Lower Targets Come into Focus
However, given the decisive selling on Friday, the next lower target zone needs to be considered or even lower extensions if momentum persists. There is the confluence of the 61.8% Fibonacci at $2.90 and a higher swing low at $2.89. The lower 78.6% Fibonacci retracement at $2.79 would likely also provide a test of support near a lower uptrend line that connects to the January swing low.
Multi-Attempt Failure at Long-Term Resistance
Three recent advances, including this week’s move, attempted to reclaim the falling 200-day moving average, representing long-term dynamic resistance, and each failed. The other similar indicator is the uptrend line that connects to the August swing low. A bearish change in trend began in January on a break below the trendline. That was followed by a rally to test support near the 200-day line, then followed by a second decline below the trendline. A short upswing followed to test resistance near the trendline and 200-day average, resulting in a lower swing high at $3.49 and the top of a falling wedge pattern.
Momentum Fails Beneath Key Resistance
This week’s high price established a lower swing high that could end the current attempt to test key long-term dynamic resistance marked by the 200-day average near $3.43 and the uptrend line. The fact that the recent advance failed to reach the 200-day line is a sign of selling pressure. Instead, resistance was seen at the 78.6% Fibonacci retracement area, reinforcing the broader bearish continuation structure now forming after the failed breakout attempt.
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