17/6/25 Bulls Need FT Buying to Confirm the Breakout

1. Monday’s candlestick (Jun 16) was a bull bar closing near its high and breaking out above the trading range.
   
2. In our last report, we said the market would likely open higher. Traders would see if the bulls could close the day as a bull bar above the 4000 level, or if the market opens higher, but lacks follow-through buying, closing the day with a bear body with a long tail above.
   
3. The bulls got a strong bull bar following the big gap up.
   
4. The bulls got a reversal from a wedge bull flag (May 16, May 26, and Jun 11).
   
5. They want a breakout above the 4000 high followed by a measured move based on the height of the recent small trading range which will take the market to around the 4150 area.
   
6. They must create follow-through buying over the next few days to increase the odds of a sustained move.
   
7. If there is a pullback, they want it to be weak and sideways. They want a retest of the Jun 17 high, even if it only forms a lower high.
   
8. The bears see the current move as a deep pullback.
   
9. They want it to form a major lower high (vs April) and a failed breakout above the trading range.
   
10. They must create strong bear bars to increase the odds of a failed breakout.
    
11. Production for June should be more or less around May's level.
    
12. Refineries' appetite to buy so far looks decent.
    
13. Export: Looks strong in the first 15 days +25%
    
14. For tomorrow (Tuesday, Jun 17), traders will see if the bulls can create follow-through buying over the next several days. If they can, that will increase the odds of a more sustained move.
    
15. Or will the market trade down and lack follow-through buying? If this is the case, it will indicate the bulls are not yet strong.
    

Andrew