Sentiment: Bearish

Previous Week Analysis:

Last week saw a textbook-level reversal within a trading range (TR) and a converging triangle. As I noted previously: "At the same time, there is another key scenario to watch. Within the current converging triangle, after three upward pushes, there remains a strong possibility that the price will return to the triangle’s range rather than breaking out." The market followed this expectation. Early in the week, it attempted to push higher, briefly exceeding the weekly bar formed a month ago. However, it reversed sharply and ultimately closed with a bearish bar near its low. Further details will be covered in the daily and 5-minute chart analysis.

Weekly Chart:

From the weekly chart perspective, this setup can be viewed as a two-bar reversal. The low from two weeks ago(6011.25) provides weak support, given the strong bearish momentum last week and the fact that the price closed at its low. Monitoring the premarket action on Monday is crucial—if the premarket drops below the previous low of the bull bar, that support is likely to turn into resistance, increasing the probability of a deeper move toward the bottom of the converging triangle.

Key Takeaways:

1. Monday’s opening is critical—whether the price holds above or drops below 6011 or 6000 will shape market sentiment.

2. A bearish gap at the open (meaning the price opens below 6011 or even 6000) significantly increases the likelihood of further downside.

3. Even if the market holds above this level, a second test of support(6000) is likely, suggesting that waiting for a short setup is a better swing trade strategy than going long.

Daily Chart

Last week unfolded in three distinct phases, which can also be seen in detail on the 5-minute chart:

1. Strong Bullish Momentum (Monday–Tuesday)

   • Two weeks ago, Friday closed with a bull bar, signaling a successful breakout (BO).

   • Last Tuesday also closed with a bull bar, confirming the breakout with a deeper pullback (PB), reinforcing strong bullish momentum.

2. Failed Breakout Attempt (Wednesday)

   • The market attempted to break above the previous high (marked by the blue arrow), but the breakout failed.

   • However, since Wednesday still closed with a bull bar, it wasn’t yet a clear sign of failure.

3. Shift in Control (Thursday)

   • Without a second test of the previous high, the market closed with a bear bar and left a long upper tail.

   • This indicated a battle between bulls and bears, but the probability of a downside move increased due to:

     1. Three pushes up within the converging triangle.

     2. A second test of support at 6120, resulting in a new low.

     3. The previous week being in a trading range (TR).

4. Bearish Confirmation (Friday)

   • Friday became a give-up day for bulls, adding to the likelihood that the upcoming week (or weeks) will either be another trading range week or a bearish continuation.

Key Takeaways:

1. Watch the 20-EMA on the daily chart.

   • This is the first time in 2025 that the weekly bar closed below the 20-EMA with a strong body—a key bearish signal.

2. A pullback to the 20-EMA (6080–6100) is possible, but a direct drop is also likely.

   • In both cases, a bearish bias is preferable.

3. Weak support levels within the converging triangle:

   • 6010, 6000, 5950, and 5900 are all weak support levels, making a breakdown more probable.

4. Short setups are preferable.

   • Even if a bullish move occurs, it could be a bull trap rather than a true reversal.

5 Mins Chart

Until the end of Thursday, the market still had a bull-favorable setup, despite some bearish signals earlier in the week.

• Wednesday opened with a bearish gap, increasing the chance of a breakout (BO) retest. However, the market eventually rebounded back to the previous resistance (blue line), which had turned into support after the breakout.

• Friday, however, was different. The bearish momentum was overwhelming, breaking through the support decisively.

  • Although there was an attempt to reverse, trapped-out bears and trapped-in bulls both sold aggressively at that level, leading to a market collapse.

  • This kind of breakdown is difficult to recognize in real-time unless viewed through higher timeframes, such as 2–3 weekly bars combined with a 15-minute chart, where the setup becomes clearer.

Key Takeaways & Monday Premarket Scenarios:

1. If the premarket opens below Friday’s close:

   • The lower it opens (6020, 6010, 6000), the higher the probability of a direct continuation downward.

2. If the premarket opens with a bullish gap above 6030:

   • There is a chance for the price to retest the breakout zone (6080–6100).

   • However, given the overall converging triangle structure, unless the market strongly breaks above 6100, the downside risk remains high.

   • Without a decisive breakout above 6100, the market is more likely to drop to 5950, 5880, or even 5800.

Bottom Line: The bias remains bearish, and any bullish move should be treated with caution, as it may be a temporary retracement or a bull trap