21/5/25 Can Bulls Create More FT Buying? Or Stall at 20-day EMA?

1. Tuesday’s candlestick (20 May) was a bull bar closing slightly above the middle of its range with a long tail above, and closing around the 20-day EMA.
   
2. In our last report, we said traders would see if the bulls could create a follow-through bull bar closing above the 20-day EMA, or if the market would trade slightly higher, but stall below the May 14 high and close below the 20-day EMA again.
   
3. The market traded higher in the morning and formed a sideways pullback in the afternoon.
   
4. The bears see the current move as a retest of the May 14 high and want it to form a lower high.
   
5. They want a reversal from a double top bear flag (April 25 and May 14).
   
6. They want the 20-day EMA to act as resistance, followed by another strong leg down to retest the May 8 low.
   
7. If the market trades higher, they want the 14 May high to act as resistance.
   
8. The bulls want a reversal from a higher low major trend reversal (May 16).
   
9. They want a large second leg sideways to up.
   
10. They must create a strong retest of the May 14 high and a strong breakout with sustained follow-through buying.
    
11. The bulls must create strong bull bars trading far above the 20-day EMA to increase the odds of a reversal.
    
12. Exports for the first 20 days seem ok, +5%
    
13. Production is up marginally so far.
    
14. Refineries' appetite to buy in recent days seems good.
    
15. For tomorrow (Wednesday, 20 May), traders will see if the bulls can create another follow-through bull bar closing above the 20-day EMA.
    
16. Or will the market continue to stall around the 20-day EMA area? If this is the case, the odds of a retest of the May 16 low will increase.
    
17. The market dynamic for Wednesday is about the same as Tuesday for now.
    

Andrew