This analyst rarely uses the moving averages as an analytical tool in technical analysis, but it is a fact that many trading firms use averages in their algorithms. Due to this well known trait — it is not surprising that the 50 Day SMA received support yesterday, just as it did in August and October when challenged. What is more important is the movement after the test — does the market realize the test is a necessary part of developing a base or the initial movement in a collapse of the rally. Seems like a low risk opportunity to add length with tight stops.
Major Support: $5.275, $5.17, $4.88-$4.825, $4.61, $4.537,$4.375, $4.211, $4.156, $3.92 Minor Support: $4.728-$4.70, $4.66 Major Resistance:$5.47, $5.568, $5.96, $6.00
