Chart of the day: Russell 2000 finds it tough at the top

PUBLISHED : Tuesday, 12 August, 2014, 11:47pm
UPDATED : Wednesday, 13 August, 2014, 9:46am

Three attempts at record highs this year and what looks like a broadening top chart pattern morphing into a triple top around 1,200 points have left the Russell 2000 Index, the broadest measure of corporate America, looking top-heavy. While the 50 and 200-day moving averages have yet to cross, the fact that the index has given up 10 per cent in recent weeks signals that it is in a clear correction mode. A weekly close below key support at the 1,100 level would trigger a death cross of the averages, adding bearish pressure for a longer and more significant drop.

Nicole Elliott is a technical analyst