PRLD: Post-Capitulation Bounce Setup — Buying the 1.68 Shelf for a Push Toward 2.02

Executive summary

• Setup: PRLD just printed a blow‑off spike (11/03 close ~3.98 on 34.6M sh) followed by a gap‑down, high‑volume washout to ~1.53 and rebound to the 1.70s (11/04 ~26.2M sh). This is a classic gap‑and‑fade with capitulation, creating a high‑probability mean‑reversion bounce within 24 hours, but with heavy overhead supply into 2.00–2.20.
• Bias next 24h: Tactical bounce favored (Buy-the-dip) toward 1.95–2.05, with failure likely near 2.10–2.20. Expect elevated volatility and two-sided trade.
• Plan: Buy pullbacks into 1.66–1.70 (near session VWAP/volume shelf) and take profit ~2.02. Risk below 1.56 (today’s liquidity sweep zone).

1. Multi-timeframe price structure

• Weekly: From late Sep lows (~1.00) to late Oct highs (~1.64–1.71) the trend turned up. The parabolic 11/03 candle (to 3.98) is a weekly buying climax (BC); 11/04 is the weekly Automatic Reaction (AR). After BC→AR, Wyckoff suggests a range forms; initial behavior is mean reversion within that range.
• Daily: Trend had been rising into 10/21–10/27 momentum burst (1.64–1.71), then consolidated 1.50–1.71. The 11/03 gap/melt-up to 3.98 expanded volatility (ATR surge). 11/04 gapped down to 2.12, flushed to 1.53, and closed in the 1.70s—heavy rotation and discovery of a new balance near 1.60–1.75.
• Intraday (11/04): Sequence was open fade (2.12→1.53), base build 1.60–1.70, late-day pop to ~1.74 and settlement around 1.68–1.76. That creates a demand shelf near 1.62–1.70 and a supply shelf 1.90–2.10.

2. Candles and classical patterns

• 11/03: Exhaustion gap and wide range close—buying climax characteristics.
• 11/04: Large red real body with a substantial lower shadow (washout beneath 1.60 to 1.53 and reclaim). Not a textbook hammer, but hammer‑like in the sense of a failed breakdown and close well above the low—often followed by a 1–2 day bounce.
• Pattern synthesis: Wyckoff BC → AR. Expect ST (Secondary Test) higher within 24–48h—often to the mid/upper third of the AR day’s range (translates roughly to 1.90–2.05).

3. Support/Resistance and levels that matter

• Supports: 1.53 (11/04 low, liquidity sweep), 1.60 (round), 1.62–1.70 (intraday volume shelf/VWAP cluster), 1.50 (psychological), 1.40 (pre-spike value area).
• Resistances: 1.76–1.80 (current control zone), 1.90, 2.00 (round), 2.12 (11/04 open), 2.20 (intraday high), 2.50 (50% retrace of 1.01→3.98), 2.85 (38.2%). Overhead supply dense from 1.90–2.30.

4. Volume, VWAPs, and profile

• Volume: Two-day cumulative volume is extreme (34.6M + 26.2M), signaling redistribution with trapped longs above 2.00–2.50 and new longs defending 1.60–1.70. This creates a pronounced high‑volume node (HVN) around 1.62–1.70 and a low‑volume pocket (LVP) 1.75–1.95.
• VWAPs (estimates from intraday bars): 11/04 session VWAP clustered roughly 1.66–1.72. Price reclaim and end-of-day rotation above this area favors a test higher into the LVP zone if 1.66 holds.
• Anchored VWAPs:
  • From 11/03 spike: likely sits well above 2.00 at first; on 11/04, price spending time below that anchored VWAP confirms overhead distribution.
  • From 11/04 open: anchored VWAP likely ~1.68–1.72, acting as immediate magnet in next session.
• Volume profile inference:
  • Support shelf: 1.60–1.70.
  • Resistance shelf: 1.95–2.10 (where trapped supply should appear).

5. Moving averages (approximations from the provided series)

• 20D SMA/EMA: Rising into ~1.45–1.55 pre-spike; today’s settlement in the 1.70s is above the 20D mean, indicating the primary daily trend remains constructive despite the flush.
• 50D SMA: ~1.25–1.35 and rising—bullish medium-term slope.
• 200D SMA: ~1.05–1.15 and turning up—long-term bear trend likely bottomed.
• Read: Price above 50/200 but below the 11/03 blow-off area. This is typically a buyable pullback in a newly formed uptrend, with the caveat of heavy supply overhead.

6. Momentum oscillators

• RSI(14) Daily (qualitative): Spiked into overbought on 11/03 (>70), then mean‑reverted sharply on 11/04, likely back toward neutral 45–55. That often precedes a bounce attempt as volatility compresses from extremes.
• Stochastics: Fast stoch likely sub‑20 intraday and curling up—bullish short-term inflection.
• MACD: Histogram likely peaked on 11/03 and crossed down on 11/04, but still above the zero line; near-term bounces can occur even as MACD lags.

7. Volatility and bands

• ATR: Daily ATR exploded from ~0.10–0.15 to ~0.30–0.60. Expect 10–25% swings intraday next session.
• Bollinger Bands: Massive expansion. With price closing near the lower/mid band after an outside day, a revert-to-mean push toward the middle/upper band (1.90–2.05) is common, provided 1.60–1.66 holds.

8. Fibonacci mapping (swing: 9/19 low ~1.01 to 11/03 high ~3.98)

• Range = 2.97. Retrace levels from 3.98:
  • 61.8%: ~2.145
  • 78.6%: ~1.646
• 11/04 low 1.53 pierced even the 78.6% briefly and reclaimed; current in 1.68–1.76 sits right around that deep 78.6% retrace—classic spot for a reflex rally.

9. Market microstructure, SSR, and tape read

• SSR likely in effect after a >10% down day from prior close, which can reduce at-bid shorting and occasionally fuel upside squeezes on upticks early next session.
• Tape on 11/04 showed an early liquidation break, then a long balance build, and a late bounce—indicative of supply exhaustion intraday.

10. Risk factors specific to micro-cap biotech

• Event risk: PRLD’s two-day surge suggests a catalyst; second-day dump could be profit-taking or capital raise speculation. Offers/halts are non-zero risks; size positions accordingly.
• Liquidity: Elevated, but slippage can be material. Use limits at key levels (1.66–1.70) rather than chasing.

11. Strategy integration and path projection (next 24 hours)

• Base case (55–60%): Early dip or shake toward 1.62–1.68, buyers defend VWAP shelf, push through 1.80 into the LVP, probe 1.92–2.02. Stalls 2.05–2.12 as overhead supply engages. Session closes 1.80–1.95.
• Bear case (25–30%): Fail to hold 1.62–1.66 → retest 1.56–1.53. If 1.53 breaks on volume, air-pocket to 1.45–1.40 possible; would invalidate the bounce setup and turn it into a range breakdown.
• Bull tail (10–15%): Surprise squeeze through 2.12–2.20 triggers a fast magnet to 2.35–2.50 (50% retrace). Low probability without fresh news, but not impossible given SSR and crowded shorts.

12. Trade plan and risk/reward

• Entry: Buy limit near 1.68 (inside the 1.66–1.70 demand shelf; also aligns with session VWAP cluster). If pre-market offers 1.62–1.66, that’s preferred; otherwise scale 1.66–1.70.
• Profit target (24h): 2.02 (first major supply pocket; just below round 2.00 and beneath 11/04 open 2.12 to front-run supply).
• Protective stop (discipline, not requested but essential): 1.56 (below 11/04 liquidity sweep).
• R:R estimate: (2.02−1.68)/(1.68−1.56) = 0.34/0.12 ≈ 2.8:1.

Conclusion

• The confluence of: deep 78.6% fib retrace reclaim, VWAP/volume shelf support at 1.66–1.70, SSR dynamics, hammer‑like recovery off 1.53, and massive two‑day volume suggests a reflex bounce is favored before the next decision point at 2.00–2.12. Use a buy-the-dip entry near 1.68 and exit into 2.02 within the next 24 hours. Respect the invalidation below 1.56.