In reference to earlier report, we might be finding ourselves in scenario 1 of the three potential scenarios outlined:
The neckline gets triggered, shorts enter the market, but the EMAs below remain supportive. In this case this would be classic bear trap. Price would find support at the EMAs and quickly turn up again, shooting out on the other side of the range, forcing all bears out of their positions.
This is precisely what is now developing after several failed breaks below neckline. Price got absorbed twice at EMA 100 on Daily, indicating that the EMA remains supportive for the current trend. The break and close above the neckline further strengthens the position of the Bulls being in control.
The next logical step in this play would be for prices to shoot out of the other side of the range, which would be a signifcant surge and close above the downward trendline, at which point not only the breakdown has failed, but the consolidation completed as well.
With a break of $9,400 High, Bears carrying Short positions will be forced out of their positions, thereby helping to up the price. A portion of those Bears could as well come to the conclusion that the Bear case is no longer valid, leading to them not only closing but turning their positions to Long. Of course, Traders who are currently flat will see this as an opportunity to long the trendline break in anticipation of the uptrend continuing. This might lead to strong volatility and spike up on volume.
As such, the price action of the six past weeks or so will be seen as consolidation and retest of Daily EMAs, thus the logical conclusion would be continuation of the rally. Takeout of $10,500 would still be most critical.
To validate the scenario outlined, price needs to break above last High around $9,400, which would act as an entry signal for flat traders looking to buy the trendline break. Knowing that Bears are currently trapped this might fuel another strong leg up with the level of $10,500 being most critical to break to re-ignite the momentum and provide a longterm rally.