20/1/25 Still Trading Range Behavior Until Strong BreakoutCrude Palm Oil FuturesMYX:FCPO1!Tech_Trader88Monday’s candlestick (Jan. 19) was an inside doji trading around the high of the big outside bull bar. In our last report, we stated that traders would continue to buy low and sell high around the edges of the 18-day trading range until there is a strong breakout with follow-through from either direction. The market traded sideways in a small range and on a low-volume day. Bulls hope to get a reversal from a large wedge pattern (Jan 17, May 8, and Dec 19) and a smaller wedge pattern (Nov 3, Nov 26, and Dec 19). They view the recent move as forming a double bottom bull flag (January 5 and December 16). They need to create strong consecutive bull bars trading far above the 20-day EMA to show they are back in control. They want the 20-EMA or the January 5 low to act as a support level. The bears want a retest of the December low from a double top bear flag (Dec 30 and 9 Jan) at the 20-day EMA. However, the move stalled around the January 5 low area, and the bears couldn’t get follow-through selling. They want the 20-day EMA to continue acting as a resistance area. If the market trades higher, they want the January 13 high to act as resistance. They need to get a strong breakout below the January 5 low to increase the odds of a retest of the December low. Fundamentals: • Production: Production for Jan - SPPOMA first 15 days -16% • Refineries: Buying interest is there at these low prices. Not paying premiums vs spot futures - yet. • Exports: ITS first 20 days rumored to be around +15% So far, the move up on January 12 trapped bulls, and the sell-off on January 15 trapped bears. The market has been in an 18-day tight trading range. The market is trading around the middle of the trading range, which is an area of balance and a magnet. For now, traders will continue to buy low and sell high around the edges of the 17-day trading range until there is a strong breakout with follow-through from either direction. As we get closer to February, the mechanics of the CNY festival and lesser working days will increasingly have a larger influence on buying and selling behavior. Andrew