Russell 2000 (IWM) Poised For More Strength, Outperformance

Conclusion, Investment Implications, Strategy

The iShares Russell 2000 ETF (IWM) is in the midst of a June 2nd major uptrend amid emerging quarterly relative outperformance versus the S&P 500 (SPY) and monthly asset expansion since mid May. These three factors indicate favorable conditions for recent strength in IWM to continue.

Current Sector & Industry Group Ideas

Table 1 below is also accessible via the Sector & Industry Group Ideas rectangle at the top of the Research Center.

Table 1

Click the table to make it larger

This table also regularly appears in our weekly Keys To This Week: Sector & Industry Groups report published on Monday mornings.

Analysis and Rationale

The upper panel of Chart 1 below plots the iShares Russell 2000 ETF (IWM) daily since January along with its 200-day moving average, a widely-watched major trend proxy. The lower panel plots the corresponding daily relative performance of IWM versus the SPDR S&P 500 ETF Trust (SPY) along with its 63-day moving average which we use to identify the Strategic (quarterly) trend of relative performance versus the broad market.

Chart 1

The green highlights in the upper panel show that IWM is in the midst of a Jun 2nd major uptrend relative to its 200-day moving average, and that this trend was successfully retested and held on Jun 23rd and Jly 6th. The lower panel shows that IWM is also in an emerging Jly 10th trend of quarterly (our Strategic time frame) relative outperformance versus SPY.

The upper panel of Chart 2 below plots IWM daily since April with a corresponding chart of the daily total net assets invested in IWM and their 21-day moving average in the lower panel. We use the moving average to identify the monthly (our Tactical time period) trend of expansion or contraction in these assets.

Chart 2

The lower panel shows that these assets are currently in a May 18th trend of monthly expansion, and that this trend appears to be resuming as of Jly 12th after being tested and held twice in late June/early July. Expanding assets indicate bullish conviction and are the fuel that drives a price trend.

The current combination of a positive major trend, quarterly relative outperformance versus the benchmark, and expanding assets establish favorable conditions for the current rise in IWM to continue.

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Russell 2000 (IWM) Poised For More Strength, Outperformance

Conclusion, Investment Implications, Strategy

Current Sector & Industry Group Ideas

Analysis and Rationale

Asbury Research

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Russell 2000 (IWM) Poised For More Strength, Outperformance

Conclusion, Investment Implications, Strategy

Current Sector & Industry Group Ideas

Analysis and Rationale

Asbury Research

Asbury Research subscribers get more detail on our latest analysis, and updates to our quantitative models

Schedule A 15-Minute Zoom Meeting With Us To Get More Information >>>

Asbury Research subscribers get more detail on our latest analysis,
and updates to our quantitative models