— Shane C. Murphy, CMT (@murphycharts) May 26, 2022
Today’s Chart of the Day was shared by Shane Murphy (@murphycharts). It’s a daily candlestick chart of the Russell 2000 over the past five years. A couple of weeks ago, Shane pointed out that the Russell 2000 was testing a major level around 1750-1700. This level acted as resistance in 2018 and 2020, and now it’s acting as support, with the Russell up 7% from its recent lows. As we know, Small-Caps often lead the broader market higher or lower, so this is encouraging for the bulls. However, the index is still 25% off its highs, and there is a lot of overhead supply to clear. The next resistance level to watch is around 1950. This level was support in January, February, and March until it eventually broke in April. 1950 also coincides with the VWAP from the Covid lows, so we’ll see how the Russell behaves if it can get to that key level in the near term.