RTY Futures Analysis for Today

Russell 2000 Index Futures Analysis for Today

Financial Instrument: Russell 2000 Index FuturesPrice at the Time of Analysis: 2,280

Key Levels to Watch

Bullish Above 2,290

• Why Bullish Above?A move above 2,290 indicates price has surpassed the Value Area High (VAH) of the last two days. This signals a potential shift in market sentiment, with buyers gaining strength and pushing price above significant resistance levels.

• Profit Targets for Long Positions:

  • 2,294.3: Yesterday’s VWAP, a dynamic level that often acts as an initial profit-taking zone.
  • 2,298: Yesterday’s Point of Control (POC), representing the price level where the highest volume traded.
  • 2,311: Yesterday’s VAH, marking the upper boundary of the value area and a key upside target for bullish momentum.

Bearish Below 2,274

• Why Bearish Below?A drop below 2,274 would place the price under today’s developing Value Area, as well as below the POC from two days ago. This indicates sellers are in control, with price rejecting higher levels and potentially trending lower.

• Profit Targets for Short Positions:

  • 2,271.2: The VWAP from two days ago, a logical support level where price might stabilize temporarily.
  • 2,266: Just above the Value Area Low (VAL) from two days ago, offering a deeper target for bearish momentum.
  • 2,257.8: The VWAP from three days ago, a further support level and potential extended bearish target.

Understanding the Tools Behind the Analysis

VWAP (Volume-Weighted Average Price)

VWAP calculates the average price of a financial instrument based on both price and volume, providing a benchmark for fair value.

• Above VWAP: Signals buyer strength.
• Below VWAP: Indicates seller dominance.

Value Area Concepts (VAH, VAL, POC)

• Value Area High (VAH): The upper limit of the range where 70% of volume traded, acting as resistance when approached from below.
• Value Area Low (VAL): The lower limit, often serving as support when approached from above.
• Point of Control (POC): The price level with the highest traded volume, often acting as a magnet for price movement.

Takeaways for Today

• Bullish Scenario: A move above 2,290 opens the door to targets at 2,294.3, 2,298, and 2,311.
• Bearish Scenario: A break below 2,274 could lead to support tests at 2,271.2, 2,266, and 2,257.8.
• Trading Guidance: Define your entry and exit points using these levels, and maintain a disciplined approach to risk management.

Trade at your own risk. Visit ForexLive.com for additional perspectives.

This article was written by Itai Levitan at www.forexlive.com.