Fade the Dead‑Cat Bounce: Short JHX Into the 20 Handle

Overview and regime

• JHX experienced an extreme regime shift on 2025-08-20: a gap-down from ~28.4 to the 19–20 area, printing a capitulation low at 17.91 and closing at 18.64 on record volume (≈71.3M vs. typical single-digit millions). On 2025-08-21 the stock staged a reflex rally, closing 19.78 with strong intraday accumulation and elevated volume (≈32.5M). This is a classic post-gap “dead‑cat bounce/mean‑reversion” dynamic within a newly established bearish trend.

Price/volume action and levels

• Gap structure: Massive breakaway gap from the 28–29 supply zone down into the high teens. Such gaps typically do not fully fill quickly unless the catalyst is decisively reversed; instead, they act as an overhead supply shelf.
• Intraday 08/21: Higher highs and higher lows through the session; hourly close progression from ~18.76 to ~19.76. Anchored session VWAP ≈ 19.27 (est.), with price closing above VWAP—short-term strength into the close.
• Key resistance: 19.85 (08/21 intraday high), 20.00 round number, 20.40–20.50 (08/20 intraday high), 20.7 (approx. 23.6% Fib retrace of 29.66→17.91), and 21.0–21.5 (overhead supply layer from prior breakdown path).
• Key support: 19.20–19.30 (VWAP band and hourly demand), 18.95–19.00 (hourly pivot), 18.60 (08/20 close), 18.32 (08/21 session low zone), 17.91 (capitulation low).

Trend and moving averages

• The gap establishes a dominant bearish daily trend. Price is well below common trend MAs (20/50/200D) given the prior multi-week range around 26–28. Expect these MAs to act as dynamic resistance on any multi-day rebound.

Momentum oscillators

• RSI(14): Collapsed into oversold sub‑30 on 08/20 and rebounded on 08/21 toward low/mid‑30s. Typical pattern after a crash day: a 1–3 session bounce that relieves oversold, then a fade as sellers reassert.
• Stochastics: From embedded oversold toward neutral; room exists for a brief push into 20–20.5 before momentum cools.
• MACD: Deeply negative on daily; histogram likely less negative on 08/21 (reflex), but signal well below zero—bear trend intact.

Volatility/mean reversion

• ATR expansion: Daily range ballooned (17.91–20.50 on 08/20; ~1.0 range on 08/21). A 14D ATR in the ~1.3–1.6 zone is plausible post-shock. Elevated ATR favors fading extensions into resistance with tight risk.
• Bollinger Bands: Price blew through the lower band on 08/20 and re‑entered on 08/21—classic mean‑reversion snapback. With the mid-band (20SMA) far above, rallies are fighting the band slope and supply.

Ichimoku (daily)

• Price far below cloud; both conversion and base lines overhead. Any bounce into 20–21 remains below a thick, downward-sloping cloud—a bearish regime.

Volume, VWAP, and profile

• 08/20 volume climax (capitulation/redistribution) followed by heavy but lower 08/21 volume (responsive buying). This often signals short-term bounce but not a structural bottom.
• 08/21 anchored VWAP ≈ 19.27; a composite HVN/volume node appears to be forming 19.2–19.6. If price spikes >20.0 early, the 19.2–19.6 area is likely the first magnet on a fade.

Fibonacci and measured moves

• From swing high 29.66 to crash low 17.91: 23.6% retrace ≈ 20.68; 38.2% ≈ 22.40. The first meaningful fib confluence aligns with the 20.4–20.7 resistance shelf (plus round-number psychology and 08/20 high at 20.50).

Candlestick/price pattern context

• 08/20 printed a long-range bearish candle with a long lower tail (exhaustion). 08/21 followed with a strong green bar closing near highs—typical of a two-day reflex. In a bearish breakaway context, such follow-through often stalls at the first overhead supply band (19.85–20.70).

Market structure/behavioral take

• Overhead trapped longs from the 26–28 region likely use any rally into the 20s to reduce exposure. Short covering plus dip buyers powered 08/21; the next session often opens firm, tags resistance, then fades as supply overwhelms reduced demand.

24-hour outlook (base case)

• Bias: Sell strength. Expect an early push to test 20.1–20.6, with sellers defending the 20.4–20.7 band. Intraday mean reversion likely drifts price back into 19.0–19.3 by the end of the next regular session if the catalyst backdrop is unchanged.
• Alternate: A squeeze through 20.7 can carry toward 21.2–21.5 before stalling; a break and hold below 18.9 would re-open 18.6 and 18.3, with 17.9 as a tail risk retest.

Trade thesis and plan (short-term tactical)

• Thesis: The post-capitulation bounce is running into a dense overhead supply window at 20.0–20.7 (prior intraday high, fib 23.6%, psychological round number). Elevated ATR favors fading a test of that band with a target back to the 19.0 handle (VWAP magnet/structure support).
• Entry: Stalk a limit short near 20.20–20.35 (optimal: 20.30) into the first push. This improves R multiple while leaning on nearby resistance and the 08/20 high (20.50) as a clear invalidation zone.
• Target: 18.90 (first structural support and just above 08/21 early-session pivot), which also front-runs potential buyers at 18.6–18.9.
• Risk considerations: Invalidation on a strong acceptance above 20.70 (fib/overhead supply). Watch for gap behavior at the next open; if a gap above 20.7 occurs with volume, stand aside.

Bottom line

• Newly established bearish regime with a classic two-day bounce. Probability-weighted path over the next 24 hours favors a pop into 20.1–20.6 followed by a fade toward ~19.0–19.3. Tactically, I prefer to Sell strength rather than chase the bounce.