Approaching overhead resistance
Good day traders! The Russell 2000 Index (RUT) finally managed to break above the high that was set on the 6th of May this year. Price is currently approaching a 0.786% Fib retracement level, measured from last year’s August high to the December low.
The first area of resistance, that price might react to, lies between 1640.40 and 1655.93 (a 1.382 Fib extension level). The upwards move, from the 3rd of October, is also starting to lose steam with momentum divergence showing on a MACD-Histogram.
RUT does have the potential to eventually make new all-time highs, but I will not be surprised if we see a correction lower sooner than later. If price, however, manages to trade above the first resistance area with decent momentum, then the second area of resistance lies between 1689.01 – 1712.56.
Until next time, happy and safe trading!