Bearish Behavior Continues

Today’s bearish behavior keeps the next lower support zone in sight. It is around a long-term rising trendline, and an anchored volume weighted average price (AVWAP) level around $2.96. The trendline has not been challenged since it was established by connecting to the August 2024 swing low. This contrasts with the AVWAP line, which showed support during the market corrections in October 2024 and April.

Potentially Solid Support

Since the two lines are marking a similar potential support area, the price area takes on greater potential significance. However, if it fails to lead to a bottom, the next lower support zone is shown from around the April swing low of $2.86 and down to a 78.6% retracement level at $2.79. There is also the completion of a bearish measured move that matches a downswing starting from an interim swing high on March 31, on a percentage basis that matches around $2.79.

Bearish End to Week Looks Likely

Since there is only one more trading day to the week, a weekly closing price below the prior swing low of $3.15 will confirm a bearish continuation of the decline from the June swing high (A). That will open the door to a possible drop to the trendline and AVWAP price zone. If support is seen and it is followed by a bullish reversal, a new higher swing low will be established. Given the bearish implications currently in the chart, rallies are likely to encounter resistance that turns price back down.

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