FCPO short pullback

Yesterday’s note:

Last night, price started pulling back and this morning, it missed the area of interest by a tick (3889 instead of 3890). A local high (3880) was confirmed when price pulls back last night and it became the high of interest when morning session started. FCPO bears faded & reclaimed the local high which is also at VWAP that was anchored from yesterday’s afternoon session high. Sellers started shorting but buyers put on a fight and lost when the morning session ended. In the afternoon, the downtrend is further solidified when sellers broke last night’s low (3849).

It’s very clear that the market is in a downtrend now but HTF divergence seems to be forming. Divergence doesn’t necessarily mean that the trend will reverse as it can just be a temporary pullback before trend continuation. There are two local highs that would be area of interest for sellers: 3854 & 3874. Sellers might short it again if buyers were able to push price back into those highs to continue the downtrend. Personally, 3854 sticks out to me as it’s where both SBR is at as well as VWAP (blue). On the buy side, it isn’t clear yet until there’s a move to the upside confirming the divergence. When that happens, new local low might be created as an area of interest for FCPO bulls to get involved.

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Fade & reclaim behavior:

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