In yesterday's post I said "the Doji could be the top of an Evening Star formation, which would require a down candle tomorrow.". Well guess what. That's what happened. We got a gap down and formed an Evening Star. And on high stochastics and solid volume. This is bad.
However, we did bounce off the 8ema and closed decidedly above it. Because of that we stayed in the trade.
The next day or two could put us in some tricky positions, where we're closing under the 8ema but getting support from one of the 4 possible sources of support I listed yesterday. Right now I'm thinking we should hold on unless we close under the bottom Trend Line. Our risk is limited to the cost of the option, and we're in a strong bullish pattern. But if we go too low, the whole pattern could be broken. On the other hand, we could just be forming a Cup & Handle pattern. It will come down to a balance between minimizing our losses and not getting out too early. We'll have to wait to see what the specifics are.
Of course, what we want is to have an up day tomorrow and close with a new high.
No comments:
Post a Comment