Price Action & Psychology - Double bottom reversal

NASDAQ:GDYN   Grid Dynamics Holdings, Inc
Hello !

Key points :
  • Double bottom, cluster of candlesticks on first bottom
  • Narrow range + low (relative) volume
  • Buying pressure on downtrend

I'm defining the resistance (previous support) based on the second gap (Gap2), on the distribution area and on the clear 3-candle swing high.

To clarify, above the drawed resistance (previous support) we had a distribution period, followed by a move to the downside (see the spike in volume and the wide-range candles).

The selling formed a cluster of 3 candlesticks , defining a pretty strong support.

The last selling wave, that formed the second bottom, is pretty indecisive, the volume is low, there's always some buying pressure and the candles are narrow, it's following the path of least resistance, i.e falling from it's own weight.

Weekly chart :

From a weekly perspective, the rejection and the gap up stress the irrationality of the move.

PS : I'm defining my stop loss based on the gap up (Gap1) that happened after the move to the downside from March.

Thanks for reading and if you have suggestions or want to discuss the idea, just leave a comment, I'll be happy to answer.

***Disclaimer : This is not an advice to buy the stock. Please, be aware that trading is a matter of probabilities and that it only takes ONE trader to deny your trade.***