RTY unable to break through key resistance level
Russell 2000 Index (RTY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, RTY ended Wednesday at 1552.33 gaining $14.18 (0.92%). Closing above Tuesday's high at 1551.02, the market confirmed its breakout through the previous session high after trading up to $21.04 above it intraday.
Daily Candlestick Chart (RTY as at Sep 16, 2020):
Wednesday's trading range has been $32.79 (2.13%), that's slightly above the last trading month's daily average range of $26.16. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for RTY.
The index managed to close back above the 20-day moving average at 1550.39 for the first time since September 2nd. Unable to break through the key technical resistance level at 1570.70 (R1), the Russell closed below it after spiking up to 1572.06 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. When prices bounced off a significant resistance level the last time on August 27th, RTY actually gained 0.88% on the following trading day. After having been unable to move lower than 1535.64 in the prior session, the stock index found buyers again around the same price level today at 1539.27.
Though Russell 2000 is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Russell 2000. Out of 458 times, RTY closed higher 55.46% 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 58.95% with an average market move of 0.69%.