You are right!  This young lady has seen her bobber go underwater and knows a fish is on the other end.  She needs to get all the slack out of her line (actually she should have had it out all along, not like in the picture) and pull up on the rod tip to set the hook.  Then she can start reeling the fish in.  She wants to dip the rod tip and point at the fish while she reels in the slack line and when the fish fights hold the rod tip up and let the rod bend to resist the fish.