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S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
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2 Stocks to Buy on The Dip: One a Value, the Other High-Yielding
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Closing prices for crude oil, gold and other commodities
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JPMorgan Chase Falls 5% as Consumer Cracking Begins to Show
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Semiconductor Giants: Navigating the Recent Pullback
2 Stocks to Buy on The Dip: One a Value, the Other High-Yielding
Breakout Alert: Coinbase's Consolidation Is About To End
3 Key Stocks Helping to Drive the EV Race
Closing prices for crude oil, gold and other commodities
You Can Follow BlackRock’s Market View for Your Money
JPMorgan Chase Falls 5% as Consumer Cracking Begins to Show
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Semiconductor Giants: Navigating the Recent Pullback
2 Stocks to Buy on The Dip: One a Value, the Other High-Yielding
Breakout Alert: Coinbase's Consolidation Is About To End
3 Key Stocks Helping to Drive the EV Race
Closing prices for crude oil, gold and other commodities
You Can Follow BlackRock’s Market View for Your Money
JPMorgan Chase Falls 5% as Consumer Cracking Begins to Show

The iShares Russell 2000 ETF Edges Closer to Major Breakout

Russell 2000 Index is a market index comprised of 2,000 small-cap companies, text concept on card

Key Points

  • The iShares Russell 2000 ETF (NYSE: IWM) has surged over 14% in the past three months, consolidating near $205, indicating a strong uptrend.
  • Small-cap stocks, including the IWM ETF, are rebounding, reflecting renewed investor interest amid market optimism.
  • The IWM's technical setup suggests a bullish trend, with a potential breakout above $205 likely driving further inflows into small caps.
  • 5 stocks we like better than iShares Russell 2000 ETF

Small caps and the iShares Russell 2000 ETF NYSE: IWM are marking a notable resurgence, reflecting a significant shift in market sentiment. Over the past three months, the ETF has surged more than 14%, showing resilience even with the year-to-date gain standing at 1.61%. Currently, the ETF is consolidating near a pivotal breakout point around $205, underlining a solid uptrend supported by key simple moving averages.

After a lengthy period of significant underperformance, small caps, and the IWM ETF are regaining their footing in the market. The resurgence of the IWM began with a robust rally three months ago. During this period, the ETF displayed remarkable strength, outpacing broader market indices and signaling renewed investor interest in small-cap stocks. This should come as no surprise, as the overall market continues to make new all-time highs, and thus, investor optimism and risk appetite are increasing, with capital now flowing into small to mid-cap stocks.

IWM stock history chart

This price action is indicative of shifting market sentiment. Investors are increasingly drawn to the growth potential offered by smaller companies, particularly in the current economic climate. As market participants reassess their risk appetite and seek opportunities for capital appreciation, small caps, and traditionally riskier options are regaining favor as an attractive investment option.

Now, with the ETF fast approaching a major breakout and inflection area, the sector might be about to experience a significant momentum shift. Due to the current relative strength and positioning of the ETF, it makes sense to take a closer look ahead of a potential breakout.

Overview of the IWM

The iShares Russell 2000 ETF tracks the performance of the Russell 2000 Index, which encompasses a diverse array of small-cap stocks in the US equity market. With approximately 2,000 constituent companies, the index provides exposure to the smaller end of the market spectrum. Despite its recent rally, the ETF maintains its intrinsic characteristics as a diversified investment vehicle within the small-cap segment.

iShares Russell 2000 ETF price targets chart

The IWM has geographic exposure mainly in the United States, with 93.5% of the fund exposed to the territory. Furthermore, the ETF has the most exposure to Financials, with 17% exposure to the sector. Notably, holdings in the IWM currently have an aggregate rating of Moderate Buy, based on 305 analyst ratings covering 47 companies (11.2% of the portfolio).


Its holdings have an aggregate price target of $220, covering 47 companies, predicting an almost 8% upside for the ETF.

The trend remains bullish

The current technical setup of the IWM is indicative of a bullish trend. The ETF is consolidating near a crucial breakout level of $205, showcasing a strong foundation for further upward movement. Moreover, it maintains a firm uptrend above its key simple moving averages, bolstering confidence among investors regarding its potential for continued growth.

Going forward, if the ETF can break above resistance, near $205, and hold with authority, further inflows could be seen into small caps. After that, a move toward $210 in the short term could be a likely outcome. 

Looking ahead, the trajectory of small caps, including the IWM, remains subject to various factors, such as economic and market-related, along with the performance of its top holdings. While the recent momentum suggests a favorable outlook, continued vigilance is warranted, given the increased risky nature of its holdings with respect to heightened volatility. Economic indicators, top holdings performance, and broader market dynamics will all play a role in shaping the future direction of small-cap stocks.

Should you invest $1,000 in iShares Russell 2000 ETF right now?

Before you consider iShares Russell 2000 ETF, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and iShares Russell 2000 ETF wasn't on the list.

While iShares Russell 2000 ETF currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
iShares Russell 2000 ETF (IWM)N/A$198.71-1.8%1.30%N/AN/AN/A
Compare These Stocks  Add These Stocks to My Watchlist 

Ryan Hasson

About Ryan Hasson

  • Ry.has7@gmail.com

Contributing Author

Technical Analysis, Momentum Trading, Risk Management

Experience

Ryan Hasson has been a contributing writer for MarketBeat since 2023.

Areas of Expertise

Equity research and analysis, technical analysis and price action, market sentiment and underlying themes, risk management and trading psychology

Education

Bachelor of Commerce in Financial Management

Past Experience

Equities trader, Kershner Trading Group, business analysis consultant, SMB Capital

Zoom International: Business Analysis Consultant.


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