5 Charts To Watch This Week: Breakouts & Divergences!

Russell 2000 – Bull flag

There’s a clear bull flag setup (price moving against prevailing trend in a narrow range).  Using the November low as the base of the flagpole would suggest a price target of around 1600.  Speculative positioning remains stretched to the upside (as talked about in the Dec 16 issue of the Weekly Macro Themes), albeit the last time it was towards the current levels was the start of the 2013 breakout.

Overall technical view: Bullish bias, bull flag serves as a trigger.

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