LRN: Fade the Bounce — Short the 69–70 Supply for a Push Toward 63

Summary of what just happened

• Regime shift: LRN suffered a catastrophic gap-down on 2025-10-29 (from a 10/28 close of 153.53 to an 85.02 open), closing at 70.05 on 25.1M shares (~40x typical volume). On 10/30, price attempted an early bounce to 73.45, then trended down to 66.12–66.45, closing ~66.66–66.72. That’s fresh post-gap lows and a second day close near lows—classic continuation pressure after a capitulation day.
• Current print: 66.72, about 4.8% below yesterday’s close (70.05). Intraday VWAP today ≈ 68.84; price is below it, confirming persistent net distribution.

Multi-timeframe technicals and tools

1. Price structure and market profile

• Massive gap and breakdown: The gap (-~54% vs 10/28 close) invalidates prior ranges and support; historical levels in the 130–170 band are not actionable near-term.
• New value area is 66–73: The heaviest day-2 rotational trading occurred 66.5–70.5. Any rally into 69–71 faces trapped supply from day-1/2 participants.
• Overhead supply: Anchored VWAP (AVWAP) from the gap event (anchor at 10/29 open ≈ 85.02) combining 10/29 (VWAP ~75.3 on 25.1M) and 10/30 (~68.84 on 7.4M) implies an AVWAP ≈ 73.8. This is a powerful dynamic resistance; price is ~9–10% below it, suggesting sellers are in control and rallies should be faded.
• Volume profile (day-2): Point of control likely near 69–70; price acceptance below POC into the close indicates the market is comfortable discovering lower.

2. Intraday VWAP/AVWAP and execution context

• 10/30 session VWAP ≈ 68.84; price closed ~3.2% below VWAP after repeated rejections between 69.1–70.8. Shorting pops back toward VWAP/POC offers favorable R:R.
• AVWAP (from 10/29) ≈ 73.8: Stronger resistance overhead; any squeeze into low 70s likely encounters heavy supply from trapped longs.

3. Trend and moving averages

• All relevant moving averages (5/10/20D) sit far above current price and are rolling over. With such a structural break, MAs lag, but they confirm a strong bearish trend and a below-all-MAs regime.

4. Momentum (RSI/MACD proxies)

• Daily RSI is almost certainly deeply oversold after a -50% gap and two closes near lows. In structural breaks, oversold can persist; mean-reversion signals are less reliable until price reclaims and holds VWAPs.
• MACD-equivalent read: Momentum impulse down; no bullish crossover evident at this timescale.

5. Volatility and ranges (ATR/Bollinger)

• Day-1 true range ≈ 18 (86.97–68.83), day-2 range ≈ 7 (73.45–66.45). ATR has exploded; expect another wide session. A 24h swing of 6–10 points is plausible absent new catalysts.
• Bollinger bands would be massively breached; this indicates extreme volatility but does not guarantee immediate reversion in the face of fundamental repricing.

6. Candlestick/price action patterns

• Day-1: Large red spread, close in lower quartile—no hammer/reversal signature.
• Day-2: Lower low and close near the lows after a failed morning bounce to 73.45—typical bear-flag continuation behavior intraday.
• Expectation: early bounce attempt toward prior intraday resistance/VWAP, then a fade back to/through lows if sellers remain dominant.

7. Fibonacci mapping (10/30 intraday swing: H 73.45 to L 66.45)

• 23.6%: 68.10 (minor speed bump)
• 38.2%: 69.12 (observed rejection area)
• 50%: 69.95 (midday rejection zone)
• 61.8%: 70.78 (key short trigger/stop reference)
• 78.6%: 71.95 (deeper squeeze line) These align with the actual intraday failure zones; they form a layered sell zone from 69.1 to 71.9.

8. Support/resistance roadmap (nearest-term)

• Resistance: 69.1 (38.2%), 69.9–70.0 (50%), 70.8 (61.8%), 71.9–72.0 (78.6%), 73.8 (AVWAP since gap).
• Support: 66.45–66.12 (today’s lows), 65.00 (psychological/round), 63.00–62.50 (next logical extension on continuation), 60.00 (round).

9. Volume spread analysis (VSA)

• Day-1 ultra-high volume suggests capitulation, but day-2 selling on still-elevated volume with lower lows indicates supply hasn’t fully exhausted. Decreasing volume into the close with price pinned near the low hints at continuation potential into the next session’s early trade.

10. Scenario planning (next 24 hours)

• Base case (55%): Early relief bounce toward 68.5–69.9 (VWAP/38–50% fib) meets supply; afternoon fade retests 66.0–65.0; possible flush probes 63–62.5.
• Bear extension (30%): Weak open under 66.2 leads to a quick break of 66.0; trend day lower targets 63–62.5 with volatility spikes; shallow bounces capped below 69.1.
• Bull surprise (15%): Strong gap up with sustained reclaim of 70.8 (61.8% fib) and hold above ~71 leads to squeeze toward 72–73.8 AVWAP; only a firm acceptance above ~73.8 would begin neutralizing the immediate short bias.

11. Risk management and invalidation

• Optimal short is into strength, not at the lows: Short the 69–70 zone where overhead supply is dense. Invalidation for a tactical short lies above 70.8–71.2 (61.8% fib/rounded stop band). A secondary, more conservative invalidation is a sustained hold above ~73.8 (AVWAP since gap).
• Reward-to-risk: From a 68.9 entry, a stop near 71.2 and a target at 62.8 yields R:R ≈ (68.9–62.8)/(71.2–68.9) ≈ 6.1/2.3 ≈ 2.65x.

12. Synthesis and 24h directional call

• Multiple independent tools converge: below intraday VWAP, well below AVWAP from the gap, fresh lows, failed fib retracements, persistent distribution, and a bear-flag character. Near-term rallies are likely to be sold. Expect either a pop-and-fade into 69–70 or a direct break of 66 leading to 63–62.5.

Trading plan

• Bias: Sell strength (short into 69–70) for a continuation move toward 63–62.5 over the next session.
• Entry: Limit sell ~68.90 (near 38.2–50% retrace band and below session VWAP ~68.84/POC cluster)
• Target (take profit): 62.80 (just above the 62.5 round/extension to improve fill odds)
• Invalidation (stop, not required but prudent): 71.20 (above 61.8% fib and intraday rejection zone). If reclaimed and held, reassess; above 73.8 (AVWAP), bear thesis weakens materially.

Note: The magnitude of the gap suggests a fundamental driver (e.g., earnings or guidance). Technicals favor short-term continuation, but headline risk is elevated—size positions accordingly and be prepared for sharp squeezes into 70–72.

24-hour price prediction

• Expected path: Bounce toward 68.5–70.0, then fade to 65.0–63.0. Probability-weighted close bias: 64–66 if continuation plays out; squeeze risk to 71–72 if 70.8 is reclaimed and held.