Today's price action looks like bad news but maybe not. We did open with a small gap down followed by a drop straight down. No top wick on today's candle. And we closed below the 8ema. This looks bearish.
However, when combined with the previous candle, we did not form a candle sell pattern. Also, we bounced off the upward angled Trend Line and closed just above the 34ema and 20sma. But the best news is that its very typical, and even embraced by traders, when a breakout goes back and tests the resistance that price action broke through. Assuming of course, the retest reverses and continues in the same direction as the break through thereafter.
We should find out in a day or two if we're continuing up or down. Tomorrow, if we continue down, we could find support at the 50sma or the 2 lower trend lines below the 50sma. Its hard to say whether its better to close the position at that point or hold and see if the support works. We'll probably wait until the end of the trading day tomorrow and see where we close.
We could also get a doji candle tomorrow. If so, we'll have to wait until the next day to see what happens. Of course, if price goes up and closes up tomorrow, that's a no brainer.
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