CROX: Breakaway Gap Fallout — Fading the Dead-Cat Bounce Toward $72–$73

Summary view

• Regime: High-volatility, downside trend continuation after a breakaway gap. Bias: Sell strength over next 24 hours; expect a lower-high fade and retest of low-70s.
• Expected 24h range: $73.20 – $77.50 with a bearish tilt; baseline path: early bounce toward $76–$77 gets sold, drift back to $74s with risk of a $73 handle.

Price action and structure

• Major shock: 8/7 session gapped down ~-29% (105.13 → 74.13 intraday low) on 17M shares, a classic breakaway gap on earnings/guidance. Day 2 (8/8) produced a small-bodied candle with a long upper shadow (H: 77.91, C: 75.24) — an inverted-hammer-like rejection under intraday resistance. This confirms overhead supply.
• Supply zones: 76.5–78.0 (intraday rejection band), 81.5 (gap-open anchor and 23.6% retrace area), 85.9 (38.2% retrace). Demand: 74.1 (gap day low), 73.8 (8/8 low), round numbers 72, 70.
• Gaps: Large, open downside gap below all recent moving averages. Breakaway gaps typically do not fill quickly; instead they consolidate 1–3 sessions and often continue lower before any meaningful retracement.

Trend and moving averages

• Short-, mid-, long-term trend all down. Price is far below the 20/50/200-day SMAs (roughly ~103/105/110–112 by estimation). Distance from 20-SMA is extreme (>25%), reflecting trend acceleration and compression risk on rallies but persistent downside pressure overall.

Momentum and oscillators

• RSI(14): Oversold but stabilizing (low-20s to mid-20s est.). Post-capitulation bounces often fail beneath 30–40 on first retest; momentum regime still bearish.
• Stochastics: Deep oversold; no confirmed bullish cross with price still making lower highs intraday.
• MACD: Deeply negative and widening; no sign of bull crossover.

Volatility and bands

• ATR(14): Expanded sharply (large ranges since late July, spike on 8/7). Expect continued wide intraday swings.
• Bollinger Bands(20,2): Price pierced the lower band on gap day, then re-entered but remains >3σ below the 20-SMA; band width expanding — a hallmark of trend move continuation.

Volume, flow, and microstructure

• Volume climax on 8/7 (17M vs ~1–2M typical) indicates institutional distribution. 8/8 volume still elevated. On-balance volume/Accumulation-Distribution would both be sharply lower, confirming outflows.
• Intraday 8/8: Early rebound to 77.9 sold hard; subsequent hours printed lower highs with VWAP gravity around mid-75s — consistent with persistent sell pressure into strength.

Fibonacci and measured moves

• From pre-gap close (105.13) to gap low (74.13):
  • 23.6% retrace ≈ 81.6; 38.2% ≈ 85.9; 50% ≈ 89.6. Day-2 high (77.9) failed even to reach 23.6% — bears in control. Any pop toward 81–82 likely meets heavy supply from trapped longs.

Ichimoku, ADX, SAR

• Ichimoku: Price far below cloud; Tenkan/Kijun above price — full bearish stack.
• ADX: Rising with negative DI dominance — strengthening downtrend regime.
• Parabolic SAR: Flipped bearish and well above price; no reversal signal.

Pattern diagnostics

• Breakaway gap below multi-month range with a two-day consolidation under resistance. Inverted-hammer-like day-2 candle beneath resistance suggests a continuation setup. The typical play is “sell the first bounce.”

Relative and context

• Relative strength vs. broad market and discretionary peers likely very weak post-earnings. Elevated implied volatility implies wide ranges; however, despite any IV crush after earnings, realized volatility remains elevated, which favors tactical shorts into rips rather than chasing breakdowns.

Risk management and trade plan

• Thesis: Short a push into 76–77.5 where supply showed up repeatedly; target a fade back toward 73–74 with scope to tag 72 if weakness accelerates.
• Invalidations: A sustained reclaim >78.5 (above Friday’s rejection band) threatens the near-term short. A decisive push >81.6 (23.6% Fib and gap-open anchor) would neutralize the immediate bear setup and argue for a deeper retracement.

24-hour outlook

• Base case: Early bounce to 76–77 stalls; price rolls over toward mid-74s; tails risk extension to ~73.
• Alternative: If gap support at 74 holds and buyers squeeze above 77.9, a test of 79–81 is possible, but odds favor sellers beneath 81.6.

Actionable levels

• Short entry (limit/sell the rip): 76.4 (within resistance band where prior intraday rally failed)
• Take profit: 72.9 (above round-number 72 and ahead of deeper supports to ensure fill in high vol)
• Protective stop (suggested, not part of order fields): 78.7 (above 8/8 rejection zone), yielding an R:R of roughly 1:1.8.

Conclusion

• Structure, momentum, and volume support selling strength. Expect a lower-high fade and retest of low-70s in the next session. Tactical short favored over bottom-fishing until price reclaims at least the 23.6% retrace/81.6 area.