on wednesday, i posted that the EGLE long trade had hit the 2nd target (primary downtrend line) where i suggested the shorter-term traders consider taking partial or full profits while longer-term traders/investors might want to raise stops. today, EGLE closed up nicely but right on that that downtrend line and upon further review of the chart, taken in context with my views on the broad market, i believe the risk/reward to remaining long does not outweigh the near-term potential risks for a pullback in the stock. i will say that i’ve traded these shipping stocks for years and at times when the momentum players are trading these stocks on the long-side, they can defy gravity to insanely overbought levels. however, again, trading is all about the risk vs. reward ratio on a trade and with a 19% gain since from where this trade was posted as a long exactly one week ago today, the prudent thing to do would be to take full profits if still long and wait for a more objective re-entry on the stock, such as a pullback or consolidation period to relieve the extreme short-term overbought conditions, or maybe on a pullback to re-test the primary trendline, if it were to break-out from here at such near-term overbought levels. charts in order as posted, including today’s updated chart with notes:
