$MERL D1 Bearish Idea

Price action has formed a series of lower highs across the recent impulse waves, a classic bearish market structure pattern. The most recent spike to 0.125 area was quickly rejected, showing sellers remain in control at higher levels. This rejection occurred right at the cluster of resistance levels visible on the right side of the chart ($0.125243).

While price briefly crossed above the fast EMA, it failed to maintain momentum and is now showing signs of crossing down. This type of failed breakout often precedes significant downside moves as trapped buyers exit positions.

Volume analysis reveals diminishing buying interest during recent attempts to push higher. The volume spikes on downward moves compared to upward moves suggests stronger selling pressure than buying conviction, a bearish signal for continuation.

MACD showing potential bearish divergence forming, with price making similar highs while the indicator makes lower highs. This typically precedes price corrections or trend reversals.

Key levels for bearish swing trade:

• $0.116854

• $0.114599

• $0.108202

Entry strategy would involve either:

1. Shorting at current levels with tight stop above $0.125243

2. Waiting for confirmation with a daily close below $0.114599, then entering with stop above the breakdown point

Risk management is crucial - a stop loss placed above $0.125243 would invalidate the bearish bias if triggered. The risk-reward ratio looks favorable with potential for 2:1 or greater returns targeting the lower Fibonacci levels.

Market context also supports this bearish outlook, as $MERL has shown inability to reclaim higher Fibonacci levels despite multiple attempts. The repeated rejection at lower highs indicates persistent selling pressure that has yet to be exhausted.

For swing traders with bearish bias, this setup offers an attractive opportunity with clearly defined risk levels and multiple profit targets at key Fibonacci supports. Ideal timeframe for this trade would be 1-2 weeks potentially.