Structural Retest of Broken Trend Support
The larger dynamic unfolding is that of prior long-term trend support now being tested as resistance. Once that process completes, the larger bearish pattern may begin to reassert itself, or price may instead break back above resistance and resume the broader recovery. In February, a breakdown from a long-term uptrend line triggered a sustained decline, eventually leading to a drop to the April swing low of $2.50. The subsequent and current advance is a pullback to test prior support of the uptrend line as resistance. Since the 200-day moving average is also nearby, it plays a similar role, functioning as an additional layer of confluence, even though it has more recently been inside a consolidation phase.
Near-Term Trend Supports in Focus
If support near the 100-day moving average fails, then the 10-day moving average marks key dynamic trend support near $3.08. A failure of support at the 10-day average may result in the 20-day moving average at $2.96 being tested.
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