iShares Russell 2000 - IWM - close 63.11 change -1.22 stop 59.80
iShares Russell 2000 Index Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the Russell 2000 Index (the Index). The Index measures the performance of the small-capitalization sector of the United States equity market. The Index is a float-adjusted capitalization-weighted index of equity securities issued by the approximately 2,000 smallest issuers in the Russell 3000 Index.
Target(s): 66.50, 67.75
Key Support/Resistance Areas: To Follow
Time Frame: 2 to 4 weeks
Why We Like It:
I believe any further weakness in the Russell 2000 and broader market present buying opportunities for an early fall rally and into the mid-term elections, of which will probably result in gridlock in Washington which is generally good for equities. Fund managers will begin reallocating their portfolios and cash on the sidelines should be put to work. Let's use a trigger of $62.50 to initiate long positions in IWM which is near the 38.2% retracement from the lows on 8/24 to the highs on 9/3. Our initial stop will be $59.80. Our targets are near the June and July highs.
Suggested Position: Buy November $57.50 CALL, current ask $2.37, estimated ask at entry $2.10
Annotated daily chart:
Entry on September xx
Earnings N/A (unconfirmed)
Average Daily Volume: 60 million
Listed on September 7, 2010