Russell 2000 index (RTY) has risen 6.39% since the 1,079 low in September and we could see more upside from here.
Last week, most equity markets fell sharply after a good run since Sept.
However, we don't see this as a sign of reversal but a profit taking activities given that it is not only RTY but also most equity indices found support at the support levels.
In RTY case, prices are remaining and holding up well above the ST resistance-turned-support trend line as well as the support band.
Besides that, with prices still trading in the ST uptrend channel (red), a bounce is likely.
Both indicators still remain in the bullish zone.
Prices could take out the 1,200 high and climb higher to retest the 200-day SMA (now is at 1,215).
Therefore in our opinion, prices could continue to head higher for the next couple of weeks.
Take note that this is only a ST bullish view and a tight stop loss is needed as our bearish view for medium and long term are still intact. (Read Report)
Source : CIMB Research