Head-and-Shoulders Pattern Signals Decline in MAR25-JUN25 Spread

FCPO1!
The opening price of the MAR25-JUN25 spread contract today was 265 points. During the midday session, the market experienced a sharp decline to 206 points but later recovered, closing at 227 points.

From the daily chart of the MAR25-JUN25 spread contract, a clear head-and-shoulders top pattern can be observed, with today’s closing price falling below the neckline, signaling a bearish trend. Referring to the March FCPO contract, the closing price today was 4,342 points, approximately 200 points above the strong support zone I identified at 4,120–4,150 points. The overall trend remains bearish.

Based on this analysis, I expect the MAR25-JUN25 spread contract to continue its downward movement tomorrow. If tomorrow’s closing price is around 200 points and the March contract has not yet tested the strong support zone, I will hold onto the position. However, if the March contract reaches the strong support zone, it will be necessary to exit the position to mitigate the risk of a rebound in the spread contract.

Market activity during the night session was relatively subdued. I look forward to seeing whether tomorrow’s price action aligns with this analysis.