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Three Good Reasons To Buy iShares Russell 2000 Index Fund (NYSE: IWM)

|Includes: iShares Russell 2000 ETF (IWM)

July 19, 2012 (By Frank Kollar)

Shares of the widely traded small cap ETF IShares Russell 2000 Index Fund (NYSE: IWM) are likely headed considerably higher in coming weeks.

IWM is in a well defined up trend, since reaching correction lows on june 5th, the ETF has gained some 9%, outperforming the Nasdaq Composite Index (NDX) and S&P 500 Index (SPX).

During this advance, IWM has corrected three times. Each correction low has stopped at a higher intra-day as well as higher closing low. There have been two completed short term rallies also, each closing at a higher high.

Chart Courtesy of

If you draw a line through the higher lows reached since June 5th, it creates a solid rising trend support line.

IWM recently tested its 50-day moving average and the average held as support. The 50-day moving average is also well above the 200-day moving average which is a bullish indicator.

IWM should move higher from here, with a test of the previous 2012 highs near $84 a share likely in coming months.

The ( ETF Timing Strategy does currently hold a position in the IShares Russell 2000 Index Fund.

Disclosure: I am long IWM.