Buyers Take Back Control

Other than a daily close above yesterday’s high, signs of aggressive buying are illustrated in the tail on today’s candle pattern, the rise above the open price following a bearish decline, and sustained buying pressure heading into the close. That shows strength that should be carried into the next two or three sessions.

Once dynamic support for the trend is successfully tested as support and followed by bullish signs, there is the potential for the bull trend to keep going. But today’s decline had additional significance as a standard falling ABCD pattern completed near the lows of the day. Overall, there looks like there is the potential for choppy movement within a two-week range from last week’s high of $3,439 to this week’s low of $3,121.

Choppy Between 20-Day and 50-Day Lines

Dynamic support continues with the 50-Day MA, while the 20-Day MA is now at $3,308 and shows a top dynamic resistance level. It will likely be more useful than the lower swing high, which is a bit higher. So, the 20-Day line provides a top price level where if it is exceeded demand may continue to improve and eventually challenge resistance around the recent lower swing high. In the near-term a rise above Wednesday’s high of $3,257 shows strength and would increase the chance for a rise into the 20-Day line.

For a look at all of today’s economic events, check out our economic calendar.