Weekly Continuous
Last week after March rallied from Monday’s high volume low ($3.155) on substantial lower volume. The air left the balloon and prices succumbed to gravity (gravity is the only thing that works every time).
A low volume rally after a high volume decline suggests an absence of enthusiastic buying interest. Typically, the result of the brief run is that price returns from whence it came…and often somewhat lower low. That is exactly what happened during the past week.
March began that process with another gap down…that remains open between $3.316 and $3.387. The prompt traded a lower low on Tuesday and Wednesday. The last two of those lows carrying March into the target zone between $3.025 and $3.100. The important technical news is not that the bounce didn’t last or that March traded a lower low, the more important factors are 1) that the prompt did so with lower volume, 2) that the low before a minor “outside” day reversal higher was above the rising long – term trend defining trend line and, 3) that the low was a higher low (higher than the January low, $3.055 v $3.006). The last technical aspect of trade was corrected with a lower low on light trade Monday.
The consensus of technical indicators continued to deteriorate but resists clear negative agreement, similar from the way the consensus declined positive agreement during the December and January rallies.
The aftereffects of extreme range expansion are still being felt by momentum indicators, but the math is slowly returning to normal. Without regard to the anomalies created a few weeks ago, weekly indicators have a price negative bias with bearish momentum divergences. The daily MACD is similarly oversold to the calculation just preceding the January low. Market internals presented a unified positive bias for the first time in a while. Volume fell along with prompt gas as did open interest which both are technical positives.
Major Support: $3.16-$3.148, $3.136-$3.024, $2.93
Minor Support/Resistance :
Major Resistance: $3.387, $3.787-$3.831, $4.063, $4.086, $4.593, $5.333, $5.496