Small Cap Index Is Holding a Potentially Key Level: Chart Study

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The Russell 2000 ETF (IWM) had a strong move coming out of the vaccine news in November. It’s been consolidating for the last two months and now may be ready to continue higher.

The main thing jumping out of today’s chart is the 50-day moving average. IWM tested it in early March and has chopped on either side of it since. But now prices are trying to hold it as they squeeze into a tight range.

Second, notice the relationship with the 10-day moving average, which is rising up toward the 50-day moving average. Other times when it crossed above in May and October were followed by periods of strength.

For more, please click here to view the related idea and chart analysis on TradingView.

Russell 2000 Index, daily chart, with key patterns, courtesy of TradingView.
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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.