IWM stock price is at a critical level as we enter into trading for the week of November 18, 2019.
IWM, the Russell 2000 index fund, is testing Rising Wedge support with a possible Rectangle breakout.
IWM stock has been testing Rectangle resistance since November 4, 2019. Price is consolidating right at resistance. In a bull market, consolidation ranges usually result in breakouts and uptrends. If IWM breaks above $160, we will likely see a run to the predicted price range of $163.15 to $168.94 (green box area).
Interestingly, a break out of the consolidation range above $160 would result in a new uptrend channel as shown with the red lines on the chart below.
Another bullish indicator is that since IWM has been in the uptrend channel (red lines), the large players volume has been rising nicely.
The future direction of the entire stock market depends on what happens the IWM stock price. Notice that IWM stock price has not been able to break above the $160 resistance area and has been locked in a range for all of 2019 on the weekly chart:
Compare that to the weekly price chart of SPY:
Notice that IWM performance is really lagging behind SPY. This lagging of small caps behind mid cap and large cap stocks suggests that the current upward move lacks a key ingredient: risk on gambling in high growth stocks. Until we see IWM leading SPY higher, the sustainability of this uptrend is suspect. This is why it’s so important to keep your eyes on IWM.