Inside Day Sets Up

An inside day provides a potential bull trend continuation setup. A decisive advance above today’s high would trigger the breakout. Then, further signs of strength should be seen to reflect increasing demand, including a daily close above today’s high. Once yesterday’s high is exceeded, the path is clear to test higher potential resistance areas. As noted in prior articles, the key higher price area to watch is around the 200-Day MA, now at 2.47. It is also marked by the 50% retracement at 2.46. In addition, a measured move completes at 2.40.

Measured Move Targets 2.40

The measured move is looking for a match with the mid-December rally on a percentage basis. That rally ended at a high of 3.39 to complete a 51.8% advance. A similar size move for the current rally completes at 2.40. It deserves attention especially since the target is close to the 200-Day line. When two or more indicators identify a similar price zone, it is the market’s way of identifying an area of interest. Since there is some distance to be traveled to approach the 200-Day line, it is anticipated to act as resistance on the first approach.

Watch Support on Deeper Pullback

Alternatively, if a deeper pullback happens before a bullish continuation, a drop below today’s low of 2.14 will provide the next sign of weakening. Yesterday’s low of 2.13 may act as near-term support, but if not the prior recent trend high at 2.09 is then a target. During uptrend, it is common for resistance around a prior trend high to act as support during pullbacks.

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