Is The Russell 2000 Still Targeting Higher Prices?

David Busick

Since bottoming on October 15th, the Russell 2000 Index (RUT) has rallied 10.6% through Friday’s closing price. The rally has given small caps stocks new life.

In my September 27 post on the Russell 2000, I highlighted some key takeaways and levels to watch.

Here’s a recap:

  • The Russell 2000 was at a Fibonacci support level of 1111.28
  • A 2nd support level of 1087.14 was identified
  • A weekly close below 1087 would technically weaken the Russell 2000
  • A higher target of 1261.75 remained

So, let’s find out where we are on the RUT now. Starting with the long-term weekly chart, you can see that the RUT did indeed close below 1087.  Although that did technically weaken the RUT, it never fell below the lower level of the uptrend channel.

Russell 2000 (RUT) – 17 Year Weekly Chart

russell 2000 rut long term chart

 

Zooming in for a tighter view, let’s look at the chart below, a 5 year weekly chart. Here we can see that the RUT:

  • Pulled back to make a low of 1040.47 the week of October 13th, 2014
  • The pullback was a precise touch of the lower support level of the uptrend channel
  • The RUT pulled back from a high of 1213.55 to a low of 1040.47; a correction of -14.26%

Russell 2000 Index – 5 Year Weekly Chart

russell 2000 rut 5 year trend chart

 

Now for an even tighter view, let’s look at a 3 year chart. Here we can see the RUT:

  • Has a Fibonacci target of 1205.92
  • Support levels of 1107.4 and 1091.61
  • Still has ample room within the trend channel to hit the original target of 1261.75 and more.

Russell 2000 Index – 3 Year Weekly Chart

russell 2000 rut 3 year bull trend channel chart

 

Thank you for reading and remember, always use a stop loss order!

 

Follow Dave on Twitter:  @TheFibDoctor

No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

 

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