Daily June E-mini Russell 2000 Index

E-mini Russell 2000 Index (TF) Futures Technical Analysis – May 13, 2014 Forecast

The June E-mini Russell 2000 Index is trading a little better in the pre-market session. However, there was no follow-through to the upside, following Monday’s surge.

A trade through 1136.10 will turn the main trend to up on the daily chart. The market may not accelerate to the upside however because of a cluster of resistance levels. Following a move through 1136.10, the market is likely to test downtrending angles at 1137.10 and 1140.00. Overcoming these angles is key to sustaining the developing rally.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

The main range is 1191.10 to 1087.10. The retracement zone of this range at 1139.10 to 1151.40 is the next major upside target and potential resistance zone. The lower or 50% level at 1139.10 forms a loose resistance cluster with the downtrending angle at 1140.00.

A failed rally today could attract selling pressure. A pair of downtrending angles at 1125.00 and 1122.10 could slow down a break, but the first meaningful support is an angle at 1119.10. This is followed by 1103.10.

Since the Russell daily chart is populated by a series of lower-tops and lower-bottoms, taking out a swing top like 1136.10 may signal a shift in sentiment. At this time, it looks as if the money is flowing into the Blue Chip stocks so a breakout in the Russell could be an indication that fresh money is moving into the smaller-cap stocks.

The first rally through a swing top often fails because buy stops rather than new buyers often drive the price action. This means investors should be careful about buying strength unless the breakout level is being defended. If buyers don’t come in to defend 1136.10 following a breakout then look for a retracement of the rally from 1087.10. Bullish traders will try to form a potentially bullish secondary higher bottom on the next break. This is likely to give the next buy signal. 

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.

Leave a Reply

Your email address will not be published. Required fields are marked *