- Technical analysis shows that bulls have the upper hand.
- Convergence pattern providing potential long opportunities.
- Levels to watch out for if the support doesn’t hold.
The last time we looked at the Russell, it was falling toward a support level. This pattern is a converging technical pattern that we could look at taking positions from as it is a large range. You can see in the chart below, the support line we are looking at. What we would need to see from here is a bullish candlestick pattern or potential double bottom on a shorter time frame to take a long position. We will need to be patient as it could still be a bit of time before that happens but it could be potentially a good long trade.
There is also a divergence in the performance of the Russell compared to the other bigger indices. For example, RTY is up 3% for the year while NQ is up 28% for the year. So this begs the question if it is time for it to catch up now.
If this support level doesn’t hold, then we can look at $1725 holding, and if that doesn’t, it could lead to a free fall in RTY. The probabilities are in the bull’s favor now, however, and a bounce from here could lead to a rally all the way back up to $2000.