By Andrew Nyquist
After breaking the June to early July uptrend line, the Russell 2000 iShares (IWM) slipped to backtest the June breakout above the March to June downtrend line (see chart below). This area (near 76 dollars) proved to be supportive, providing a launching pad for the current 2 day bull stampede higher. See previous IWM chartology.
It’s important to note, though, that the index is nearing the 80 dollar level which offers two levels of resistance: 1) Backtest resistance in the form of the broken June to July uptrend line (mentioned above, seen in chart below) AND 2) Current near term downtrend resistance.
This confluence of resistance bears watching. In my opinion, if the broader markets are going to power to new highs, the bulls will want to see the IWM sustain a move above the 80 dollar mark first.
(Related reading: “S&P 500 Weekend Update: Shall We Try That 1400 Thing Again?“)
Russell 2000 iShares (IWM) stock chart with technical analysis overlay as of July 27, 2012. Price support and resistance levels and stock market analysis. IWM chart with trend lines and technical support levels. IWM technical analysis. Small Cap stocks.
No position in any of the securities mentioned 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 his employer or any other person or entity.