RZLT: Post-Crash Dead-Cat Bounce Sets Up a Fade — Short Into 1.82–1.95 Resistance

Executive summary

• Context: RZLT experienced a catastrophic gap-down on 2025-12-11 (−85%+ from the ~$10 band to ~$1.40 close) on extreme capitulation volume, followed by a strong Day-2 reflex bounce on 2025-12-12, closing near $1.80 after printing $1.85 intraday. This is a classic post-capitulation “dead-cat bounce” setup with high two-sided volatility and heavy overhead supply.
• Next 24h thesis: Into the next trading session, probabilities favor a fade/retest of the Day-2 support cluster (1.55–1.60) before any sustained attempt higher. Base case: a lower open or small pop that stalls near 1.85–1.95, then mean reversion toward 1.56 (pivot S1 and 61.8% retracement confluence). Risk case: squeeze through 1.95–2.10 (R1/R2) invalidates the short.
• Trade plan (short-term tactical): Short into strength near 1.82–1.88 with a profit target 1.56. Risk management: protective stop if sustained >2.05 (above R1/R2 cluster). Position sizing small due to extreme volatility and event-risk.

Step-by-step technical analysis

1. Price action and structure

• Regime shift: A one-day collapse from the prior $9–11 consolidation to ~$1.40 (close) changes the regime from trending to event-driven. Such dislocations generally produce multi-day volatility clusters with lower highs until a durable base forms.
• Day-2 rebound: 2025-12-12 opened around 1.46, tested 1.51–1.53 midday, then powered to 1.85 with a late-session fade to 1.66 in the final hour before a print up to ~1.80. This is the classic Day-2 bounce after capitulation: strong intraday momentum that often gives back part of the move on Day-3 unless buyers can clear the first resistance shelf decisively.
• Overhead supply: The 20–50D holders are trapped far above ($9–10). Any multi-day strength typically meets distribution, making sustained trend reversals difficult without a new catalyst.

2. Volume, liquidity, and participation

• Volume spike: 128.7M shares on the capitulation day, followed by 34.8M on Day-2. That’s textbook capitulation → reflex bounce sequencing. OBV remains dramatically impaired; Day-2 positive OBV cannot offset the prior day’s negative impulse.
• Intraday volume profile (Day-2): Heavy prints around 1.52–1.65 in mid-session and 1.70–1.80 late. Value developed near 1.62–1.68; late-day extension to 1.85 lacked strong follow-through, evidenced by the final-hour slip to ~1.66.
• Liquidity risk: While volume is ample, borrow availability and borrow cost for shorts may be dynamic. Slippage risk is elevated; scale entries and avoid chasing.

3. VWAP and Anchored VWAP

• Session VWAP (approx): Day-2 VWAP ~1.62–1.65 (given a large block of shares traded in the 1.52–1.70 corridor). Current price ~1.80 sits above VWAP, indicating a stretched close relative to the day’s value area.
• Anchored VWAP from the 12/11 capitulation low (~1.07): Estimated ~1.57–1.62 after Day-2 trade. This AVWAP band aligns with the 1.55–1.62 support cluster. First mean-reversion magnet on weakness.

4. Support/Resistance mapping (multi-method confluence)

• Fibonacci retracement of Day-2 swing: Low 1.07 → High 1.85 (range 0.78)
  • 38.2%: 1.37–1.38 (near 12/11 close 1.40)
  • 50%: 1.46 (near Friday open and intraday basing)
  • 61.8%: 1.55–1.56 (key support pivot)
  • 78.6%: ~1.68–1.69 (intraday resistance turned tentative support after breakout)
• Classic pivots (using H=1.85, L=1.45, C=1.80 for 12/12):
  • Pivot P ≈ 1.70
  • S1 ≈ 1.55 (aligns with 61.8% Fib and AVWAP band)
  • S2 ≈ 1.30 (aligns with prior day’s value area/38.2% region)
  • R1 ≈ 1.95; R2 ≈ 2.10; R3 ≈ 2.35 (overhead squeeze targets if momentum reignites)
• Intraday structure: 1.82–1.85 acted as resistance on first test; 1.66–1.70 was the late-day failure zone. Expect the 1.82–1.95 supply pocket to produce sellers on first attempt Monday.

5. Momentum oscillators

• Intraday RSI: Rose into the high 60s/low 70s during the 1.85 push; faded into the close. That’s a typical momentum crest followed by a cooling-off. Not deeply overbought, but extended relative to the new, lower regime.
• Daily RSI: Still depressed post-crash (likely mid-30s to low-40s after the bounce). In bear-market conditions, RSI can remain sub-50 for extended periods; bounces tend to fade under the 50–55 zone.
• Stochastics: Fast stoch elevated into the close (overbought on intraday frames), supportive of a near-term pullback unless price gaps and runs.

6. Trend indicators

• Moving averages (daily):
  • 20D/50D/200D all far above current price (9–10+ area), confirming severe downtrend and heavy overhead supply. Any bounce is guilty until proven innocent.
• EMAs (intraday): 8/21 EMA bullishly stacked into the afternoon, but the late fade knocked price back toward the fast EMA ribbon. This typically resolves with a pullback to the 34/55-EMA region on the next session unless fresh buying arrives.
• MACD (intraday): Crossed positive during the rally; histogram peaked and began contracting late session. Expect a momentum rollover early next session if price cannot reclaim 1.80–1.85 quickly.

7. Volatility and ranges

• True Range: Day-2 ATR proxy ≈ 0.40 (1.85 high − 1.45 low). Expect 20–30% intraday swings to persist. Risk controls must account for 0.20–0.35 swings against the position.
• Bollinger Bands (intraday): Price expanded above upper band into the 1.85 print then mean-reverted back inside, a common signal of near-term exhaustion.
• Keltner Channels: Late-session pushes tagged outer channels; a reversion to the mid-channel (≈1.60–1.65) is consistent with mean reversion probabilities.

8. Market profile / value analysis

• Value area (Day-2): Centered near 1.62–1.68 with poor structure above 1.80 (thin volume nodes). Thin zones often fill on the next session; thus a move back through 1.80 can accelerate down to 1.70 without much friction.
• Poor high: The 1.85 spike appears as a poor/unfinished high created by emotional buying rather than balanced acceptance. These are often revisited later—but not necessarily immediately. In the near term, poor highs are sellable on first retest when momentum stalls.

9. Candlestick and pattern read

• 12/11: Capitulation long lower wick with huge volume; close well off lows but still deeply red. Classic panic day.
• 12/12: Bullish outside/up day vs 12/11 high, closing strong but with late fade. Often followed by an inside-to-down day or lower open unless momentum gaps-and-go.
• Setup identity: Post-capitulation Day-2 bounce into first resistance → favored fade (short) into the prior session’s VWAP/AVWAP confluence.

10. Cross-check via multi-technique confluence

• Confluence support: 1.55–1.62 zone (61.8% Fib, S1 pivot, AVWAP band, session VWAP cluster). High-probability magnet on weakness.
• Confluence resistance: 1.82–1.95 (prior intraday high region, thin volume node above 1.80, pivot R1 at ~1.95). If buyers can’t clear and hold >1.95, bounces likely fail.
• Breakout invalidation: Sustained push >2.05 with volume would target 2.10 (R2) then 2.35 (R3), forcing shorts to cover.

11. Event and weekend gap risk

• The next 24 hours span a weekend. Day-3 (Monday) commonly opens with a gap. Without a new positive catalyst, gap-down to value (1.60s) is favored. If headlines emerge (e.g., financing, formal updates), path could deviate significantly. Risk sizing must reflect this.

12. Strategy synthesis and trade plan

• Bias: Short-term tactical bearish (fade) into resistance; look for mean reversion to 1.55–1.60 before any attempt to build a higher low.
• Entry: Scale short between 1.82 and 1.88. Given current ~1.80, optimal limit entry at 1.82 to ensure participation while allowing for a small pop.
• Target: 1.56 (first support confluence). Partials can be taken at 1.62–1.64 if momentum stalls; core target 1.56.
• Invalidation: Sustained trade above 2.05 (daily close or 30–60m hold) implies momentum regime change; consider flipping bias toward 2.10–2.35 test.
• Risk management: Because typical ATR ≈ 0.40, a 0.20–0.25 stop (above 2.05) provides asymmetric R:R to a 0.26–0.30 target (to 1.56). Position size small to moderate given gap and borrow risks.

13. Scenario probabilities (qualitative)

• Base case (55%): Early pop stalls sub-1.95 → fade toward 1.62–1.64 → tag 1.56.
• Upside squeeze (25%): Gap-up or fast reclaim 1.95 → 2.05 → extension to 2.10; shorts uncomfortable; reassess.
• Deep flush (20%): Risk-off open drives straight to 1.46–1.40; watch for responsive buying near 1.40–1.38 (Fib 38.2% and prior close).

Conclusion

• With price stretched above Day-2 value/VWAP and heavy overhead supply, the path of least resistance over the next session is a mean-reversion lower toward 1.56. Favor a tactical short entry near 1.82 with a take-profit at 1.56 and a hard stop above 2.05. If 1.95–2.10 breaks and holds, stand aside or switch bias; otherwise, sell the rip into the 1.82–1.95 pocket.

Risk notes

• Extremely high volatility/event risk; consider reduced size and firm stops.
• Shorting micro/small caps can entail borrow constraints and elevated locate fees; confirm availability.
• No single indicator is decisive; the edge here is confluence + trade location + disciplined risk control.