Cidara Therapeutics, Inc. Price Analysis Powered by AI

Pinned at 218: CDTX shows deal-price consolidation—fade the upper bound

Executive summary

CDTX printed an extraordinary, news‑type gap from ~106 to ~218 and then traded in an exceptionally tight 1-pt band around 217–218 for hours on heavy volume. This is classic “deal-price pinning,” typical of a definitive M&A cash takeout where the stock converges to the consideration price minus a small risk/time-value discount.
Intraday structure shows repeated mean reversion to ~217.7–217.9 (VWAP magnet) with shallow excursions to 216.8 and 218.85. Volatility has collapsed relative to the magnitude of the gap (volatility crush), and liquidity is concentrated at the new reference price.
For the next 24 hours, the highest-probability path is a narrow range consolidation between ~216.8 and ~218.6 with settlement near ~217.3–217.9, barring fresh headlines. This favors range-fading rather than trend-following. Asymmetry for a short is modestly attractive intraday (limited upside above a fixed deal price; large but low-probability downside if the deal breaks).

Regime identification: event-driven, not technical trend

Gap diagnostics: Close 11/13 ≈ 105.99 to last ≈ 217.71 → +~105% overnight. Such discontinuities rarely arise from purely organic catalysts; they are consistent with a buyout/reverse split-type corporate action. The regular-session range compressed to ~0.9% of price (H: 218.85, L: 216.80), signaling price anchoring to a reference (deal) level.
Volume regime shift: 17.29M shares on 11/14 vs recent daily ~0.6–1.6M → >10–25x. The majority of regular-session prints clustered near 217.6–218.0, producing a new, dominant point of control.

Multi-timeframe price/volume context

Daily trend: Before 11/14, CDTX was oscillating 93–116 with moderate momentum. The 11/14 gap created a vertical regime shift. All moving averages are now far below price; traditional trend tools become secondary to the event anchor.
Intraday structure (11/14):
- Opened ~217.48, quick test ~218.85, then stabilized with VWAP ≈ 217.7–217.9.
- Bid/ask microstructure suggests heavy resting liquidity at 217.6–217.8, with a “liquidity wall” around 218.0–218.3 and supply above 218.5.

Support/resistance mapping (now defined by microstructure)

Resistance: 218.85 (session high, likely near stated consideration cap), then psychological 219.00.
Immediate resistance band: 218.10–218.40 (seller reload zone seen in repeated fades).
Support: 217.50–217.60 (VWAP shelf), then 217.00–217.20 (intraday low-volume node), hard support at 216.80 (session low). Below 216.5 is a vacuum until premarket pivots (~215.0), but probability is low without new information.

Indicator suite (noting their limited value under a deal pin)

SMA20 ≈ low 100s (pre-gap), SMA50/200 also ~100 area. Price > 100% above all MAs → extreme positive deviation (z-score >> 5). Under deal pinning, such overextension rarely resolves via pullback; it resolves via time.

RSI(14) would be >85–90 due to the single-step gap. Overbought readings are expected and not predictive here. Stochastics pinned. MACD shows a massive positive impulse with immediate flattening—again consistent with a one-off repricing.

Pre-gap ATR(14) likely ~4–6 on a $100 handle; post-gap realized regular-session range ~2 on a $218 handle (<1% of price). Bollinger Bands explode on gap then price “hugs” the new upper band before compressing. Expect continued sigma compression absent headlines.

AVWAP from regular-session open sits ~217.8. Price repeatedly reverted to this magnet. Strategy implication: mean-reversion fades around ±0.5 from AVWAP have best expectancy.

Price is far above the cloud; Tenkan/Kijun are far below. In event regimes, Ichimoku offers little edge; the only takeaway is “no trend signal reversal risk” intraday unless news hits.

D-shaped distribution centered ~217.8, showing a balanced day. Value Area High ~218.3–218.5; Value Area Low ~217.3–217.4. POC ~217.8. Expect another balanced day next session unless a headline shifts the reference price.

Small-bodied, low-range candles dominate the regular session—hallmark of absorption at a fair value defined exogenously (deal price). Premarket extremes were “price discovery”; regular session was “acceptance.”

Traditional wave/ratio tools are not reliable post-gap; price has leapt beyond any reasonable extension from the prior swing. Regression channels will simply re-anchor around 217–218.

Mean-reversion OU model: half-life intraday appears short (tens of minutes). Deviations > +0.5 above VWAP were faded efficiently back to the mean; symmetric on the downside to ~217.2.
GARCH intuition: variance shocks spiked on the gap; conditional variance decayed rapidly during the session. Forecast next 24h realized vol is low unless exogenous shock.

Price behavior (doubling, then pinning within ~1 point, heavy volume at the level) is consistent with a definitive cash deal at or near 218. The persistent ~0.1–0.5 discount vs the “cap” reflects deal risk and time value. In such states, the stock trades as a credit-like instrument, not on fundamentals/technicals.
Asymmetry: Upside is capped near the consideration; downside is significant only if the deal breaks (low probability in 24h). For intraday, the best expectancy is micro-fading moves toward the top of the band, taking profits near the VWAP/POC or lower edge.

Scenarios next 24 hours (base case: no new headlines)

60%: Balanced range 216.8–218.6, close ~217.3–217.9 (VWAP reversion day).
25%: Slight downward skew early to 216.8–217.1 as the spread widens marginally, then revert to 217.5–217.8 by the close.
10%: Quick probe 218.6–219.0 (liquidity sweep) fails, fade back to 217.6.
5%: Headline shock (positive or negative). If deal reaffirmation or improved terms, a brief print above 219 is possible; if adverse, an air-pocket toward 205/200, with tail to pre-gap region (unlikely within 24h but defines risk).

Trade strategy and execution plan

Strategy: Range fade / VWAP reversion short. Rationale: price repeatedly fails to sustain above ~218.3; upside capped; mean reverts to ~217.6–217.8. Shorting near the upper bound offers small, repeatable edge with limited likely adverse excursion.
Entry: Sell (short) on a liquidity sweep into 218.0–218.2. If not filled, avoid chasing; the edge diminishes near 217.6.
Profit target: Cover near 217.1–217.3 (just above the session’s lower value area), expecting a bounce back to VWAP afterward.
Time horizon: Same day to next session open; do not carry size over potential headline windows.
Position sizing: Small, as edge is measured in tens of basis points; rely on tight execution and fees/borrow considerations.

Risk considerations

Borrow/locate and hard-to-borrow fees can erode the narrow edge; ensure availability and cost are acceptable.
Headline risk: Any official confirmation/change to terms or regulatory updates can move the reference price. Keep overnight exposure minimal.
Liquidity cliff: If price slips below 216.8 without news, slippage may accelerate to ~216.0–216.3; stagger bids for cover.

Bottom line

Expect continued pinning around 217–218 with small, mean-reverting oscillations. The higher-probability intraday edge is to Sell (short) near 218.0 and cover near 217.1–217.3. Probability-weighted expectation over 24 hours: slight drift to 217.3–217.7 with low realized volatility unless a headline hits.