Yesterday I warned that a test of the 200 day EMA was possible. Thankfully the equity bounced off of that level and recovered. I had said that the action presented a good buying opportunity. If you were fast enough and lucky enough to get in a buy, good for you! If you were not, it appears that you may have to enter at a slightly higher level.
Some good news is that the equity actually tested the resistance at about $3.25 today, so it is demonstrating that it can test the level. Volume was above normal at 93 million shares, but a sharp decline from the 153 million that traded in the previous session. If there was a seller takedown, it seems to have run out of steam.
The support and resistance is showing little support all the way down to $2.99. Keep your eyes on this, because it can walk down again as fast as it walked up. Resistance above is at $3.23 and then $3.34. Watch volume and be cautious of $3.18. If the equity can pop above $3.25 or so and hold, we can re-enter a trading range.
The EMA's did add a warning flag. That is why we need to be prepared for another walk down. This stock needs to gain about a dime to start taking away warning flags. Watch that $3.25 level closely, and then watch $3.32.
Support and Resistance