UE Double Headed Double Short - Update 5

UE opened gapped down, which is a bearish indication. At first it went up to fill in the gap and catch any orders that were resting there and didn't get a chance to fill. That is very common. But after filling the gap, it started right back down. All the way, and then some. Finally closing near the bottom. These are also bearish indications.

The first target was 16.75 for half the position. Today's low was 16.84. Only 9 cents away!

It was very tempting to just sell the first 100 shares at the close because its certainly possible we bounce tomorrow and maybe this is the bottom for a long time.

I had to take a breath and say ok wait a minute, what are the chances we continue down tomorrow vs having hit the bottom today.  All the bearish reasons we went short to begin with and breaking a double neckline, and having filled the gap, which eliminates the pressure to fill the gap going forward, I have to think if we do go up tomorrow, it'll be to test the neckline from the underside and then come back down. Also, being so close to my order it seems likely it'll take a dip or gap down a little before heading back up. So I resisted the urge to take the profit from the first half position.

I added Fibonacci levels to the chart today and see the 61.8% retracement (16.33) lines up just above the 2nd target of 16.15. The 61.8% Fib level is a common retracement which added to the decision to leave the first 100 shares in place for a better exit tomorrow.

When I saw where the 61.8% level was I made a change to the exit order for the 2nd 100 shares. I split it in half so 50 shares have the original target of 16.15, and entered a new order for the other 50 shares to sell at 16.34 for the 61.8% Fib.

Something that did give me pause, is that today's candle looks like an inverted hammer candle, and the stochastics are very low. That suggests this is a bottom. Maybe a local bottom, maybe a long term bottom. It was difficult not to take any profits at the close but a very common problem for traders is to take profits too early. The decision to leave the position on seemed like the harder decision but the better one.