Russell 2000 Technical Analysis | Forexlive

The Russell 2000 this week held into last week’s
gains as the lack of economic releases and the Thanksgiving Day holiday
contributed to a steady risk sentiment. On the data front, the US Jobless Claims on
Wednesday beat expectations across the board, which is a good thing for the
market at the moment given some recession fears, although one beat after a
series of misses doesn’t change the trend. Today, all eyes will be on the US
PMIs, but given the early closure for Black Friday we might not see much
movement, unless the data surprises.

Russell 2000 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Russell
2000 rejected the key resistance zone
around the 1820 level and started to consolidate just beneath it. We can expect
the sellers to pile in around these levels to position for a pullback into the
upward trendline. The
buyers, on the other hand, should lean on the trendline and the red 21 moving average to
target a break above the key resistance.

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
for confluence. A break
below the trendline would invalidate the bullish setup and likely trigger a
selloff as the bearish momentum will likely increase with the buyers folding
and the sellers increasing their bets.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
recent price action has formed what looks like a symmetrical
triangle right at the key resistance zone. The price can break
on either side of the pattern but what follows next is generally a sustained
move in the direction of the breakout. In this case, more aggressive buyers
might want to pile in already on an upside breakout to target a break above the
key resistance. The sellers, on the other hand, will want to see the price
breaking lower as it would increase even more the chances for a pullback into
the trendline.