Moving-Average Pressure Builds
Notably, as the symmetrical triangle formed, it successfully tested resistance at both the 200-day and 100-day moving averages. More recently, the 100-day average has defined dynamic resistance, as it was repeatedly tested as resistance, resulting in further weakness that led to Wednesday’s bearish signal. The 20-day and 50-day moving averages also converged prior to more decisive selling. This set the stage for the completion of the consolidation phase, as the convergence of the moving averages reflected further narrowing of the price range. Eventually, that compression led to an expansion in volatility and a decisive move lower, as seen on Thursday.
Can HYG Reclaim Broken Support?
Given the likelihood of lower prices being reached, counter-trend rallies will likely be met with resistance that could ultimately resolve to the downside. A key resistance zone is marked by the higher swing low at $79.46 and Wednesday’s low of $79.48. This area is particularly important because it sits near the lower boundary of the broken triangle. A sustained recovery above the $79.46-$79.48 zone would therefore weaken the immediate bearish breakdown signal, while continued resistance below it would reinforce the risk of further declines toward $78.57 and potentially the triangle’s measuring objective.
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