The
SPX
and the
NDQ
broke out more than a month ago, while the Russell 2000 small-cap index has lagged. Normally traders like to focus on the outperforming areas but IWM’s technicals may have something in their favor.
The $158 level was resistance for
IWM
starting in September 2018. That marked the top of the channel at least four times since then – until last month. It held $158 for almost three weeks before breaking out to a new 52-week high. Now IWM has pulled back to test the same price area.
Chart watchers may view the current level as a strong risk/reward, with plans to cut their losses on a break not far below $157. However there could be more room for movement to the upside because IWM is still about 13 percent below its all-time high from the summer of 2018.
Fundamentals are another potential consideration for IWM. Its P/E ratio of 16x is lower than larger-cap indexes like SPY (18x) and QQQ (23x). The fund may also give investors more exposure to potential merger activity because its member companies are smaller.
SPX
and the
NDQ
broke out more than a month ago, while the Russell 2000 small-cap index has lagged. Normally traders like to focus on the outperforming areas but IWM’s technicals may have something in their favor. The $158 level was resistance for
IWM
starting in September 2018. That marked the top of the channel at least four times since then – until last month. It held $158 for almost three weeks before breaking out to a new 52-week high. Now IWM has pulled back to test the same price area. Chart watchers may view the current level as a strong risk/reward, with plans to cut their losses on a break not far below $157. However there could be more room for movement to the upside because IWM is still about 13 percent below its all-time high from the summer of 2018.
Fundamentals are another potential consideration for IWM. Its P/E ratio of 16x is lower than larger-cap indexes like SPY (18x) and QQQ (23x). The fund may also give investors more exposure to potential merger activity because its member companies are smaller.