Tradzar
Unity Software Inc. Price Analysis Powered by AI
Unity (U) in Post-Capitulation Downtrend: Sell the Bounce as Support Weakens Below $20
Market state (U) — Context from the provided series
Current price: 18.68
The data shows a major regime shift:
- From Oct–mid Jan U traded mostly 35–50.
- Starting 2026-01-30 there was a crash gap / capitulation break (low 27.54, close 29.10 on extremely high volume ~86.9M).
- A brief oversold bounce into 29.06 (2026-02-10) was followed by another waterfall selloff on 2026-02-11 (open 21.41, low 18.80, close 21.41 on ~104.9M).
- Then two follow-through red days: 19.65 (02-12) and 18.68 (02-13).
This is classic “dead-cat bounce then continuation” behavior after a structural breakdown.
1) Trend & structure (Dow Theory / swing analysis)
Daily trend
- Lower highs, lower lows since the late-Jan breakdown.
- The bounce peak at 29.27 (02-10 high) is a clear lower high relative to the prior price regime (40s). It also functions as a major overhead supply zone.
Key daily levels (from the chart)
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Immediate resistance (near-term supply): 19.65–20.28 (02-12 close / 02-13 high area)
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Stronger resistance: 21.00–22.10 (02-11 open/high zone)
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Major resistance: 24.9–25.7 (02-04/02-06 zone)
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Major “capitulation bounce top” resistance: 28.3–29.3
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Immediate support: 18.54 (02-13 low)
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Critical support / pivot: 18.80 (02-11 low) — already tested once
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If 18.5–18.8 fails: next likely psychological/support vacuum toward 17.50, then 16.00 (round-number and typical post-break air-pocket behavior; not explicitly printed in your data, but implied by the lack of nearby historical congestion in this region).
Structural conclusion: price is below all meaningful broken supports and is now building a base only if it can reclaim/hold above ~19.65–20.00. Currently it is not.
2) Volatility / range behavior (ATR-like inference)
The last ~10 sessions have very wide daily ranges (examples):
- 01-30: ~10.49 range (38.03–27.54)
- 02-11: ~3.30 range (22.10–18.80) but on enormous volume
- 02-03: ~4.25 range (28.82–24.57)
Even without calculating exact ATR, the character is clear:
- Volatility remains elevated and typically stays elevated after a capitulation phase.
- High volatility + downtrend = bearish drift punctuated by sharp counter-trend bounces.
For the next 24h, this implies mean-reversion pops are possible, but the path of least resistance remains down unless price reclaims key breakdown levels.
3) Volume / capitulation & supply analysis
Climax events
- 01-30 (86.9M) and 02-11 (104.9M) are capitulation-scale volumes.
What happened after the climaxes?
- After 01-30 capitulation, price bounced to 29.06 by 02-10.
- Then 02-11 produced another massive sell wave and since then price has made lower closes (21.41 → 19.65 → 18.68).
This sequencing often indicates:
- Institutions used the bounce to distribute into strength.
- The second capitulation suggests the first was not final, or that negative catalyst(s) continue to be absorbed.
Volume conclusion: overhead supply is likely heavy; rallies into 19.6–20.3 and 21–22 are likely to encounter sellers.
4) Momentum (RSI/MACD-style reasoning without exact calc)
Given the magnitude and speed of the drop from 29 → 18.7 in three sessions, momentum is:
- Bearish and strong, but also likely near-term oversold.
Typical implications:
- Oversold conditions can cause intraday rebounds, but in a strong downtrend these rebounds are frequently sold (bear-market rally dynamics).
Momentum conclusion for 24h: choppy-to-down, with bounces likely failing beneath resistance.
5) Candlestick / price-action read
- 02-11: large gap-down type move with huge volume (panic).
- 02-12 and 02-13: follow-through weakness (no immediate V-reversal). This is important: true bottoms often show failed breakdown + strong reclaim; instead we see acceptance below 20.
- Last hourly prints are tightly clustered around 18.62–18.63 (after-hours/illiquid), indicating no strong reversal impulse into the close; rather, stabilization at lows.
Price-action conclusion: stabilization is not yet reversal; bias remains sell rallies.
6) Support/Resistance mapping & trade location (where the trade is “wrong”)
With current price 18.68, you’re sitting just above the 18.54–18.80 band.
- Selling right here is late (near support), increasing bounce risk.
- A higher-probability short typically comes from a pullback into resistance.
Best “optimal” short entry from your data:
- 19.60–19.80 area (near 02-12 close 19.65 and below 02-13 high 20.28). This is a natural retest zone.
If price instead gaps up strongly:
- Next shortable area: 20.90–21.40 (02-11 open region).
7) 24-hour forward view (probabilistic)
Base case (higher probability):
- Price attempts a rebound toward 19.3–19.8, then sellers fade it.
- A re-test of 18.5–18.8 is likely.
- If 18.54 breaks with momentum, price can slide toward ~17.80 within the next session/day.
Bull case (lower probability):
- Strong reclaim above 20.30, triggering short-covering toward 21.00–22.00.
Given trend, volume distribution, and failure to hold 20, the bear case is favored.
Decision
Sell (Short Position) — trade the dominant downtrend, but prefer entry on a bounce rather than pressing at support.
Suggested order levels (next 24h tactical)
- Open (optimal short entry): 19.70 (sell into a rebound/retest of the 19.6–20.0 supply band)
- Close (take profit): 17.80 (first meaningful air-pocket target below current support zone; aligns with likely breakdown continuation if 18.5 fails)
(If price never bounces to 19.70, the short setup is less attractive; chasing at ~18.6 increases whipsaw risk.)