Outperforming Small-Cap ETFs Eye Five-Year Breakout

ETF Trends

The small-cap iShares Russell 2000 (IWM) has more than doubled the return of the S&P 500 the past month and is trying to break out to all-time highs.

The small-cap ETF is up 6.6% for the trailing month, compared with a 3.1% gain for the S&P 500, according to Morningstar.

However, the fund’s tracking index, the Russell 2000, has found the 855-870 price zone to be tough resistance since 2007. Each time it has kissed this price zone it has backed off, says Chris Kimble at Kimble Charting Solutions.

“A break above resistance would be a real positive for small-caps, because it would represent a five-year breakout,” he added.

For 2012, the small-cap ETF and the S&P 500 have performed about the same with total returns of about 16%.

iShares Russell 2000

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small-cap-etf

Full disclosure: Tom Lydon’s clients own IWM.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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