The E-Mini Russell 2000 futures contract (TFZ0) has been trading within a clear trading range since May. It is time for a reversal, or breakout? Let’s check it out..
Resistance
The daily chart shows the TF has been trading within a large trading range that spans from 586 to 672 since May. While price has reversed from support twice during that time, resistance has been more pronounced at 672, which has led to twice the reversals.
Since resistance at 672 has extremely clear, the entire market will be watching this level closely for directional bias. An upside break could lead price back toward the prior price pivot of 720. However, we must see price close beyond 672 in order for this to be possible.
Otherwise, we could be looking at another sharp sell-off from this zone – one that could easily push price back toward 644 in one fell swoop.
Bollinger Bands
Also, you’ll notice that price closed above the upper boundary of the Bollinger Bands indicator two days ago, and closed back below yesterday. If price closes below yesterday’s low of 662, we could see a reversion back toward the mean – and potentially lower.
Since the upper band of the indicator also coincides with visual resistance, a downside reversal – at least initially – is the most likely scenario.
Let’s see how this plays out!
P.S. Have you seen THIS?
Cheers!
Frank Ochoa
PivotBoss.com
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