Weekly Bull Pattern
Last week’s low was $2,982 and it is part of the trend structure of higher weekly lows, and therefore a potential support area. If the current weekly uptrend pattern of higher weekly lows is to be retained, support for the pullback would need to be seen at or above that price area. Nevertheless, there is potential support a little lower starting with the 38.2% Fibonacci retracement level at $2,971.
Notice that the 20-Day MA (purple) is rising, and it rose above the prior trend high of $2,956 today. The 20-Day line represents a key potential support zone following the reclaim of the line on March 12. It is now at $2,959. This pullback would be the first test of the 20-Day MA as support since then. Since it is also associated with other key initial price levels, there is a good chance that support is seen.
Intraday Pattern is Bearish
Although the short-term consolidation may continue to evolve a while longer, a drop below $2,999 will signal a continuation of the decline. Further insight is provided by the 1-Hour intraday chart (not shown). It shows a breakdown from a head and shoulders topping pattern last week, followed by two successful tests of resistance around the neckline of the pattern this week.
And there is a parallel trend channel or bear flag type pattern below the neckline. Lines for both the neckline and bottom of the channel can be seen on the enclosed daily chart. Therefore, a dip below Tuesday’s low of $3,007 may provide a sign of weakness that could lead to a drop below $2,999.
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