Monday 22 April 2013

Russell 2000 looking shaky

I'm back with my daily posts after a 2 weeks break. Almost all indices were topping during these 2 weeks so I'm glad I haven't missed the action. Russell 2000 is one of my favorites which, until now, showed good short signals and channel breakouts. The blue shaded area is a strong support area for the bulls but it has tested it 5 times in the last one week. Bulls have enough reasons to be careful if this area is broken with conviction. For my channel rules, the upward trend from last November is broken and retested which I showed with red channel. One more thing to consider for bears is that, if it comes back to the blue shaded area now and make a lower low there will be a strong positive divergence. So careful with shorts. Hope it helps.

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