Stacks (STX/USD): Strong rebound signals potential bottom

Stacks (STXUSD) is strongly bouncing from the projected support after completing wave C of a larger ABC flat correction on the weekly chart. We also spotted a completed five-wave bearish impulse within wave C, while the sharp rebound back above the channel resistance line suggests that a potential bottom may be forming. To confirm the bottom, we need to see a further rally above 0.38, while a short-term corrective pullback remains possible.

A bullish irregular flat is a corrective ABC structure that can often appear before the next larger move higher. In this pattern, wave B moves beyond the start of wave A, creating a new extreme, while wave C then declines in a five-wave structure and typically ends below the low of wave A.

Once wave C is completed and price starts to reverse higher, the pattern can signal that the correction is ending and that the larger bullish trend may be resuming. A strong impulsive rally following wave C provides additional evidence that the irregular flat may be complete.