Today, we’re looking at the smaller stocks that appear to be setting up for a potential opportunity.
These types of stocks are represented by the Russell 2000 Index (RTY).
So let’s take a look at the Russell 2000 Index futures contracts…
Looking at RTY Futures Contracts
Here’s how the chart is shaping up and how we see the market…
The RTY daily time frame is in an up channel.
The market hit the bottom of the channel and pushed bullish. The market is hitting the short term daily downtrend line where resistance can be found.
If the market is able to close above the short term downtrend line and enter into the buy zone, it is expected the market will continue to push bullish towards the top of the channel price point 2,076.3 about +1,721 ticks above the market.
If the market is not able to close into the buy zone, it is expected the market will sell off back towards the bottom of the channel price point 1,800.00 about -1,045 ticks below the market.
It will be a good idea to turn to the one hour time frame and to look for a trend to confirm the daily direction.
The Bottom Line
There are multiple ways to trade the futures, stock and other markets. We can trade the indexes, both up and down, as well as individual stocks…
For more on the markets as well as trading education and trading ideas like this one, look for the next edition of Josh’s Daily Direction in your email inbox each and every trading day.
I’ll be bringing you more of my stock and futures contract trading tutorials as well as some additional trading ideas.
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Keep on trading,
P.S. I have been working with my teammate, Ross Givens on his latest Stealth trading strategies.