👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

Russell 2000 Holds Steady; Nasdaq, S&P 500 Search for Support: What Lies Ahead?

Published 13/09/2023, 08:24
US500
-
US2000
-
IWM
-
IXIC
-

There wasn't a whole lot of change from my last post. The Russell 2000 (IWM) is holding just above its 200-day MA but has been curtailed by its 20-day MA; this squeeze will have to resolve eventually, but the likelihood of a breakdown is higher because of the weak technical picture.

IWM Weekly Chart

The Nasdaq is pinned by its 50-day MA but is trading well above its 200-day MA. However, it's the selling from the peak at the end of August that is dominating current trading.

I would be looking for a retest of 13,161 swing low, and if that fails, then a move down to its 200-day MA.

One key aspect in its favor is that the technical picture is surprisingly resilient, so despite today's loss, there is still an opportunity for the 20-day MA to be the launch point for a renewed attack on its 50-day MA.

COMPQ Daily Chart

The S&P 500 is trading below its 50-day MA with a more mixed technical picture than the Nasdaq. I would view this as a status quo play (i.e., "hold"), with a test of the August swing low the most likely outcome in the coming weeks.

SPX Daily Chart

In closing, bulls will want to see a re-establishment of moving average support for the Nasdaq and S&P 500, with the Russell 2000 (IWM) continuing to hold above its 200-day MA.

Given the technical picture, however, we are more likely to see a break of this 200-day MA for Small Caps, which will drag the other indexes down low with it.

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.