One of the more noteworthy developments in recent days has been the move in micro-cap stocks. The group is catching up to its larger peers with a healthy start in the first week of the last quarter of the year. The iShares Micro-Cap ETF (IWC) has risen more than 2 percent MTD, outperformed the S&P, which is up 1.30 percent. Now the question is whether the rally has more legs? Below is an update look at a trade in IWC.
The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red. The yellow bars identify period of neutral or sideways trading pattern. Additionally, the light-blue shading represents the short-term trading range. A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading). Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.
Chart 1.1 – iShares Micro-Cap ETF (daily)
Our “U.S. Market Trading Map” painted IWC bars in bright green (strong buy). The first dominant feature on the chart is the rising trend starting early 2016. The second dominant feature of the chart is the sideways consolidation between 83 and 88 since early 2017, which represented an orderly high-level consolidation period. The August’s massive rally pushed the ETF above the summer highs, signify…Click here to read more.
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