Last week, the Russell 2000 didn't move much given the lack of economic events and the Thanksgiving holidays in the final part of the week. The only two important reports were the US Jobless Claims and the US PMIs. The former beat expectations across the board, while the latter came basically in line with forecasts. This week we can expect more action with the holidays in the rear-view mirror and some key economic releases on the agenda.
Russell 2000 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Russell 2000 is testing the key resistance zone around the 1820 level. We can expect the sellers to pile in here with a defined risk above the resistance to target a drop into the upward trendline. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the next resistance around the 1920 level.
Russell 2000 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers will have a much better risk to reward setup at the trendline where we can also find the 61.8% Fibonacci retracement level and the daily red 21 moving average for confluence. A break below the trendline would invalidate the bullish setup and likely trigger a selloff with the sellers adding more to their positions.
Russell 2000 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the recent consolidation has formed a symmetrical triangle right below the key resistance, which was breached last Friday. The buyers piled in on the breakout and are now targeting a break above the key resistance. The odds are now more in favour of a continuation to the upside given the breakout of the triangle, but the buyers will need to break the key resistance to confirm it.
Upcoming Events
Tomorrow, we have the US Consumer Confidence report. On Thursday, we will see the latest US Jobless Claims figures and the US PCE report. On Friday, we conclude the week with the US ISM Manufacturing PMI which missed expectations by a big margin the last time.
