COTY: Sell the Pop into 4.00—Bearish Regime After Breakaway Gap, Targeting 3.78

Comprehensive multi-timeframe technical analysis for COTY (Coty Inc.) based on supplied OHLCV data through 2025-08-22

Context and regime identification

• Structural break: A dramatic breakaway gap down on 2025-08-21 from the prior 4.70–5.10 range to a 3.75–3.96 day range on 44.7M shares (multiple of average volume). This signifies a regime shift to a lower value area with strong overhead supply.
• Post-gap behavior: 2025-08-22 showed an early bounce to ~4.03 followed by supply-driven fade to ~3.92 into the close/after-hours. The pattern resembles a classic dead-cat bounce within a new lower distribution.
• Liquidity and microstructure: Under $5 stocks often exhibit wider spreads and higher slippage around key levels; the volume profile shows a developing node around 3.90–3.95 and a low-volume pocket above 4.05–4.15 where squeezes can be sharp but typically short-lived absent positive catalysts.

Key levels (derived from provided data)

• Immediate resistance: 4.03–4.05 (8/22 intraday high cluster and R1 pivot), 4.13 (R2 pivot), then 4.18–4.22 (projected 1h cloud top/low-volume area).
• Immediate support: 3.85–3.86 (8/22 intraday shelf), 3.80 (8/21 closing zone), 3.75 (8/21 low; S2 cluster approx 3.72–3.75).
• Legacy resistance overhead: 4.70–4.90 was prior multi-week value; now formidable supply.

Volume, VWAP and market profile

• Volume climax: 8/21’s 44.7M suggests capitulation/redistribution rather than pure exhaustion given the weak close and lack of immediate reversal.
• 8/22 session VWAP approximation using provided hourly bars: ~3.94. Price ended slightly below VWAP (~3.92), indicating sellers defended the mean.
• Developing value: Point of control forming around 3.92–3.95; initial balance suggests a balanced-to-bearish skew with sellers active on pushes toward 4.00–4.03.

Classical indicators

• Moving averages (daily, approximations from series):
  • 20-day SMA ~4.95–5.00; 50-day ~4.95; 200-day slightly below 5.00. Price at 3.93 is decisively below all, confirming a strong downtrend and overhead supply.
• RSI (daily, estimated): After the gap, RSI likely in low-30s to high-20s (oversold), consistent with a short-term bounce risk but still within a bearish regime where oversold can persist.
• MACD (daily): Bearish cross and expanding negative histogram post-break; momentum remains down.
• Stochastics: Sub-20 regime; can stay pinned during strong downtrends; any upticks to 30–40 often fail below resistance in this context.
• Bollinger Bands (20,2): Bands expanded lower on 8/21; price hugged/submerged below lower band, then re-entered on 8/22. This often precedes a brief mean reversion toward the 20-day mean only if supply abates; given overhead resistance and volume, the more likely path is grind/bleed rather than swift reversion.

Ichimoku (daily and 1h, qualitative)

• Daily: Price below cloud; Tenkan below Kijun; bearish lagging span. Thick overhead cloud from the prior range implies persistent resistance.
• 1-hour: Price oscillating near/below the base line with projected cloud resistance 3.97–4.05; rejection zone aligns with intraday highs and pivot R1.

Price action and candlestick read

• 8/21: Large gap down with a modest lower wick but weak close near lows; conviction from sellers.
• 8/22: Upper wick to ~4.03 and fade into the close; indicates supply step-in above 3.95. Sequence of lower highs through the midday and late session underscores distribution.

Pivot points (calculated from 8/22 H/L/C: H=4.0272, L=3.82, C=3.93)

• Pivot P ≈ 3.926
• R1 ≈ 4.031, R2 ≈ 4.133
• S1 ≈ 3.824, S2 ≈ 3.719 Interpretation: Price closed near P and below VWAP with overhead R1 ≈ 4.03 rejecting twice; downside magnet toward S1/S2 if 3.85 breaks.

Fibonacci levels

• Short swing: Using 8/21 low 3.75 to 8/22 high 4.03, the 61.8% retrace ≈ 3.86; price oscillated around this level late session, treating it as a fulcrum. A sustained break below 3.86 typically opens a retest of 3.80/3.75 (78.6%–100%).
• From pre-gap reference (e.g., 5.05 to 3.75), 23.6% rebound ≈ 4.05, matching intraday rejection. Confluence reinforces 4.03–4.05 as supply.

ATR and volatility

• Daily ATR expanded from ~0.15–0.20 pre-gap to ~0.20–0.25 post-gap. With current price ~3.93, a 1x ATR move implies 3.70–4.15 bounds over a 1-day horizon. Given weekend/premarket dynamics, expectation skews toward 3.78–4.05.

Elliott wave framing (tactical)

• Impulsive wave down on 8/21 (Wave 3-type behavior), minor Wave 4 corrective bounce on 8/22 to 4.03, positioning for a Wave 5 marginal lower low or double-bottom test 3.72–3.80 before a larger-degree consolidation.

Mean reversion vs trend following synthesis

• Trend following inputs (MA stack, MACD, Ichimoku, structure) overwhelmingly bearish; favor sells into strength.
• Mean reversion inputs (RSI/Bollinger) warn of occasional squeezes to 4.03–4.13, but these are better used as entry zones for shorts given supply concentration and pivot confluence.

Intraday structure (hourly bars provided)

• 13:30–14:30: Spike to 4.03 met immediate selling.
• 15:30: Pullback low ~3.88; subsequent bounces failed to clear 3.95–3.96; repeated VWAP rejections.
• 19:30–20:00: Range 3.91–3.96 with close at 3.9197; weak into the bell suggests sellers comfortable holding short risk over the weekend.

Scenario analysis next 24 hours (encompasses weekend AH/premarket into next session open)

• Base case (≈60%): Early drift lower to 3.86; break triggers test of 3.80 then 3.75. Expect intraday bounces but a net close near 3.78–3.85 zone.
• Bull squeeze (≈25%): Brief pop through 4.03 toward 4.08–4.13 (R2). Without new positive catalyst, supply likely reasserts there.
• Bear extension (≈15%): Swift liquidity vacuum to S2 ≈ 3.72 if 3.75 snaps; potential exhaustion wick and rebound into 3.80.

Risk management and trade construction

• Thesis: Sell rallies into 4.00–4.03 where multi-tool confluence exists (R1 pivot, Fibonacci 23.6% from the larger drop, 1h cloud resistance, VWAP vicinity). Target a retest of 3.78–3.80 (prior low cluster and near S1/S2 band), which aligns with Elliott Wave 5 test and value-area lower edge.
• Entry: Limit sell around 4.00 to improve risk/reward.
• Stop (not requested but prudent): Above 4.14 (beyond R2 and above supply pocket), acknowledging possibility of a short-lived squeeze.
• Take profit: 3.78 initial; reassess if momentum accelerates to 3.72.
• Reward/risk (indicative): Entry 4.00, stop 4.14 (risk 0.14), target 3.78 (reward 0.22) → R/R ≈ 1.57:1 with decent probability skew given structure.

Cross-check across methods

• Momentum/trend tools (MA stack, MACD, Ichimoku) → bearish.
• Volatility/pivots (ATR, Classic pivots) → upside capped near 4.03–4.13; downside magnets 3.82/3.72.
• Price action (wicks, lower highs) → sellers active above 3.95.
• VWAP/volume profile → distributing below session VWAP; POC ~3.93 with lower-tail risk.
• Fibonacci confluences reinforce both 4.03 resistance and 3.86/3.80 supports.

Conclusion and 24-hour directional bias

• Expect a retest of 3.86 followed by 3.80, with risk of undercut to 3.75–3.72 before stabilization. Optimal strategy is Sell the bounce near 4.00 with profit objective near 3.78.