The US small-cap index Russell 2000 has been completely uninteresting for most of the year, as it moved just booring sideways. But now, for probably for the first time in 2021, there seems to be a fairly safe chance of sustainable higher prices or at least something super exciting developing!
As usual and like many other analysts, I use the well-known IWM ETF to analyze and forecast possible future developments in the small caps universe.
The Russell 2000 index hasn`t yet finally cleared its 2021 trading range but it has regained its relative leadership role versus the NASDAQ and S&P 500!
I have been observing the Rounded Top of the US small-cap index/IWM for months. I love rounded bottoming and topping formations simply because after rounded supports and resistances are overcome, much safer trades are possible than if only lines, horizontals or diagonals are finally taken out.
The main reason for this is that an overcoming of rounded rails is often not only a signal in terms of price, but also a signal in terms of time factor.
And I see that the IWM ETF triggered such a combined price/time buy signal with Friday`s close at the latest, as the market managed another weekly close above the dark-red-dashed year 2021 Rounded Top resistance.
The 2021 Rounded Top startet to form exactly at the turn of the year and additionally at lowest price of this year.
And this means this recent upward break of the 2021 Rounded Top hasn`t only triggered a heavy buy on the daily chart but also is a buy signal on yearly base what could lead to the outcome that IWM from now on will rally maybe precisely into the last trading day of the year, then maybe trading at or close to the absolute high of the entire 2021 trading year.
==> Unleashed from the Rounded Top resistance chain, likely now finally overcome yearly resistance, it is obvious & necessary that this daily uptrend must re-test the dark-red alltime-high (ATH) resistance line within days!
This next image below is a 22/25 Candles up on weekly base. The bull market measurement starts at # 1 // 2020 Low. Obviously, the course of the circular 2nd double arc magnet was responsible for the 8-month Rounded Top pattern:
With lower line of 2nd beeing general main support for months and upper line of 2nd acting as strongly confirmed 2021 main resistance.
There never was a week close above that upper line of 2nd yearly main resistance UNTIL FRIDAY!
Therefore, a very bullish signal has emerged in terms of TIME & PRICE, which started with this week`s opening auction, as the resistance of the upper line of 2nd double arc was already skipped to the upside at the official opening of the week.
This week fired weekly GUNNER24 Buy Candle is the first stronger one since the beginning of 2021!
Thus, according to the rules of the GUNNER24 Trading Method, FIRST the next hit and backtest of the downward red-dotted ATH resistance rail is activated at a 233.20$ with a probability of +95%!
And SECONDLY, the NEXT WEEKLY CLOSE at or very close to the red-dotted ATH resistance line will activate this future monthly uptarget, which could then be finally worked off until the end of 2021:
The classic 8-Fib number Candle up, starting at # 1 // 2020 Low, offers that then the upper line of 2nd double arc at 249$ to 250$ surroundings will be the main uptarget of 2021, after the lower line of 1st is now well confirmed alltime-high resistance point!
A monthly close, BUT even the FIRST weekly IWM-close above the current 234.50$ alltime-high would confirm & finally activate such next higher GUNNER24 Uptarget on the monthly IWM chart.
Our forecasting method now fires – after this week powerful buy singal in terms of price & time –, that the upper line of 2nd has to be tested/worked off during 2021 with a probability of about 80%.
IMHO, this should be enough for us to make the hard call that IWM ETF should reach 249$ by the end of 2021!:
==> Yearend = main IWM uptarget at 249$-250$!