The $158 level was resistance for IWM starting in September 2018. That marked the top of the channel at least four times since then – until last month. It held $158 for almost three weeks before breaking out to a new 52-week high. Now IWM has pulled back to test the same price area.
Chart watchers may view the current level as a strong risk/reward, with plans to cut their losses on a break not far below $157. However there could be more room for movement to the upside because IWM is still about 13 percent below its all-time high from the summer of 2018.
Fundamentals are another potential consideration for IWM . Its of 16x is lower than larger-cap indexes like SPY (18x) and QQQ (23x). The fund may also give investors more exposure to potential merger activity because its member companies are smaller.