We could have closed with a more bullish chart, but certainly not ready to bail on this trade yet. We closed with a Doji candle which represents indecision. But we closed right on the 3ema, which shows continued strength.
However, we closed with a lower low and a lower close than yesterday. We also have very overbought Stochastics (14,3,3 K%=88). These hint at possible weakness on the way.
A common possibility from here is a roll over down to the Trend Line we broke out of, for a re-test of the TL as support. If that happens and we bounce off the TL and climb from there, that's actually a very strong bullish pattern. However, we could crash back down through the TL and keep going. So, if we close below the 8ema, and there's significantly more distance to the TL, we'd probably want to exit, take a small loss, and wait to see if we bounce and close back over the 8ema. At which point we can re-enter a long position.
For now, we held our long position.
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