NEW YORK (TheStreet) -- Small caps look poised for an upside move this quarter.
In the chart above, we show an easy to read line chart, also known as "close only," of the Russell 2000 Index. The Russell has rallied over its 50-day moving average and shows a bullish Moving Average Convergence Divergence oscillator. If, or rather, when the Russell 2000 closes over its September peak around $1178, we will have a breakout to the upside. Measuring the height of this two-month pattern gives us an upside price projection of around $1250. The volume for this index is not reported, so we looked at the iShares Russell 2000 ETF (IWM) to see if volume confirms.
In this chart, we can see a flat On Balance Volume (OBV) line for IWM the past two months. If the OBV line starts to turn up soon with the price action, we will be more bullish in our view of the Russell 2000 Index for the fourth quarter.