Capitulation Hammer at the Lows: Setting Up a 24‑Hour Relief Bounce in FRMI

Summary view

• FRMI just printed a classic capitulation day: −33.8% from 15.25 to 10.09 with extraordinary volume (≈63.1M vs recent 2–5M). It made a new multi‑month low at 8.30, then closed 69% off the session low and near VWAP. The daily candle is a high‑volume hammer outside the lower Bollinger Band. This setup favors a 1–2 session reflex bounce/mean reversion into initial overhead supply, while the dominant multi‑week trend remains down.

Multi‑timeframe structure

• Higher timeframe (daily): Persistent downtrend from October highs (30s) to mid‑teens, then today’s gap‑down into single‑digit prints. Price is well below the 20/50‑day moving averages (bearish regime). Today’s extreme range and volume suggests a potential near‑term inflection for a relief rally, not a trend reversal.
• Intraday (hourly blocks provided): Premarket–midday accelerated selloff to 7.67–8.30 (selling climax), aggressive bounce to 10.88 (automatic rally), then a series of higher lows around 9.28–9.86 into the close—constructive intraday basing.

Trend and moving averages

• 20‑day SMA ≈ 15.62 (calc from last 20 closes). Price at 10.09 is ~35% below the 20‑SMA; the slope is down—primary trend bearish.
• 50‑day SMA (est) in the low–mid 20s from earlier price history—also downward sloping. Bearish longer‑term context means bounces face strong overhead supply 11–14–16.
• Short‑term EMAs (intraday): After the midday reversal, fast EMAs (e.g., 8/21 on 5–15 min) likely crossed up; price repeatedly reclaimed/held above intraday VWAP late day—tactical bullish into next session open.

Momentum indicators

• Daily RSI: Likely deeply oversold (<30) after a −33% down day. Oversold with a hammer/volume spike supports a short‑term mean‑reversion bounce probability.
• Stochastics: Oversold crossover conditions typically appear on such flushes; supportive of a 1–2 day bounce.
• MACD (daily): Negative and below signal; however, extreme downside momentum often precedes a reflex stabilization. Watch for intraday MACD positive divergence vs the 7.67–8.30 low cluster—already hinted by higher lows after 13:00.

Volatility and Bollinger Bands

• 20‑day Bollinger Bands: Price closed well below the lower band, then snapped back toward it—a classic “pierce and revert” setup. Expect mean reversion toward the lower band area first (still above spot), with the middle band (SMA20 ~15.6) far overhead and unlikely in 24h without fresh news.
• ATR(14): Expanding sharply due to the gap/truest range spike (low ~8.30 vs prior close 15.25). A conservative 1‑day expected move ~±$1.8–$2.3 from spot puts a probabilistic 24h range near 8.0–12.3. Our upside targets respect this band.

Volume, VWAP, market profile

• Volume climax: 63M shares—capitulation characteristics. Climax often marks or precedes a tradable low.
• Intraday VWAP: Late‑day price hovered near to slightly above VWAP (~10.05–10.20 estimate from the largest blocks at 9.78, 9.86, 10.27, 10.69). Closing near VWAP after a capitulation day suggests short‑term equilibrium.
• High‑volume nodes/POC: Heaviest prints clustered 9.75–10.50. Expect this zone to act as a magnet and potential launchpad for a push to first resistance if early weakness is absorbed.

Candlesticks and pattern read

• Daily hammer following a wide‑gap breakaway move, with the body closing in the upper third of the day’s range. This is a classic “capitulation hammer” that frequently yields a 1–3 day dead‑cat bounce into overhead supply.
• Intraday sequence resembles Wyckoff: Selling Climax (SC) 7.7–8.3 → Automatic Rally (AR) 10.88 → Secondary Tests (ST) near Fib supports (10.27/9.89/9.59/9.29). Late‑day higher lows imply early accumulation.

Support/Resistance map

• Newly formed supports (intraday Fib from 8.30→10.88, range=2.58):
  • 23.6%: 10.27 (tested late session)
  • 38.2%: 9.89 (multiple touches/holds)
  • 50%: 9.59
  • 61.8%: 9.29
  • 78.6%: 8.85
  • Session low: 8.30 (capitulation pivot)
• Immediate resistances:
  • 10.50–10.88 (intraday supply; day high 10.88)
  • 11.20–11.25 (classic pivot R1, partial gap fill)
  • 11.70–12.30 (38.2–50% fill of the prior day’s downside gap toward 15.25)
  • Heavy overhead 13–14.5 from November range—unlikely in 24h without new catalyst.

Classical pivot levels for next session (based on 12/12 H/L/C: 10.88/8.30/10.09)

• Pivot P = (H+L+C)/3 = 9.757
• R1 = 11.213; S1 = 8.633
• R2 = 12.337; S2 = 7.177
• R3 = 13.793; S3 = 6.053 These align with our mapped resistance 11.2 and support 8.6–8.9.

Gap and retracement logic

• Gap vs 12/11 close: 15.25 → 12/12 high 10.88 leaves a 4.37 gap overhead. Typical post‑capitulation behavior is a 20–50% gap fill over 1–3 sessions if no additional negative news hits. 20% fill ≈ 10.96, 38.2% ≈ 11.76, 50% ≈ 12.44. First day target band thus 10.9–11.8 is reasonable; 11.2 R1 is a natural first objective.

Regression channel and microstructure

• Linear regression on the afternoon segment slopes upward with rising swing lows (9.28 → 9.67 → >9.85). That’s constructive for a continuation attempt early next session toward 10.5–10.9, provided VWAP holds on first pullback.

Ichimoku (daily)

• Price well below the cloud; Tenkan/Kijun above spot—bearish regime. However, in such regimes, sharp oversold bounces often test Tenkan (short‑term mean) before rolling. Tenkan likely in the 14–15 area—too far for 24h; intraday Tenkan/Kijun on 30–60m likely supportive near 9.8–10.1.

Elliott/Wave context (heuristic)

• Today likely completed a 5th of a C or a wave 3 capitulation leg on the daily. Expect a wave 4/B‑type reflex up into 10.9–11.7 before a possible subsequent retest. This is tactical long, not a strategic reversal.

Bollinger squeeze/expansion

• Bands massively expanded; closes outside the lower band tend to revert inside within 1–2 sessions. A close back inside the band with follow‑through commonly targets the 5–10 day mean first. That aligns with 10.9–11.3 as an initial magnet.

ATR‑based expected move and probabilities (24h)

• Baseline expected move: ±$1.8–$2.3 around 10.09.
• Scenario probabilities (subjective, conditioned on no fresh adverse news):
  • 60%: Bounce/mean reversion toward 10.9–11.3 (pivot R1), with intraday dips bought near 9.8–10.0.
  • 25%: Sideways 9.6–10.4 around VWAP/POC, awaiting clarity.
  • 15%: Breakdown below 9.3 leading to 8.85/8.30 retest if sellers reassert or new negative news appears.

Risk factors / catalysts

• The magnitude/volume hints at a company‑specific catalyst (dilution, guidance, regulatory headline). Any follow‑on news can overpower technicals. Manage risk strictly.

Trade plan (tactical, next 24h)

• Bias: Buy the reflex bounce from VWAP/POC with tight risk.
• Optimal entry: Pullback into the 9.90–10.05 zone (around VWAP/38.2–23.6% Fib cluster and just above pivot P=9.76). Proposed single entry price: 9.95.
• First target: 11.20 (classic R1; aligns with partial gap fill and intraday supply band). This fits inside a 1‑ATR move.
• Risk management (recommended even if not requested): Stop below 9.22 (Fib 61.8% ~9.29 and micro support), giving ≈$0.73 risk from 9.95. Reward to 11.20 ≈ $1.25, R:R ≈ 1:1.7. More conservative stop 8.85 increases buffer but reduces R:R.
• Add‑on/scale plan: If price reclaims and holds >10.50 with rising VWAP, consider adding for a push to 11.7; otherwise take profits at 11.2 on first test.

Bottom line

• Dominant trend is bearish, but the combination of a capitulation gap, hammer close near VWAP, validated intraday Fib supports, and expansion then contraction of volatility favors a 1‑day relief rally toward 10.9–11.3. Tactical long with tight risk is favored over chasing further downside immediately at 10.

Prediction (24h)

• Expected range: 9.3–11.3.
• Path: Early dip into 9.8–10.0 gets bought → push toward 10.6–10.9 → attempt at 11.2 R1 if liquidity allows. Failure to hold 9.3 invalidates long and reopens 8.85 → 8.30 retest.

Note: This is a short‑term trading view based solely on the provided price/volume data; not investment advice. Always adjust sizing and stops to your own risk tolerance.