Above $3.19 is Bullish

A decisive rally above today’s high will trigger a one-day bullish reversal, confirmed by a daily close above it. But an advance above the recent lower swing high at $3.19 presents a more reliable level to indicate that demand is improving and may continue. An advance above $3.19 will trigger a bullish reversal of the short-term decline that began from the $3.63 swing high. If triggered, the 20-Day MA, now at $3.29 and falling, is the first upside target and it could easily be surpassed if demand continues to improve.

Second Target 200-Day MA

Subsequently, the area around the 200-Day MA, currently at $3.64, identifies the next upside target. Particularly, given that the 50-Day MA just converged with the 200-Day line and they identify a similar price level as possible resistance. An AVWAP line that began off the April swing low, also shows support around those two lines. Given the confluence of indicators, the price zone could potentially act like a magnet as price is drawn towards it. Nevertheless, it identifies a potentially significant pivot zone, as a decisive rally above it will signal a breakout and further confirm strength.

Long-Term Support Holds

The establishment of support near the long-term trendline shows the possible completion of the bearish correction that began following the trend high of $4.90 in March. Notice that the volatility of the long-term uptrend has been contained within a large rising parallel trend channel (purple).

Resistance was successfully tested multiple times at the beginning of year, eventually leading to a sustained correction. Given the symmetrical nature of the channel, a bounce off one side points to the other side. Once the other side is reached, as happened today with a touch of the bottom of the channel, a move to the other side is possible.

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