Today's price action made a Doji candle on the Daily chart above, which makes me nervous. A Doji candle represents indecision. If we form a green candle tomorrow, across from red candle from the previous day (Fri), then that would create a Morning Star candlestick pattern, which is Bullish. Not good for our Bearish trade.
We also appear to be experiencing support from the 20sma, which could lead to the green candle tomorrow that we don't want to see. In addition, volume has been steadily decreasing, which is not encouraging.
However, on the other hand, we did form a lower high and a lower low today, and Stochastics are not yet oversold. These are constructive to our Bearish position.
It was a harder decision today, whether to exit or not, than it was the previous trading day, which was a Friday, which is a little ironic. Meaning I'd rather leave the position at risk for 3 days, than just 1 day.
While there's a real chance we've just formed a swing bottom, I think it would be more an act of fear than playing the odds to exit today. We're still looking at a strong case for a continued down trend. It would be a mistake to get out today just because we hit some support and made a Doji. There's no real indication we'll reverse tomorrow even though we certainly could.
So, bottom line, at the end of the livestock market Close at 14:05 ET, I exercised my courage and decided to hold the position.
No comments:
Post a Comment