RUT: Looking at Some Trendlines

The RUT held it's own today and after gapping down rallied to close up 6.6 points at 455.

Pulling out to the Daily Chart there are several things that stand out to me. I'm going to list my observations below.

- The 200MA is pointing down, confirming an intermediate downtrend
- The 50MA is sideways, indicating consolidation
- With the consolidation the next move will either be continuation or reversal
- Markets generally resume in the direction of the intermediate trend (RUT did it for 5 years going up, now time for the bears?)
- Price is in the bottom 25% of the overall move down
- Price resisted when it hit the 38.2% retracement area
- Just confirmed lower low and lower high, confirming current short term bearish bias
- 20MA pointing down
- Wedge type formation forming on daily chart, wedges are typically a continuation pattern

Those are some observations of the chart taken at face value, since the trend is down, we have a lower high and lower low and a continuation pattern is forming I'd have to say the charts are looking a bit bearish. Having traded a lot of wedge patterns, the can be tricky and looking at this one there seems to be room for another move up to retest that upper trendline before it decides to fall. I am by no means saying that's what it's going to do, but now that I have my lines on here I start looking for the potential possibilities so I am better prepared with where resistance and support areas are likely. Just be aware that if it does get a bounce here there is some overhead resistance at that trendline.

RUT Daily Chart: