Shares Russell 200 ETF (IWM) is your Trade of the Week.
Happy New Years! 2018 price action has started with a bang. The major indexes have all broken out to new all-time highs as new money is put to work in equities. However, the Russell 2000 index made up of smaller cap companies is clearly lagging the rest. It is lagging with a ripe setup on the daily charts. The consolidated price action continues to march toward a new all-time high and if it does, that is our Trade of the Week.
As you can see by the “Sector ETF” Top List scan we use here at Trade Ideas, sorting by a 20 day range, IWM has severely lagged behind SPY, QQQ and DIA. The concept of the Trade of the Week is not to chase momentum, but rather look for consolidated setups or even pullbacks.
The Trade of the Week in IWM will be considered live at new 52 week highs of 155.42. The suggested stop will be 151.42. The upside target will be a measured move of approximately 10 points; so we will call the price target at 165.00. Risking 4 points to make just less than 10 points is the idea for this play. With the strength of the other indexes last week and the Cup n Handle formation in IWM here, we think the odds of this ETF having a strong move higher are good.