For this week’s trade idea, Live Trade Profit’s Josh Martinez has an opportunity for you, and wants to go over a possible Russell 2000 E-mini contract play. An E-mini contract is a futures contract that is worth one fifth of the corresponding full-sized contract.
The first thing we noticed when looking at the one-hour chart is that the E-mini Russell’s trading channel continues to widen.
What exactly does this mean?
A trading channel consists of both support and resistance. Support is the lower portion of a channel and resistance is the top.
Depending if the Russell 2000 continues to be bullish, there’s the possibility of entering the market on the back side of resistance. If it continues on a bearish trajectory, however, a possible good entry might be on previous support.
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