iRobot (IRBT) has been in correction mode since it made an all time high at $118.75 in late August. After a price top, it fell to $76 by late October, where it found support. We then saw a couple waves up, but should now expect more bearish correction price action.IRBT Daily Chart(click to enlarge)ABC Correction:- Note that from the $76 low, price made 2 waves up, connected by a wave down. - We can therefore say that IRBT may have completed an ABC correction.- The resistance at $104 suggests that the market is respecting the triangle price top formed in September and early October.- The subsequent bearish price action suggests bears are in control.- Furthermore, the RSI held under 60, which reflects maintenance of the prevailing bearish momentum (from October). Downside Risk:- If IRBT is still in a bearish correction as we would expect, there is further downside to the $70 area. - If price does fall to $70, we can expect support here.- The weekly chart below shows that price will find a rising trendline support, and a support/resistance pivot around $70. - The RSI on the weekly chart would likely be around 40 by then, and it should hold above this level if the overall trend is to remain bullish. - We should note that so far the overall trend is indeed bullish. However, there was a lot of volatility on the rally, so we should anticipate a long and deep period of consolidation to follow. - So, even if price does bounce off of $70, we should anticipate price action to be sideways with a possible range between $70 and $100. - Perhaps, after a couple years of strong volatility, it is time to cycle back into low volatility, in which case we should anticipate some curling (essentially a triangle) between the $70 and $100 area. IRBT Weekly Chart(click to enlarge)