Russell 2000 futures technical analysis in 60 seconds, 26 June 2023

Market trends of Russell 2000

  • The Russell 2000 futures experienced a downturn, closing lower on June 23, 2023, following a week characterized by increase, but still, fairly low volatility, as the ViX is still quite low.
  • The index, which maintained its position within a certain range since May 31st, broke down below the lower boundary on June 22nd.
  • At present, the price trades at the ‘value area high’, a potential pivot point for a rebound. However, the risk of a further downward movement remains, as the RTY technical analysis video shows.

Russell 2000 as a stock market indicator

  • The Russell 2000, an index composed of small-cap stocks, serves as an important indicator for the broader market.
  • Recent weeks have seen the index under pressure due to concerns over economic robustness. However, some indicators suggest the index could be nearing its lowest point. Many investors and traders view the Russell 2000, a broad index of small-cap stocks, as a key indicator of market depth and resilience, offering a diversified perspective beyond the concentrated influence of mega-cap names like Nvidia and Apple.

Volume profile overview

  • Analysis of the four-hour chart’s volume profile reveals substantial buying activity at the ‘value area high’ of the volume profile, see video above.
  • This could be an indication of substantial support at this level, signaling possible positive market sentiment.

Observations on channel formation

  • The four-hour timeframe chart illustrates a distinctive channel pattern, marked by three notable touchpoints.
  • The first two touchpoints were observed on May 31st and June 1st, respectively, while the third was marked on June 23rd.

Potential bear flag formation

  • The possibility of a Bear Flag formation – indicative of potential market downturns – should not be disregarded if the price continues to trend downwards along the channel. It’s crucial for investors to remain vigilant to these potential market shifts. A Bear Flag is a pattern signaling potential continued downtrend after a steep price drop. Traders heed this as a cue to possibly sell or short, anticipating further price decline.

This Russell 2000 technical analysis is for informational purposes only and is not intended as investment advice. And you’re welcome to view other perseptives on Stay informed, stay prudent, and happy trading!

This article was written by Itai Levitan at Source