🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

Bull Traps for Nasdaq, S&P 500; Russell 2000 Sees Bullish Ascending Triangle

Published 27/11/2023, 08:26
US500
-
US2000
-
IWM
-
IXIC
-

Whether you see the past week-and-a-half action in the Russell 2000 (IWM) as a bullish ascending triangle or pennant, it's clear there is a significant bullish turn in momentum since the early November gap higher (on higher volume accumulation).

Obviously, we can't read too much into Black Friday's trading, but we have a broader bullish picture on net bullish technicals.

Even relative performance against the S&P 500 looks to be turning in bulls favor. The only key resistance level left to break is the 200-day MA, and it is interesting that prices have stayed consistently below since the failed attempt on the inverse hammer spike.IWM-Daily Chart

While the Russell 2000 sets up for a bullish week, other indices reached a logical end point of their October-November rally. For the Nasdaq, a sequence of narrow range days above the August swing high has the potential to generate a 'bull trap' that would leave shorts with a trade (to the 20-day MA).COMPQ-Daily Chart

Likewise, for the S&P 500, we have August swing high to play as support, but I don't see this former resistance level has having been sufficiently breached to think buyers will step in to defend it should sellers make a run at this level.

SPX-Daily Chart

Another reason to expect selling in the S&P 500 and Nasdaq is that both indices are sitting on weekly timeframe resistance.COMPQ-Weekly Chart

So we have a tale of two cities; a Russell 2000 that's ready to break higher and a S&P and Nasdaq ready to head lower, at least on a temporary basis.SPX-Weekly Chart

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.