when it broke out above a 13-year base (not a typo).
Looking at the stock's one-year daily chart, one can see it has outperformed our domestic benchmark. One must also admire how it has ridden its 21-day exponential moving average, a key momentum gauge since last April. It has formed a bull flag. One can enter here and add to above an $81.50 pivot, which could see a move toward the very round par number by year-end, representing a gain of 21% from today's prices. Respect that weekly closes have been very tight, with the last three all closing within just .29 of each other, and breakouts from this three week tight pattern tend to be very powerful, especially near all time highs. Remain bullish above $76. EWW was trading around $79 Monday.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 02, 2026 11:40 ET (16:40 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
