Small Cap Rally?

Licia Leslie

Licia Leslie

Licia Leslie

By Licia Leslie

September 18, 2024

Hi Shoppers,

 

The mantra I keep hearing is how well the small cap stocks are going to do with lower interest rates.

 

Perhap but let’s look at the chart:

The iShares Russell 2000 ETF (Ticker: IWM) has had a nice rally since it bounced off my support level at $204.70 taking it up to yesterday’s high at $221.80.

 

Yesterday’s action created a possible gravestone doji candle which could be signaling a change in this uptrend.

 

Of course we need confirmation with IWM trading lower today.

 

If IWM trades below $217.55 it could trade back down to the $209.50 level.

 

On a rally there is resistance at $222.45 and then $227.

 

Looking at Friday’s options:

Maybe a strangle is in order.

 

Check out the 216 puts and the 223 calls.

 

I would say we can move $3.50 by Friday.

 

Trade Review

 

Those XLF calls I recommended are up nearly double …

 

Thank You for Reading … See You Next Tuesday,

 

Licia Leslie

Licia Leslie

Head of Technical Analysis

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Licia Leslie

Licia Leslie

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About the Author

Licia Leslie

Licia Leslie

Former CBOE floor trader and CIO at Karman Line Capital. Author of ‘The Option Traders Hedge Fund’ with over 30 years of options trading experience.

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