First Majestic Hitting Multi-Decade Support Level

First Majestic could go lower from here but it has reached a fairly strong support level. The $3 level acted as both support and resistance during 2006 through 2010 and now price is testing that level again. The sliding parallel, see the dashed line on the chart below, provided support in November and December 2014 and price is testing that support level again.

MACD is supportive of higher prices from here. The histogram has been rising for a year now, creating a significant divergence with the price action. The MACD line and moving average have flattened out like they don’t want to go any lower.

Check out the price action starting with the MACD buy signal and double exponential moving averages (DEMA) crossover in 2009. At some point, possibly soon, we are likely to see a repeat of this behavior.



By Bryan from Pitchfork Playground

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