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Ishares Russell 2000 Index Fund (NYSE: IWM) Tests Support

|Includes: iShares Russell 2000 ETF (IWM)

January 11, 2011

Shares of Ishares Russell 2000 Index Fund (NYSE: IWM) have led the stock market in its four month rally. But share prices have been hitting important support during intra-day selloffs.

IWM has been unable to rise above $79.00 a share except for one day last week, January 3 when it reached $80.00 before closing at $79.60. But the very next day share prices dropped precipitously and closed at $78.42.

Over the past week intra-day lows have tested $77.50 almost every day, but still managed to rise by the close to end each day near $79.00.

If we hold here a new rally could easily take IWM up to $83.61. But if share prices close below $77.50 in coming days, look for a correction that could quickly reach $74.00 a share.

The ( ETF Timing Strategy has a position in Ishares Russell 2000 Index Fund.