The iShares Russell 2000 ETF (IWM) continued its strong rally, reaching a record high of $244.8 this week. It has jumped by over 51% from its lowest level in 2023 as the American economy avoided a hard landing. This article looks at some of the best and worst-performing Russell 2000 stocks and whether it has more upside to go.
Top performing stocks in the IWM ETF
Many companies in the Russell 2000 index have done well this year, helped by their respective industries and its strong performance.
Genedx stock has soared by over 2,825% this year, helped by the ongoing demand of genomic testing in the United States. This rally has brought its market cap to over $2.21 billion.
The other top-performing company in the IWM ETF is Sezzle, a leading player in the Buy Now Pay Later (BNPL) industry that is doing well. Like Affirm and Klarna, the company enables users to buy and pay products with four installments.
Sezzle’s business has been doing fairly well, with its annual revenue surging from $13.3 million in 2019 to over $221 million in the trailing twelve months (TTM). It has also started to make a profit as it made $7.1 million in 2023 after making a $38.1 million loss a year earlier.
Root Inc. stock price has also surged this year as demand for online insurance jumped. Its annual revenue has risen from $275 million in 2019 to almost $400 million last year. As we wrote on Lemonade, demand for online insurance solutions will likely continue rising.
NuScale Power is another top-performing company in the IWM ETF as it jumped by over 750% this year. This growth happened as demand for nuclear energy rose among data center companies like Microsoft and Amazon. Analysts believe that the future of small modular reactors is bright, especially when there is scale.
Intuitive Machines stock has soared by 474% this year as the company continued to see more demand and increased backlog in its launches.
The other top-performing companies in the Russell 2000 index are Core Scientific, Nano Nuclear Energy, Avidity Biosciences, Rocket Lab, and Lumen Technologies.
The Russell 2000 index often has some of the best-performing companies in Wall Street. However, it also has a good track record of having some notable laggards. Canoo stock price has crashed by over 92% this year as concerns about its viability continues.
The other notable laggard in the index is Virgin Galactic, a company that has been in the business for over 20 years. Analysts expect the company to run out of money in either 2024 or 2025.
Other companies that have underperformed the market this year are Marketwise, Luminar Technologies, Cassava Sciences, Chegg, and Digital Turbine.
IWM ETF analysis
IWM chart by TradingView
The weekly chart shows that the Russell 2000 ETF has been in a strong bullish trend in the past few months. It has now formed a cup and handle, which is made up of a rounded bottom and a consolidation at the top.
To estimate the target with the C&H pattern, one needs to measure the size of the cup and extrapolate it from its upper side. In this case, the depth of the cup is about 33%, meaning that the fund could jump to $325 in the longer term.
The IWM Fund has also remained above the 50-week and 200-week Exponential Moving Averages (EMA), a sign that there is still demand. Oscillators like the Relative Strength Index (RSI) and the MACD have all pointed upwards.
Therefore, the IWM Fund will likely continue rising although some consolidation is possible as it forms the handle section of the C&H pattern.
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