28/5/25 - Can Bears Get a Strong Retest of the Low? FCPO

• Friday's candlestick (Apr 25) was a bull doji closing in its lower half with a long tail above.
  
• In our previous report, we said traders would see if the bulls could create another follow-through bull bar testing near the 20-day EMA, or if the market would trade slightly higher but stall around the 4050-4080 area or the 20-day EMA area and reverse lower, forming a retest of the April 22 low instead.
  
• The market gapped up on Friday morning trading far above the 20-day EMA, but reversed to close below it.
  
• The bears see the current move as a pullback following the climactic selloff and oversold conditions.
  
• They want the 4050-80 area or the 20-day EMA to act as resistance.
  
• They want at least a retest of the recent leg low (Apr 22) followed by a strong breakout and a measured move based on the height of the 5-month trading range (AFTER the pullback).
  
• At the least, they want a small sideways to down leg to retest the April 22 low, even if it only forms a higher low.
  
• The bears must create a strong follow-through bear bar on Monday to increase the odds of another leg down.
  
• The bulls got a reversal from a wedge pattern (Mar 25, Apr 9, and Apr 22) and a lower low major trend reversal.
  
• They hope to get a 2-legged pullback closing above the 20-day EMA.
  
• The market traded above the 20-day EMA on Friday but reversed to close below it. The bulls are not yet as strong as they hoped to be.
  
• If the market trades lower, they want it to form a higher low (vs Apr 22) and a double bottom (Apr 22) followed by a second leg sideways to up.
  
• They want any retest of the April 22 low to be weak, sideways and with poor follow-through selling.
  
• The bulls want a TBTL - Ten Bars, Two Legs pullback. That means they want a second leg sideways to up after a pullback.
  
• The selloff from April 2 to April 22 was strong enough for traders to expect at least a small sideways to down to retest the April 22 low (AFTER the current pullback), even if it forms a higher low.
  
• Perhaps we may see the retest of the April 22 low early next week.
  
• If the market forms a retest of the April 22 low, traders will see the strength of the selling. If strong, traders may expect a breakout attempt below the April 22 low.
  
• If it is weak, we may see more profit-taking from the bears moving forward, followed by a larger second leg sideways to up after that.
  
• For tomorrow (28/4/25), traders will see if the bears can create a strong bear entry bar closing near its low.
  
• Or will the market trade slightly lower, but lack strong follow-through selling, closing the candlestick with a long tail below or a bull body instead?
  
• The market remains in a large trading range (4500 - 3850). Traders may Buy Low and Sell High within the trading range.
  
• That means buying in the lower third of the trading range, and selling in the upper third until there is a strong breakout from either direction with follow-through buying/selling.
  

Andrew