Shares of the iShares Russell 2000 ETF (NYSE: IWM) have been in a steady downtrend. This ETF tracks small cap stocks. If it drops to the $171 level, there’s a chance the sell-off ends and the market reverses.
As you can see on the following chart, this level was previously resistance. And sometimes levels that were resistance can convert into support. It happens because of the seller's remorse.
After the shares broke resistance and the price went higher, many investors who sold at $171 now regret doing so. A number of them will decide to buy their shares back, but they will only do so if they can get them for the same price they sold at.
As a result, there may be a large concentration of buy orders placed around the $171 level. This could form support and put an end to the downtrend.
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