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Short Covering Rocks Prices

Daily Continuous

Daily Continuous

Major Support: $3.444-$3.431, $3.313, $3.108, $3.045

Minor Support: $3.261, $3.152, $3.13, $2.938, $2.783, $2.704, $2.695, $2.61

Major Resistance: $3.568-$3.576, $3.661

With the forecasts changing several players who had been selling the old support between $3.31-$3.36 were forced to cover and the results are what we saw yesterday with the volume exploding in the Dec contract. Just as we witnessed when prices blew above $3.11 and rocketed up on short covering they eventually settled into a range between $3.11-$3.30.  Not sure how far this short covering will take this extension but the market is starting to become extended into the 3 standard deviation band that I warned about last month.  Give this time to settle in and develop a range before extending positions  of length. The rally is not over (rising volume is not a signal that the run is complete and expect open interest to decline on yesterday’s run) but prices need to digest this move.  That said, it is also becoming clear that the bias is positive and buying the dips is likely to continue.

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