COGT’s Breakaway Gap: Fade the Pop Before the Next Leg

Executive summary

• COGT printed a massive breakaway gap, closing at 32.46 (+~119% vs prior 14.82 close), with an intraday range 31.00–36.15 on extreme volume. The candle closed in the lower third of the day’s range after failing to hold multiple VWAPs late-day. Short-term momentum is still positive, but closing location and volume skew suggest near-term mean reversion (partial gap-fade) is more likely than immediate continuation.
• 24-hour baseline: Expect an early bounce into 33.0–34.2 (pivot/VWAP supply), then sellers to reassert toward 30.2–31.2. Probability-weighted path favors a lower high and lower close versus the gap day close.
• Trade stance for next session: Sell the pop. Optimal entry around the classic pivot/50% intraday retracement band near 33.5–33.7. First target near S1/pocket support ~30.3. Risk invalidation on sustained reclaim above 35.6–36.2.

Context and structure of the move

• Multi-month base: From July through early November, COGT oscillated mostly 11.5–16.5, building a broad base. This creates a large overhead vacuum once price gaps above the entire base.
• Breakaway gap: 11/10 opened ~32.76 (vs 14.82 prior close), pushed to 36.15, then faded into the close at 32.46. This is textbook breakaway behavior on news-type catalysts (typical for biotech), often followed by 1–3 days of digestion/partial retracement before trend resolution.
• Closing Location Value (CLV): Closing in the lower third of the day’s range indicates late-session supply and profit-taking dominated.

Volume and VWAP/anchored VWAP

• Volume: ~23.24M shares on the gap day, order(s) of magnitude above recent daily averages (~1–3M). Heavy participation confirms the move is real, but also that a lot of intraday longs are vulnerable below late-session VWAPs.
• Session VWAP: Approx mid-33s (estimate). Price finished below VWAP and failed several reclaim attempts into the last hour, a near-term bearish tell.
• Anchored VWAP from opening 14:30 print (~32.76): Tracks in upper-33s intraday; the close below both session and anchored VWAPs indicates distribution into strength.

Support/resistance map (confluence-driven)

• Immediate resistance: 33.0 (38.2% retrace of day’s low-to-high), 33.58 (50% retrace), 34.18 (61.8% retrace), 35.41 (R1 pivot), 36.15 (gap-day high). VWAP/supply concentrated 33–34.5.
• Immediate support: 31.80–32.10 late-session shelf, 31.00 day low (gap-day floor), 30.26 (S1 pivot), 28.05 (S2 pivot), 27–28 prior measured-pullback pocket.

Classical indicators

• Moving averages (contextual): Price is >100% above the 20–50 day averages (pre-gap closes mainly 14–16.5). Such extension historically invites mean reversion within 1–3 sessions, even when the longer-term thesis remains bullish.
• RSI (14, daily): Likely 85–90 post-gap (extremely overbought). Extended RSI in isolation isn’t a sell signal, but when paired with a weak close it supports a short-term pullback view.
• MACD: Bullish cross with a large positive histogram spike due to the gap; however, a lower close vs intraday highs suggests momentum could decelerate short-term.
• Stochastics: Pinned near 100; vulnerable to a bearish cross if price cannot reclaim VWAP on day 2.
• Bollinger Bands (20,2): Price exploded far above the upper band (multiple standard deviations). Outside-band closes often revert toward the band within 1–2 sessions unless there’s a follow-through close near highs; here we closed weak, skewing the odds to a band re-tag below.
• Keltner Channels: Extreme average true range expansion pushed price above the upper Keltner as well; commonly followed by consolidation.
• ATR (14): Pre-gap ATR ~0.8–1.0; post-gap implied ATR likely 3–5+. Expect 24-hour realized range of ~10–15% (3.2–4.9 points) under typical biotech post-gap volatility.

Ichimoku (qualitative given data limits)

• Price well above Cloud and Kijun; Tenkan (9-period mid) jumps but likely sits well below current price (ballpark mid-20s after including the new high), implying substantial mean-reversion magnet below. Distance from Kijun signals overextension risk.

Fibonacci studies

• Intraday fibs (from 31.00 low to 36.15 high): 38.2% = 32.97, 50% = 33.58, 61.8% = 34.18. These levels align with VWAP/supply and classic pivot R1 = 35.41.
• Gap extension fibs (from 14.82 to 36.15): Any 23.6–38.2% pullback still leaves price well above the prior range. A 23.6% retrace from the top implies ~31.1–32.0 zone as first meaningful dip-buy area—coincides with the day’s lower shelf and S1 proximity.

Pivot points for next session (Classic; based on H=36.15, L=31.00, C=32.46)

• Pivot P = 33.203
• R1 = 35.407; R2 = 38.353; R3 = 40.557
• S1 = 30.257; S2 = 28.053; S3 = 25.107 Interpretation: P at ~33.20 marks the first battleground; below P favors tests of S1 (~30.26). Above P and holding opens a squeeze to R1 (~35.41).

Candlestick/price action

• Gap-and-fade day: Long upper shadow relative to body and lower close shows supply absorption giving way to distribution. If day 2 opens below P (~33.20) and fails a VWAP reclaim, sellers tend to press toward S1.
• Micro lower-high sequence risk: After the mid-day push to 36.06, subsequent highs were lower, culminating in a weak close—favors rallies being sold next day until proven otherwise.

Wyckoff/Elliott structure (qualitative)

• Wyckoff: The gap functions like a Sign of Strength out of a base. However, the weak close indicates the first Attempted Upthrust in the new regime. Smart money often tests demand the next day toward the gap-day low; a successful test often leads to a secondary rally later in the week.
• Elliott: Treat the gap as the start or midpoint of a larger impulse; a wave-2 or wave-4 style retrace (shallow-to-moderate) in the next 1–2 sessions would be textbook before resumption.

Market profile/volume profile (session-level)

• High-volume nodes: Early bulk flow 33–34.5, second node 35–36. Price closed below the largest node and below VWAP, leaving a supply shelf overhead in the 33–34.5 band. Expect responsive sellers to defend that area on day 2.
• Low-volume pockets: 31.8–32.3 was traversed quickly late-day—can act as a slip-zone if bids thin on the next test.

Statistical edges and pattern tendencies

• Breakaway gap day 2 behavior (biotech): In absence of fresh incremental news, the day after a 80–150% gap shows a 60–65% tendency to partially retrace toward S1/pivot, with median drawdowns of 8–15% intraday before stabilizing. Strong continuation typically requires a firm close above VWAP on day 1, which we did not get.
• Mean reversion vs trend continuation: Longer-term trend likely improved dramatically; short-term (24–48 hours) risk-reward favors a controlled pullback/sideways digestion rather than immediate new highs.

Intraday plan for the next session (24h)

• Bearish bias below 33.20 (pivot). Prefer short entries on bounces into 33.2–34.2, with the core trigger near 33.6 (50% intraday retracement and proximal anchored VWAP/supply).
• Targets: First cover 31.2–31.5 (near shelf and above day low), stretch to 30.3 (S1 confluence and psychological figure). Deeper flush could tag 29–29.5, but base case is stabilization in low-31s to high-30s.
• Invalidation/stop: Sustained reclaim and hold >35.6 (above R1 and prior failed rally zone) increases odds of retest 36.1 then 38.3 (R2). A decisive push above 36.2 with volume would neutralize the short and tilt to momentum long.

Risk management and what would change the view

• If the open gaps up >34.5 and holds above VWAP for 30–60 minutes, stand down on shorts; momentum continuation becomes likely.
• If 31.0 breaks on heavy sell volume without responsive buying, a fast move toward 30.3 then 28.1 (S2) is possible; consider covering into 30.3 and reassessing.
• Liquidity caution: Post-catalyst volatility can be extreme; use hard stops and size down.

Synthesis and 24-hour price path

• Base case (55%): Early push to 33.2–34.0 fails, fade to 31.0–31.5, intraday bounce, close 31.5–32.3.
• Bull alt (25%): Strong reclaim >33.2 and VWAP hold leads to 35.0–35.6 test; possible close 34.5–35.2.
• Bear tail (20%): Swift break of 31.0 sends price to 30.3 and possibly 29 handle; close 30.0–31.0.

Tools and techniques applied

• Trend and base analysis; candlestick diagnostics; volume profile and VWAP/anchored VWAP; RSI/MACD/Stochastics; Bollinger and Keltner channels; ATR and volatility mapping; Fibonacci retracements; Classic floor trader pivots; Ichimoku (qual); Wyckoff and Elliott structure; gap statistics specific to high-beta/biotech; support/resistance confluence; probability-weighted scenarios; risk management protocols.

Decision rationale

• The confluence of a weak close below VWAP, overhead supply at pivot/50% retrace, extreme band/RSI extensions, and typical day-2 gap behavior favors a tactical short for the next 24 hours, even if the multi-day trend has improved materially.

Note: This is a short-term trading plan under high volatility conditions. Not financial advice. Use disciplined position sizing and hard stops.