Even though the long term uptrend remains in play, investors should be wary of a significant shift in sentiment.
For the coming weeks a correction back to 1638 and even 1610 can be expected. This correction is classified as a counter trend move within the aforementioned uptrend. Significant support is found around the 1615<>1610 zone. Here former pivots, retracements and cloud support coincide. This zone must hold out in order to keep the long-term trend valid.
Since indicators (longer term) are becoming increasingly wary, investors should be cautious in maintaining large long-exposure. A larger correction beyond 1610 is becoming increasingly likely. We suggest tightening stops or even partially closing longs and await developments on the near term. Again, below 1615<>1610 things turn very sour.
- Near term trend: negative
- Long term trend: positive
- Outlook: correction in uptrend, possible reversal
- Strategy: tighten stops and/or trading short
- Support: 1638 / 1610 / 1580*
- Resistance: 1710+
- Outlook cancelled/neutralized below 1610
Weekly chart Russel 2000 Index (USA)