Candlestick Context & Psychology
This rally comes after a huge drift lower. That context matters a lot. Here's why:
After long downtrends, sharp rallies are common (“dead-cat bounce” or true reversals). The last 3–5 candles (large white Marubozu) show massive momentum. But the latest candle is starting to show upper wicks → this often means the first sellers are showing up into strength.
There are good signs in terms of volume and price action, but we’re also in a danger zone for “exhaustion”. The strongest moves often attract late buyers, meaning that when upper shadows begin appearing after large candles, it’s often the first sign of a reversal or at least consolidation.
Boxes & Structural Resistance
Prior Darvas range: $0.40–$1.00 → broken cleanly. Current price is attacking $2.50, which is not just a round number but prior supply from a breakdown zone in April–May 2023. A clean close above $2.50, with volume expanding, would indeed “clear the air” for higher moves.
But if it stalls or wicks hard here, it suggests trap potential.
🔢 Fib Extensions Say This
Measured from $0.40 → $2.31:
🎯 127% = $2.71
🎯 161% = $3.09
🎯 200% = $3.63
If $2.50 breaks, these are logical targets. But remember, $2.50 is a battle zone. If sellers defend it → we could see a sharp drop back to $1.90–$1.65 retracement zone.
On Eric Jackson & News
Fund managers being bullish can help sentiment short-term. But price action > opinions. If big funds were heavily accumulating, we’d expect steady volume and a controlled advance—not this vertical surge. Right now, the chart screams short-covering and retail momentum, not yet sustained institutional accumulation.
Tactical Take
If $2.50 breaks + closes strong (esp. on above-average volume): I agree —it opens the door for a run to $2.70–$3.09.
If price gets rejected at $2.50 (upper wick, reversal candle): Expect a violent pullback toward $1.90–$1.65.
RSI at 90+ says late longs are entering now → reward/risk here is terrible for new longs. Only aggressive traders can play breakout momentum above $2.50 with a tight stop. I wouldn’t be surprised if smart money uses this rally to lighten up positions into late buying enthusiasm.
Bottom Line
$2.50 is the line in the sand. Above = greenlight for momentum. Rejection = possible air pocket lower.
This rally comes after a huge drift lower. That context matters a lot. Here's why:
After long downtrends, sharp rallies are common (“dead-cat bounce” or true reversals). The last 3–5 candles (large white Marubozu) show massive momentum. But the latest candle is starting to show upper wicks → this often means the first sellers are showing up into strength.
There are good signs in terms of volume and price action, but we’re also in a danger zone for “exhaustion”. The strongest moves often attract late buyers, meaning that when upper shadows begin appearing after large candles, it’s often the first sign of a reversal or at least consolidation.
Boxes & Structural Resistance
Prior Darvas range: $0.40–$1.00 → broken cleanly. Current price is attacking $2.50, which is not just a round number but prior supply from a breakdown zone in April–May 2023. A clean close above $2.50, with volume expanding, would indeed “clear the air” for higher moves.
But if it stalls or wicks hard here, it suggests trap potential.
🔢 Fib Extensions Say This
Measured from $0.40 → $2.31:
🎯 127% = $2.71
🎯 161% = $3.09
🎯 200% = $3.63
If $2.50 breaks, these are logical targets. But remember, $2.50 is a battle zone. If sellers defend it → we could see a sharp drop back to $1.90–$1.65 retracement zone.
On Eric Jackson & News
Fund managers being bullish can help sentiment short-term. But price action > opinions. If big funds were heavily accumulating, we’d expect steady volume and a controlled advance—not this vertical surge. Right now, the chart screams short-covering and retail momentum, not yet sustained institutional accumulation.
Tactical Take
If $2.50 breaks + closes strong (esp. on above-average volume): I agree —it opens the door for a run to $2.70–$3.09.
If price gets rejected at $2.50 (upper wick, reversal candle): Expect a violent pullback toward $1.90–$1.65.
RSI at 90+ says late longs are entering now → reward/risk here is terrible for new longs. Only aggressive traders can play breakout momentum above $2.50 with a tight stop. I wouldn’t be surprised if smart money uses this rally to lighten up positions into late buying enthusiasm.
Bottom Line
$2.50 is the line in the sand. Above = greenlight for momentum. Rejection = possible air pocket lower.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.