RHB - Long Legged Doji - Reversal?

I have had a few requests to comment on the Long-Legged Doji that has formed in RHB. It is called LLD because of the extra long upper shadow. Normally Dojis point to a reversal in prices but in this case it came 2 days after the long white candle breakout from a Flag, therefore it is more difficult to call.

We can consider several options. Firstly, Dojis seem to be a common occurance in RHB. In May & June 2006 alone there were 3 Dojis that were temporary tops (A-C). Doji 'B' is not an exact Doji but it is close to one & can therefore be considered a Doji. Doji 'C' came within a sideways movement so it may not be significant as a reversal pattern.

Yesterday's Doji however does have significance because it came just 2 days after a very large white candle. The day after the white candle was a harami & now a Doji. This seems to indicate a reversal is a strong possibility.

As this does not give us a 100% signal we should look for other confirmation signs. An important point is that all 3 candles were stopped at the 1.32 level which is also a long term resistance. This is important and may signal that the bulls are unable to break this strong resistance. However, the half way point of the long white candle at 1.22 is still providing strong support even for the LLD.

RSI is only 67 (not overbought so no sell signal there), MACD is still positive & volume on the LLD day was lower that the previous 2 days.

A valid call would be for a correction to take place BUT I would wait for one more day before I make that call. If today prices open at or below 1.24 (yesterday's closing price) & fall (and close) below 1.22, then the LLD has signalled a reversal & prices will fall further. This might still only be a minor correction and not a major correction. Strong support is at 1.16.

As a precaution I would advise contra players to sell if prices fall below 1.22, but if not then hold on prices might just be flat before resuming the uptrend.