- This article will give some insights on the technical analysis of the Russell 2000, as well as a deeper look at the important indicators that traders and investors should keep an eye on. On weekly and daily time frames, resistance and support levels, the 20 exponential moving average (EMA), trend lines, candlestick patterns, and VWAP (aVolume-Weighted Average Price) are all analyzed.
- On the weekly chart, a bull flag has been spotted, and it is possible that this level of support will be retested in the near future. Because so many traders are keeping a close eye on it, the 20-day exponential moving average (EMA), which currently sits at 1857.6, is also an essential indicator to track. Be on the lookout for a potentially negative trend if two weekly candles close below the 20-period exponential moving average.
- On the daily chart, there are many supports in the short term. These include the two-week low at 1883.1 and the 1900 round number, which is a favorite area for traders to set their stops. Both of these levels can be seen in the immediate vicinity. It is also important to take note of the trend line; although it is not always a fundamental component, several algorithms do monitor it anyway. If the daily close goes below 1900, the Bulls might find themselves in a precarious situation, as the Bears could start to gain an edge.
- The analysis also mentions a revent candlestick pattern. When looking at the weekly timeframe as shown in the video above, consolidation is indicated when an inner bar is shown on a lower time frame. This is because the inner bar's body as well as its low and high are contained within the bar that came before it. The fact that the closing price did not fall below the opening price of the preceding candle is positive information for the bulls, especially after many of them got kinda scared that we are going to crash down, following the bearish price action on Wed and Thurs, 1st and 2nd of Feb.
- When trading the Russell 2000, keeping an eye on these technical indicators can help you obtain a better understanding of the market trend and make decisions that are more informed. Pay close attention to the 20-period exponential moving average, trend lines, and candlestick patterns, in addition to the bull flag and important support levels. The closest and key price level to watch is the 1900 round number. Bulls want to see that a weekly candle does not close below it. Those that seek earlier information (but at a higher risk of being faked out) will want to see that a daily candle does not close below 1900.
- Trade the Russell at your own risk and do return to ForexLive.com for additional updates and views.
BTW, here are 10 interesting facts that you may or may have not known about the famous Russell 2000:
- The Russell 2000 Index tracks the financial results of 2,000 of the largest U.S. small and mid-cap corporations.
- Originally developed by Frank Russell Company in 1984, the index is currently managed by FTSE Russell.
- The Russell 2000 is frequently used by investors and financial experts as a measurement of small-cap performance.
- The index is a decent depiction of the small-cap portion of the U.S. stock market since it is made up of businesses with market capitalizations between $300 million and $2 billion.
- The Russell 2000 is often regarded as a proxy for small-cap market performance, economic growth, and investor mood.
- The Russell 2000 includes varied organizations from many different industries, such as IT, healthcare, consumer products, and finance.
- Because it comprises smaller and less well-known firms, the Russell 2000 is seen as a more representative indicator of the U.S. stock market than the more widely followed S&P 500.
- To maintain its relevance as a barometer of the small-cap market, the Russell 2000 undergoes yearly reconstitution.
- Larger, more established firms are less susceptible to economic and market shifts than the index, which is notoriously volatile.
- Interest rates, economic growth, and political events are just a few of the outside variables that might affect the Russell 2000's performance. Thus, both retail and institutional investors use it as a resource when making financial choices.
