IWM Upcoming Targets
Trader Moe | Nov 28, 2014 01:26AM ET
iShares Russell 2000 Index (ARCA:IWM) put in the max number of alternating touches on the side of a price channel that rolled up into a steeper price channel. Then it broke out into the sideways move required by those price channels—a megaphone (navy blue on chart).
It has put in a 5th wave false top within this megaphone (the November 21st high that retraced to the megaphone VWAP). That means it would almost always break out of the megaphone top on this wave to put in a topping pattern up there.
Then the price would almost always return to the navy megaphone bottom before a retrace to the megaphone VWAP to decide on longer-term direction.
The navy blue megaphone bottom will be at roughly the VWAP of the entire sideways move of 2014 by the time the price gets there, so a downward breakout from the navy blue megaphone would imply a move down to at least the bottom of this year’s trading range.
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