Technical Analysis

Russell 2000 futures (RTY) blast off as bulls take charge

  • RTY broke above $1,820, entering low-volume nodes up to $1,873.
  • Low-volume nodes lack liquidity, leading to quick price breakthroughs.
  • Caution advised as RSI approaches overbought levels and recent green candles appear on the daily chart.
  • Waiting for pullbacks and using lower time frames with a moving average can help identify entry points.

RTY shoot through low volume nodes

Bulls have completely taken control of RTY as it has rocketed 7% in four days. One of these reasons is that as RTY broke above $1,820, it entered into low-volume nodes all the way up to $1,873. Low-volume nodes have little liquidity, meaning price tends to break through them quickly compared to high-volume nodes with high liquidity. See the chart below for a perfect example of this:

RTY Daily chart showing volume profile
RTY Daily Chart

Moving forward

RTY has surged recently, and as we already know, it is never a good idea to chase the market. As the RSI approaches overbought, bulls must be aware of taking longs, especially with the recent green candles we see on the daily chart. With that said, long-term targets are higher, first being $1,930 and then $1,995, but as we already mentioned, we should not chase the market. It is a better idea to wait on pullbacks before entering into the market. We can do this by lowering the time frame and applying a moving average, and taking long as the price returns to it.