Small Cap Surge: Sharp Gains Expected

The iShares Russell 2000 Index ETF (NYSEARCA:IWM), which tracks small caps, has a very bullish consolidation pattern setup over the last few weeks. This is a digestion of the massive 20% surge it saw after Donald Trump won the presidency. As long as the chart holds this pattern, investors should be looking for a surge higher over the next two weeks in the IWM to $140 at a minimum. However, if at any time the IWM closes below the channel shown in the stock chart of IWM below, exit immediately. This would be a failed pattern and signal a coming collapse. Investors should pay very close attention to small cap stocks that are undervalued. They may see big gains as long as the breakout begins.

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