Applied Optoelectronics $AAOI has been in a period of consolidation and a bit of bearish correction since June. This comes after a rally from around $24.60 to $almost $50 (basically 100%) since April. AAOI Daily Chart(click to enlarge)Are Bulls in Charge?- The recent pullback brought price to a critical pivot at $36. - To me, this was a key pivot, and essentially the last line of defense for the bullish scenario.- A better way to put it would be that if $36 holds, I would maintain a bullish outlook towards $50, and eventually the $56-$60 area. - A break below $36 would open up the $23-$24 low.- The fact that price is holding above $36 gives us a bullish "slingshot", where price crosses over a key moving average, and then tests that MA as support. So far, it has held as support.- The next key event will be a break and hold above $40. - At this point, the bullish outlook would be building up, but the bearish outlook is not shelved until a break above $44. - In other words, even though price bounced off of $36, a rejection at $44 would be a sign that the market is still in consolidation and maybe bearish correction mode.