Simplistic technical analysis for Russell 2000 (November 8th 2014)

Last week I had predicted that against all expectations, the Russell may push higher before reversing itself by end of the week.

The way things actually proceeded was that the Russell moved sideways and ended the week pretty much at the same place as last week.

Again, we are looking at 6 month candlestick chart for Russell 2000 on Yahoo stocks, with the following indicators on the chart.

1. Bollinger Bands at 20 days and 2 Standard deviation
2. 20, 50 and 200 day Simple Moving Averages
3. MACD indicator for 26, 12 and 9
4. 14 day Money Flow Index

Looking at the above, we can see that the Bollinger band has broadened, giving the stock room to grow (highlight 1). The MFI has moved sideways from last week indicating that a downward movement is likely but not guaranteed (highlight 2). However, the MACD divergence has sloped down indicating that downward pressure has reduced. Given indicators 1 and 3, it seems these are bullish indicators hinting that the index still has room to move higher.

I would also like to include the following chart... XLE (Energy index), XLP (Consumer Staples) and XLY (Consumer Discretionary). We can see that XLY is quite correlated to the Russell. The Discretionary spending outlook is weak indicating that Russell will continue its long term down ward trend eventually.

Based on the above, my amateur predictions are as follows:

1. The index will move higher by 10 or 15 points in the coming week (1185-1190) , before starting to fall.

2. By end of second week, the index would again fall marginally below 1180.

Please do your own research before making any financial decisions.