28/7/25 Minor Pullback or Something Stronger?

1. Friday’s candlestick (Jul 25) was a bear bar closing slightly below the middle of its range with a long tail below.
   
2. In our last report, we stated that traders would assess whether the bulls could generate follow-through buying or if the bears would create a strong pullback, which would close the weekly candlestick with a bearish body, thereby creating more doubts and uncertainty.
   
3. The bears got a pullback, and the weekly candlestick closed as a bear doji, creating uncertainty.
   
4. The bulls want a retest of the April high.
   
5. The current move up is in a bull channel with overlapping candlesticks. The bulls are slightly stronger but not yet as strong as they hoped for.
   
6. They want any pullback to lack follow-through selling, similar to the last few pullbacks (July 7, July 11, July 15, and July 22).
   
7. They want the 20-day EMA to act as support.
   
8. If there is a deeper pullback lasting more than a week, they want it to be shallow (overlapping candlesticks, bull bars and long tails below candlesticks).
   
9. They want another strong leg up to form the wedge pattern, with the first two legs being Jun 20 and July 24.
   
10. The bears want a reversal from a large wedge pattern (May 15, Jun 20, and Jul 24) and a trend channel line overshoot. They want a major lower high vs the April high.
    
11. They view the current move as a retest of the prior high (Jul 18), and want it to form a higher high and a double top with July 18.
    
12. The problem with the bear's case is that they have not been able to create follow-through selling in the last four selloffs (July 7, July 11, July 15, and Jul 22). The bears are not as strong as they hoped for.
    
13. They need to create consecutive bear bars closing near their lows and trading below the 20-day EMA to show they are back in control.
    
14. Production for July is expected to be around the same level as June or slightly higher. August may be flat or slightly lower.
    
15. Refineries' appetite to buy looks decent recently.
    
16. Export: Down 10% in the first 25 days.
    
17. So far, the buying pressure is slightly stronger than the selling pressure. The bulls have a slight edge in buying pressure, but not in an overwhelming way yet (no strong consecutive bull bars closing near their highs).
    
18. However, the move up has lasted a long time. The market may have to form a pullback before it moves higher again.
    
19. If there is a pullback, traders will see the strength to decide whether it will be a minor pullback or something stronger.
    
20. The bears need to create follow-through selling to show they are back in control, something they couldn't do in the last few pullbacks (July 7, July 11, July 15, and Jul 22).
    
21. For tomorrow (Monday, July 28), traders will see if the bears can create follow-through selling.
    
22. Or will the pullback phase be weak and sideways instead?
    

Andrew