Technical outlook:
Russell 2000 rose to the 1,781.00 highs intraday on Monday before turning lower and closed at around 1,771.00. The index has produced a Star Doji on the daily chart indicating indecision and a potential pullback lower towards 1,700. Bulls will remain poised to hold prices above the 1,640 interim support to keep the near-term structure constructive.
Russell 2000 has carved a larger degree downswing since its November 2021 peak at the 2,458-59 mark. The drop between 2,458.00 and 1,640.00 could be complete or it could be still heading lower towards 1,400.00, which is the March 2020 support. If a potential downswing is in place, bulls shall remain in control from here and push through the 1,919.73 initial resistance to confirm.
Russell 2000 has also initiated a potential lower degree upswing since June 17, after printing lows around the 1,640.00 mark as seen on the daily chart. Potential remains for a rally through the 1,919-54 zone, which is also the Fibonacci 0.382 retracement of the entire drop between 2,458.00 and 1,640.00. Only a break below 1,640.00 will delay the proposed corrective rally.
Trading plan:
Potential rally through 1,919-50 against 1,640
Good luck!
