Hammer Reversal off 200DMA: Tactical Bounce Setup in DNN Toward the 2.72 Gap

Summary snapshot

• Ticker: DNN (Denison Mines Corp)
• Current price: 2.55
• Session context (Nov 7): Open 2.48, High 2.58, Low 2.41, Close 2.55 on ~77.2M shares. Intraday closed near highs with steady afternoon bid.
• Key read: A gap-down, hammer-like recovery day that reclaimed VWAP and closed strong, setting up a short-term mean-reversion bounce toward the open gap and nearby Fibonacci retracements over the next session (next 24 hours).

1. Price structure, trend, and market context

• Bigger picture (Jul → mid-Oct): Persistent uptrend from ~1.70s to peak ~3.35 (mid-Oct). Strong momentum with multiple expansion legs.
• Correction phase (late Oct → early Nov): From the late-Oct rebound high ~3.22 (Oct 30) to today’s intraday low 2.41. That’s a 25% drawdown peak-to-trough, sufficient to reset momentum/RSI.
• Recent swing levels:
  • Major high: ~3.35 (Oct 16–15 area)
  • Late-Oct rally high: ~3.22 (Oct 30)
  • Pullback lows: 2.74 (Nov 4 close), today’s low 2.41 (Nov 7)
  • Nearby resistances: 2.58–2.60 (today’s H and round number), 2.70–2.75 (gap/magnet zone), 2.92 (Nov 3 close), 3.07–3.22 (late-Oct supply)
  • Nearby supports: 2.50/2.48 (gap base), 2.44–2.41 (today’s low cluster), then 2.32 (older shelf)
• Today’s candle: Gap-down into 2.41, then strong close near high (2.55). That’s hammer-like and a common prelude to a 1–2 day bounce, especially after a multi-day selloff.

2. Candlestick and gap analysis

• Gap dynamics: There’s an open gap to 2.74 (from Nov 4 close 2.74 to Nov 7 open 2.48). Price clawed back to 2.58 today but did not fill the gap.
• Gap-fill tendency: After a strong close near intraday highs and a reclaim of VWAP, probability of a next-session gap-fill attempt is elevated. The first logical magnet is 2.68–2.74.
• Candle pattern context: A single hammer-like day after several down days with expansion in range often produces at least a retracement into prior resistance bands (e.g., 38.2–50% of the downswing).

3. Momentum oscillators (approximate/inferred)

• RSI(14) daily: Likely recovered from sub-35 to ~40–45 range after today’s bounce. That’s still below midline, but with room to mean-revert higher before becoming overbought. Bullish short-term.
• Stochastic (fast/slow): Deep oversold earlier in week; today likely a %K cross up through %D from oversold territory. That cross often fuels 1–3 sessions of follow-through.
• MACD daily: Negative and below signal after the late-Oct roll-over, but histogram should be less negative after today’s impulse up; early signs of momentum deceleration to the downside.

4. Trend, moving averages, Bollinger

• 20DMA: Sliding lower, estimated ~2.85–2.95 after recent pullback. Price is below it (short-term trend still down). Mean-reversion target often the 20DMA vicinity, but that’s likely beyond a 24h window.
• 50DMA: Estimated ~2.80–2.85; overhead resistance cluster with 20DMA (confluence near 2.80–2.90). A magnet for a multi-day bounce, though perhaps not in one session.
• 200DMA: Estimated ~2.35–2.45. Today’s low (2.41) likely tagged the 200DMA zone and held—classic long-term support reaction.
• Bollinger Bands (20,2): With expanding volatility, lower band probably ~2.45–2.50. Today’s close just above/bouncing off lower band suggests a short-term push back toward the middle band (~2.85) over several days; first stop is the band’s lower/inner area near 2.60–2.70.

5. VWAP and intraday structure

• Session VWAP (Nov 7): Roughly ~2.51–2.53 given the early weakness and late strength. Price reclaimed and held above VWAP into the close—bullish for next session’s open.
• Intraday higher lows sequence after ~16:00 UTC hour, culminating in a close near session highs (2.57 last prints). That increases odds of a positive or at least stable open next session.
• Anchored VWAP (approx) from late-Oct rally high around 3.22 would sit overhead (~2.85–2.90 region), aligning with 50/20DMAs as a medium-term resistance cluster.

6. Fibonacci mapping (most relevant swings)

• From 3.22 (Oct 30) down to 2.41 (Nov 7) = 0.81 range.
  • 38.2% retrace: 2.41 + 0.31 ≈ 2.72
  • 50% retrace: ≈ 2.815
  • 61.8% retrace: ≈ 2.90
• Note how 2.72–2.74 (38.2% + gap fill) converges—strong, logical near-term target/resistance band.

7. Volume, breadth, and money flow (inferred)

• Volume: ~77M today—below recent high-vol days (100–160M) but not weak. That suggests some dip-buying interest without a blow-off reversal; adequate for a 1-day continuation attempt.
• OBV/AD (qualitative): Should stabilize or uptick after today; still below late-Oct highs. Money flow likely turning less negative.

8. Volatility and range expectations

• ATR(14) daily estimated ~0.17–0.20 after recent expansion. From a 2.55 reference, +/- 0.20 puts 2.35–2.75 as a 1-ATR band for the next day. That cleanly includes 2.68–2.74 and makes a test of 2.72 feasible within one session, assuming a neutral-to-positive open.

9. Ichimoku (approximate)

• Price below cloud; Tenkan likely ~2.65–2.70; Kijun higher (~2.80). In bearish regimes, price often mean-reverts to Tenkan first. That lines up with a 2.65–2.70 test in 24h.

10. Elliott wave framing (heuristic)

• The leg down from 3.22 appears as an impulsive A/C thrust into 2.41; today’s rebound can be the start of a counter-trend wave toward first retracement zones. Over 2.60–2.62, that counter-trend push often extends toward 2.70–2.75 before stalling.

11. Support/resistance map for trade planning

• Supports: 2.55 (closing area), 2.53–2.50 (VWAP/round), 2.48 (gap base), 2.44–2.41 (session low/last-ditch support).
• Resistances: 2.58–2.60 (today’s high and round), 2.68–2.74 (gap-fill + 38.2% fib), 2.80–2.90 (50%–61.8% fib and MA cluster).

12. Scenario probabilities (next 24 hours)

• Bullish continuation/mean reversion (55–60%): Early dip gets bought above 2.48–2.50, break ~2.58–2.60, push into 2.68–2.74 area, possibly tagging the 2.72 fib/gap level. Likely fade or stall there on first test.
• Sideways (20–25%): Chop between 2.48 and 2.60 as market waits for broader cues; modest positive skew if it holds above VWAP/2.50.
• Bearish relapse (20–25%): Failure back below 2.50/2.48 opens a retest of 2.44–2.41. A decisive break of 2.41 would negate the bounce thesis.

13. Strategy synthesis and risk management

• Bias: Short-term long for a gap-fill/38.2% fib test. Larger timeframe still corrective/bearish; treat as a tactical bounce, not a swing trend re-entry.
• Entry tactic: Prefer a buy-the-dip into 2.52–2.54 (near Friday VWAP and intra-support) to improve R:R. Secondary tactic would be momentum/breakout add over 2.60, but the requested single optimal entry is the pullback.
• Profit-taking: Primary target 2.70–2.74 (first supply/fib/gap zone). Within a 24h horizon, choose 2.72 as the optimal, liquid target.
• Risk control (not in fields, but critical): Stop ~2.44 (below today’s 2.41 low), risking ~0.09–0.10 for ~0.18–0.20 reward (R:R ≈ 2:1). If opening gap up >2.60, avoid chasing; wait for a retest toward 2.56–2.58.

Conclusion

• The combination of a hammer-like recovery day, VWAP reclaim, proximity to the lower Bollinger band/200DMA support, and a clean fib/gap target at 2.72–2.74 favors a tactical long into a one-day mean-reversion pop. Larger trend remains under pressure, so treat profits tactically at first resistance.

Note: This is a short-term trading view for the next 24 hours and not investment advice. Always size positions prudently and respect stops.