Chart Analysis » IWM

IWM Chart – Close to Key Support Level

Alex F — Tue, 27 Oct 2009 15:42:07 +0000

I charted the year to date daily prices of the Russell 2000 ETF, IWM, late this morning when it was trading at $59.36. It’s getting close to a key support level and is worth watching here. Yesterday IWM broke below its shorter trend line of higher lows and is only a few cents away from the longer trend line that hasn’t been tested since it was last touched in July.

Before trying to get in front of the trade, it might be a wiser move to wait for Williams %R to give the buy signal first. In green I highlighted this year’s moves above oversold for the 14 and 28 day indicators. Notice how they foreshadow a good run for IWM in each case. On a couple of them the run only lasts for a short period of time, but on others the bull run lasts much longer. In either case, getting in before Williams %R gives that signal is a set up for more losses. IWM is now set up to move higher, but it’s probably wiser to miss the first day or two of the rally to save the chance of missing further declines.

IWM Chart – Back to Resistance

Alex F — Tue, 25 Aug 2009 15:13:04 +0000

I charted IWM on August 25, 2009 just before 11 am when it was trading at $58.43. Just as the past two days of trading found resistance, so has today. The line that keeps holding back the Russell 2000 ETF is the line of higher highs. I can’t make myself buy into this market when it’s at the high end of its trading range, even if it stands a chance of staying up there for a while.

I think a better move is to wait for IWM to move back towards its lower trend lines of higher lows, closer to its 50 day moving average. The potential for a reversion to the mean with the 200 day moving average is always possible which is just one more reason to hold off on opening a full position right now on IWM.

iShares Russell 2000 ETF (IWM) Chart – 4/14/09

Alex F — Tue, 14 Apr 2009 20:47:19 +0000

I charted iShares Trust Russell 2000 Index Fund (IWM) after market close on April 14, 2009 when IWM closed at $45.31. IWM attempts to mimic the performance of the Russell 2000 index.

IWM held support at its 10 day moving average today
IWM hit resistance at the trend line of previous lower highs
IWM hit resistance at the trend line of the highs of late January and early February
IWM is still trading within an old horizontal trading channel that tracks back to November 2008 and a shorter rising trend line higher lows and higher highs
The Williams %R indicator for the 14 day period broke below overbought, but hasn’t yet on the 28 day indicator

Opinion =IWM is at a tipping point. The battle between the shorter rising trading channel and the longer horizontal trading channel will be decided within a couple of days. A telling indicator for which trading channel wins could be found in the Williams %R indicator. If IWM has another down day on Wednesday the 10 day moving average could break and the trend line of higher lows could break. If Williams %R continues to lose momentum IWM could be in for a retreat back down to the $40 range, if not lower.