The Russell 2000 had a sharp rally in late 2020 and early 2021. Now it may be setting up for a similar move.
Notice the triangle forming on the small cap index recently, which is interesting for two reasons.
First, it shows that prices are squeezing into a range. Ranges can be followed by breakouts.
Second, it shows that RUT made a higher low in September versus August. This is noteworthy because the S&P 500, Nasdaq-100 and Dow Jones Industrial Average all made lower lows this month. Higher lows and modest drops amid periods of volatility are signs of accumulation and relative strength.
Speaking of relative strength, this chart shows how RUT’s relative strength has improved since mid-September. (See our Smart Relative Strength script.)
Next, the small-cap index has been holding support at its rising 200-day simple moving average (SMA).
Finally, the macro backdrop may favor RUT as interest rates rise and investors pivot back toward cyclical reopening stocks. Traders may want to keep a close eye on this chart for a potential breakout if the broader market stabilizes.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Notice the triangle forming on the small cap index recently, which is interesting for two reasons.
First, it shows that prices are squeezing into a range. Ranges can be followed by breakouts.
Second, it shows that RUT made a higher low in September versus August. This is noteworthy because the S&P 500, Nasdaq-100 and Dow Jones Industrial Average all made lower lows this month. Higher lows and modest drops amid periods of volatility are signs of accumulation and relative strength.
Speaking of relative strength, this chart shows how RUT’s relative strength has improved since mid-September. (See our Smart Relative Strength script.)
Next, the small-cap index has been holding support at its rising 200-day simple moving average (SMA).
Finally, the macro backdrop may favor RUT as interest rates rise and investors pivot back toward cyclical reopening stocks. Traders may want to keep a close eye on this chart for a potential breakout if the broader market stabilizes.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
