TERN’s Breakaway Gap: Buy the Day‑2 Dip Into 13.7 for a VWAP Reversion Toward 15.5

Executive summary of today’s tape

• TERN printed a massive breakaway gap: prior close 8.26 → open 14.05 (+70%), intraday high 16.27, low 12.77, close 14.03. Range = 3.50 (≈43% of close). Volume 33.8M vs ~1.1–1.5M recent average (≈20–30x). This is a volatility-and-liquidity regime shift.
• Structure: New 55-day (and multi‑month) high at 16.27 with no historical overhead supply in the 9–16 zone. The day ended below session VWAP and below the midpoint of the day’s range, signaling late-session supply but within the context of a powerful upside regime change.
• 24h bias: Expect an early Day‑2 dip or shaking action toward 13.5–13.8 (61.8–78.6% retrace window of the intraday impulse) followed by a rebound toward 14.9–15.6 (VWAP/Pivot cluster). Optimal plan: buy-the-dip, not chase.

1. Multi-timeframe trend and structure

• Weekly/daily trend: Prior multi-month uptrend from ~4 (July) → ~8 (Oct). Today is a clear regime break with a fresh price discovery zone above all recent highs; trend turns decisively bullish on higher timeframes.
• Donchian breakout: New 55‑day high (16.27) = classical trend-following buy signal. Trend followers will be in accumulation mode on dips while placing stops under Day‑1 low.
• Market structure: Absence of overhead supply reduces friction for continuation; near-term S/R is defined entirely by today’s intraday print.

2. Gap diagnostics (Breakaway vs. exhaustion)

• Magnitude and volume confirm a breakaway gap (catalyst-driven). Exhaustion gaps typically occur late in trends with immediate full fills; here we have a trend reset and a large-volume expansion day, favoring consolidation then continuation rather than full fill.
• Gap support: The open zone 13.75–14.05 and the 61.8% retrace 14.11 form a first reaction support band; deeper support sits near 13.5 (78.6%) and the LOD 12.77.

3. Candlestick and intraday tape read

• Daily candle: Small real body near the open with long wicks both sides (indecision after an explosive open). It closed slightly below the 61.8% retrace of the 12.77→16.27 leg (14.11), hinting at a potential early Day‑2 undercut toward 13.5 before buyers reassert.
• Intraday: Price traded above likely session VWAP early, then faded below in the last two hours on relatively lighter volume versus the opening impulse. That pattern favors a Day‑2 VWAP magnet test from below.

4. Volume, VWAP, and participation

• Volume climax: 33.8M shares (multi‑decade relative spike vs recent days) typically marks either a blowoff or the start of an institutionally sponsored leg. Given the structural breakout and absence of overhead supply, odds favor the latter with a 1–3 day digestion.
• Session VWAP (approx.): Weighted by the heaviest hours, VWAP is estimated ~15.2–15.4. Closing at 14.03 below VWAP adds short-term mean-reversion pressure upward on Day‑2 if early sellers exhaust near 13.5–13.8.
• OBV/Accumulation (qualitative): Massive positive delta day; while the close < VWAP is a caution, cumulative participation is net bullish.

5. Key levels (supports/resistances)

• Fibonacci of 12.77→16.27:
  • 38.2%: 14.93 (resistance on first test)
  • 50%: 14.52 (intermediate pivot)
  • 61.8%: 14.11 (first support; marginally lost at close)
  • 78.6%: 13.52 (deeper support/ideal dip)
• Intraday swing points: 12.77 (LOD, must hold for the breakout thesis), 15.05–15.55 (congestion band), 16.27 (Day‑1 high/continuation trigger).
• Classic floor pivots (H=16.27, L=12.77, C=14.03):
  • Pivot P ≈ 14.36
  • R1 ≈ 15.94 | S1 ≈ 12.44
  • R2 ≈ 17.86 | S2 ≈ 10.86 Expect Day‑2 chop around P (14.36) with tests toward 14.9–15.6 (P→R1 zone) if dip buyers step in.

6. Momentum and oscillators

• RSI (daily, qualitative): Likely >80 post-gap; signals short-term overbought, which typically leads to consolidation/digestion rather than immediate trend failure in breakaway contexts.
• Stochastics/Stoch RSI: Pegged high; Day‑2 pullbacks are common to reset oscillators before the next leg.
• MACD: Strong positive impulse and widening histogram; signal-line lag implies any Day‑2 weakness could be a buyable dip within a new momentum regime.
• ADX/DI: ADX expanding with +DI dominant; reflects a fresh trend initiation, not exhaustion.

7. Volatility and bands

• ATR regime shift: Today’s true range 3.50 dwarfs the prior 14‑day average (~0.5–0.8). Expect elevated Day‑2 ATR ≈ 1.3–1.8.
• Bollinger/Keltner: Price blasted outside upper bands; band-width expansion suggests a volatility breakout. Typical pattern: Day‑2–3 mean-reversion toward the upper band, then attempt to walk the band higher if the catalyst is durable.

8. Moving averages and trend filters (approx.)

• 20D SMA ~8.1; 50D ~7.6; 200D ~6–6.5. Price now far above all MAs; slope of 20D/50D turning higher confirms a momentum-led uptrend. Pullbacks toward faster MAs are unlikely in 24h; dip zones are defined by intraday fibs/pivots instead.
• Parabolic SAR likely flips below price, supporting dip buys while Day‑1 low acts as structural invalidation.

9. Market profile / volume profile (qualitative)

• A high-volume node likely formed 14.8–15.6 (heavy trading in the mid-session), with a secondary node near 14.0. Expect initial resistance selling at 14.9–15.5; acceptance back above that zone opens a path to 16.0–16.3.

10. Scenario analysis for next 24 hours

• Base case (45%): Early fade to 13.6–13.8 (78.6%/gap support), reversal through pivot 14.36, grind to 14.9–15.5 (session VWAP/upper mid node). Close near 14.8–15.4.
• Bear case (25%): Weak open, decisive loss of 13.5 → liquidity run to retest 12.8–13.0. Buyers defend Day‑1 low; close 13.0–13.6. This would dent, not destroy, the breakout if 12.77 holds.
• Bull extension (30%): Strong open above 14.5, quick reclaim of 14.9–15.2, push to 15.9–16.3 (R1/Day‑1 high). A hold above 15.5 late-session telegraphs another momentum day ahead.

11. Trade plan (24h tactical)

• Bias: Buy-the-dip within the 13.5–13.8 demand pocket; fade chasing into 15.8–16.3 on Day‑2 unless acceptance above 16.3 is clear.
• Entry: Limit near 13.75 (between 61.8% and 78.6% retrace; above deep support 13.52), with contingency add down to 13.55 if tested.
• Take-profit: 15.40–15.60 (VWAP/R1 approach and prior congestion). Our specified TP: 15.45.
• Invalidation/stop (for risk context): A decisive break <12.70 (below Day‑1 low 12.77 and S1 ~12.44) would negate the immediate dip-buy thesis.
• Risk/Reward (indicative): Risk ≈ 1.05 (13.75 → 12.70); Reward ≈ 1.70 (13.75 → 15.45); RR ≈ 1.6:1 with high probability of at least a VWAP reversion test.

12. Why Buy and not Short?

• Despite end-of-day weakness, the structural signals (breakaway gap, trend reset, ADX expansion, lack of overhead supply) favor upside attempts after a shakeout. Shorting Day‑2 into a breakaway often has poor expectancy unless the gap is clearly failing (i.e., loss of the Day‑1 low). The better asymmetry is buying controlled weakness above 12.77.

Bottom line

• Expect an early dip to 13.6–13.8, then a reflex rally toward 14.9–15.6. Use 13.75 as an optimal entry and 15.45 as a 24h target. A break below 12.7 would invalidate the setup for this horizon.