Mystery Chart (09-01-2020)
We're hoping this week's chart will be a bit more challenging than usual.
No beautiful base breakout, no clearly-defined risk, no bullish momentum characteristics... Just an unusually long continuation pattern with an upwards bias.
Let's have a look.
Click on chart to enlarge view.
On second thought, maybe it's not a continuation pattern at all.
Based on the textbook definition of a flag or pennant, the flagpole that precedes the consolidation should be greater in length than the consolidation itself. Additionally, the consolidation should only last a few months, tops.
That's not what's happening here at all. Price has been coiling for three months, which is far longer than the two-month average duration of these patterns.
Another reason why we might not want to consider this a continuation pattern is because flags and pennants tend to have a neutral or negative slope.
The positive slope and upwards bias of this chart puts us in the camp that this is most likely a rising wedge and not a pennant. And unlike flags and pennants, that's a bearish reversal pattern.
So, let us know what you think.
Is this pattern bullish or bearish?
Is this a pennant or a wedge?
Are we buying or selling this chart right now, or waiting for more information?
We want to hear from you!
Tweet me @Sstrazza or email strazza@allstarcharts.com and check back at the end of the week to find out why this chart is relevant.
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Allstarcharts Team