Parabolic Pop, Tired Tape: Setting Up For A Day-2 Mean Reversion In FRMI

Note: This is market commentary for education, not investment advice. Volatile, low-liquidity names can gap or halt; size and risk-manage accordingly.

Summary of today’s tape

• Symbol: FRMI (Fermi Inc. Common Stock)
• Currency: $ | Current indicated price: 32.53
• Session structure (10/01): Open 25.00, High 36.46, Low 24.50, Close 32.53, Volume ~39.34M
• Intraday ramp: Multiple hours of higher highs/higher closes with volume peaking early and tapering into the close; after-hours print shown near 33.85 on zero volume.

Price action and structure

• Massive gap-and-go from a flat 21 baseline (prior two days with 0 volume) to a 36.46 spike intraday, closing 32.53.
• The day’s true range was 11.96 (≈47.9% of the day’s low), indicating extreme expansion.
• Into the late session, price accelerated while volume declined, a classic sign of parabolic exhaustion risk.

Volume and VWAP positioning

• Approximate multi-hour VWAP (15:30–20:00 bars): ~26.98–27.00 using typical price weighting by volume.
• Price finished 20–25% above VWAP, a significant dislocation that often mean-reverts at least partially the next session unless a fresh catalyst extends the squeeze.
• Volume trajectory: 16.7M → 9.3M → 12.0M → 5.6M → 4.3M → 0.66M. Rising price on diminishing volume suggests buying pressure waned while late shorts covered.

Momentum and overbought signals

• Hourly RSI proxy (5 bars) ≈ 96–97, an extreme overbought print. Short-term probabilities favor pullbacks toward high-volume nodes/VWAP when RSI is this stretched.
• OBV trend intraday is higher but the slope decelerated late day, consistent with momentum slowing.

Fibonacci mapping (from L=24.50 to H=36.46; range=11.96)

• 23.6%: 33.64
• 38.2%: 31.89
• 50.0%: 30.48
• 61.8%: 29.07
• 78.6%: 27.06 Confluences:
• 78.6% retrace ~27.06 ≈ anchored VWAP ~27.00 (strong support cluster if a deep flush happens).
• 38.2–50% band (31.89–30.48) is the first logical mean-reversion zone for day-2.

Pivot levels (classic) using H=36.46, L=24.50, C=32.53

• P = 31.16
• R1 = 37.83, R2 = 43.12, R3 = 49.79
• S1 = 25.87, S2 = 19.20, S3 = 13.91 (S2/S3 are theoretical; unlikely unless extreme event) Interpretation:
• Current price > P (bullish bias), but far below R1; R1 clusters near the intraday blow-off area 36–38, likely heavy supply/halts risk if retested.

Volatility and expected move

• Parkinson volatility estimate: ln(H/L) = ln(36.46/24.50) ≈ 0.398; daily σ_P ≈ 0.6006×0.398 ≈ 0.239.
• Applied to 32.5 mid, a 1-day one-sigma move ≈ ±7.7. A 24-hour path testing 30–35 is statistically ordinary; pushes to 29 or 38 are within 1–1.5σ.

Candles and pattern context

• Intraday shows a late-stage expansion candle to 36.46 followed by a pullback to 34 into the close, consistent with a short-term blow-off and first pullback.
• After-hours indication around 33.85 sits near the 23.6% retrace (33.64). Failure to hold 33.6–34 early tomorrow would likely trigger a slide toward 31.9 then 30.5.

Market microstructure and regime

• Prior two sessions recorded at 21 with zero volume; today’s surge suggests new listing dynamics, ticker change, uplist, or news-driven low-float squeeze.
• Such names often show day-2 pattern: early push (sometimes micro gap-up) into prior high/supply, then “gap-and-crap” retracement toward VWAP/fib bands as momentum traders recycle.
• Liquidity risk: elevated odds of volatility halts. Borrow availability/fees for shorting could be constrained; plan entries near liquidity pockets.

Ichimoku (conceptual)

• Price is far above any reasonable cloud proxy; Tenkan/Kijun would lag far beneath price. This regime screams “trend strong, but extended” and typically invites mean reversion to Kijun-equivalent levels (roughly 30–31 if one approximates from mid-session basing).

Keltner/Bollinger context (qualitative due to limited data)

• With an intraday ATR approaching 3–4 (hourly), late bars traded beyond an implied 2–3 ATR envelope. Reversions from 2–3 ATR extensions to the mean are common absent fresh volume inflows.

Wyckoff lens

• Phase B to C style upthrust within a very compressed base (the 21 flat prints) into an Upthrust After Distribution (UTAD)-like blow-off. If early day-2 cannot absorb supply above 34–36, a markdown toward the value area (31.9 → 30.5) is favored.

Elliott wave sketch (very short term)

• Impulsive 5-wave intraday sequence likely culminated near 36.46 (wave 5 extension), followed by an initial a-b-c pullback into the close. A deeper c-wave into 31.9–30.5 fits the textbook day-2 correction.

Mean-reversion and pairs of confirmation triggers

• Bearish divergence proxy: price made higher highs while volume made lower highs late session.
• Breadth/participation proxy weakens into the close; lack of new buyers at highs increases probability of first-30–60 minute fade on day-2 if 34 cannot reclaim and hold.

Scenarios (next 24 hours)

• Bearish base case (45%): Early rally attempts stall 33.6–34.5; breakdown through 31.9 triggers a slide to 30.5. Possible spikes to 29.1 on liquidity pockets.
• Bullish alt case (35%): Quick squeeze through 34.5 → 36.5; tests 37.8 (R1) where supply likely reappears. Sustainability requires expanding volume; otherwise, reversal likely from 36–38.
• Chop (20%): 31.5–34.5 range-building ahead of a later directional move.

Levels that matter

• Resistance: 34.50, 36.46 (HOD), 37.83 (R1), 38–39 psychological/halts risk.
• Support: 33.64 (23.6% fib), 31.89 (38.2% fib/P≈31.16), 30.48 (50% fib), 29.07 (61.8% fib), 27.00 (VWAP/78.6%).

Trade logic and rationale

• Given the extreme VWAP dislocation, parabolic late-day structure, RSI ≈ 96, and volume taper, mean reversion toward 38.2–50% fib is the higher-probability day-2 path unless new buyers step in aggressively.
• Optimal short entries are near reclaimed resistance/supply: either a weak open pop into 33.6–34.2 or a squeeze into 35–36; both provide favorable risk/reward to targets 31.9–30.5.

Risk notes

• Stock may be low float; borrow could be scarce/expensive. Consider using defined-risk instruments where available.
• Expect outsized intraday swings (~±7–8). Be prepared for volatility halts and slippage.

24-hour price expectation

• Bias: Down-to-sideways with tests of 31.9 and 30.5 likely if 33.6–34.5 fails to hold on strength. A brief squeeze toward 35–36 is possible before fading.