20/11/25 PB to 20-Day EMA, Retest Low
Wednesday’s candlestick (Nov 19) was a bull bar closing in its lower half with a long tail above.
In our previous report, we said traders would watch if the bulls could get a strong follow-through bull bar, closing above the 20-day EMA, or if the candlestick will close below the middle of its range, and with a long tail above.
The market tested the 20-day EMA, but reversed to close below it.
The bulls hope the current decline will form a major higher low.
They want a pullback to the 20-day EMA. They got what they wanted in Tuesday's session.
If the market trades lower, they want it to form a higher low, followed by a second leg sideways to up.
They want the previous tight trading range to act as support.
They must now produce strong consecutive bull bars to show they are clearly in control.
The bears’ measured-move target, based on the height of the prior trading range, projects toward the 4000–3950 area.
The selloff formed a tight bear channel, indicating strong bearish sentiment and persistent selling pressure.
They see the recent move (Nov 19) as a pullback. They want it to stall around the 20-day EMA, followed by a second leg sideways to down.
At the least, they want a retest of the November 18 low, even if it only forms a higher low. The move is underway.
Fundamentals
• Production: SPPOMA about flat in the first 15 days.
• Refineries: Buying interest remains, though not paying premiums vs spot futures.
• Exports: ITS said exports are down 15.50% in the first 15 days.
Overall, the market sold off in a tight bear channel, indicating strong selling momentum.
The market remains Always-In-Short.
The selloff, however, is slightly climactic and has a parabolic wedge shape. The market may need to form a minor pullback before resuming its decline.
The market has formed a pullback to the 20-day EMA yesterday.
For now, odds still slightly favor the first pullback being minor, followed by a retest of the Nov 18 low, even if it only forms a higher low. This remains true.
Today (Thursday, Nov 20), traders will watch if the bears can get a strong retest of the November low, trading back into the tight trading range.
Or will the market trade slightly lower, but close with a long tail below?
Andrew
