$ITUB Took the Lows, Then Took Them Back. What Comes Next Points to $8.11

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$ITUB just ran the obvious level, took the stops and reversed.

$ITUB sits at $7.37, $2.83 below its 20-day high of $10.20 and $0.14 above its 20-day low of $7.23.

My read: lean bullish. Buyers are close enough to force the issue, but I want volume before I call it a breakout.

What the sweep left behind

Against its own 60-session range, $ITUB is 27.7% below the high of $10.20 (Oct 6) and 3.0% above the low of $7.16 (Aug 20). $ITUB closed higher in 2 of its last 9 sessions.

Volume over the last five sessions averaged 1.1x the twenty sessions before them.

The largest one-day move in the past twenty sessions was -23.2% on Oct 26. Break of structure down through $9.38 on the daily chart. Liquidity sweep: price ran the lows at $7.39 and closed back inside the range.

What I make of it: stops sit at obvious levels, and a sweep shows they were collected. What price does next shows whether the move was a trap or a start.

What the market looks to be pricing in

Off-exchange trading: NORMAL: $1.2M block at $7.38, +59% yesterday's biggest. Biggest single off-exchange print: 156,932 shares at $7.38, about $1.2M, on an uptick (buyer lifted). A print that size is one order being crossed away from the public book, not a crowd of small trades.

Days to cover 1.1, 23.8M shares short, short interest -11.3% since the last report. Squeeze risk 5 of 100; shorts pressing 98 of 100. Across the broader market, the read is Lean bullish (bias +20).

Insiders: quiet.

On the daily chart, technical patterns include spinning_top, doji, doji in a up trend.

What I make of it: the pieces mostly point the same way as the price, which is more than I can say for most setups. None of them is proof.

The bull case

• Structure setup with a measured path to $8.11
• Backdrop: Lean bullish (bias +20)

The bear case

• Charts can be annotated after the fact

The part nobody is talking about

What I think traders are overlooking is how little room the thesis needs. The line that proves it wrong is close and the level it points to is not, which is the kind of imbalance I like to see.

The price alone doesn't show it.

If I'm right, and what proves me wrong

If $ITUB posts a retest of the supply block $9.55 to $9.82 that holds and volume expands, I think $8.11 becomes the next serious test. Under $7.32, I'm wrong.

The honest objection is selection bias. Sweeps that worked get remembered and the ones that failed don't, so any chart can be annotated into a story afterward.

That's the whole trade: a level to clear, a line that proves me wrong, and not much in between.

Kill switch

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

• A close through $7.32.
• Selling absorbs the buying at a key level and price loses it on volume.
• Order flow reverses: the sweeps and blocks turn to the other side.
• A scheduled event changes the picture before the trigger is reached.

What I'm watching

Buyers are close enough to force the issue. I want the volume before I call it anything more than a lean.

Desk record. 8 of 35 scenario targets traded before their invalidation (23%), 21 stopped out, 6 ran out of time, average outcome +2.09% per piece. Past pieces say nothing about this one.

The desk's scenario leans bullish. Bull or bear, the kill switch above is what keeps either view honest.

Sources and further reading: SEC EDGAR filings for ITUB · FINRA daily short sale volume files · Nasdaq short interest: ITUB · ITUB quote, chart and data on StockMarketLoop.

Data as of Oct 26, 11:04 AM ET: options positioning, FINRA short volume, the off-exchange trade record, the structure map, SEC filings and the ticker's headlines. Vaughn McNair (Grandmaster-Obi) and Making Easy Money may hold or trade positions in the names discussed. This is speculation and education, not financial advice.