Small stocks are a great source of potential upside. They tend to be focused on the domestic economy and separate from the woes of the global economy.
The Russell 2000 Index futures contract (RTY) is made up of these small-cap stocks.
But it is now moving downward from the top of its channel, reversing the recent course and providing an opportunity to cash in as it moves through the sell zone.
Today, let’s take a look at capitalizing on what we see as a potential bear market run developing in the RTY and unpack what’s happening inside the chart formation…
The Russell 2000 Index (RTY) Trade Setup
Here’s how the chart shows the potential gain in RTY setting up…
And here’s how I’ve outlined my analysis…
The Russell 2000 Index futures contract (RTY) daily time frame is in a down channel.
The market is moving from the top of the channel towards the bottom of the channel price point 1,635.00, about +450 ticks below the market.
It will be a good idea to turn to the one hour time frame and to look for high prices in the sell zone.
The Bottom Line
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