CFLT coils under $30 after a monster gap — bull flag points to a 30.20–30.25 breakout next

Executive summary

• Signal: Bullish continuation within 24 hours, with tight post-gap consolidation suggesting an imminent range expansion higher.
• Setup: 3-session “gap-and-hold” followed by a micro-range compression under the round-number pivot at 30.00.
• Plan: Buy a slight pullback into the 29.90–29.95 demand pocket (anchored VWAP/pivot confluence) for a push toward 30.20–30.25 (R2–R3/pattern measured move). Invalidation on decisive loss of 29.80.

1. Price action and structure

• Primary trend (daily): Strong uptrend. Price surged from a late-Nov low near 20.73 to 30.00, highlighted by a massive upside gap on 2025-12-08 (close 23.14 to open/close ~29.87). The last three sessions (12/8–12/10) are higher closes with very tight true ranges after the gap. This is classic “gap-and-hold”/“gap and go” behavior.
• Post-gap behavior: Three sessions of sideways-to-up consolidation between ~29.70 and ~30.04 with progressively lighter volume (146.3M → 55.5M → 31.1M). That’s textbook digestion of supply rather than distribution.
• Intraday (12/10): Extremely narrow range 29.88–30.04. Price repeatedly tests 30.00 with shallow dips bought near 29.90; no meaningful rejection at highs. Microstructure implies absorption at the round number rather than aggressive selling.
• Pattern: Tight rectangle/bull flag just under the psychological 30.00. Range height ~0.16–0.20. A clean breakout projects to ~30.16–30.24.

2. Support and resistance mapping

• Immediate resistance: 30.00 round number; 30.04 intraday high (12/10); projected pivot R1/R2/R3 at ~30.07/30.13/30.23.
• Near support: 29.97 pivot P (12/10 calc: P ≈ 29.973); S1 ≈ 29.91; deeper S2 ≈ 29.81; key line-in-the-sand: 29.70 (gap-day low) — if lost, opens room toward 29.30.
• Broader context: Pre-gap resistance at 24.4–24.9 now well below and should act as secondary support if a larger mean reversion occurs (low probability near term).

3. Volume and participation

• Gap day volume 146M dwarfs prior sessions; follow-through days declining volume is constructive for consolidation (supply absorption). No distribution prints after the gap (no wide-range down days with heavy volume).
• On-Balance Volume (qualitatively) surges with the gap and remains elevated; no OBV rollover evident in the last three sessions.

4. Momentum and mean-reversion gauges

• RSI(14): Likely in the low-to-mid 80s (overbought), but overbought in strong trends is a “feature not a bug.” The lack of price giveback while overbought argues for a continuation rather than immediate reversal.
• Stochastics: Embedded in overbought territory, consistent with a band-walk. A brief dip to mid-90s would still be constructive.
• MACD (12/26/9): Bullish with a wide positive spread; histogram likely compressing slightly during the micro-consolidation — often a precursor to a fresh expansion if price holds highs.

5. Trend/volatility envelopes

• 20-day SMA ≈ 23.65 (est.). Price is ~+27% above the 20SMA — extended, but that’s typical post-catalyst. The 10EMA/5EMA are likely clustered around 29.85–29.95, offering dynamic support.
• Bollinger Bands (20,2): Bands expanded sharply on the gap; last two sessions show band contraction as price “rides” the upper band. A renewed push above 30.04 would re-expand the upper band and invite momentum chasers.
• Keltner Channels (20,1.5ATR): Price is at/above the upper Keltner, signaling trend strength; the brief consolidation is relieving “overbought” pressure via time rather than price.
• ATR(14): Elevated by the late-Nov swings but compressed the last three days. Volatility contraction inside a strong uptrend typically resolves with a range expansion in trend direction.

6. VWAP, anchored VWAP, and intraday microstructure

• Session VWAPs (12/10) sat close to ~29.96–29.98 for much of the day; price oscillated fractionally above/below without heavy rejection — a bullish balance.
• Anchored VWAP from the gap session (12/08) likely resides ~29.92–29.95 (given the massive day’s prints tightly around 29.84–29.95). Price defending above that aVWAP supports a buy-the-dip bias into 29.90–29.95.

7. Market profile / auction takeaways

• Value migrating higher: three consecutive value areas established near 29.9–30.0. Poor high at ~30.04 suggests unfinished auction above; odds favor a probe higher to “repair” that poor high.

8. Candlestick diagnostics

• 12/08: Big gap and small-bodied close near highs — buyers in control.
• 12/09–12/10: Small-bodied candles/doji-type near the top; no upper shadow rejection, implying balance rather than failure. An upside “range expansion day” is favored as the next impulse.

9. Pivot points (derived from 12/10 H/L/C = 30.04/29.88/30.00)

• P ≈ 29.973
• R1 ≈ 30.067, R2 ≈ 30.133, R3 ≈ 30.227
• S1 ≈ 29.907, S2 ≈ 29.813, S3 ≈ 29.747 These levels match observed intraday reaction bands and align neatly with the measured move of the flag.

10. Fibonacci context (short-term)

• Using the post-gap swing base (12/08 intraday low ~29.70) to today’s high (30.04): 38.2% pullback ≈ 29.91; 61.8% ≈ 29.83 — both sit inside today’s demand pocket and above S2. Dips to 29.90–29.92 are optimal risk-reward entries ahead of a breakout.

11. Ichimoku

• Price is far above Kumo; Tenkan and Kijun lag far below. This is a textbook bullish but extended state. The distance from the cloud argues for momentum continuation tempered by the risk of shallow mean reversion intraday; still supports buy-the-dip.

12. Wyckoff lens

• Character of the gap is a Sign of Strength (SOS). The last two sessions are a “backing up” action (BU) to the edge of resistance, holding high in the range — commonly followed by a minor up-leg (markup continuation). The area 29.88–29.95 reads as a Last Point of Support (LPS) in the short-term structure.

13. Elliott wave (tactical)

• The gap likely completed/minor-extended Wave 3 of an impulse from the late-Nov base. The current tight sideways action is a flat-ish Wave 4; a modest Wave 5 projection from the rectangle suggests 30.2–30.4 near term. If momentum surprises, extensions can print 30.5–31.0, but the base case is 30.2–30.3 within 24h.

14. Relative strength (qualitative)

• The stock is showing outsized relative strength versus its own 1–3 month history (and typically vs. peer software names given this magnitude of gap). In a market-neutral read, this favors continuation attempts before any larger pullback.

15. Risk, invalidation, and expectancy

• Invalidation: A decisive break and hold below 29.80 (S2/S3 region and under the 12/08 aVWAP cluster) would negate the immediate bullish continuation and invite a partial gap-fill toward 29.30.
• Base-case path (next 24h): Shallow dip to 29.90–29.95 → reclaim 30.00 → break 30.04 → traverse pivot ladder to 30.13–30.23. Highest confluence target: 30.20–30.25 (R2/R3 + measured move of the flag).
• Alternate (lower probability): Immediate breakout from the open with no dip; momentum can overshoot to ~30.30–30.40 if volume expands. Conversely, a failure through 29.88 with expanding sell volume would aim at 29.81 and possibly 29.70; odds lower given current tape.

16. Synthesis and trade plan

• Edge rationale: Post-catalyst consolidation at the highs with decreasing volume and no rejection is statistically favorable for a continuation nudge. Multiple tools agree: bull flag measured move, pivot ladder, Fibonacci retrace cluster as support, anchored VWAP confluence, and lack of distribution.
• Execution: Buy the pullback near 29.92 (inside S1 and near P/aVWAP). If filled, look for a push through 30.04 toward 30.20–30.23. If the dip doesn’t come, a secondary tactic would be a stop-entry above 30.06 aiming for 30.20–30.25 (noted here for completeness).
• Risk: Tight tactical risk beneath 29.80 (outside the micro-structure, below S2 and the gap-session low). Reward to 30.22 offers ~0.30 vs ~0.12–0.15 risk from 29.92, an acceptable 2:1 intraday swing.

Conclusion: Buy (Long). Expect a modest continuation toward 30.20–30.25 within 24 hours, provided 29.80 holds.