Mystery Chart 11-05-2019

JC Parets
November 5, 2019

From the desk of Tom Bruni @BruniCharting

New Mystery Chart!

For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it's a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

To me, this looks like a confirmed bullish momentum divergence and failed breakdown below support. In these types of situations, it's clear that we can't be short if prices are back above their former lows, but it'll only be clear in hindsight what this failed move develops into.

Some people are comfortable with that, others aren't.

Click on chart to enlarge view.

I like these types of setups, so  I'd take this entry and see how it develops.

Do they fail more often than not? Yup, but the ones that do result in fast moves in the opposite direction pay for the small papercuts we take each time the others fail.

So, what do you think?

Tweet me @BruniCharting or email bruni@allstarcharts.com and check back in Thursday to find out why this chart is relevant.

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