Russell 2000 Technical Analysis – New all-time highs incoming?

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Russell 2000 Technical Analysis - New all-time highs incoming?

Fundamental
        Overview

The Russell 2000 has been
    outperforming the other major indices recently as there's much more value compared
    to the S&P 500 or the Nasdaq. The market is now looking forward to the next
    year with Trump's policies being a positive driver for growth.

The only bearish reason we
    had for the stock market was the rise in Treasury yields. That's generally
    bearish only when the Fed is tightening policy though not when yields rise on
    positive growth expectations.

Right now, the Fed's
    reaction function is that a strong economy would warrant an earlier pause in
    the easing cycle and not a tightening. That should still be supportive for the
    stock market in the bigger picture.

If the Fed's reaction
    function were to change to a potential tightening, then that will likely trigger
    a big correction in the stock market on expected economic slowdown. For now,
    the pullbacks look as something healthy and opportunities to buy the dips.

Russell 2000
        Technical Analysis - Daily Timeframe

On the daily chart, we can
    see that the Russell 2000 is consolidating around the all-time highs. The
    buyers will want to see the price breaking higher to increase the bullish bets
    into new highs. The sellers, on the other hand, will keep on piling in around
    these levels to position for a drop back into the 2290 support.

Russell 2000 Technical
        Analysis - 4 hour Timeframe

On the 4 hour chart, we can
    see that we have a rangebound price action between the 2418 support and the
    2461 resistance. The market participants will likely keep on playing the range
    until we get a breakout on either side.

Russell 2000 Technical
        Analysis - 1 hour Timeframe

On the 1 hour chart, we can
    see that we have an upward trendline
    defining the bullish momentum on this timeframe. The buyers will likely lean on
    it to position for a break into new highs, while the sellers will look for a
    break lower to target a pullback into the 2418 support. The red lines define
    the average daily range for today.

                This article was written by Giuseppe Dellamotta at www.forexlive.com.

Source: Russell 2000 Technical Analysis - New all-time highs incoming?

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