$COHX at $12.75: a sweep, a dead tape, and a 10.0% bounce to $14.03

$COHX is down 7.4% on the session at $12.75, and almost nobody showed up to watch. Volume is 0.0x normal. That is the detail I keep coming back to. A drop that size on an empty tape reads less like conviction selling and more like a thin book giving way.

I lean bullish, and I want to be straight about how small that lean is. The smart-money read says markdown, sellers in control, strength 78 of 100. I am not calling a recovery. I am looking at a bounce of 10.0% to $14.03 over 1 to 3 weeks, and nothing grander.

A map that has gone stale

The daily chart changed character down through $20.58. Then came the sweep: price ran the lows at $20.58 and closed back inside the range. That is the piece I like, because a sweep that gets absorbed is how a lot of bounces begin. The supply block at $29.30 to $31.04 is where the move that broke structure started, and the unfilled bearish imbalance from $15.91 to $17.68 hangs over everything like unpaid rent.

The trouble is that price is at $12.75, nowhere near those zones. The last CHoCH was down at 14.45. So the structure I am reading is a record of how we got here, not a picture of what is next door. The patterns on the daily are a rectangle, a doji and a dragonfly doji in a flat trend. Indecision, with a long lower wick in the mix.

Why a bounce is plausible

Look at what sits just around price. The liquidity map has $14.00 as value area low, $13.61 as a demand block, and two small dark pool marks straddling the current price: $12.60 where 5k sold and $12.70 where 1k bought. Not much size at either. My target of $14.03 sits just through value area low, which is where I would expect the first honest test of whether buyers exist.

The dark pool is QUIET. No block prints, 50% off-exchange, all of it spread over small prints, which is what internalized retail flow looks like. DIX at 7% says off-exchange prints lean sell, but I do not give that much weight when it is built from retail dust. It tells me nobody big is chasing the drop. It does not tell me somebody big is dumping.

The bull case

• Sweep of $20.58 absorbed and closed back inside
• Dragonfly doji after a drop on 0.0x volume
• Quiet dark pool with no block selling
• Demand block at $13.61 and value area low at $14.00 close overhead

The bear case

• Smart-money markdown at 78 of 100
• VPIN 0.937 with one side owning the buckets
• DIX 7% leaning sell
• Bounces into map levels are where sellers add

What keeps me honest

VPIN is 0.937, toxic. One side owns the volume buckets, market makers will widen, and moves extend. That cuts both ways, but I would not bet that the owning side is the buyers. The smart-money read is markdown, with the positioned side hitting bids and price moving with the flow. Bounces into the map levels above are where they add.

So $13.61 and $14.00 are not neutral ground. They are where sellers have said they will show up. I take the target seriously because it sits right there, and I treat it as a place to get paid, not a place to fall in love. The market backdrop is Neutral with a bias of -13. Nothing in the tape is going to carry this for me.

What I need to see

The written trigger is a retest of the supply block at $29.30 to $31.04 that holds. I will be honest, that is a long way from here, and it does not fit a trade aimed at $14.03. Confirmation is the part I can actually use: a close back above the break level on rising volume. Without volume behind it I am just looking at a bounce in a downtrend.

The idea is wrong at $20.37. Technically it is wrong on a close below the swept low, which would mean the sweep was the real move and not the trap. I will manage the trade well inside that line, because it is a thesis level and not a stop I would sit on.

Kill switch

Any one of these and the thesis is over, no averaging down, no renaming it.

• A close below the swept low, meaning the sweep was the real move
• A print through $20.37 against the thesis
• The $13.61 demand block failing on rising volume
• Bounces stalling under $14.00 while the flow stays marked down

Bottom line

This is a small, tactical long on a dead tape, aimed at the shelf where sellers have already said they will show up. I like the sweep and the dragonfly, I do not like the flow, and I will take the 10.0% if it is offered. If volume does not wake up, I am not going to argue with the tape.

The desk leans bullish. Bull or bear, the kill switch above is what keeps either call honest.

Sources and further reading: SEC EDGAR filings for COHX · COHX quote, chart and data on StockMarketLoop.

Data as of Oct 20, 8:13 AM ET from the Making Easy Money Academy data desk: options positioning, FINRA short volume, the off-exchange trade record, the structure map, SEC filings and the ticker's headlines. Vaughn McNair and the Making Easy Money publication may hold or trade positions in the names discussed. This is speculation and education, not financial advice.