Short the Rip: FLY’s Weak Close Below VWAP Sets Up a Pivot-Zone Fade

Step-by-step multi-angle technical assessment (intraday and daily)

1. Market structure and context

• Two-session picture: 8/7 opened at 70, closed 60.35 on extreme volume (29.9M), signaling a major distribution day. 8/8 opened with a gap down at 54.85, ranged 57.06 to 49.11, and closed 50.17 on 8.54M. This is a two-day drawdown from the 8/7 high (73.8) to 8/8 low (49.11) of ~33%, with only a shallow intraday retracement on 8/8. Overall bias: bearish with possible oversold mean-reversion bounces.

2. Intraday VWAP and where price closed relative to value

• Computed session VWAP (13:30–20:00 bars) ≈ 52.56 using volume-weighted typical prices. Close (50.17) sits ~4.5% below VWAP, i.e., sellers controlled the session and price ended below value. This favors short-the-bounce setups into 52–53 on the next session.

3. Volume profile and trapped supply

• Heaviest hour: first hour (3.29M shares) with typical price ~54.63, plus sizable volume 14:30–16:30 above 52. Many participants are trapped at 52–55, likely to sell into rallies. Expect supply to emerge near 52.0–53.5 and again into 54–55.

4. Candles and price action diagnostics

• 8/8 day: red candle with notable upper wick (high 57.06 vs open 54.85, close 50.17). Rejection above ~55–57 confirms overhead supply. Intraday made sequential lower highs with late-day stabilization around 50, but no strong reversal print.

5. Gaps and mean reversion dynamics

• 8/8 gap down from 60.35 to 54.85; early push toward 57 failed. Unfilled gap area 57–60 is now a strong resistance zone. Typical short-term behavior after consecutive heavy down days: either a dead-cat bounce toward pivot/VWAP or a continuation breakdown through the most recent low (49.11). Given the weak close under VWAP and inability to reclaim 52–53 into the close, continuation risk is elevated.

6. Momentum and oscillators (hourly)

• RSI (approx. 7-period on hourly closes) estimates to the high single digits/low teens due to a sequence of net losses; this is deeply oversold, but oversold can persist in strong downtrends.
• Stochastic %K relative to the day’s range: (Close – Low) / (High – Low) ≈ (50.3 – 49.11) / (57.06 – 49.11) ≈ 15%. Also oversold. Takeaway: conditions favor a tactical bounce, but the trend remains down until key levels are reclaimed.

7. Moving averages (intraday proxies)

• 5-hour SMA (last 5 hourly closes) ≈ 50.39; last close 50.30 sits slightly below it (bearish micro-bias).
• 8-hour SMA ≈ 51.16; price below this by ~0.86, reflecting a negative short-term slope.
• With only two dailies available, a true daily MA set is unreliable, but the slope of any fast MA would be falling sharply.

8. Pivot points (for next session map)

• Using 8/8 H/L/C (57.065/49.1101/50.17):
  • Pivot (P) ≈ 52.12
  • R1 ≈ 55.12
  • S1 ≈ 47.17
  • R2 ≈ 60.07
  • S2 ≈ 44.16
• Price closed well below P. Expect initial resistance near P (52.1), then stronger supply near 53–55. On breakdowns, S1 (~47.2) is the first downside magnet.

9. Fibonacci context

• Intraday 8/8 swing: 57.06 → 49.11 (range ~7.95). Retracements from the low:
  • 23.6% ≈ 50.99
  • 38.2% ≈ 52.16 (coincides with Pivot P)
  • 50% ≈ 53.09
  • 61.8% ≈ 54.02
• Close (50.17) is below 23.6% retrace; any bounce into 52.1–53.1 hits a Fib cluster + pivot confluence → high-probability fade zone.
• From 8/7 high (73.8) to 8/8 low (49.11): 23.6% retrace from low ≈ 54.94, 38.2% ≈ 58.54. The intraday bounce failed to even reach the 23.6% of the two-day drop (bearish).

10. ATR and volatility framework

• Two-day true ranges: 8/7 ≈ 13.77, 8/8 ≈ 7.95; a simple 2-day ATR proxy ≈ 10.86. This implies wide daily swings are possible; 3–5 point moves intraday are very plausible.
• With such ATR, both breakdown extensions to S1 (~47) and snapback rallies to P (~52) can occur in a single session. Plan entries at edges, not mid.

11. Support/resistance ladder (intraday-derived)

• Supports: 50.00 (psychological), 49.70/49.80 (late-day lows), 49.11 (session low), then 47.17 (S1). Sub-47 opens 45–46 air pocket (S2 ~44.16 longer-tail risk).
• Resistances: 51.00–51.10 (local intraday caps), 52.00–52.20 (Fib 38.2% + Pivot P), 53.00–53.10 (50% Fib), 54.0–54.5 (61.8% Fib/overhead supply), 55–57 (prior rejection zone), 60 (gap resistance).

12. Pattern recognition

• Intraday: descending channel/controlled bleed from the early high, with late-session basing near 50. Not a completed reversal; if anything, a bear-flag-like stabilization into the close.
• Multiple failed retests above 51–52 hint the path of least resistance remains lower until 52.1–53 is reclaimed on strong breadth/volume.

13. Order flow inference and VWAP regimes

• Closing under session VWAP, with most volume transacted above current price, implies sellers have the upper hand. Next session, watch for reversion pops toward 52–53 to encounter supply. Shorting into VWAP/pivot re-tests is favored over pressing shorts into 49 unless you use a breakdown trigger.

14. Scenario analysis for next 24 hours

• Bearish continuation (≈55%): Early test and break of 49.11 triggers stops; extension toward S1 (47.2). If momentum accelerates, 45–46 can print before stabilizing.
• Dead-cat bounce then fade (≈30%): Pop toward 51–53 (VWAP/pivot zone), failure, then roll back to 49–48. This path offers the best R:R for shorts via sell-the-rip.
• Strong reversal (≈15%): Sustained reclaim of 53.1 (50% Fib) and hold above 54 (61.8%) would neutralize bears and target 55–57; currently lower probability absent a catalyst.

15. Strategy synthesis

• Confluence of: close < VWAP, failure to hold even 23.6% retrace, trapped supply overhead, pivot P at 52.1 aligning with Fib 38.2%, and persistent lower highs → favors short bias.
• However, given deep short-term oversold, the optimal short entry is on a bounce into 51.7–52.5 rather than chasing at 50.2. Alternatively, a breakdown entry below 49.00 is viable, but bears risk a whipsaw if a flush attracts dip buyers.

16. Trade plan (24h horizon)

• Bias: Sell the bounce.
• Optimal entry: 51.9 (limit sell) — inside the 51.7–52.5 confluence zone (near Pivot P 52.12 and below session VWAP 52.56).
• Profit target: 47.2 (around S1), aligning with the likely extension if the bounce fails. This captures ~4.7 points downside from entry.
• Risk guardrail (contextual): A prudent protective stop would sit above 54.2 (above 61.8% retrace and the rejection wick zone), risking ~2.3 per share; R:R ≈ 2.0:1. Not required by your prompt but essential to the plan.

17. What would flip this view?

• Strong open drive reclaiming and holding above 53.1 (50% Fib) on rising volume, then acceptance above 54.0. That would signal a shift from distribution to accumulation and postpone shorts.

18. Next 24-hour price path expectation

• Base case: Early session bounce toward 51.5–52.5, failure at pivot/VWAP zone, then roll back to retest 49.1, with continuation toward 47.2 if 49 breaks. Secondary: No bounce, direct break of 49.1 early, fast move to 47–46.5, then late-day stabilization.

Decision logic conclusion

• Given the bearish structure, overhead supply, VWAP/pivot confluence above, and high ATR, the higher-probability/high R:R play over the next 24 hours is to Sell (short) a rally into ~51.9 with a take-profit near ~47.2.