RTY runs into sellers again around 1695.17
Russell 2000 Index (RTY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
RTY finished the week 1.86% higher at 1687.58 after losing $6.16 (-0.36%) today ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (RTY as at Feb 14, 2020):
Friday's trading range has been $11.70 (0.69%), that's below the last trading month's daily average range of $17.18. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for RTY. Prices continued to consolidate within a tight trading range between 1680.38 and 1696.54 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 1689.15 (now R1), which is likely to act as resistance going forward. The last time this happened on February 7th, RTY actually gained 0.66% on the following trading day. After having been unable to move above 1696.54 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 1695.17.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 1696.54 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 1680.38 where further sell stops might get triggered. With prices trading close to this year's high at 1715.08, upside momentum could accelerate should the Russell be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Russell 2000. Out of 521 times, RTY closed higher 56.05% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 58.16% with an average market move of 0.60%.