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IWM trade ideas

What happens after double top rally in markets?I am using index ETFs here since I use them for option trades and they are so widely traded. Study DIA, SPY, and QQQ and note the double top similarity as it corresponds to RSI. DIA and SPY were a little stronger in that RSI showed a double top above 50. QQQ had an earlier 20 below 200 ma cross, so it is weaker and its RSI did a double retest of 50. Friday's candle broke the lows on these three charts and technically triggered more downside. However, in this anything can happen market, there is a possibility that this Friday-Monday pullback results in another move higher before making new lows. For trading, this means be patient and do not over-commit to one direction. You can start a smaller swing position and add more puts when you have more confidence in the trade. Also, though not shown here, stochastic %K has given a sell warning on the daily chart. The candles from 9-11 Feb moved %K from above 80 to below 20. Sometimes more downside follows immediately, while more often there is a price bounce up first as %D is still making its way lower. I cannot predict which will happen but I know to be on the lookout for a reason to buy puts. I want to discuss IWM separately, as it does not have the same double top formation on RSI and price. IWM is more bearish, as 20sma crossed below 200 earlier, and so this chart is weaker. When you look at its weekly chart and indicators, you may want to buy swing puts.
AMEX:IWMShort
by OptionsRising
2
100% distribution IWM is in the final phase of a wyckoff distribution cycle. Its pretty obvious to where this is heading, and where we get our bounce. ( green trend line ) but before we get there, i see a quick little drop to the high 180s (186 to 188) then a little run to retest that downward resistance and then that is when we will get our bounce on the green trend line. which also lines up to where a distribution cycle would end... ( where the last accumulation ended) plus its time they remove the covid band-aid price target 160 to 170... but end of March. Good luck.
AMEX:IWMShort
by Taterchip09
$IWM Russel 2000 - Small caps previous support now resistance?Small caps tend to lead the market. Not a great picture as we saw a strong reversal off previous support yesterday. Technically we have the 50dma trading below both the declining 200day sma and emas. The moving averages are pointing down and we are still under the anchored vwaps from the previous highs. We also seem to be forming a rising wedge formation which are usually continuation patterns in the direction of the previous trend (currently down). Not much to be bullish about in this chart, so odds are in favour of further downside, unless we can climb above a mountain of significant resistance levels above (something which seems unlikely at this stage).
AMEX:IWMShort
by MarcoOlevano
$IWM — Market Forecast UpdateThe Russell2000 needs to be stopped; the small cap index is filled with flaky names that have yet to make profit. These companies, for the most part, don't earn money. This index will continue to get crushed. We played the upside breakout to 240s, and we also played the downside break to 190s. I called the top on this index at 225. I am forecasting lower. The CCI is egregiously overextended, we have pitiful volume on strong moves to the upside, and we just created a gap from today's strong move higher. We have a recipe for a 500% trade with put options.
AMEX:IWMShort
by OptionsAddicts
IWM 184/179 Mar 4th Put SpreadTrade entered today based on my thinking that 1. This is our second green bar in a row, and I believe that either we have found a new range in the 190-200 range or we are headed back up. Which leads me to point number two 2. If we are in fact in a range then the 184 short strike is outside of that range and then some, providing a decent margin of error. 184 was also the 16 delta short strike at the time, and met the return metrics for the trade (10% return on margin required - AKA Max loss). The plan will remain with these trades to close at -200% or take profit at +50%. Fill on these was -0.57 on average after commissions. That is it, mechanical and S/R based. Sorry there isnt more secret sauce!
AMEX:IWMLong
by ThetaTrades
Russell 2000 (IWM) Breaks Major 1-Year Support, More DownsideRussell 2000 represented by its ETF counterpart IWM has now broken a major 1-year support level. This level has provided support (with only minor breaks that ended up reversing) since approximately February 2021. Interestingly, IWM had a failed breakout / rally back in early November 2021. After about 12 trading sessions, the breakout completely collapsed and price re-entered the trading range (shown in the chart above as a yellow-tinted trading channel). Moreover, Stochastics and ADX/DMI confirm that a downtrend is well underway in the short term (and perhaps the intermediate term). ADX / DMI shows trend levels rising on the daily chart with ADX at 29.70 and -DI rising well above +DI at approx. 36.9. On the weekly chart (not shown above), the ADX / DMI shows even strong downtrend levels at 30.47. The Awesome Oscillator shows increasing downward momentum on the daily chart as well as the weekly chart. And the Fast Stochastics Oscillator (13/1/3) shows oversold readings, but oversold readings in a downtrend tend to confirm the trend and can remain oversold (i.e., not a buy signal in a downtrend). On the weekly chart, my Fast Stochastic shows a pattern characteristic of a downtrend as %D has been printing for the most part under the 30 level for about 8 weeks, with the week of January 3, 2022 rising to 32, barely above the 30 level before turning lower gain. (Note that January 3, 2022 was the end of the year-end Santa Claus rally.) With this breakdown, what happens next? Nothing is certain, but technical analysis yields reasonable estimates. A bounce is likely given that Stochastics are quite oversold on all time frames. Even though oversold levels may persist, a better risk-reward entry may be provided when and if IWM bounces (perhaps tomorrow). The bounce could retrace a portion of the recent downward move. I might consider a bounce worth selling between 208-210. I am trading this cautiously (smaller position) with IWM call credit spread. I chose an OTM call credit spread today as a way of keeping risk smaller (i.e., more premium collected = lower capital risk). But OTM call credit spreads also increase the risk of failure because they are OTM. A higher probability play may be an ITM call credit spread (i.e., around 210-215 strikes)—but because the premium collected will be much lower, the risk is higher and the risk reward ratio is worse. Near-term target : Approximately 190-195. There could be a bounce as described above. Stop : A close above 211-212. (If IWM starts dropping like a rock tomorrow, it might be better to avoid chasing and wait for the next bounce if there is one.) A better entry would occur after an overbought signal on the Fast Stochastics using shorter term timeframes intraday. DISCLAIMER: Please do not trade options or IWM securities unless you understand risk, position sizing, and the security product being traded. And please do your own research. I cannot provide financial advice and am not licensed nor offering services as a financial advisor.
AMEX:IWM
by SquishTrade
3
$IWM likely retest the low range of January$IWM the small-cap index ETF, which broke down its 1 year-long distribution area, is looking like the second weakest index in terms of structure (still hasn't made past the fib 0.382 level which indicates weakness) - With 2 weekly rejection candles, the index is looking like it will inevitably test the bottom of the trading range, there's around a 4% downside from the current level. Personal trade: Taken short position from the 0.382 level - Entry 201 - first take profit 194, second take profit 191. - Stop-loss 205.
AMEX:IWMShort
by Mattyx227
Rolling: IWM February 25th 197/198 Short Strangle to March 18th... 199 short straddle. Comments: As with my February 18th IWM tight short strangle, rolling out my February 25th to the March 18th 199 short straddle for a 4.24 credit. Total credits collected of 12.80 relative to the March 18th 199 short straddle price of 14.46, so also still slightly underwater. I'll continue naturally continue to do defensive adjustments as necessary to keep these setups from getting too directional.
AMEX:IWM
by NaughtyPines
4