Written by Forrest Crist-Ruiz
Above is a chart of the Russell 2000 (IWM). It is one of the most valuable indices as it tracks 2000 small-cap companies and therefore gives a great picture of the overall market direction.
Since the beginning of 2021 IWM has been mostly rangebound. The high of the range is around $234, while the low or the range is in the $209 area.
Thursday, IWM visited the bottom area of that range and now on Friday we are seeing IWM clear back over its 200-Day moving average at $214.
However, the key is that IWM is bouncing off the bottom of its range and is offering opportunities for traders to enter at a lower price with good risk based off the recent low.
With that said, on the above chart sits a special indicator that helps confirm the markets rally from an oversold state, but also gives caution for the coming trading weeks.
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