RUN After a -28% Breakdown: Capitulation Stabilization or Next Leg Down? (24H Sell-the-Rally Setup)

RUN (Sunrun Inc.) — 24H Technical Outlook from Provided Data

1) Market structure & regime (top-down)

• Higher-timeframe swing: From 2025-10-31 close 20.76 to 2026-02-27 close 13.25, RUN is in a clear bearish regime (major lower-low breakdown).
• Immediate shock event: 2026-02-27 printed an extreme range day:
  • Open 18.59 → Close 13.25 (≈ -28.7% close-to-open)
  • Low 12.47, High 18.74 (very wide range)
  • Volume 56.39M vs recent typical ~5–15M → capitulation / forced liquidation signature.
• Post-shock microstructure (hourly snippets provided): trading is stabilizing around 13.08–13.19 with no rebound impulse yet. That suggests base-building, but not reversal confirmation.

Conclusion: Trend is down; the most recent session is a high-volatility breakdown. In this regime, the default bias is sell rallies until price proves otherwise.

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2) Support/Resistance mapping (price action)

Using the most recent and structurally relevant levels:

Key supports

• 12.47: breakdown day intraday low (first major support; if lost, opens air pocket lower).
• ~13.00 / 13.10: psychological + observed hourly acceptance (current “balance” area).

Key resistances (overhead supply)

• 14.00–14.50: round-number + likely first relief-rally supply zone after a gap/downshock.
• 16.80–17.00: prior 2026-01-20 close 16.79 area (old pivot; would be heavy supply if reached).
• 18.85–20.50: pre-breakdown trading region and prior Feb congestion.

Interpretation: After a capitulation drop, the first bounce typically meets aggressive sellers at the nearest supply (often 14–15). With no bullish reversal candle confirmed (we only have flat hourly prints), resistance overhead remains dominant.

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3) Candlestick & event-day analysis (capitulation day logic)

2026-02-27 candle characteristics:

• Massive real body down with a deep low (12.47) and close near 13.25.
• This is consistent with:
  • Breakdown continuation (trend-following), and/or
  • Panic flush followed by attempt to stabilize.

What would confirm a bullish reversal?

• A strong rebound day closing back above key reclaimed levels (at minimum >14.50, ideally >16) with sustained volume.

What the provided post-close hourly data says:

• 13.19 → 13.09 → 13.08: no meaningful rebound, slight downward drift.

Net: Capitulation can mark a low, but confirmation is absent; thus probabilities still favor either consolidation then another leg down or weak bounce that fails.

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4) Trend & moving-average inference (from closes)

Even without computing exact MA values, the close series from Jan–Feb shows:

• Late Jan/early Feb traded mostly 18–21.
• Now 13.25 is far below those areas → price is almost certainly below 20DMA/50DMA/200DMA.

Implication: Any bounce is statistically more likely to be a mean-reversion rally into falling averages (sellable) than a durable trend reversal.

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5) Momentum / RSI-style reasoning (qualitative)

• The single-day -28% drop plus prior weakness implies momentum is deeply negative.
• However, the magnitude suggests short-term oversold, which increases the probability of intraday spikes upward.

Tradeable takeaway: Oversold does not mean “buy”; it means expect volatility. In a downtrend, oversold often leads to sharp bear-market bounces that get sold.

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6) Volatility / ATR logic & expected 24H range

• The 2/27 high-low range: 18.74 – 12.47 = 6.27 (~47% of price). That will mechanically expand ATR.
• With the market now around 13.1, a more typical “day-after” range might still be very large, e.g. 10–20%.

24H expectation: wide swings are likely; planning entries via limit levels (not market chasing) is crucial.

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7) Volume / VPA (Volume-Price Analysis)

• Extreme volume on a breakdown day frequently implies distribution + margin calls + stop runs.
• Two common outcomes:
  1. Dead-cat bounce into overhead supply (best short entry)
  2. Sideways base then continuation lower once bids are exhausted

Given the lack of rebound in the hourly snippets, scenario (2) and (1) both keep a bearish bias.

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8) Pattern recognition

• Failure after prior up-move: RUN had pushed to 21.41 (1/28 close) then churned ~19–21 through Feb, then broke violently → classic bull trap → breakdown.
• The 2/27 move resembles a breakaway gap/downshock from the prior close (20.42 → 13.25). That typically creates a large overhead supply vacuum.

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24-hour forecast (next session)

Base case (higher probability):

• Early stabilization near 13.0–13.3, then either:
  • a weak bounce toward 14.0–14.5 that fades, or
  • a direct retest of 12.47.

Directional bias: Down / Sell-the-rally.

Most likely 24H path (probabilistic):

• Range: ~12.40 to 14.50 (very volatile)
• Bias to close below/near current: likely 12.80–13.30 unless a strong reversal catalyst appears.

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Trade plan (decision + levels)

Decision: Sell (Short Position)

Rationale: dominant downtrend + breakdown/capitulation without reversal confirmation + heavy overhead supply.

Optimal open (entry)

• Prefer shorting a bounce into first resistance rather than shorting at the hole:
• Open Price (short): 14.20
  • This targets a likely relief-rally zone (14–14.5) while improving reward/risk vs shorting 13.25.
  • If price never bounces, the trade may not trigger—this is intentional to avoid chasing.

Profit target (close)

• Close Price (take profit): 12.60
  • Just above the prior flush-low 12.47, where bids may reappear.

(Risk management note: not requested, but practically a stop would usually be above ~15.00–15.50 to avoid getting squeezed if a real reversal starts.)