GOOG In-Trend Short Update 1

Tough call. Very tough call. The Put option ended the day down -$666. Represents a lot of heat, in more ways than one. Do I sell or do I stay? Here's my thinking:

Notice the low of the last 4 candles. They were all within 77 cents of $1031. That seems remarkable. You might conclude there's some very hard support at 1031. Also 1031 is very close to the 61.8% Fib from the most recent upswing, which could be helping with the support. Today closed over the 8ema on slightly higher volume with a sizable candle. Looks like the DMI+ green line is about to cross over the DMI- red line, which usually is coincident with a pop in price (in my opinion). The 10/29/18 low coincides with the 3/28/18 low, which could provide support and result in a double bottom pattern. Together these make a reasonable case to get out of the trade and preserve what value is left in the option.

On the other hand, notice the bottom of today's candle body (the open), is slightly higher than than the bottom of yesterday's candle body (the close). Technically this means we do not have a valid engulfing candlestick pattern, which means we don't have a candlestick buy signal. Today's candle closed right under the 20sma and a trend line that it recently broke to the downside. This could be just a retest of that trend line. The 20sma often acts as resistance. Today's candle close is very close to half the retracement of the most recent down swing, which is a very typical retracement before resuming the current trend. The dominant trend, which you can see in the previous post, is decidedly down. Stochastics have not been oversold for many days. There could be some price movement today due to options expiration day tomorrow. Together these points introduce serious doubt whether getting out today is the best idea. It could lead to missing a gap down day tomorrow.

The big picture is we've been in a consolidation phase since about 10/30/18, after a respectable down trend. You'd have to say the momentum is currently to the downside, which means the breakout of the consolidation is more likely to be to the downside.

So, after considering all of the above, I decided to hold it overnight and see the degree of follow through to the upside tomorrow, if any. This isn't the price action I was expecting to see, but you just have to play the cards you're dealt the best you can.