Technical Analysis: Three-Day Moving Average Convergence Pattern and Its Historical Implications

After this round's three-day moving average convergence, a downward test of the lower track appears inevitable.

Examining historical patterns reveals consistent behavior. The market displayed nearly identical technical formations in March, May, and August of 2023, as well as January and April of 2024, and January of 2025.

These historical reference points demonstrate that such three-day moving average convergence typically signals an upcoming period of increased volatility.

Technical analysis indicates these formations frequently lead to multiple weekly pullbacks following the initial consolidation pattern.

Patient positioning remains the optimal strategy at this juncture.

A pullback in the three-day moving average represents a significant technical retracement. Traders should anticipate this correction phase lasting approximately ten days to half a month - well within normal parameters for this technical pattern.

Following this expected correction period, historical data suggests substantial price rebounds will likely emerge. Previous instances have demonstrated that such recoveries frequently drive prices toward new highs.

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