Russell 2000 (US2000) has been an outperformer following Democrat victory in US elections. The index is trading at record highs and has hit 2,300 pts. The index trades at the largest distance above the 200-day long-term average in decades, signalling an overbought market. From a technical point of view, US2000 has approached the upper limit of the upward channel in the 2,300 pts area. Having said that, there is a near-term risk of a correction. In such a scenario, support level to watch can be found at the lower limit of the market geometry (2,175 pts) as well as lower limit of the channel. However, traders should keep in mind that overall market sentiment remains bullish in anticipation of the final approval for US stimulus deal.
Source: xStation5
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Source: Bloomberg, XTB
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