A sell rally set-upCrude Palm Oil Futures (Jan 2026)MYX:FCPOF2026hilmiyusBearish Consolidation The market is currently in a downtrend, evidenced by the price trading significantly below the Ichimoku Cloud (the green shaded area). The recent price action shows a corrective rally (pullback) after a sharp drop, forming a structure that resembles a Bearish Flag pattern. Technical Breakdown 1. Price Action & Trend Lower Low (LL) & Lower High (LH): The chart explicitly marks a LL at 4,078 and a recent LH at roughly 4,261. This sequence is the definition of a downtrend. Current Move: The price is currently retracing downwards from the "LH" (Lower High). The large red arrow drawn on the chart suggests an anticipation that the impulsive bearish trend is about to resume. 2. Ichimoku Cloud (Kinko Hyo) Bearish Bias: The price is below the Kumo (Cloud), which acts as a major dynamic resistance. Signals: The status box in the bottom right confirms this: Kumo Breakout: Strong (Red/Bearish) Chikou Span: Strong (Red/Bearish) — The lagging span is below the price. 3. Fibonacci Levels The chart displays Fibonacci retracement and extension levels relative to the recent swing. Current Struggle: The price is hovering near the 0.5 Fib level (4,170) and 0.382 (4,191). It is failing to hold the gains above these levels, which signals weakness. Critical Zone: The 0.618 Fib level is at 4,148. If the price breaks below this, the "correction" is considered over, and the downtrend usually accelerates. Key Levels to Watch Resistance 1 4,218 - 4,261 Immediate overhead resistance (recent LH and 0.236 Fib). Resistance 2 4,355 The Kijun-Sen (Baseline). A break above this is needed to flip the trend to neutral. Support 1 4,148 The 0.618 Fib level ("Golden Ratio"). Losing this is very bearish. Support 2 4,078 The previous Lower Low (LL). Target 3,965 The 1.618 Fibonacci Extension target (indicated by the blue line at the bottom). Projected Scenarios Scenario A: Bearish Continuation (Most Likely) Price fails to hold the current support at 4,170. It breaks below 4,148 (0.618 Fib). Momentum accelerates downward to retest the low at 4,078. If that floor breaks, the target becomes the 3,965 - 3,987 zone. Scenario B: Bullish Reversal (Less Likely) Price must find strong support here and break back above the recent high of 4,261. It needs to enter the Ichimoku Cloud and close above 4,355 to invalidate the bearish thesis. Summary The market attempted to recover but was capped at the resistance zone around 4,261. As long as the price stays below the Ichimoku Cloud and the 4,261 level, the path of least resistance remains down.