There’s a good chance the stock rebounds if it reaches $3. Not only is this level important psychologically, but it was also resistance in March and early April.
Many investors who sold at $3 probably regretted their decision after the stock moved higher. A number of these remorseful sellers decide to buy their shares back, but only if they can get them for the same price they sold then at.
This means they’ll be placing their buy orders at $3. If there are enough of these orders, support will form.
If they keep going lower, there’s a good chance they find some support around the $10.50 level. This was support and the bottom in April. Sometimes support levels can remain intact for long periods of time and that could be the case here.
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