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Hugo in HTO Trading,

Russell 2000: Setting highs but for how long

Since the beginning of the year the index gained more than 9.0% however last week only rose 0.36% and continues in a well-established bullish phase since the end of June.

Last week the index initially rose but found enough selling pressure to give back to the market most of its gains although closed in the green, in the middle of the weekly range, in addition managed to close within previous week range, which suggests being clearly neutral, neither side is showing control.

The stochastic is showing an extreme overbought market and is beginning to display a weak bearish momentum.

Expecting a downward move to a weekly support at 1,212 (scenario 1) on a break below the previous week low at 1,229 however a bounce from the weekly support at 1,212 may trigger a rally up to a weekly resistance at 1,276 (scenario 2).