KD After the Crash: Capitulation Bounce Fades—High Odds of a 10.6 Retest in the Next 24 Hours

Market Regime Snapshot (KD)

Current price: 11.12 (last print ~11.198)
Context: KD experienced an extreme gap-down / collapse on 2026-02-09 from the prior multi-week range (~22–27) to ~10–11 with very abnormal volume (60.97M), followed by a dead-cat bounce / reflex rebound on 2026-02-10 (intraday high ~11.96, close ~11.12) on still-elevated volume (31.90M).

This is a classic post-capitulation environment: volatility is huge, liquidity is heavy, and price is attempting to stabilize after forced selling.

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1) Trend & Structure (Multi-timeframe)

Daily structure (last ~4 months shown)

• Oct–mid Jan: KD traded in the mid/high 20s, generally range-to-slight-down.
• Late Jan–early Feb: stepped down into the 23–24 area; increasing fragility.
• 2026-02-09: structural break—price collapsed to a new regime near 10–12. This is not a normal pullback; it’s a new price discovery zone.

Implication: The dominant higher-timeframe trend is strongly bearish (massive downside gap + breakdown of all prior supports). Any long is counter-trend until a base forms.

Intraday structure (hourly on 2026-02-10)

• Pre-market/early hours hovered ~10.5–10.7.
• Open impulse: 14:30 candle surged to 11.85 (high) and closed 11.51 (strong demand burst).
• Subsequent hours: pushed up to 11.96 (17:30 high) then rolled over into the close with lower closes (11.72 → 11.82 → 11.72 → 11.48 → 11.11).

Implication: Buyers stepped in aggressively, but supply appeared above ~11.7–12.0 and the session ended with distribution / profit-taking.

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2) Support/Resistance Mapping (price-action)

Key supports

• 11.00–11.10: near the late-session breakdown area and current price vicinity. This is immediate support.
• 10.50–10.60: prior day close area (~10.59) and early stabilization prints; psychological/auction support.
• 10.10: panic low zone from 2026-02-09 daily low (10.10). If this breaks, downside acceleration risk increases.

Key resistances

• 11.50–11.60: prior close-to-impulse area and where price churned.
• 11.85–12.00: intraday highs (11.85/11.96) = major near-term supply.

Implication: With price under 11.50 and failing near 12.00, the path of least resistance over the next 24h is range-to-down unless 11.60 reclaims convincingly.

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3) Volatility & Range Metrics

Realized range

• 2026-02-10 (daily): Low 10.63 / High 11.96 → range ~1.33 (~12% of price). Very high.
• 2026-02-09 (daily): Low 10.10 / High 11.43 → range ~1.33 as well.

Implication: Expect continued wide swings. Any forecast should be probabilistic and framed as a range.

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4) Volume & Capitulation Read

• 60.97M on 2/9 and 31.90M on 2/10 are orders of magnitude above prior ~1–4M typical days.
• That strongly suggests:
  1. Forced liquidation / news-driven repricing occurred.
  2. A large transfer of shares from weak hands to stronger hands may be underway.

However: capitulation does not guarantee immediate uptrend—often you get a bounce, then a retest (sometimes undercutting the low).

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5) Candlestick / Auction Interpretation

2/9 daily candle

• Large bearish displacement (gap/flush) with huge volume → capitulation / regime shift.

2/10 daily candle

• Open 10.64, high 11.96, low 10.63, close 11.12.
• This is a strong intraday rebound but with a close well off highs, signaling sellers active into strength.

Implication: The bounce is real, but momentum is fading short-term, increasing odds of a pullback toward 10.6–11.0.

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6) Momentum (qualitative RSI/MACD logic)

We can’t compute exact RSI/MACD without longer intraday history, but the price behavior implies:

• Daily momentum is deep oversold due to the collapse (RSI likely crushed). Oversold conditions often support bounces.
• Intraday momentum on 2/10: strong early impulse then negative divergence behavior (higher highs to ~11.96, but later inability to hold >11.7 and weak close).

Implication: Oversold bounce conditions exist, but the next 24h bias is mean-reversion downward unless price reclaims 11.60 quickly.

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7) VWAP / Mean Reversion (session logic)

Given the heavy volume and the late fade, the market likely traded a lot of volume between ~11.1–11.6. Price ending near 11.1 suggests it is drifting to the lower side of value.

Implication: A common next-day path is:

• small push up toward value (~11.4–11.6) to test supply,
• then continuation lower if supply holds.

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8) Scenario Forecast (Next 24 Hours)

Base case (higher probability): range-to-down / retest

• Price likely tests 11.50–11.60 early (reaction rally / short covering), but if rejected, drifts back to 11.0, and potentially to 10.6.
• Expected 24h range: roughly 10.55 to 11.65.

Bull case (lower probability): breakout continuation

• If price reclaims 11.60 and holds above it (acceptance), next magnet is 11.85–12.00. A clean break could squeeze to 12.30–12.60.

Bear case (tail risk): undercut capitulation low

• If 10.50 fails with momentum, 10.10 comes quickly; below that, air-pocket risk increases.

Net: Given the late-session distribution and clear resistance at ~12, the highest-probability 24h direction is slightly bearish (Sell/short bias) with tight respect to the 11.85–12.00 resistance zone.

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Trading Plan (tactical)

Decision: Sell (Short Position)

Rationale:

• Major trend is down (regime break).
• Bounce stalled at 11.85–11.96 and closed weak.
• Likely retest of lower supports (11.0 → 10.6) within 24h.

Optimal Open Price (entry)

• Best risk/reward is to short into a bounce near resistance rather than at current support.
• Open (short) around: 11.55 (retest zone below 11.60, often offers liquidity).

Target Close Price (take profit)

• First meaningful demand zone: 10.60 (prior close area / stabilization band).
• Close (take profit) around: 10.65.

(If price instead breaks and holds above ~11.85–12.00, the short thesis is invalidated; risk management would require a stop above that zone. Not requested, but critical in practice.)