Sport Investors League
  • Politics
  • Stocks
  • Investing
  • Business

Sport Investors League

  • Politics
  • Stocks
  • Investing
  • Business
Stocks

Small-caps Break Out and Lead – Now What?

by admin July 19, 2024
July 19, 2024
Small-caps Break Out and Lead – Now What?

Small-caps took the lead over the last two weeks with the S&P SmallCap 600 SPDR (IJR) surging over 10% in five days and hitting a new high. IJR also broke out of a long consolidation and this breakout is bullish. There are now three possibilities going forward. First, IJR continues higher without looking back. Second, IJR tests the breakout zone with a throwback. Third, IJR fails to hold its breakout and turns bearish. Let’s look at the current chart and some prior breakouts for insights. We covered the recent setups and breakouts in small-caps, mid-caps and non-tech stocks in our reports and videos at ChartTrader (here).

The first chart shows the current situation. IJR surged with the broader market from late October to December and then embarked on a six month trading range. As we will see, IJR is no stranger to long, and frustrating, trading ranges. IJR formed an ascending triangle in the second half of this range and broke out with a big surge the last two weeks. This breakout is bullish and a strong breakout should hold. A close below 109 would erase more than half of this surge and call for a re-evaluation.

The next chart shows IJR with a breakout that failed to hold. After a big advance from November to March, IJR embarked on a seven month trading range. A symmetrical triangle (blue lines) formed in the second half and the ETF broke out with a big move in November. A strong breakout should hold with broken resistance turning into the first support zone. IJR did not hold this breakout as it gapped below the breakout zone in late November. This gap and sharp decline through the breakout zone were the first signs that something was wrong.

The next chart shows IJR with a breakout and continuation higher. IJR bottomed in March 2020 and advanced until early June. The ETF then embarked on a five month trading range that lasted until October. A classic cup-with-handle formed (blue lines) in the second half and IJR broke out with a gap-surge in November. The ETF never looked back and advanced over the next three months. This is the strongest scenario for a breakout, but we are not seeing this as IJR fell 2% the last two days.

There are two key takeaways. First, IJR and small-caps can and do get stuck in trading ranges. They go through trending periods, but are also prone to extended periods of sideway price action. Second, a strong breakout should hold and the breakout zone is the first area to watch going forward. Be careful if we see a sudden and sharp decline back through the breakout zone.   

ChartTrader reports and videos covered setups in the S&P MidCap 400 SPDR (MDY) and S&P 500 EW ETF (RSP) in late June and updated these charts with our analysis this week. We also featured a number of non-tech stocks with bullish continuation patterns and breakouts. Click here to learn more.  

//////////////////////////////////////////////////

0
FacebookTwitterGoogle +Pinterest
previous post
Deadly explosion in Tel Aviv leaves one dead, more wounded
next post
VIX SPIKES! Is a Market Correction Coming?

Related Posts

This Is How I Crush The Benchmark S&P...

February 21, 2025

From Hammer to Harami: Using StockCharts to Crack...

July 15, 2025

Simple Approach to Transform Your Trading

March 7, 2025

Could AMZN’s Stock Hit $3 Trillion Valuation? What...

July 3, 2024

Gold and Silver Are Crushing the S&P 500!...

February 26, 2025

Three Stock Ideas as S&P 500 Treads Water

May 29, 2024

Golf Geometry & Kinematics

July 14, 2024

The Finances Look Good For Equity Trend

November 26, 2024

Stocks In Focus: Three Charts to Watch

March 29, 2025

Major Shifts Taking Place As Lower Rate Bets...

May 18, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent

    • Trump warns of ‘massive bloodshed’ if Hamas fails to agree to peace deal: ‘MOVE FAST’

      October 6, 2025
    • Self-described ‘unapologetic supporter of Israel’ John Fetterman weighs in as Trump seeks to broker peace deal

      October 6, 2025
    • More lawmakers say they’re rejecting paychecks as government shutdown drags on

      October 6, 2025
    • Boundiali indicated gold resources grows by 53% in two month

      October 6, 2025
    • Platinum Price Pushes Past US$1,600 to Fresh 12 Year High

      October 6, 2025

    Categories

    • Business (1,115)
    • Investing (3,188)
    • Politics (3,890)
    • Stocks (1,155)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: sportinvestorsleague.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 sportinvestorsleague.com | All Rights Reserved