Russell 2000 Testing Important Support
- Posted by JC Parets
- on June 15th, 2011
The Russell 2000 is down to some pretty important support levels. This Small-Cap index is testing levels where buyers last showed up in March. That rally took the Russell2000 ($IWM) up 12% in about 6 weeks. The previous rally that started from these same levels in January took the Russell up almost 9% in less than a month. Now just because the buyers came with a vengeance in the past doesn’t mean they are going to show up this time. This is just a potential area that we want to watch a little closer to see if the buyers come. If they do, and we will know soon, it can set up for a nice trade with a pretty decent risk/reward.
The upward-sloping 200 day Moving average is right here also. These moving averages often act as a magnet for stocks. So again, just another reason to watch these levels a little closer. The problems start when these levels are breached. Broken Support here could lead to lower lows for the $IWM with next support levels around $74.00. I also would not be surprised to see a little consolidation at these current levels before a rally.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.blog comments powered by Disqus
J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He earned the Chartered Market Technician designation (CMT) and is a member of the Market Technicians Association. More
- Eagle Bay Capital Managed Assets
- They Hate Cotton Right Near Historic Support
- Financials Are Breaking Key Support On a Relative Basis
- The Problem That I See With Silver
- Words of Wisdom From Jim Rogers
- Watching Micro-caps to Gauge Risk-Appetite
- Here’s Why There Is A Trade In Corn
- Fox Business: S&P500 On Multiple Timeframes
- Which is the Best S&P Sector to be Overweight?
- Materials Look Attractive on a Relative Basis
Archive by Year