Fade the Bounce: Short RALLY into 12.80 Resistance on RELY’s Post-Gap Drift

Executive summary

• Bias next 24 hours: Mildly bearish to range-bound. Expect trade inside roughly 12.15 to 12.80 with a downside skew. Best edge is to fade strength into 12.75–12.85.
• Trade idea: Short on a push toward 12.80 (near daily pivot R1 and volume-shelf supply). Target 12.16–12.15 area where buyers defended and where the new daily pivot S1 sits.

Context and regime

• Primary trend: Down. A major gap-down on 2025-11-06 collapsed price from the mid 16s to low 12s on extreme volume, shifting regime to markdown. Subsequent sessions show a low-energy bounce and compressing range under heavy overhead supply.
• Post-gap behavior: Classic dead-cat bounce and flagging beneath the gap. The unfilled gap from about 13.3 to 16.4 leaves a substantial supply overhang. Until the gap begins to fill with authority, rallies are suspect.

Structure and price action

• July to early Aug: Transitioned from 16s to 19–21 with momentum. Mid-Sep to late Oct: Lower highs and lower lows drifted back to mid 15s. Nov 6: violent reset to 12.31 close with 23.4M volume. Aftershock days 11/7, 11/10, 11/11 show tightening intraday ranges and lower highs.
• Current micro-structure: 11/11 intraday printed high 12.77 early, sold, made a low 12.125, then recovered to finish 12.49. The day is a small-bodied candle nestled under 12.77, which now acts as immediate resistance. Series since the gap: LHs around 12.92 then 12.77; HLs around 12.16 then 12.33 then 12.44 intraday, forming a bear flag ascending channel under resistance.

Volume and participation

• Regime shift volume: 11/06 printed 23.4M shares, dwarfing prior sessions; 11/07 10.4M; 11/10 6.4M; 11/11 about 5.2M by close. Declining volume on the bounce is textbook for a weak recovery and favors another leg lower or at least a retest of support before price can base.
• Volume shelf: Notable trading has accumulated between 12.35 and 12.65 across 11/06–11/11, creating a supply shelf. Price below the shelf is vulnerable to fast moves to 12.15 and then 11.8–12.0 if 12.15 fails.

Key levels and map

• Resistance: 12.77–12.80 (11/11 high and new daily R1), 12.92–13.13 (11/07 and 11/10 highs), 13.34 (gap-day open and anchored supply). Deep resistance band 15.5–16.5 is far above and not relevant for 24h horizon.
• Support: 12.40–12.50 intraday pivot band; 12.15–12.16 daily S1; 12.12–12.20 local swing low zone; 11.82 daily S2; psychological 12.00.

Gap analysis

• A large gap remains above from roughly 13.3 to mid 16s. Price is consolidating beneath the gap window, often a sign of acceptance at lower prices. Failure to reclaim and hold above 12.92–13.13 keeps the gap shut and sellers in control.

Moving averages

• 5-day mean of closes roughly 12.54, price fractionally below it. 10-day moving average estimated around 14.7, well above, confirming downtrend. 20- and 50-day are higher still, reinforcing bearish slope and overhead gravity. A classic bearish stack with price under all medium-term MAs.

Momentum oscillators

• RSI daily is likely in the low 30s after the gap and minor bounce, typical of a bear trend with periodic relief rallies. That argues for rebounds to stall near resistance rather than launch trend reversals within 24 hours.
• Stochastics likely recovered from oversold to mid-zone; in downtrends, this often resets momentum for another test of lows.

Trend and momentum indicators

• MACD is negative and below signal after the gap; histogram contraction the last two sessions hints at slower downside impulse but not yet a bullish cross. This supports a fade-the-rip stance.
• DMI/ADX: ADX likely rising post-gap with DI- above DI+, indicative of trend strength to the downside. Shorting into resistance aligns with this state.

Volatility and ranges

• ATR 14 estimate about 0.58. From 12.5, a typical daily traverse is roughly 11.9 to 13.1 if expanded; with current compression, 12.15–12.80 is a reasonable next-day bracket.
• Bollinger Bands expanded on the gap; past two sessions show reversion inside the lower band with modest contraction. Price is hugging the lower half of the envelope, a bearish tilt.

Ichimoku view

• Price below the cloud, Tenkan below Kijun, and lagging span under price and cloud. The entire system remains bearish; rallies into the Tenkan area are usually sold in this context. With recent volatility, the Tenkan is likely near 12.8–13.0, aligning with our sell zone.

Anchored VWAP and VWAP context

• Anchored VWAP from the 11/06 gap event is plausibly in the mid 12.6–12.7s given the bulk of post-gap trading below 12.8. Current price 12.49 is beneath that, implying average longs since the event are under water and rallies to AVWAP are supply opportunities.

Fibonacci framework

• From the pre-gap swing 16.96 (10/23) down to 12.205 (11/06), the 23.6 percent retrace is near 13.33 and 38.2 percent near 14.02. Price has not even achieved the shallowest retrace; strength is weak. For the immediate micro swing 12.125 to 12.77, a 61.8 percent retrace sits near 12.44, which coincides with intraday congestion and today’s settlement band, underscoring the importance of the 12.44–12.50 zone.

Classical pivots for 2025-11-12 (using 11/11 H 12.77, L 12.125, C 12.49)

• Pivot P = 12.4617
• R1 = 12.7983, R2 = 13.1067
• S1 = 12.1533, S2 = 11.8167 These levels match observed supply near 12.77–12.80 and demand near 12.12–12.16. Tactically, fading R1 with a target near S1 offers favorable alignment.

Candles and patterns

• 11/06 long red expansion candle with minor lower wick: momentum break. 11/07 small green and 11/10–11 steady indecision inside the gap-down range: bear flag beneath resistance. Bear flags break lower more often, especially under heavy overhang.

Wyckoff lens

• Distribution completed into a markdown phase. Post-break, current action resembles an automatic rally and secondary test below resistance. Without a sign of strength above 12.92–13.13, expect continued testing of supports.

Intraday 11/11 read

• Opening pop to 12.77 was rejected; most of the session balanced between 12.33 and 12.55, with late prints around 12.49. Highest volume hours occurred on the selloff and early rebound, consistent with reactive two-sided trade but with sellers capping the top. This strengthens the case to sell near 12.75–12.80 if revisited.

Scenario analysis next 24 hours

• Base case 55 percent: Early probe higher toward 12.70–12.85 meets supply; fade to 12.20–12.25 with intraday stabilizing near 12.15–12.20. Close near 12.25–12.40.
• Bear extension 25 percent: Loss of 12.15 leads to a quick liquidity pocket run to 12.00 and possibly 11.85–11.82 S2 on an expanded range day.
• Bull squeeze 20 percent: Strong open drives above 12.80 and squeezes to 12.92–13.13. Failure expected below 13.13 on first attempt; only a sustained hold above 13.13 would begin to challenge the bearish thesis into 24–48 hours.

Risk management and invalidation

• Invalidation for the short-tactical setup is a sustained acceptance above 12.92–13.13, which would put price back inside the lower gap lip and above AVWAP and R1 cluster. A prudent stop for a 12.80 entry sits around 13.03–13.10.
• If price gaps down and never offers a bounce to the entry, a momentum continuation short could be considered on a clean break of 12.30 with a tighter stop, but the preferred plan remains to sell strength.

Conclusion and trade plan

• Trend, volume character, momentum, pivots, and overhead supply argue to sell rips. Optimal entry aligns with daily R1 near 12.80. Aim for the 12.16 S1 area as a first profit objective within the next session. This provides attractive risk-reward and sits squarely within the ATR envelope.