Higher Volume Selling, And Bearish Engulfing Pattern In Russell 2000
Declan Fallon | Sep 22, 2014 12:35AM ET
In day when Alibaba (NYSE:BABA) took the headlines, it was left to the Russell 2000 and Semiconductor Index to warn of potential change.
The Russell 2000 experienced a large bearish engulfing pattern, although within the boundaries of the declining channel. There was an undercut of the 200-day MA, which will need to be watched on Monday. Shorts could get aggressive with a stop above 1,164 (and/or declining channel line).
The S&P experienced huge volume trading on Friday, but there was little net change on Thursday's close. Given the volume, it's hard to look past a retest of 1,987, but it's going to take more than Friday's selling to hand market control over to bears.
For Monday, bears have a chance to generate some follow through. However, stops need to be kept tight. Even a strong upside gap on Monday might be enough to nix the short side play.
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