Potential Bear Flag Breakdown in the Russell 2000The Russell 2000 small cap index fell sharply last month, and now traders may see risk of further downside.
The first pattern on today’s chart is the series of higher highs and higher lows since December 18. Given its preceding drop, that could be viewed as a bearish flag that’s resolving to the downside.
Second, short-term indicators may be viewed bearishly. MACD has been falling and the 8-day exponential moving average (EMA) is below the 21-day EMA.
Third is the November 19 low of 2284. RUT probed it early this week but quickly reversed. Has old support become new resistance?
Finally, you have the big picture. This benchmark is the only major index in the last year that failed to sustain new highs versus 2021. That relative weakness may be consistent with a lack of investor enthusiasm.
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