Stride’s 50% Shock: Sell the Bounce into VWAP, Aim for a 66 Test Within 24 Hours

Executive summary

• Regime shift day: LRN suffered a catastrophic breakaway gap lower on massive volume, signaling a structural change in trend and valuation. With price now far below any recent daily support and closing well under session VWAP, short-term bounce attempts are likely to meet heavy overhead supply. The base case for the next 24 hours is an early-morning flush toward 66 to 68 followed by a reflex bounce that struggles beneath 75 to 76. Tactically, fading strength into the VWAP and opening-range resistance offers favorable risk-reward.

Current state and context

• Instrument: Stride, Inc. LRN
• Currency: USD
• Current price: 70.05 (post-market close snapshot around 20:59:52Z shows 70.69, but session close 70.05)
• Today’s session profile 2025-10-29
  • Gap down from prior close 153.53 to open 85.02, about minus 44.6 percent
  • Intraday range 86.97 high to 68.83 low, minus 21 percent from high to low
  • Close 70.05, roughly minus 54.4 percent vs prior close; closed near the session low, showing weak demand into the bell
  • Total volume about 25.0M versus typical 0.4 to 1.2M in prior days; this is liquidation scale, confirming a regime change

Market structure and trend analysis

• Daily trend
  • Prior multi-month uptrend channel 130 to 170 is decisively invalidated by a breakaway gap below all known support in the provided dataset. This resets the regime to bearish until a new base forms.
  • The gap down is accompanied by extreme volume, which typically cements the new lower value area and creates persistent overhead supply over the next days to weeks.
• Intraday trend 2025-10-29
  • Opening range high 86.97 was never reclaimed; price stair-stepped down all day and closed below VWAP, indicating sellers in control. Each lower high failed near 76 to 77 before the late-session flush to 69 to 71.

Gap and volume analytics

• Type of gap: Breakaway gap lower after a likely negative catalyst earnings or guidance, based on timing and scale.
• Statistical tendency: Breakaway gaps of this magnitude and volume exhibit continuation risk on Day 2 roughly 55 to 65 percent of the time, especially when Day 1 closes in the bottom decile of the range. Dead-cat bounces are common intraday but usually fade below VWAP unless a strong reclaim occurs.
• Volume profile 10-29 by hour
  • High-volume nodes concentrated between 74 and 76 and again 79 to 81 early; price acceptance zones likely to act as supply on retests.
  • Low-volume pocket 71 to 73 suggests price can traverse this area quickly; failed bounces may accelerate down through this pocket.

VWAP and anchored VWAP

• Session VWAP estimate using hourly typical price times volume: approximately 75.7.
• Current price 70.05 sits around 7.5 percent below VWAP, a bearish location. As long as price is below VWAP and rejected on tests, short-the-rip remains the higher-probability tactic.
• Anticipated behavior: First retest of VWAP on Day 2 often fails unless there is a catalyst shift. Expect initial sellers to defend 74.5 to 76 area.

Opening range and microstructure cues

• Opening range 13:30Z bar high 86.97 and low 75.21 set the initial reference. Subsequent bars made lower highs peaking 76.95 to 76.44, confirming supply.
• Key micro levels derived from intraday price action
  • Resistance supply: 72.0, 74.4 to 76.5, 79.5 to 80.0
  • Support: 70 round, 68.83 session low, then vacuum zones to 66 and 63.6 pivot S1 (see pivots)

Momentum indicators

• Intraday RSI proxy using hourly closes is depressed low 30s, consistent with persistent selling pressure. Notably, there was no marked bullish divergence into the close; momentum did not improve despite price stabilization near 70.
• Daily MACD and signal are set to cross down sharply given the magnitude of the gap; even if a reflex rally occurs, daily momentum remains bearish for days.
• Rate of Change ROC on the day is extreme negative, which historically supports either 1 a continued drive lower early next session or 2 a snapback bounce that fades under supply zones. Because the session ended below VWAP and near lows, continuation probabilities are elevated.

Volatility and Bollinger Bands

• Effective daily ATR just jumped from single digits to about 18 to 20 based on the day’s range 18.14. Expect Day 2 realized range around 10 to 15 points, requiring wide stops and conservative size.
• Price rode the lower intraday Bollinger Band most of the session, indicating trend persistence. With no strong mean reversion signal into the close, default bias is that any bounce is tactical and sellable under VWAP.

Fibonacci mapping

• From today’s intraday high 86.97 to low 68.83 range 18.14
  • 38.2 percent retracement from the low: 75.77 aligns almost perfectly with session VWAP 75.7
  • 50 percent retracement: 77.90
  • 61.8 percent retracement: 80.03
• These levels cluster with prior intraday supply shelves 74.4 to 76.5 and 79.5 to 80.0, reinforcing resistance zones for Day 2.

Pivot points for 2025-10-30 based on 10-29 H L C

• Pivot P = 75.283
• R1 = 81.736, R2 = 93.423
• S1 = 63.596, S2 = 57.143
• Interpretation: Trading below P favors shorts; first meaningful support below 68.83 is around 63.6 S1, with psychological bidders likely near 65.

Support and resistance map multi-timeframe

• On the provided multi-month daily data, the lowest close pre-gap was around 128; price is now well below any visible historical support in this dataset. Therefore, natural references are 80, 75 to 76 VWAP block, 72 to 73 intraday ledges, 70 round, 68.83 low, 66 and 63.6 pivot S1, then 60 psychological.

DeMark and exhaustion style read

• The session pattern resembles a Day 1 waterfall without a capitulation wick close; genuine exhaustion is more often signaled by a large lower shadow and a close well off lows, which did not occur. This suggests sellers may press again early Day 2 before any sustainable intraday bounce.

Relative strength and supply overhang

• Enormous overhead supply created by trapped longs from 130 to 170. Any rally into the 70s and low 80s likely meets persistent selling from participants seeking to exit at better prices.

Event and options context

• Implied volatility is almost certainly elevated after the move. Options-based plays would need to overcome high premiums. Directional equity short via fade-the-pop remains cleaner for a 24-hour horizon.

Scenario analysis 24-hour path probabilities

• Base case 55 percent
  • Early liquidity hunt below 70 toward 66 to 68, then a reflex bounce into 72 to 74 that stalls beneath 75 to 76 VWAP cluster; day settles 69 to 72.
• Bear extension 25 percent
  • Gap flat to down; sellers drive through 68.83 quickly, tag 65 to 66, attempt a weak bounce under 71, then close sub 68.
• Squeeze countertrend 20 percent
  • Opens firm; strong dip buying and short-covering reclaim 72 to 74 early, quick squeeze to 75.7 to 77.9. Without a VWAP reclaim-and-hold plus confirmation breadth, this likely fades into the close back toward 72 to 74. Only a decisive hold above 80 would start to neutralize immediate bear control.

Trade plan logic

• Bias: Sell strength into the 73.8 to 75.8 zone where multiple resistances cluster VWAP 75.7, Fib 38.2 at 75.77, micro supply at 74.4 to 76.5.
• Entry approach: Place a patient sell limit near 73.8 to 74.5 to fade a Day 2 bounce. If the open gaps down and never reaches the limit, no fill is better than forcing a chase in a high-volatility environment.
• Stop reference risk management not an order output here, but for sizing purposes
  • Protective stop suggested 76.8 to 77.2 above the supply band and half-retrace 77.9, allowing for intraday spikes. Risk per share roughly 3.0.
• Profit target for 24h horizon
  • First target 68.8 retest of session low
  • Stretch target 66.0 near the psychological level and just above pivot S1 trajectory
  • Risk-reward from 73.8 short to 66.0 is about 7.8 reward vs 3.0 risk, approximately 2.6 to 1
• Contingency
  • If price reclaims and holds above 76 for 30 to 60 minutes with rising cumulative delta and VWAP support, the short thesis is invalid for the day; stand aside or reassess.

Key confluences supporting a Sell-the-bounce setup

• Below all major moving averages and far below daily cloud structures; trend is down
• Day 1 close below VWAP and near low indicates weak demand into close
• VWAP and Fib 38.2 retracement align at 75.7 to 75.8 overhead
• Pivot P at 75.28 sits in the same supply zone; trading under P favors shorts
• Volume nodes show heavy supply at 74 to 76
• Opening-range high 86.97 is remote; air pocket above 76 to 80 likely meets aggressive supply

24-hour price prediction

• Expected range 65 to 78 with a volatility skew to the downside early.
• Most likely path: small gap flat to down, early flush 66 to 68, intraday bounce stalls 72 to 74, afternoon drift 69 to 72.

What would flip me neutral or cautiously long

• Strong upside gap and hold above 75.8 with a VWAP reclaim early and conversion of 75 to 76 into support, plus breadth improvements. Even then, upside is likely capped near 79.5 to 80 on Day 2.

Execution notes

• Liquidity and spreads will be wider than normal; use limit orders, avoid marketable shorts into air pockets to reduce slippage risk.
• Size down; ATR is elevated. Consider partial scaling 50 to 30 to 20 percent tranches at 73.8, 74.8, 75.6 if liquidity allows, aiming for an average around 74.5 with the same protective zone.

Conclusion

• With structural damage, heavy overhead supply, and a close near session lows below VWAP, the default 24-hour play is to sell a bounce into 73.8 to 75.8 with a target back to 66. The bear case is not invalidated unless the stock reclaims and holds above the VWAP cluster and pivot near 75 to 76.