December began the week with a gap higher ($2.748 – $2.769) and extending its rally to test conventional, moving average and mathematical resistance (all around $3.00).
With volume increasing (average daily volume was 180,000 contracts higher) and open interest declining (total open interest fell 57,000+ contracts from last weeks all – time high) suggested the potential for a spirited round of short covering. Unfortunately for the bulls, December failed at that resistance and declined to close Monday’s gap. Trade up to and failure at a nearly identical price in consecutive months suggests a textbook “double top”, not unlike the twin lows of then prompt November at $2.210 on 10/21 and $2.200 on 10/29, and previously before that prompt October at $2.214 on 09/11, $2.229 on 09/12 and $2.223 on 09/19, clearly defining the low end of trade range.
