By Doug Busch

Strength continues to build beneath the surface in South American equities, with the region quietly emerging as a standout performer in the global market.

While much of the focus remains on U.S. mega caps and developed markets, capital is increasingly rotating toward Latin American names, where strong relative strength and commodity-linked tailwinds are driving renewed interest.

From financials to energy and infrastructure, a growing list of South American stocks is not only outperforming their regional peers, but beginning to challenge leadership on a global basis.

A notable driver behind this strength has been renewed capital inflows into the region, as the U.S. increasingly turns its focus inward and toward its own hemisphere. This shift is showing up in price action, with improving liquidity and foreign investment flows beginning to reinforce the region's leadership across multiple sectors.

The Global X MSCI Argentina ETF is trading near all-time highs. There was a 27% weekly gain the last week of October for the ARGT after the election that it has been digesting, and it is now breaking out to the upside. Price action has remained constructive since, with the ETF now pressing toward the round $100 level.

Meanwhile, the Global X MSCI Colombia ETF has come out of the gate strong in 2026, posting three consecutive weekly gains between 6--7% and suffering just two down sessions all year, underscoring the persistence of demand across the region.

Brazil and Mexico, two of the region's heavyweights, are enjoying powerful runs of their own. The iShares MSCI Brazil ETF is up 50% over the past year while offering a dividend yield north of 4%, adding income to the performance story. The iShares MSCI Mexico ETF, up roughly 10% year to date, also deserves recognition for its steady advance. Beyond the headlines, lesser-followed vehicles such as the iShares MSCI Peru ETF and iShares MSCI Chile ETF have delivered eye-catching gains of 118% and 72%, respectively, over the past year. With momentum broadening across the region, let's take a look at three names poised for continued strength.

Energy has long dominated the conversation in Latin America, given the region's heavy commodity weighting, and Vista Energy has been acting well within that theme. The stock sits just 7% below its most recent 52-week high, and while it remains down roughly 7% over the past year, momentum has shifted firmly in its favor, with shares advancing 33% over the last three months.

The daily chart continues to act well relative to the broader energy space, as seen in the ratio versus the Energy Select Sector SPDR, which has been trending higher since the start of the fourth quarter. The 200-day simple moving average has begun to slope higher since the first half of 2025, suggesting the long-term trend is strengthening.

On Sept. 8, the stock formed a double bottom with the April lows, marking the start of a strong uptrend. That name resolved higher on Jan. 13, with a decisive breakout above the very round $50 level, clearing a $49.79 pivot, and price action has remained constructive since. Notice the pattern started after a 10-point pullback following a bearish dark cloud cover candle on Dec. 4, helping reset momentum before the next advance. I believe the stock can work its way toward $77 by year-end, representing approximately 45% upside from current levels. Remain bullish above $48.

Vistra Energy was trading around $54 Monday.

The banking space across the region has been a standout, led by names such as Grupo Cibest of Colombia, which is up an impressive 132% over the past year. Brazil offers its own best-of-breed exposure through Itaú Unibanco Holding, already up 16% in 2026 while paying a dividend yield near 10%. Momentum accelerated further last week, with the stock surging 12%, marking its first double-digit weekly gain in nearly three years.

The daily chart of Itaú Unibanco Holding continues to show firm relative strength on the ratio chart, versus the Financial Select Sector SPDR trending higher over the past year. The 21-day exponential moving average, along with the 50- and 200-day simple moving averages, are all sloping higher, underscoring strong and improving momentum.

Last week, the stock broke out decisively above a cup base pivot at $7.99 on Jan. 22, advancing 4.5% on roughly double its average daily volume. Ideally, a pullback toward the $8 level would offer a more attractive entry, and from there the stock appears capable of working toward the very round $10 mark in the second quarter, representing approximately 21% upside from current levels. Remain bullish above $7.

Itau Unibanco Holding was trading around $8.35 Monday.

The industrial space in the U.S. has remained firm, and a Mexican airport-related name has recently caught my attention. Grupo Aeroportuario del Centro Norte is up 48% over the past year while offering a dividend yield north of 4%. Price action has been consistently constructive, with the stock recording no back-to-back weekly losses since the start of November.

The daily chart continues to show solid relative strength versus the Industrial Select Sector SPDR over the past year. A powerful bullish engulfing candle on April 9 recorded a 7% surge. From that signal, the stock rallied 66% into its July 14 peak and has been constructively digesting those gains ever since. This week, price is breaking out above a long, seven-month cup base pivot at $116.36, and longer patterns historically carry a high probability of success. Notably, today's breakout is negating prior dubious candles with several dojis and shooting stars from July, as well as a bearish engulfing candle from Sept. 15. I believe the stock can work its way toward $160 by year end, representing approximately 36% upside from current levels. Remain bullish above $108.

Grupo Aeroportuario del Centro Norte SAB de CV was trading around $117.50 Monday.

Write to Doug Busch at douglas.busch@barrons.com

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January 26, 2026 16:15 ET (21:15 GMT)

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