FI: Inside-Day After Capitulation—Setting Up a 1–2 Day Relief Rally Toward 70.6

Executive summary and 24h bias

• Very large regime shift on 2025-10-29 (gap-down of ~-44% vs prior close) with capitulation volume, followed by a lower close on 10/30 and an inside-day green candle on 10/31. This is a classic post-gap stabilization setup with odds favoring a 1–2 day relief bounce into initial retracement/pivot resistance.
• Next 24h bias: Modestly bullish. Expected range 65.2–70.6 with an upside skew toward 68.1–69.5 first and 70.6 as stretch target.
• Trade stance: Buy the pullback near the daily pivot (≈66.60) targeting 70.60 (first major post-gap reference), with risk managed below 65.10.

Context and regime assessment

• Structural break: Price collapsed from 126.17 (10/28 close) to 71.36 (10/29 open) and finished 70.60 on extreme volume (103.5M). Such gaps often come from corporate actions or unexpected catalysts. Post-gap indicators using pre-gap moving averages are not directly comparable; treat 10/29 as a new regime anchor.
• Volume regime: 10/29 (103.5M), 10/30 (63.8M), 10/31 (30.1M). Decelerating relative volume after the shock suggests selling pressure is easing and price discovery is shifting to balance.
• Price action sequence: 10/29 wide-range selloff; 10/30 follow-through lower close 65.19; 10/31 small green inside day (open 65.64, high 68.00, low 65.13, close 66.69). An inside day after capitulation commonly precedes a directional expansion day; with a green close, bias tilts slightly upward.

Key levels (derived from 10/31 and post-gap anchors)

• 10/31 Pivot (Classic): P = (H+L+C)/3 = (68.00+65.13+66.69)/3 ≈ 66.61.
  • R1 = 68.08, R2 = 69.48, R3 = 70.95; S1 = 65.21, S2 = 63.74.
• Gap-day references (10/29): High 76.65, Close 70.60, Low 66.58 intraday? (low was 66.58 on 10/29, confirmed). 70.60 is the most immediate overhead supply line.
• 10/30 range: High 70.10, Low 64.52; 10/31 high sits inside this range, confirming compression.

Indicator suite (focused on post-gap reliability)

1. RSI (short lookback due to regime change)

• 3-day changes: 10/29→10/30: -5.41; 10/30→10/31: +1.50. RS ≈ 1.50/5.41 = 0.277. RSI_3 ≈ 21.7 (oversold). Oversold in a balancing tape supports a relief bounce toward first resistance bands.

2. ATR and volatility structure

• True ranges: 10/29: 10.07; 10/30: 5.58; 10/31: 2.87. ATR_3 ≈ 6.17 (~9% of price). Volatility is compressing quickly (10.07 → 2.87), which often precedes a range expansion day. Inside day plus falling ATR favors a breakout move; given the green bias and oversold RSI, skew is up.

3. Candlestick and pattern diagnostics

• 10/30 large bearish candle; 10/31 small-bodied green inside day (bullish harami-type context). This pattern after capitulation frequently leads to a bounce into prior session pivot/R1 or to the gap-close reference.
• No follow-through selling on 10/31 despite early dip to 65.13; close near the mid-upper of the day shows demand emerging around 65–66.

4. Fibonacci retracements (post-gap swing)

• Swing: 10/29 high 76.65 to 10/30 low 64.52 (Δ = 12.13).
  • 38.2%: 64.52 + 0.382*12.13 ≈ 69.15.
  • 50%: ≈ 70.59 (virtually identical to the 10/29 close at 70.60).
  • 61.8%: ≈ 72.02.
• Expect initial bounce attempts to stall between 69.15 and 70.60. This aligns with pivots R2 (≈69.48) and the gap-day close (≈70.60), reinforcing the target zone.

5. Support/resistance mapping

• Support: S1 ≈ 65.21 (aligns with 10/31 low 65.13) and psychological 65.00. Deeper S2 ≈ 63.74 (10/30 range context), but that would imply a breakdown.
• Resistance: R1 ≈ 68.08 (also 10/31 high), 10/30 high 70.10, gap-day close 70.60, and R3 ≈ 70.95. Expect supply to intensify 69–71.

6. Pivot/Range strategy confluence

• Optimal long entries cluster near the daily pivot P ≈ 66.61 with stops below S1 (≈65.21). First targets at R1 (≈68.08) and R2 (≈69.48); stretch to 70.6.

7. VWAP/Anchored VWAP (conceptual)

• Anchored to the gap day (10/29), aggregate positioning is likely above current price given the large early-day open near 71 and broad trading 66.6–76.7. That leaves overhead supply; hence target modestly below major AVWAP likely improves hit-rate (70.6 is pragmatic).

8. Keltner and Bollinger context (qualitative)

• Post-shock, price sits well below pre-gap midlines; immediate post-gap bands expanded dramatically then began contracting on 10/31. A volatility contraction day after a shock leans toward a one-day mean reversion pop before the next decision area (69–71).

9. Market profile/auction theory

• 10/31 formed a tighter value area inside 10/30’s range; buyers defended 65–66 and tested toward 68 but were capped. Expect a test of value-area high/initial balance extension to 68.1 first; acceptance above that opens 69.5 then 70.6.

10. Statistical tendency after large gaps

• After extreme negative gaps with >2x relative volume, the day-3/4 bounce rates into 38.2–50% retracement zones are elevated historically (tactical mean reversion). Our 10/31 inside day sets up day-4 (next session) extension.

11. Elliott wave (heuristic)

• The gap and follow-through likely represent a terminal wave-3 type capitulation; inside day is wave-4 consolidation with a probable wave-5 attempt up to the 0.382–0.5 retracement before reassessing.

12. Momentum alignment

• Classic MACD/MA signals are not reliable across the split/regime. Short-horizon momentum favors an upside test given green inside day and improving close vs open.

Scenario analysis (next 24 hours)

• Bull case (~55%): Early dip toward 66.0–66.6 is bought; break above 68.1 (R1) triggers momentum to 69.2–69.5; continued strength tags 70.1–70.6. Closing near 69–70 if buyers hold intraday VWAP.
• Base case (~30%): Range-bound day between 65.8–68.8, close 67–68. Consolidation continues.
• Bear case (~15%): Breaks below 65.2 (S1), runs stops to 64.5–63.9 (S2) before stabilization; this invalidates the bounce setup short-term.

Risk management and execution plan

• Entry logic: Favor a buy near the 10/31 pivot (≈66.6) to align with expected mean reversion while controlling risk.
• Stop (not required by prompt but critical): Below 65.10 (under S1 and 10/31 low), to avoid noise; risk ≈ 1.5 per share from 66.60.
• Target: 70.60 (gap-day close and 50% retracement confluence). Reward ≈ 4.0 per share; reward:risk ≈ 2.7:1.
• Alternative trigger for momentum traders: Buy-stop above 68.10 (R1/inside-day high) to confirm expansion; same target 70.60. Lower reward but higher trigger quality. Primary plan remains the pivot pullback buy for best R:R.

Assumptions and caveats

• Pre-gap moving averages and longer indicators are de-emphasized due to likely corporate action/regime shift; post-gap anchors are prioritized.
• Liquidity is ample post-event; slippage risk remains given ATR ~6.2. Position sizing should reflect elevated volatility.

Conclusion

• Setup quality: Moderate. We have capitulation, inside-day compression, oversold RSI_3, and clear confluence targets. Overhead supply exists at 69–71, so expect selling pressure there; hence take profit into that zone. Net, a tactically bullish 24h mean-reversion trade is favored.