ELF: Post-Capitulation Play — Positioning for a Reflex Bounce into Overhead Supply

Summary view

• Ticker: ELF (e.l.f. Beauty, Inc.)
• Currency: USD
• Current price (last regular close): 73.74
• After-hours prints: 74.22–74.38 (stabilizing slightly above close)
• Regime change: Massive breakaway gap down on 2025-11-06 with extreme volume; second day follow-through but with long lower tail and smaller net loss.

1. Price structure and trend (multi-timeframe within provided data)

• Prior trend (Jul–Oct): Uptrend into mid-Sep (150 area), then rolling top and progressive lower highs/lows through Oct (loss of momentum, distribution phase), culminating in a violent repricing.
• Regime shift: 2025-11-06 open at 89.44 from prior 117.83 close, low 74.11, close 76.54 on 19.36M shares (vs ~1–2M typical). This is classic breakaway gap + selling climax. 2025-11-07 extended lower to 69.05 but closed 73.74 with 8.30M shares — a secondary test below the gap day low, closing mid-range.
• Market message: Institutional flush/capitulation likely occurred; price is now far below all major moving averages and prior value area. Short-term, odds favor a reflex (dead-cat) bounce toward overhead supply/anchored VWAP zones before trend resolves.

2. Candlestick and pattern analysis

• 11/06: Wide spread down bar, huge volume = potential Selling Climax (SC) in Wyckoff terms.
• 11/07: Long lower shadow (low 69.05, close 73.74), smaller body — not a textbook hammer, but a “stopping” candle indicating demand emerged sub-70 and absorbed supply.
• Two-day structure: SC → Secondary Test (ST). Typical next leg is an Automatic Rally (AR) toward first resistance.

3. Support/resistance mapping (price memory)

• Immediate supports: 69.05 (11/07 intraday low), 74.0–74.5 (after-hours micro shelf), psychological 70.00 round number.
• Immediate resistances: 76.50–77.20 (11/07 intraday high cluster), 78.8–79.2 (Fib 23.6% retrace of crash leg; see below), 82–85 (overhead supply from anchored VWAP clusters), 89.5–95 (gap-day high to gap base — heavy supply).

4. Gap and Fibonacci analysis

• Crash leg reference: From 11/06 low 74.11 to 11/06 high 94.99 within the gap-day range and including 11/07’s lower low 69.05.
• Using 11/07 low-to-11/06 high (69.05 → 94.99, span = 25.94):
  • 23.6% retrace: 69.05 + 0.236*25.94 ≈ 75.18 (first magnet; already near after-hours). If we anchor from 74.11, 23.6% = ~79.04 — both frames bracket 75–79.
  • 38.2%: ≈ 78.9–83.0 zone depending on anchor. This aligns with recent congestion/supply.
• Expect AR often reaches ~23.6–38.2% on day 1–2 of reflex rallies. Thus 76–79 is a reasonable first-session target; stretch to low 80s if momentum improves.

5. Moving averages and trend filters

• 5-day SMA (approx): (120.94 + 118.29 + 117.83 + 76.54 + 73.74)/5 ≈ 101.5 — far above price, evidencing extreme dislocation and downside acceleration.
• 10/20/50/200-day SMAs (approx) are all well above price given months spent 120–145+. Classic bearish alignment, but these are lagging; extreme distance often precedes mean-reversion bounces.

6. Oscillators

• RSI(14) (qualitative): After a 35–40% 1-day gap and a subsequent lower low, RSI is typically sub-20 (deeply oversold). Two consecutive heavy down days usually produce an RSI trough in the teens. Oversold in itself is not buy signal, but supports a reflex-bounce thesis.
• Stochastics: Likely <10 with potential for quick cross up if price stabilizes above 74–75.
• MACD: Deeply negative with wide histogram — confirms bearish regime but historically precedes sharp countertrend pops when stretched.

7. Volatility, ATR and Bollinger Bands

• True Range expansion: 11/06 TR ≈ 20.88; 11/07 TR ≈ 8.16. A 14-day ATR is likely ~8–10 now (elevated vs pre-crash ~4–6). Expect large intraday swings.
• Bollinger Bands(20): Price is multiple standard deviations below the 20-SMA; closes this far outside the lower band frequently mean-revert toward the band within 1–3 sessions. First target is often the lower band itself rising toward high 70s/low 80s.

8. Volume, VSA and Wyckoff lens

• 11/06: Climax volume; 11/07: still elevated, with a lower low but close well off the day’s low — suggests supply absorption at 69–71.
• Wyckoff sequence: SC (11/06) → ST (11/07) → AR expected next (bounce to resistance). Not a full accumulation yet; risk of further testing remains if AR fails.

9. VWAP/Anchored VWAP

• Anchored VWAP from 11/06 open (89.44) likely sits ~77–80 given heavy turnover and closes sub-77 across both days. That zone often acts as a magnet/cap on first bounce. Expect responsive sellers into 78–80.

10. Market profile/auction theory (session structure)

• Post-crash value is attempting to form around low–mid 70s. Two-day range 69–77 created a nascent value area with point of control near 73–74. First directional move Monday often tests the opposite edge of this mini-balance: upside test 76–77, downside test 70–71.

11. Scenario analysis for next trading session (next 24h of market time)

• Bullish (prob ~58%): Early probe lower toward 71–72 finds buyers; reversal drives into 76–79 where overhead supply checks the move. Close 76–78.
• Bearish (prob ~42%): Early bounce fails below 76; break of 71 triggers another liquidity air-pocket to 68–69; weak close sub-72. True downside continuation below 69 requires fresh negative news, otherwise buyers reappear.

12. Strategy synthesis and trade plan

• Edge: Short-term mean reversion from extreme oversold with elevated ATR and evidence of a selling climax + secondary test.
• Tactics: Prefer buy-the-dip into intraday support rather than chase. Use a limit near 72.6 (just above 71.9–72.4 micro-demand seen Friday) to improve R:R. Profit target near first heavy resistance/anchored VWAP cluster ≈ 78.8 (aligns with 23.6–38.2% retrace confluence and Friday’s high zone). If price gaps up above 76 at open, a momentum alternative is a buy-stop above 77.3 targeting 80–81, but primary plan remains dip-buy.
• Risk framing (informational): A logical protective stop (not requested) would sit below 68.7 (beneath 11/07 low buffer), producing an approximate 1:1.6 to 1:2 R:R versus 78.8–80 targets.

13. Key levels

• Support: 69.05; 70.00; 71.9–72.4; 74.0–74.5
• Resistance: 76.0–77.2; 78.8–79.2; 82–85; 89.5–95 (gap supply)

Outlook (next 24 hours): Base case is a reflex bounce toward 76–79 after an early dip toward 71–73. Volatility remains high; expect sharp two-sided auctions.

Conclusion: Favor a tactical long for a 1–2 day rebound. Open via a buy-limit on weakness near 72.6; aim to exit into 78.8 where first dense supply likely resides.