TRADE SETUP

Where do we stand fundamentally?

A U.S.-brokered ceasefire between Israel and Iran, reported on June 24, 2025, has influenced markets, with oil prices dropping significantly. This has contributed to a rally in major indexes, although the Russell 2000’s lag indicates that small-cap stocks are not keeping pace with their large-cap counterparts.

The Russell 2000 is testing the 2200 resistance level of the rising wedge, and there is a possibility of rejection here, potentially leading to a downside reversal.

For the rally to continue, we need a sustained breakout above 2200; however, we could see another swing lower inside the channel, and I am inclined towards a short-term short trade entry, as the overall market sentiment remains fragile due to geopolitical risks and the potential for inflation to rise again due to tarriffs. A break below 2100 could open a test of the next support 1900, in the medium-term.

_{I am taking a near-term short-trade entry with an SL above 2260 to target 1980. You can buy put options as well. If the trade is stopped, reverse it to a long trade entry.}