Technical Analysis

Frightening evening star pattern on RTY futures

Weekly Chart

Starting with the weekly chart, the E-Mini Russell 2000 Index Futures are oscillating within a defined trading range between approximately $1964.5 and $2000, with the ATH at $2463.7. The index is currently testing the upper boundary of this range. A convincing breakout above the range could signal a strong bullish sentiment, potentially targeting new highs. If the range upper boundary holds and we see a rejection, expect a possible move back towards the middle or even the lower end of the range. The weekly candlestick pattern closed last week as a bearish evening star pattern. This is something the bulls need to be watching very closely because it usually signals a top in the market.

weekly RTY chart showng RSI and a trading range as well as a evening star pattern

Levels to Watch:

  • Breakout Trade: A sustained break above $2000 could justify a long trade, with the ATH as the potential target.
  • Range Rejection Trade: A failure to break higher could lead to a short opportunity, especially if price trades below the evening star pattern, aiming for the mid-range or lower boundary as targets.

Daily Chart

The daily chart adds more detail, particularly with the placement of the Simple Moving Averages (SMAs). The index is trading between the SMA 50 at 1893.8 and the SMA 100 at 1842.6, showing a slight uptrend as the 50 is above the 100. Bulls need to see price stay above the 50 SMA in order to maintain the bullish sentiment.

Trade Scenarios:

  • Bearish Reversal: A drop below the SMA 50 might indicate weakness, with a potential short scalp position targeting the SMA 100.
daily chart RTY with 50 and 100 sma and volume profile indicator

15-Minute Chart

On the 15-minute chart, the index shows a short-term ascending triangle pattern. The pivot point at 1977.8 will be crucial for short-term trades because bulls must see a close above this to see price move higher.

  • Bullish Break: A move above the immediate resistance, which is the pivot point could lead to a move to R1.
  • Failure to Break: If the price fails to break through R1, a short-term retracement to the support level (S1 at 1952.3) might occur.

The content in this article is in no way a recommendation to buy or sell. Remember to maintain proper risk management. Set stop losses according to your risk tolerance, and be ready to adjust your trades as new market data comes in.