Hey, Ross here:
As the rally continues, let’s look at a chart that shows why small-cap stocks could be about to break out strongly…
What needs to happen first – and why this matters for you.
Chart of the Day
This is the small-cap Russell 2000 index. Two head-and-shoulder patterns to notice here.
The first is the classically bearish one, where after forming the head and shoulders, the index falls below the “neckline”…
In this case represented by the 200-day moving average (red line on chart) – before plunging further.
But as you can see, the index just finished forming an inverse head-and-shoulder pattern – a classically bullish pattern…
And is now close to rising above the same 200-day moving average “neckline” once more.
If that happens, we could see the under-performing small-cap index stage a strong breakout…
And that is definitely something we can take advantage of.
Insight of the Day
The variance in small-cap stocks makes target selection even more important.
Small-cap stocks have the potential to deliver some truly spectacular gains – and deliver them fast.
The problem is that the variance in small-caps is huge…
Meaning certain stocks could be blasting off – while others are going nowhere or even falling.
That’s why, when it comes to small-caps, target selection is extremely critical. If you had just bought the small-cap index this year, you would still be underwater compared to a year ago.
And it’s also why I’m going LIVE right now to show you my top strategy for sniffing out the highest-potential stocks in this rally.
This strategy relies on much more than just price action…
It also looks for price-moving catalysts completely hidden to most traders.
That’s what makes it so powerful.
And let’s go get some year-end gains.
Embrace the surge,
Editor, Stock Surge Daily