Small Caps Take Advantage of Tech Hold Out

It was a day for watching the Nasdaq and Nasdaq 100 but it was the Russell 2000 which took the day's honors.

Both the Nasdaq and Nasdaq 100 held on to channel support for another day although it wasn't entirely a decisive defense. Fifty-day MAs are holding but the 'spinning top' candlesticks are a mark of indecisiveness. Volume climbed to register as accumulation.

The Russell 2000 went one better and actually broke resistance. The breakout barely stalled at resistance which is a good sign for bulls seeking further gains. Historic price action for the Russell 2000 doesn't typically become an issue until the index is 12% or more above its 200-day MA (based on the table at the end of this article) which in this case would be a target of 1,560.

The S&P didn't do a whole lot although technicals are a looking a little wobbly and on the verge of 'sell' triggers for MACD and +DI/-DI. However, with the breakout intact and both 20-day and 50-day MAs to lean on, there are a number of price points where buyers can be expected to come in should prices push lower.

For tomorrow it will be about again watching the Tech averages to see whether channel support can hold for another day and if so, can the Russell 2000 build on its breakout to deliver a move into the 1,500s. I'm not looking for much from Large Cap indices.

You've now read my opinion, next read Douglas' blog.

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Dr. Declan Fallon is a blogger who trades for fun on eToro and can be copied for free.
. I invest in my pension fund as a buy-and-hold.

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