Sentiment: Bullish

Weekly Chart:

During the Christmas week, despite having only 3.5 days of regular trading hours (RTH), the bulls displayed notable strength following a sharp selloff two weeks ago, closing the week with a bullish bar. A strong battle occurred during the final two hours of Friday's RTH. From a weekly perspective, bearish momentum remains weak. Even after a significant selloff, the bears failed to follow through with a bearish bar, increasing the likelihood of the bull trend resuming in the coming weeks. However, the market setup may transition into a trading range (TR) for a couple of weeks before the bull trend resumes(If TR lasts long, the probabilities of trend resumption and reversion will be same).

At this point, the strength of the upcoming bullish trend remains unclear due to the following factors:

  1. There is a potential TR forming with a range of approximately 5800–6200.

  2. The Christmas week and the previous week formed an inside-inside (ii) setup.

  3. Most of the gaps created during the recent selloff were closed in the last two weeks.

Nonetheless, the price action favors the bulls. Even within the potential TR, the price has been forming higher lows (HLs) consistently, which supports bullish continuation.

Daily Chart:

The bulls have been working hard to push the price back toward the previous bearish breakout (BO). The price action suggests a lack of selling pressure below the prior bear BO. Trapped bears appear unwilling to re-engage unless the price retests that level. This dynamic explains why, as the price approached the channel line (leaving a small gap below the bear BO), bulls started taking profits, while bears initiated shorts.

Key developments from Friday's price action:

  1. The bulls managed to create a higher low (HL).

  2. During the last 3–4 hours of RTH, there was a fierce battle around the 6000 level. Eventually, the bears gave up, and the price pushed back above 6000.

This price action leaves a strong possibility for further bullish movement. The market could retest the bear BO, close the remaining gap, and potentially attempt to reach the all-time high (ATH) again.

Hourly Chart:

An intraday hourly gap was left after last Friday’s RTH. Currently, the price structure shows:

  • Two legs down and two legs up, followed by one leg down that reversed on Friday, forming a HL.

Given the weekly and daily contexts, the price still favors the bulls. There is a high probability that the bulls will close Gap 1 and attempt to close Gap 2 as well. The likelihood of the market reversing down directly to test Gap 3 is relatively low.

Support Levels:

  • 6179.75 (ATH)

  • 6115 (Gap fill)

  • 6090 (Gap fill)

Resistance Levels:

  • 5884 (Gap fill)

  • 5782 (Worst-case scenario)