As global breadth continues to expand, capital keeps moving further out on the risk curve.
New areas are asserting leadership as market rotation runs its course, with one country after another joining in on the international bull market.
While value and cyclicals are what have most investors’ attention, the highest-risk, highest-beta corners of the market are also sharing in on the upside.
Today, we’re talking about Brazilian speculative growth stocks.
Like most countries, Brazil's economy is resource-intensive, and its equity market reflects that. Materials, energy, and financials do the heavy lifting.
But beneath the surface, there is a growing ecosystem of small-cap fintechs and speculative technology companies… and they’re being overlooked.
They are not large index weights. They are not what moves the headline averages. But with risk appetite building, the stage is set for them to be the leaders of the future.
Below is an equally weighted index of our favorite Brazilian speculative technology stocks. Notice the textbook trend reversal.
At the same time, MSCI Brazil is finally breaking out from a downtrend that has capped prices for nearly two decades.
As that structural barrier gives way, participation is broadening, and these higher-beta tech names represent some of the top opportunities.
Now let’s talk about what we’re buying.
This first trade setup is a large-cap, but the rest are mid- and small-caps. Here’s the $88B digital banking giant, Nu Holdings $NU:
NU is currently resolving a continuation pattern at the 161.8% extension level, making this a logical place to define risk and get– or stay long this leader.
