FCPO capitulation

Yesterday’s note:

Last night, price fell into one of the key low (afternoon) that buyers would be interesting in buying. And that’s exactly what happened. FCPO bulls faded & reclaimed yesterday’s afternoon’s low (3912) and pushed price into SBR (3921 - 3925) where they started covering their longs while sellers tried to short it. The night session ended with a tight range.

This morning, market opened with a gap down taking out one of the local low (3914) where lower VWAP band is located (green). Buyers were able to pushed back sellers and reclaimed the low with a bullish 3-minute bar. Price then spiked up in the next couple of minutes into HTF sell range where buyers started taking profit and sellers started shorting it heavily. Price took a dive from then on and went back inside HTF range. HTF sell divergence sell is confirmed and HTF buy range is formed (3801 - 3956) as a result from this morning’s activity.

It’s not all sunshine & rainbows for FCPO bulls as market went into capitulation mode after HTF sell divergence has formed. Pullback buyers (including myself) got wrecked trying to fade & reclaim the lows anticipating a retracement to the upside. That didn’t happen as sellers kept shorting between 3pm - 5pm leading to a tight range before breaking down by 5:15pm. What is happening is another impulsive move on FCPO, this time to the downside by sellers.

While market is capitulating in an impulsive manner, it’s hard to tell where it’ll stop, bounce or reject but there are a few areas that FCPO bears could potentially start covering their short positions. One being the closed price (3869) of afternoon’s session. The area between 3857 - 3845 would be another area of interest for sellers & buyers to come back in. Personally, I’m not interested in catching a falling knife and would rather wait for another shorting opportunity if it presents itself. In the chart above, the area between 3890 - 3921 is where price could pullback to. It’s a large range but within it, there’s a VWAP (blue) and a local high (3902) where sellers might continue their shorting activity.

---

Fade & reclaim behavior:

Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any financial instrument, to make any investment, or to participate in any particular trading strategy.

The author does not take into account reader's personal investment objectives, specific investment goals, specific needs or financial situation and makes no representation and assumes no liability to the accuracy or completeness of the information provided here. The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort.

Any expression of opinion (which may be subject to change without notice) is personal to the author and the author makes no guarantee of any sort regarding accuracy or completeness of any information or analysis supplied.