Introduction
The E-mini Russell 2000 Futures (RTY) continues to trade within a well-established bullish channel. The channel is not very strong, but nevertheless, the price is rallying over the long term. Lets take a closer look at the technicals.
Technical Analysis
Bullish Channel Formation
- Price Action: The RTY remains within a bullish ascending channel. (BULLISH)
- Recent Movement: RTY has been bullish over the long term, but traders should be patient when buying dips since the price action is not strongly bullish. Buying too high could mean sitting in losses for a while before the market rallies above the entry point.
Support and Resistance Levels
- Immediate Support:
- A horizontal pivot level around 2,305.2 (marked on the chart) is an important level that will determine the strength of the market regarding bulls vs bears.
- The 200-day SMA at 2,178.6 is a major support zone and aligns with the lower channel boundary.
- Resistance Levels:
- Immediate resistance at 2,398.6 (R1 pivot level) needs to be breached to signal renewed bullish momentum.
- The upper channel boundary near 2,540 is the next significant upside target, with a broader resistance zone stretching to 2,600.
Indicators Analysis
Relative Strength Index (RSI)
- The RSI is at 38.96, which is approaching oversold territory. This could lead to a short-term bounce if buyers step in at current levels.
- A break above the RSI midline (50) would confirm renewed bullish momentum.
Bullish Case: Continuation of Channel Uptrend
- A push above the pivot level at 2,305.2 could signal a retest of the upper channel boundary near 2,540.
- RSI bouncing off current levels could support renewed buying pressure.
Bearish Case: Potential Breakdown
- A break below 2,200 would expose the price to further downside, targeting the 200-day SMA at 2,178.6.
- Failure to hold the lower channel boundary would invalidate the bullish structure, with the next major support at 2,062.9 (S2 level).
Trade Ideas
Bullish Setup
- Entry: Long positions near 2,225 or 2,305.2 (pivot level).
- Targets:
- First target: 2,398.6 (R1 pivot).
- Second target: 2,540 (upper channel boundary).
- Stop-Loss: Below 2,156 to minimize risk.
Bearish Setup
- Entry: Short positions on a break below 2,156.
- Targets:
- First target: 2,062.
- Stop-Loss: Above 2,305 to limit risk.
