Mystery Chart (02-23-2021)

Steve Strazza
February 23, 2021

From the desk of Steve Strazza @sstrazza

Check out our latest Mystery Chart!

What we do here is take a chart that's captured our attention and remove the x/y-axes as well as any other other labels that'd help identify it. This chart can be any security of any asset of any timeframe - on absolute or relative basis.

Maybe it's a ratio, a custom index, or maybe price is inverted. It could be all three!

The point is, when we aren't able to recognize what's in front of us, we put aside any biases we may have and scrutinize it objectively.

While you can try to guess the chart, the point is to make a decision...

So let us know what it is… Buy, Sell, or Do Nothing?

Here's this week's chart!

This line chart shows prices working higher within the context of a massive base and primary uptrend.

While momentum remains in a bullish regime, it is definitely waning as the 14-period RSI hasn't hit overbought to confirm the recent string of new highs. In fact, momentum has been diverging from price for some time now.

Not only does the rally appear to be losing steam, but it's doing so at a logical level of overhead supply. It's currently consolidating in a slight rising channel just beneath its former all-time highs.

So, what are we doing here?

Do we want to buy this chart and bet on price resolving higher in the direction of the underlying trend?

Or, does this bearish divergence and potential resistance at the former highs make you want to sell this here?

We can always sit on our hands and wait for more information too.

Be sure to check back later in the week to find out why this chart is relevant.

In the meantime, we want to know what you think about it!

Let us know by tweeting me at @Sstrazza or shoot me an email at strazza@allstarcharts.com.

Allstarcharts Team
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