Russell 2000 hits a record high: could small caps move even higher?

The Russell 2000 Index hit a record high on Tuesday, but Bay Crest Partners’ Jonathan Krinsky says the small-cap index could continue the rally and move further up from here.

Krinsky defends his bullish call on CNBC’s “Halftime Report”

On CNBC’s “Halftime Report”, Krinsky said the Russell 2000 has been in consolidation for about nine months and historically, the small-cap index tends to rally after prolonged periods of trading sideways. He added:

A third of the Russell 2000, Krinsky said, hit a one-month high on Monday that also substantiates that the small-cap index will move further up in the coming months. Bespoke’s Paul Hickey also has a similar outlook on the Russell 2000.

Other reasons why Krinsky sees upside in the Russell 2000

According to Krinsky, the make-up of the Russell 2000 itself indicates that an even bigger break out is in the offing. He said:

Seasonality, he added, is a big factor for Biotech as well. Over the last nine years, the sector has been up 7.0% on average in November. Other metrics that track small caps like Vanguard have already broken out, which Krinsky sees as another indication that the Russell 2000 will be next.