UWMC[1D]: Fueling for Launch? Ready to Bounce?
Updated
UWMC got some love from the meme stockers earlier this year, the but focus has moved elsewhere since. Last week, the bottom, daily demand zone was touched as the price appears to settle in at a baseline.
BULL case: An entry at $6.20, with anticipated return on a bounce to the hourly gap/ supply zone should quickly return 11% to 13%. Barring further breakdown, resistance would be expected at the 0.236 of the previous bull impulse (approx. $7.37, +18.8%). I would expect a pullback there, even on a bullish move, but if it can hold 7.2x, further up side is likely.
BEAR case: A breakdown below $5.77 suggests further down side, and a likely dip all the way below $5, though the shape of the price curve at present suggests this is unlikely. $4.87 would be the next target, based on the Fib. extension.
Let's see how this plays out over the next three weeks (+/-1). Will reassess when appropriate.
BULL case: An entry at $6.20, with anticipated return on a bounce to the hourly gap/ supply zone should quickly return 11% to 13%. Barring further breakdown, resistance would be expected at the 0.236 of the previous bull impulse (approx. $7.37, +18.8%). I would expect a pullback there, even on a bullish move, but if it can hold 7.2x, further up side is likely.
BEAR case: A breakdown below $5.77 suggests further down side, and a likely dip all the way below $5, though the shape of the price curve at present suggests this is unlikely. $4.87 would be the next target, based on the Fib. extension.
Let's see how this plays out over the next three weeks (+/-1). Will reassess when appropriate.
Note
Jumped up and filled that gap first before heading back down. Still waiting on that entry.Note
Entry achieved yesterday. Nice bounce today, but still expecting more touches in the entry zone. Not impossible to see a wick below it either.Note
On the other hand, after the last gap up, we might have seen the bottom already. New analysis, after the bounce --Entry (high): $6.85
Entry (low): $6.72
TP(1): $7.69
TP(2): $8
TP(3): $8.19
SL: $6.49
Risk: $0.23 to $0.36
Reward: $0.84 to $1.47
Ratio: 2.33 to 6.39
For max. returns, expect to hold for up to one month. R/R range suggests commitment to the lower entry might be essential, though I think the higher will still be profitable on a longer time frame.
Look for a rejection in the low 8s and a re-entry on a bounce.
Note
Premature breakout? Maybe forming a new bottom now?Note
We touched $6.72 today. Trading should be live by now or when the week opens.Note
So far, this looks like a failed trade, but there's been some extreme price action in the past few days, and this one may recover. We're basically back to the top of my initial entry zone. I would not be surprised to see that newly formed gap fill down' to approx. $5.52. After that, anything could happen. Apparently, the stock sale offering news that triggered the drop turned into offering cancellation news, so a return to starting point might be expected and the outlook unchanged.Scaling in between $5.52 and $5.77 (or $5.98 if you don't mind paying a little more to ensure orders get filled) may pay off nicely and relatively soon.
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