Finding Bigger Gains from Smaller Stocks

Sometimes, traders can actually find bigger gain opportunities from smaller stocks in the US market. 

Smaller stocks tend to be focused on US customers and market segments, which insulates them from currencies, including the stronger US dollar, as well as global economic challenges, as the US is currently setting up to be one of the better performing economies on the planet.

Recently, the Russell 2000 Index has been outperforming the large-cap focused S&P 500 Index by more than two to one since May 13 through today.

And with that, I have a trade opportunity shaping up this week for the Russell 2000 Index futures contract (RTY) that I want to share with you today.

So, here’s how the trade is shaping up this week and how I see smaller stocks potentially setting up for bigger gains for you.

Russell 2000 Index Trade Setup

Here’s how the chart is moving this week…

Russell 2000 Futures Contract (RTY) Price and Technical Analysis – Source: TradingView

And here’s how I see the trade shaping up…

The Russell 2000 (RTY) one hour time frame is in an up trend. The market just finished extending to form a high price and is showing evidence of a short term bear pullback towards the up trend line. 

It will be a good idea to wait for a lower price near the up trend line before looking for long ideas. 

Entry: Counter trend line break bullish in the buy zone.

Stop: 1,718.40

Limit: 1,930.20

As long as the market stays above the up trend line, it will be a good idea to turn to the

five minute time frame and to look for Tunnel Trader long / Destination Trader long ideas.

The Bottom Line


For more on the markets as well as trading education and trading ideas like this one, look for the next edition of Josh’s Daily Direction in your email inbox each and every trading day.

I’ll be bringing you more of my stock and futures contract trading tutorials as well as some additional trading ideas.

And if you know someone who’d love to make this a part of their daily trading routine, send them over to joshsdailydirection.com to get signed up!

Keep on trading,

P.S. My colleague here at Traders Agency, Anthony Speciale, continues to provide a great pipeline of trading opportunities from his crude oil analysis. 

To learn more directly from him, click here for an on-demand seminar.

Josh Martinez

Josh Martinez

Josh Martinez is an elite Analyst who’s been actively trading the financial markets since 2011. He’s known as one the leading innovative traders in this industry due to his his cutting-edge strategies.

Josh first burst into the scene when he took an initial deposit investment of $500 and turned into over $39,000 in just under 2 years.
Josh’s trading articles have been featured in Your Trading Edge, The FX Street, Trader Planet, Forex Crunch, Trading Pub, and Equities.com.

In addition to trading, Joshua has also trained thousands of traders worldwide. His strategies and systems have helped others find success in the market

Leave a Reply

Your email address will not be published.

Stop wondering what direction the markets are headed! Sign up right now to get Josh’s Daily Direction straight to your inbox each morning before the trading day even begins. Best of all – it won’t cost you a dime.