Mystery Chart (03-03-2021)

Steve Strazza
March 3, 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 and y-axes as well as any other labels that could help identify it.

This chart can be of any security, in any asset class, on any timeframe. Sometimes it's an absolute price chart, other times it's on a relative basis.

It might be a ratio, a custom index, or maybe the 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!

Let's break this one down quickly from left to right.

First and foremost, while there's evidence this could be changing, we're still in a strong underlying downtrend for now.

Next, notice the significant basing period in the middle of the chart which was followed by the downside resolution of a double top pattern.

Fast forward to the present now and you'll see price recently carved out a constructive bottom and has rebounded back toward former support.

After a positive divergence at the lows, the 14-period RSI just hit overbought for the first time in a long time. Seeing momentum shift back into a bullish regime definitely supports the recent rally to new highs.

On the other hand, price is already stalling out a bit after hitting a logical level of overhead supply at its key former lows.

So, do we want to sell this chart here in anticipation of sellers stepping in and defending this critical level?

Or, do we have enough evidence to be buyers here and bet on a sustained trend reversal?

We want to know what you're doing... Buying, selling, or waiting for more information?

Tweet me at @Sstrazza or shoot me an email at strazza@allstarcharts.com and let us know!

And as always, be sure to check back later in the week to find out why this chart is relevant.

Allstarcharts Team
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