Monday, February 22, 2016 8:50 AM EDT
Written by Rob Tovell
The Russell 2000 is showing signs of strength.
The most important facts on the chart of the Russell 2000 are the swing lows, one back in January and another one two weeks ago. The latter was a swing low which did not get any follow through. Support two weeks ago was broken but recovered immediately. That is a powerful signal. In other words, the buying that appeared at the two swing lows is strong.
Moreover, the 10 day moving average is transitioning from a downtrend to a flattening pattern.
Where is the Russell 2000 going from here? Probably, as of here, a pullback to the 990 level is likely, but as of there a strong rise is in the cards towards the longer term moving average (60 day moving average) around 1055 points.
Given the recent downtrend, traders should be careful and not get too excited too fast, so the first upside target should not be set too high.
Watch the video for a detailed analysis of the Russell 2000, and the bullish signs since last week.
Video Length: 00:05:18
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