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50% Retracement at $3.73
The 50% retracement at $3.73 marks the beginning of a possible support zone that goes down to the 61.8% Fibonacci retracement level at $3.56. Last week’s low at $3.55 marked support for the week and is part of the uptrend price structure of higher weekly highs and higher lows.
It therefore has significance as a drop below it provides a bearish weekly signal and could lead to a drop towards the lower internal uptrend line. Since the weekly low aligns with the 61.8% retracement at $3.56, it deserves extra attention. In addition to a lower trendline target, there is a price zone from $3.32 to $3.31, consisting of the 20-Week MA and the 78.6% retracement, respectively.
Price Range From $4.73 to $3.56
Within the $3.73 to $3.56 price range is the 50-Day MA at $3.71. That looks to be the next key potential support level, particularly since the 20-Day MA has converged with the 50-Day as of today. Both moving averages are rising and are on track converge with the 50% retracement level. Unless there is a sharp drop before the end of today’s session, this week will end as an inside week with a closing price near the lows of the range.
Monthly Chart Shows Downward Pressure
Moreover, February ends today with the sixth consecutive month of higher monthly highs and higher monthly lows. However, the month is set to close in a relatively weak position near the midpoint of the month’s trading range, which is $3.82. The prior two months also ended in a relatively weak position, especially January, which closed near the lows for the month. In addition, the 50-Month MA was exceeded over the past few months but in each case the month ended below the 50-Month line, now at $3.85.
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