Russell 2000 trading idea: towards a return below 1700 points

The Russell 2000 could fall back to its recent short-term low

In terms of technical analysis, the underlying trend of the Russell 2000 has been unquestionably bearish since the beginning of the year, the index evolving under a bearish slant and below its 200-session moving average.

After a short rebound in the last two weeks, the outlook is once again bearish in the short term since the Russell just formed a bearish engulfing pattern yesterday, below the long-term bearish slant.

The Russell 2000 could be about to start a new leg down, at least until the recent low at around 1640 points, before possibly attempting another bounce if the economic outlook improves or if inflation seems to be slowing down faster than expected.

The new short-term bearish outlook would theoretically be invalidated in the event of a bounce above Monday’s high at around 1845 points. In this case, a continuation of the rebound up to 1900 points would be expected.

Entry: Sale below 1820 points

Stop: 1850 points

Objective: 1640 points

Risk/return ratio: 6

Follow the US Russ 2000 price evolution with IG.

Leave a Comment