OPEN at the Brink: Short the Bounce as 7.10 Beckons

Summary and 24h view

• Bias: Bearish into the next 24 hours; expect a relief bounce toward 7.85–8.05, then continuation lower toward 7.20–7.30; risk of a stop-run spike to 8.30–8.55 before fading.
• Optimal tactic: Sell the bounce (short into strength) rather than chase weakness at 7.57. Primary target zone 7.10–7.30 with potential intraday flush to ~7.05.

Context and structure of the move

• Regime shift: Since the 9/11 gap-and-go high (10.52), the stock has carved a series of lower highs and lower lows over the last week. The last four sessions show accelerating downside momentum and expanding real bodies—distribution character.
• Open gaps: A large unfilled gap remains below from 9/11 (5.86 vs 9/10 close). While far away, such gaps act as medium-term magnets. Near-term, the 9/23 swing low at 7.09 is the critical reference. Price is now within one ATR of that pivot, increasing the probability of a test.

Multi-timeframe trend check

• Daily trend: Lower high at 10/06–10/07 (~9.69/9.47), then decisive breakdown of 8.00 pivot (10/09–10/10). Today’s candle: wide-range bearish continuation (open 8.22, high 8.22, low 7.45, close 7.57).
• 1-hour intraday: Sequence of LH/LLs. Attempts to reclaim VWAP failed repeatedly; late-session sell program pushed to 7.27 after-hours, aligning with S1 pivot (see Pivot section).
• Week-over-week: From 10/06 close 9.28 to 10/10 close 7.57 is ~-18.4% in four days—momentum-dominated regime.

Key levels (derived from recent price structure)

• Resistance: 7.85–8.05 (broken pivot and tomorrow’s R1 proximity), 8.30–8.55 (supply shelf and R2 zone), 8.80–9.00 (prior congestion/20DMA region).
• Support: 7.45 (session low), 7.30–7.27 (S1 pivot cluster and after-hours print), 7.10 (9/23 swing low), 6.98 (S2), 6.65 and 6.04 (deeper daily references if panic accelerates).

Moving averages and slope analysis

• 5DMA ≈ 8.55: Price well below—short-term momentum bearish.
• 10DMA ≈ 8.31: Price below—pressure remains; rallies to the 10DMA likely get sold in first test.
• 20DMA estimated ≈ 8.6–8.8: Rolling over; middle Bollinger band resistance.
• 50DMA estimated ≈ 6.8–7.1: Rising; price approaching this longer-term support. First touch of a rising 50DMA often produces a bounce, but down-momentum can overshoot intraday.
• Conclusion: Bearish short-/intermediate-term alignment (price < 5/10/20DMAs; slope of 10/20DMA turning down). 50DMA below is the medium-term catchment where responsive buyers could appear (7.1±0.2).

Momentum indicators

• RSI(14) daily: Likely ~30–33 after a 3-day accelerated decline; not extreme yet, leaving room for further downside before a strong reflex bid. 1h RSI dipped into mid-20s on the after-hours flush—supports a bounce then fade setup.
• MACD daily: Bearish crossover with expanding negative histogram—momentum build favors continuation post-bounce.
• Stochastics: Near oversold on daily; signals often stay pinned in trend, reinforcing the sell-the-bounce approach.

Volatility and range structure

• ATR(14) daily estimated ≈ 0.9–1.1. Today’s true range (~0.77) sits near average; the 24h expected move envelope roughly 7.57 ± 1.0 → 6.6–8.6.
• Implication: A 0.7–0.9 downside swing is entirely feasible in the next session, fitting a 7.15–7.30 target if shorted in the 7.9–8.0 area.

Bollinger Bands (20,2)

• Middle band ~ 20DMA (~8.6–8.8); price below mid-band—bearish regime.
• Lower band likely ~6.8–7.0. Today’s session probed toward the lower half without a full-band tag, suggesting downside energy remains unfinished. A tag or minor undercut into 7.0–7.1 can complete a short-term exhaustion.

VWAP and volume analysis

• Session VWAP: Price failed to sustain above intraday VWAP most of the day, with late-day heavy selling into the close and after-hours continuation to 7.27. Rallies back to VWAP (expected 7.85–7.95 early) are candidates for re-supply.
• Volume: Elevated relative to the 30-day baseline but tapering vs the early-September blowoff. Today’s down day with strong volume is a distribution day—institutions selling into bids.

Fibonacci mapping

• Last upswing: 9/23 low 7.09 to 10/06 high 9.69 = 2.60.
  • 38.2%: 8.70
  • 50%: 8.39
  • 61.8%: 8.08
  • 78.6%: 7.64
• Price closed 7.57, i.e., below the 78.6% retracement and near a full retrace—typical of transitions from correction to trend reversal. Retest of 7.09 is now a high-probability event.

Ichimoku lens (approximate)

• Price below Tenkan and Kijun; future cloud above and turning flat-to-down. Bearish configuration. First Kijun retest (~8.3–8.5) is often sold in downtrends.

Linear regression channel and momentum slope

• Short window (last 10 sessions) regression slope clearly negative; 1-day projection suggests drift toward 7.2–7.3 even after a mean-reverting push to the channel midline (~7.9–8.0).

Classical pivots for next session (computed from 10/10 H/L/C: 8.2188/7.45/7.57)

• Pivot (P): 7.746
• R1: 8.043
• R2: 8.515
• R3: 8.811
• S1: 7.274
• S2: 6.977
• S3: 6.505 Note: After-hours print at 7.27 tagged S1 almost precisely—common behavior before a morning bounce into P or R1, then a fade.

Candle/price patterns

• Today’s daily candle: wide-range bearish with small upper wick, close near lower third—continuation tone, not a classic hammer. Intraday 1h shows failed bounces near 7.92–7.95 forming a bear flag, then breakdown.

Scenario map for next 24 hours

• Base case (55%): Early bounce into 7.90–8.05 (R1/P confluence, near session VWAP), sellers step in, trend resumes down toward 7.30 with a possible liquidity sweep to 7.10–7.20. Close 7.30–7.45.
• Bear extension (25%): Minimal bounce; breaks 7.27 quickly, accelerates to 7.00–7.05 (lower band/50DMA confluence), and wicks. Late-day stabilization ~7.10–7.25.
• Bull surprise (20%): Oversold rally extends beyond 8.05; stop-run pushes to 8.30–8.55 (R2/Kijun/20DMA underside zone) before supply reasserts. Even here, edge favors selling strength unless 8.60+ holds on a closing basis.

Risk and invalidation

• Invalidation for the short thesis: Sustained reclaim and close above 8.55 (R2/MA/Cloud underside) would suggest a stronger corrective rally toward 8.80–9.00.
• Key risk to shorts: A news-driven squeeze. Mitigate via entering on strength (not weakness) and placing stops above 8.55–8.60.

Trade plan (24h)

• Setup: Sell the bounce into 7.95–8.05 (optimal entry 7.98). Target 7.15 on a trend continuation flush; consider partials at 7.30–7.35. If no bounce: an alternative momentum add-on is a breakdown-through 7.45 with tight risk, but the preferred plan remains to fade strength.
• Rationale: Confluence of R1/P, VWAP reversion, downtrend momentum, MACD negative, price under key MAs, and proximity to untested 7.09 swing low.

Expected path summary

• Likely intraday arc: Gap/drive to ~7.85–8.00 → rejection → stair-step lower → probe 7.20–7.30 → potential liquidity sweep to ~7.10 → late stabilization above 7.20.