Post‑Gap Gravity: Short the Weak Bounce in Compass (COMP)

Comprehensive multi‑framework read on COMP (Compass, Inc.) as of 2025‑09‑23 close ($7.94)

1. Market context and recent structure

• Intermediate trend (June→mid‑Sep): Uptrend from ~$6.0 to ~$9.7, stair‑stepping higher on constructive volume through August, then stalling 9/10–9/19 around $9.0–$9.7.
• Regime shift: 9/22 printed a very large, news‑driven gap‑down (O: $8.61, H: $8.98, L: $7.69, C: $7.92) on extreme volume (45.8M), erasing multiple weeks of gains in one session. This turns the short‑term trend decisively down and creates a heavy overhead supply zone.
• 9/23 session: Sideways‑to‑lower drift (O: $7.99, H: ~$8.03, L: ~$7.68, C: $7.94) with repeated failures near $8.00–$8.03 and higher‑low attempts rejected. Volume 17.7M—still elevated, suggesting ongoing distribution rather than a strong absorption/mean‑reversion day.

2. Support/Resistance mapping (multi‑timeframe)

• Immediate resistance: $8.00–$8.05 (intraday rejection band), then $8.14 (pre‑market print), $8.34 (38.2% retrace of 9/19 high→9/22 low—see Fibs below), $8.55 (50% retrace), $8.71 (61.8% retrace). The gap window from $8.61 to $9.40 is a broad supply shelf; expect sellers to lean there.
• Immediate support: $7.77–$7.80 (9/23 early support), $7.69 (9/22 spike low). Below: $7.50 round number/psych level, then $7.30–$7.35 (late‑July shelf), and $7.00.
• Volume profile: Massive prints clustered ~$7.85–$8.05 (9/22–9/23) suggest a forming volume shelf/acceptance zone just below $8.00; losing this shelf typically opens a quick path to test the 9/22 low ($7.69) and possibly the prior shelves near $7.3x.

3. Gap analysis and Fibonacci retracements

• Gap reference: Prior close 9/19: $9.40; 9/22 low: $7.69. Range Δ = $1.71.
• Retracement levels from $7.69 low: • 23.6%: $8.09 (coincides with today’s ceiling zone); 38.2%: $8.34; 50%: $8.55; 61.8%: $8.71.
• Behavior: Day‑2 failed to push past the shallow 23.6% retrace (~$8.09), indicating sellers remain in control. Typical post‑event behavior favors 1–3 days of drift/continuation before any material mean reversion—unless price reclaims and holds above the 38.2% level ($8.34).

4. Moving averages (qualitative read)

• Fast MAs (5/10/20‑day): Rolled over and are now above price after the gap. Price trades below the 20‑DMA and very near or slightly below the 50‑DMA, flipping the short‑term bias bearish. The 200‑DMA remains well below (longer‑term trend still improved vs. spring), but that does not negate near‑term downside momentum.
• Implication: With price beneath fast MAs and those MAs sloping down, rallies into $8.1–$8.5 are sell zones until proven otherwise.

5. Momentum

• RSI (daily): Likely in an “oversold cluster” but not yet printing a decisive bullish divergence. Day‑2 inability to reclaim $8.10 suggests momentum remains negative.
• MACD: Bearish crossover developing/active post‑gap with expanding negative histogram; momentum confirms downside.
• Rate of change: One‑day shock followed by muted bounce points to persistent supply.

6. Volatility and Bollinger Bands

• BB: The gap drove a sharp expansion of band width; price is hugging/below the lower band—classic bearish continuation posture. Until we see a strong close back inside bands with follow‑through above the 20‑DMA, bounces are suspect.
• ATR: Daily ATR has spiked (from ~0.25–0.35 to ~0.8–1.3 on the event). Expect wider intraday swings; set targets and risk accordingly.

7. Volume, VWAPs, and anchored VWAP

• 9/22 distribution: 45.8M vs. typical single‑digit millions—institutions actively repositioned.
• 9/23: Elevated 17.7M with price capped beneath ~$8.05.
• Intraday VWAP (9/23) stabilized near high‑$7.80s/low‑$7.90s; late‑day price hovered slightly above but failed to trend.
• Anchored VWAP from the 9/22 gap open is estimated in the ~$8.1–$8.3 area; this overhead “thick air” is a natural sell zone on first tests.

8. Intraday market structure (9/23)

• Lower‑highs sequence: $8.03 → ~$7.95 rejections created a tight bear flag above $7.85.
• Liquidity pockets: Thin air below $7.80 toward $7.69; if $7.80 fails in the next session, a quick tag of $7.69 is probable, with risk of extension toward $7.55–$7.50 if stops cascade.

9. Pattern recognition

• Daily candles: 9/22 large red body with long range—bearish. 9/23 small real body/spinning‑top near lows—often continuation when occurring below broken supports.
• Setup: Classic “gap‑down and base under resistance” (bear flag) just beneath round‑number $8.00.

10. Ichimoku (directional read)

• Price below Tenkan and Kijun with a likely bearish Tenkan/Kijun cross. Cloud ahead acts as resistance; chikou span likely under price. Bias aligns with continuation lower unless price reclaims and holds above ~$8.35.

11. Elliott/Wyckoff framing

• Elliott: The August–mid‑September advance appears complete; 9/22 began an ABC corrective sequence. We’re likely in wave B attempt that failed shallow (near 23.6%), pointing to a pending wave C test of fresh lows (sub‑$7.69) before balance.
• Wyckoff: 9/22 = Supply climax (SC) without a proper automatic rally (AR). Absence of a forceful AR on day‑2 implies we may still be in a markdown phase, not yet in accumulation.

12. Statistical/contextual tendencies

• Negative event gaps on heavy volume often see 1–3 days of continuation or sideways digestion under the gap window before credible retracement. Day‑2 failure at 23.6% retrace supports a continuation skew.
• Mean reversion becomes higher probability only after price reclaims 38.2% ($8.34) and holds above an anchored VWAP from the gap day.

13. Risk management and trade plan

• Bias: Short into strength under clearly defined invalidation.
• Preferred entry: Into a pop toward $8.00–$8.05 (confluence: round number, day‑2 ceiling, 23.6% fib neighborhood, intraday supply). If stronger bounce, second chance sell between $8.14–$8.34 (premarket print and 38.2% fib), but probability of reaching $8.34 in the next 24h is lower unless there’s fresh positive news.
• Primary target: $7.58 (above $7.50 psych, captures a retest and modest undercut of $7.69 without being greedy). Secondary stretch: $7.30–$7.35 if momentum accelerates.
• Invalidation/stop (discretionary): Close above $8.26–$8.35 zone (reclaim of anchored VWAP band + 38.2% fib) negates the immediate short and opens room to $8.55.
• R:R (illustrative): Entry $8.02, stop $8.26 (−$0.24), target $7.58 (+$0.44) ≈ 1.8R.

14. Next 24 hours – scenario map and probabilities

• Bearish continuation (base case ~55–60%): Early attempt to push $8.00 fails; price rotates $7.80 → $7.65–$7.58, tags $7.69 and perhaps briefly undercuts before stabilizing.
• Range chop (~25–30%): $7.80–$8.05 oscillation as it builds a bigger shelf; limited edge intraday but fades near $8.00 still favored.
• Bullish surprise (~10–15%): Strong open above $8.10 with sustained bids; if $8.34 is reclaimed and held, a squeeze to $8.55 (50% retrace) is feasible—this would invalidate the short.

Bottom line

• The combination of: (a) a high‑volume downside gap, (b) failure to reclaim even shallow retracement levels, (c) proximity to thin support pockets, and (d) bearish posture of momentum/volatility tools suggests a sell‑the‑bounce setup. Probability skew favors a test/undercut of $7.69 over a durable reclaim of $8.34 in the next session absent new information.

Actionable plan

• Decision: Sell (Short).
• Optimal entry: $8.02 (sell into a small pop toward the $8 handle).
• Target: $7.58 (take profit). Consider scaling partial at $7.69 and final into $7.55–$7.50 if momentum accelerates.
• Invalidation (for risk control): $8.26 initial; hard invalidation on any 30–60 min hold above $8.34.

Note: This is a short‑term, tactical view over ~24 hours. If unexpected bullish catalysts hit and price reclaims $8.34 with authority, the short thesis is invalid; step aside or pivot to a bounce trade toward $8.55.