Introduction
In our previous analysis on January 8, 2025, the expectation was for RTY futures to hold within the established bullish channel, with the support levels acting as a springboard for further upside. Since then, price action has respected the lower boundary of the channel, and the recent bounce confirms the bullish structure remains intact. The next target now shifts toward the all-time high (ATH) as market sentiment improves.
Technical analysis overview
Bullish Channel Holding Firm
- The price continues to trade within the long-term ascending channel, with multiple successful retests of the lower boundary around the 2,185 – 2,200 region.
- The recent rally has brought RTY back above the 50-day SMA (2,333.1), reinforcing short-term bullish sentiment.
Support and resistance levels
Resistance Levels (Upside Targets):
2,400 – Psychological level and minor resistance from previous consolidation.
2,460 – 2,480 (ATH zone) – The next major upside target if bullish momentum persists. A break above this level could trigger a continuation of the broader uptrend.
Support levels:
2,300 – 2,310 – Previous resistance turned support, aligning with the 50-day SMA.
2,185 – 2,200 – The lower boundary of the bullish channel and confluence with the 200-day SMA.
Market sentiment and external factors
- U.S. markets are rallying post-Trump inauguration, with investors pricing in expectations of tax cuts, deregulation, and increased fiscal spending.
- Broader market strength in indices such as the S&P 500 and Nasdaq is providing tailwinds for small-cap stocks, further supporting RTY’s bullish outlook.
- Positive risk sentiment and stable economic data continue to favor equities, keeping the bullish case intact.
Scenarios to watch
Bullish Case (Higher Probability – 70%):
- A sustained move above 2,333 could accelerate gains toward the next resistance at 2,400, followed by a potential test of the 2,460 – 2,480 ATH zone.
- Strong momentum and favorable macroeconomic conditions could push RTY to new highs in the coming weeks.
Bearish Case (Lower Probability – 30%):
- A failure to hold above 2,300 could result in a pullback to the 2,185 – 2,200 support zone, where the lower trendline and 200-day SMA converge.
- Breaking below this level would invalidate the bullish structure and expose downside risks toward 2,100.
Trade Ideas
Bullish Setup:
- Entry: Long positions on a confirmed hold above 2,333, targeting 2,400 and eventually the ATH zone (2,460 – 2,480).
- Stop-Loss: Below 2,300 to limit downside risk.
Bearish Setup:
- Entry: Short positions if price rejects 2,400, targeting a pullback to 2,300 – 2,310.
- Stop-Loss: Above 2,420 to minimize risk.
