🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Russell 2000 Reverses off Resistance; Nasdaq, S&P 500 Still Net Bullish

Published 03/25/2024, 03:18 AM

The Russell 2000 (IWM) has shaped a four-month cup-and-handle pattern, but Friday's challenge of handle resistance was not enough to generate the follow-through needed to continue the rally.

Despite the losses, On-Balance-Volume remains on a 'buy' trigger and the MACD has the potential to offer a 'buy' trigger of its own on the next gain. However, losses did reverse relative performance away from Small Caps to the Nasdaq.IWM-Daily Chart

The Nasdaq banked a small gain Friday on trading volume which was lighter than normal. While price action gathered little attention, there was a return to net bullish technicals with a new MACD trigger 'buy' to go alongside the earlier 'buy' signal in On-Balance-Volume.

Thursday's bearish black candlestick was not good to see, but Friday didn't deliver the losses such a candlestick can deliver. I have added a support trendline that will offer itself as an additional buy zone. Momentum is strongly bullish.

COMPQ-Daily Chart

The S&P had the weaker 'black' candlestick but finished Friday with a narrow range day loss, again, not the kind of loss feared.

With the larger loss in the Russell 2000, we now have a return to relative leadership in the Large Caps index. Since October 2023 this index has barely skipped a beat, and Friday's loss didn't change that.

S&P 500-Daily Chart

While we may yet see an acceleration of losses today, current action doesn't suggest any increasing doubt on the part of bulls, and the steadiness of the rally means excessive greed isn't a factor either.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.