Capitulation Sets the Stage: Targeting a 24h Bounce to 17.6 in C3.ai (AI)

Executive summary

• The 8/11 session was a capitulation gap-down with extreme volume (66.5M vs recent single-digit millions), a broad intraday range (14.70–17.29), and a close at 16.47, modestly above the session midpoint. Such profiles often precede a 1–2 day reflex bounce (“dead-cat”) back toward first resistance clusters before the larger downtrend resumes. For the next 24 hours, the highest-probability path is a mean-reversion push toward 17.5–17.6, with support on dips into 16.0–16.3.

Multi-timeframe trend and structure

• Primary trend (daily): Strongly bearish. Price has broken well below all recent swing supports from early August (22–23), creating a fresh low regime in the mid-teens. Expect heavy overhead supply into 17.5–19.0 and a major supply shelf back at 20–22.
• Intermediate structure: The gap created a volume vacuum between ~18 and 22; below, the new balance developing is 15.0–17.2. A reflex bounce into the underside of broken structure is typical after such gaps.
• Intraday (hourly): Post-open spike to 17.23 failed, then price compressed 16.45–16.70 into the close—an early base with higher lows vs the 14.70 extreme, consistent with mean-reversion attempts in day 2.

Key levels (confluence)

• 14.70: Gap-day low and panic print; first oversold pivot.
• 15.02: Classic S1 pivot (derived from 8/11 H/L/C), near the psychological 15.00 round number; strong dip-buy zone if tested.
• 16.15: Classic pivot (P) for 8/11 (P ≈ 16.153); intraday magnet.
• 16.7–17.0: Gap-day intraday VWAP zone; first resistance/magnet.
• 17.17–17.29: Gap-day intraday high band; initial resistance.
• 17.54–17.61: 38.2% retracement of the 22.13→14.70 drop (≈17.54) aligns with R1 pivot (≈17.61). This is the primary upside target/resistance cluster for a 24h bounce.
• 18.42–18.75: 50% retrace (≈18.42) and R2 pivot (≈18.74); stretch target in an outsized relief rally.

Gap and Fibonacci analysis

• Prior close (8/8) ≈ 22.13. Gap-down to an intraday low of 14.70 produced a -33% trough and -25% close day. Typical gap-fill dynamics favor partial retrace: 38.2% (≈17.54) is commonly tested within 1–2 sessions post-capitulation if no additional negative catalysts hit immediately. The day-1 high (17.29) stopped just shy of this level, keeping 17.5–17.6 as the next logical tag.

Pivot point map (8/11 H/L/C = 17.29/14.70/16.47)

• P ≈ 16.153; S1 ≈ 15.016; S2 ≈ 13.563; R1 ≈ 17.606; R2 ≈ 18.743.
• Expect the next session to oscillate around P (16.15) with attempts to extend toward R1 (17.6). Failure through P increases odds of probing S1 (~15.0) before any bounce.

Moving averages and trend filters

• Price is far below the 20/50-day moving averages (based on recent tape, those MAs are in the low-to-mid 20s), confirming a dominant downtrend. In such conditions, rallies into the falling MAs typically fade; however, in the next 24h, price is unlikely to reach them, so short-horizon mean reversion can still play out toward nearby resistance clusters (16.9–17.6).

Momentum oscillators

• RSI(14) daily is deeply oversold (typical prints in the 20s after a -20–30% gap-down day). Oscillators in this regime often support a tactical bounce to relieve conditions before the trend resumes.
• Stochastics: Likely sub-20 and curling; supports an early-session dip-and-rip pattern if buyers defend 16.0–16.2.
• ROC: Extremely negative day-over-day; short-term reversion is statistically favored.

MACD

• Daily MACD has bear momentum expansion from the gap; however, on intraday frames (60/30-min), histogram contraction into the close suggests selling pressure abated, often preceding a day-2 probe higher toward VWAP/previous intraday highs.

Volatility framework

• True range 8/11: 2.59. Expect day-2 ATR to remain elevated (2.0–2.4). A plausible 24h distribution: support 15.0–16.0; value 16.1–16.9; resistance tests 17.2 then 17.5–17.6. Tail events could print 14.7 retests or 18.0 spikes.

Bollinger/Keltner

• Price closed outside/near the lower Bollinger Band on a volatility expansion. Typical response is either a band walk continuation (if selling persists) or a snapback into/just inside the band. With the large-volume flush already recorded, the probability-weighted near-term path is a snapback toward 17.0–17.6.

Volume and tape read

• 66.5M shares traded—capitulation-scale turnover. Such sessions often mark local exhaustion of sellers. The latter half of the day showed balanced trade and narrowing ranges (16.45–16.70), a sign of absorption and early base construction.
• Expect anchored VWAP from the gap day to act as day-2 magnet/resistance (estimated high-16s). A push through that VWAP frequently targets the 38.2% retracement next (≈17.54).

Candlestick and pattern context

• Gap-down with a relatively long lower shadow and a close above open is consistent with a hammer-like stabilization. While not a full reversal signal in a strong downtrend, it often produces a 1–2 day bounce.

Market profile-style inference

• Single prints from 16.9–17.2 early in the session and a later balance near 16.45–16.60 suggest unfinished auction higher. If early sellers cannot push below 16.15–16.20, a rotation up to fill the 17.0–17.3 low-volume area is likely, with extension to 17.5–17.6 where multiple resistances converge.

Elliott wave (tactical)

• A sharp wave 3-like capitulation appears complete intraday; day-2 commonly prints an A-B-C corrective bounce toward 0.382–0.5 retrace (17.5–18.4). For a 24h horizon, the 0.382 (≈17.54) is the pragmatic target.

Ichimoku (directional bias)

• On daily and hourly, price is well below the cloud; trend bearish. However, the Kijun/Tenkan will be far above price; mean reversion often seeks Tenkan on intraday frames first (high-16s to ~17), then stalls.

Scenario probabilities (next 24h)

• Base case (55%): Early dip toward 16.0–16.3 holds, then grind higher to 16.9–17.2, extension to 17.5–17.6 (tagging Fib 38.2% and R1). Close in 17.1–17.6 zone.
• Bear continuation (25%): Failure at/under pivot (≈16.15), acceleration to 15.3–15.0 (S1), possible spike into 14.8–14.7 before responsive buying; close 15.2–16.0.
• Overshoot bull (20%): Strong gap-up/open drive through 17.3; momentum squeeze to 17.9–18.2, possibly 18.4–18.7 (50%/R2). Less probable without a fresh positive catalyst.

Trade plan (tactical long for 24h)

• Bias: Buy the dip into 16.0–16.3 where pivot and intraday base meet, aiming for the 17.5–17.6 confluence.
• Entry: Limit near 16.20 to improve risk/reward; alternatively, if market opens >17.0, wait for a pullback to 16.9–17.05 (prior high/VWAP zone) to enter.
• Stop (risk control, not part of order fields): 15.35–15.45 (below intraday higher-low structure and ahead of S1 ~15.0). Tighter risk: 15.85 if volatility reduced.
• Take profit: Primary 17.50–17.60; stretch 17.90–18.20 if momentum accelerates.

Why not short here?

• Shorting immediately after a capitulation flush is lower expectancy in the first 24h because: (1) sellers already expended large energy; (2) confluence resistance above is close enough for a controlled long with defined stops; (3) mean-reversion statistics favor a test of 0.382 retrace in the next session. The better short location would be higher (17.6–18.4) if momentum falters there.

24-hour outlook

• Expect chop early with a downside probe into 16.0–16.3, followed by a climb toward 17.0–17.3 and a test of 17.5–17.6. Probability-weighted close: upper-16s to mid-17s.

Decision: Buy (Long) for a 24-hour rebound toward the 17.5–17.6 resistance cluster.