Today's price action could be a bad thing or a blessing in disguise. Could be bad because we dipped back rather deeply into the Flag consolidation, and could continue downward in the next session. Could be a blessing because we're filling the gap right away, so we don't need to worry about the gap "attracting" price to fill it in before we reach our target.
Our Bullish long trade hasn't been invalidated by today's big red candle. We did not close below the 8ema or below the lower Trend Line of the Flag. Its more likely its profit taking on a gap up rather than a trend reversal. However, we did form a Dark Cloud candlestick pattern, which is Bearish, but we haven't closed below the 8ema. We've been forming alternating Bullish and Bearish candlestick patterns since the recent swing low on 5/26/21.
- Bullish Engulfing
- Bearish Harami
- Bearish Harami
- Bullish Harami
- Dark Cloud (bearish)
Given the alternating nature, the price consolidation we're in, and mid-range Stochastics, I think we have to give little weight to the candlestick patterns for now.
While its disturbing to fall back into the consolidation after gapping up and breaking through the upper Trend Line, we still have a predominantly Bullish setup. So we need to hold the position, and perhaps tomorrow will be a Turn-around Tuesday.
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