Chart of the day

Where do we stand fundamentally?

As of mid-September 2024, the Russell 2000, an index tracking approximately 2,000 small-cap U.S. companies, has been performing relatively well. It showed a strong gain of over 5% in the last five days leading up to September 16, outpacing the S&P 500 during the same period. In terms of earnings, the Russell 2000 posted a solid year-over-year blended earnings growth estimate of 20.6% for Q2 2024, driven by sectors excluding energy which reported a 28.8% growth rate. Around 60.1% of companies in the index exceeded analyst expectations

RUSSELL2000 is bouncing off the support 2130 after breaking it before strongly as an upside resistance. This indicates a strong upside continuation in the fifth wave to target 2800 in the medium to long term. Invalidation of this immediate upside extension could come upon a break below 2100.

An invalidation level of a fifth-wave long-term extension higher and a bullish cycle is 1750. As said this extension higher could lead to a 2800 target in the medium-term to long-term if the Index stays above 2200. Reversal however is possible and a new swing-down retrace to 1940 if we see a break below 2080.

_{Try a long trade entry with a narrow stop loss below 2080 to target 2400 and higher.}