Thursday, January 26, 2017 12:42:10 PM
IJR Breaks Flag Resistance
The S&P SmallCap iShares (IJR) was lagging this year because it corrected with a falling flag. RSI dipped to 32.18 last week, but did not become "oversold". Sometimes RSI does not fully cooperate and provide a nice oversold signal. This is when I look to the price chart for clues. First and foremost, the pullback over the last few weeks was always viewed as a correction within a bigger uptrend. IJR closed below 68 with a black candlestick last Thursday, firmed on Friday-Monday and then broke out on Monday. This is a four-candlestick reversal pattern - decline, stall and reverse. The breakout zone becomes the first area to watch for a failure. Thus, I think a close below 68.2 would call for a reassessment.
The S&P SmallCap iShares (IJR) was lagging this year because it corrected with a falling flag. RSI dipped to 32.18 last week, but did not become "oversold". Sometimes RSI does not fully cooperate and provide a nice oversold signal. This is when I look to the price chart for clues. First and foremost, the pullback over the last few weeks was always viewed as a correction within a bigger uptrend. IJR closed below 68 with a black candlestick last Thursday, firmed on Friday-Monday and then broke out on Monday. This is a four-candlestick reversal pattern - decline, stall and reverse. The breakout zone becomes the first area to watch for a failure. Thus, I think a close below 68.2 would call for a reassessment.
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