27/8/25 PB Phase, Bears Need Strong FT Selling

1. Tuesday’s candlestick (Aug 26) was a follow-through bear bar closing near its low.
   
2. In our last report, we stated that traders would see if the bears could create a strong second leg sideways to down testing the August 21 low, or if the second leg sideways to down would lack strong follow-through selling, stalling around the August 21 low instead.
   
3. The market is forming the second leg sideways to down, testing the August 21 low.
   
4. The bulls see the current move as part of a two-legged pullback.
   
5. They want any pullback to be weak and sideways, lacking follow-through selling, as has been the case with all recent pullbacks.
   
6. They want it to form a double bottom bull flag with the August 21 low.
   
7. They want a retest of the August 19 high, followed by a strong breakout above it after the pullback.
   
8. If the market trades lower, the bulls want the 20-day EMA to act as support.
   
9. The bears want a reversal from a wedge pattern (June 20, July 24, and August 19), and a large double top bar flag with the February high.
   
10. They see the current move as the second leg sideways to down.
    
11. They need to create strong follow-through selling, trading below the August 21 low to increase the odds of a reversal.
    
12. Production for August may be flat or down. Sept should be flat or down as well.
    
13. Refineries' appetite to buy remains decent.
    
14. Export: August export up 10% in the first 25 days.
    
15. The market is still in the sideways to down pullback phase following the wedge pattern.
    
16. So far, the pullback phase has been mostly sideways, characterized by overlapping candlesticks. The pullback appears to be minor for now.
    
17. For tomorrow (Wednesday, Aug 27), traders will see if the bears can create a strong second leg sideways to down, breaking below the August 21 low and testing the 20-day EMA.
    
18. Or will the market trade lower, but stall around the August 21 low or the 20-day EMA instead?
    

Andrew