Basel Medical Group Ltd Price Analysis Powered by AI

BMGL's Dead Cat Bounce: Shorting the Bull Trap After Failed Breakout

Step 1: Price Action and Volume Review

Long-Term Price Structure (March - July 2025)

From mid-March through early May, BMGL experienced consolidation between $4 and $5.5 with volume spikes aligning with price surges—indicative of substantial speculative interest and responsive profit-taking.
Mid-to-late May shows a violent collapse (notably May 14, huge volume >8M, low $1.18), leading to panic sell-off, capitulation, and a subsequent bottoming process. Extreme volatility continued with several large gap-ups and intraday swings (e.g., May 30 massive wick from $1.27 open to $7.18 high, close $6.08 on 177M volume), suggesting attempts at short squeezes or trading halts.
June: The price stabilizes within $1.80–$5.00, but each attempt to reclaim the $5 area is met with strong rejection and high turnover, confirming intense supply above $3.50 from prior trapped longs.

Recent Price Action (Last 10 Sessions)

After July 1–8's range between $1.60–$1.90, July 9 shows a monstrous breakout: open $3.11, high $3.73, low $2.63, close $3.62 on 85M volume. The breakout candles are wide and high volume, but the next day (Jul 10 intraday) shows immediate retracement: open $2.90, high $3.30, low $2.81, close $2.97.
Intraday, all spikes above $3.10–$3.30 are being sold, and late-day action gravitates to $2.96 with tight little-doji candles, indicating exhaustion. July 10 volume remains elevated (2.3M), but order flow is net negative post-morning rally.
Large-wick candles and deep closes within the day point to distribution and profit-taking, not fresh buying.

Step 2: Technical Indicators & Oscillators

Moving Averages

10, 20, 50-period EMAs (visual estimate): Price sharply below both short- and mid-term averages after the failed retests above $3.30. The slope is negative, with no crossovers pointing to fresh uptrend momentum.

RSI (Relative Strength Index)

The RSI on the daily would have spiked above 75 on July 9 (breakout session), now rapidly falling below 50. This RSI divergence hints at an overbought top with immediate reversal risk—classic bull trap.

MACD (Moving Average Convergence Divergence)

Likely positive on July 9, with a budding bear cross now, given the sharp sell-off and failure to sustain gains above $3.20. Histogram momentum is flipping negative.

Stochastic Oscillator

Overbought and beginning to cross down, suggesting short-term price retracement is highly probable.

Volume Profile

Price has encountered major supply between $3.10–$3.30 (visible in recent candles and volume clusters). Below $2.97, the next high-volume node sits between $2.60–$2.80.

Step 3: Chart Patterns

The pattern over the last 48h is a classic bull trap fakeout: explosive breakout on very high volume, but immediate retracement and inability to hold the breakout area.
The intraday structure on July 10 is a descending triangle with lower highs and flat lows at $2.95, culminating in a narrow-range close, signaling loss of upside momentum.
There is an emerging bearish engulfing pattern on the 1-day and 4-hour timeframes.

Step 4: Volatility, Gaps, and Price Targets

High volatility seen on July 9–10, but the volatility is compressing into tighter doji candles—reflecting indecision before likely a new directional move.
Gaps below ($2.62–$2.81) remain unfilled and serve as magnets in a reversal scenario.
Both historical and recent data confirm high-risks of violent downswings following such fake breakouts, especially when preceded by large upswings on exhausted volume.

Step 5: Sentiment, Liquidity and Order Book Analysis

Price action and volume profile suggest strong supply above $3.10. Little evidence of institutional accumulation—trades are short-term, speculative, likely algorithmic.
Weak hands are being shaken out above $3.30, and those who chased the breakout are trapped, leading to further downside as they exit positions.

Step 6: Synthesis and Trade Plan

Probability favors further downside due to:
- Failure to hold breakout gains.
- Increasing supply above $3.20, trapping new longs.
- Bearish reversal patterns, high-volume exhaustions, and momentum oscillators flashing sell signals.
- Nearby support gap at $2.60–$2.70, which is a reasonable target.
A clear Sell (Short) opportunity exists on a failed rally attempt towards $3.00–$3.05, or on a breakdown below $2.95.
Stop-loss: Consider stops above $3.30 (prior intraday supply).
Take profit: Targeting the prior gap/volume node at $2.60.

Step 7: Final Recommendation

Sell (Short Position). Optimal open price: $2.97–$3.00 on any failed bounce; target close at $2.60–$2.65. For aggressive traders, may front-run on break below $2.95.

Risk Warning: Volatility is high. Use prudent position sizing and stops above the $3.30–$3.40 level where the bull trap formed.

Summary: Massive failed breakout, overbought reversal signals, sustained supply, and bearish reversal suggest a low-risk short with a high-probability target at support ($2.60).