After forming a bearish, six week base at the lows, iShares MSCI Brazil ($EWZ) is poised to resume its downtrend soon, especially if the price action is unable to push through the declining 50-day moving average.

Wednesday's rally pierced through the 50-day moving average, but the price reversed to close in the bottom third of the day's range on heavy volume. The bearish reversal candle may have produced the first lower high within the base.

On the chart below, notice that the price action also ran into resistance of the broken uptrend line in red. Given the action over the past few weeks, it is clear that $EWZ has been unable to hold above the $41 level for more than a few hours:



$EWZ's bearish reversal candle now offers a low-risk entry point on the short side. However, rather than selling short $EWZ, we are stalking the inversely correlated iShares MSCI Brazil ($BZQ) for potential buy entry.

Regular subscribers of our nightly ETF & stock pick letter should note our exact entry, target, and stop prices for this setup on the "Watchlist" section of today's report. Officially, the trade will be in $BZQ, but for those who are able, we recommend short selling $EWZ instead (trade details can be found in the ETF notes section).

Looking at the daily chart of the Nasdaq 100 ETF ($QQQ) below, it now appears as though the price action could chop around for a few more weeks, in order to digest the last V-shaped rally off the lows:



The good news, however, is that rising 50-day moving average is already near the prior high, so $QQQ wont have to dip much lower before finding a strong support level.

Top stocks in the Nasdaq 100 such as $GOOG, $PCLN, and $FB could also pull back in to the 50-day MA over the next two weeks.

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.