Mystery Chart (03-10-2021)

Ian Culley
March 10, 2021

From the desk of Steve Strazza @sstrazza and Ian Culley @ianculley

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!

The first thing that jumps out on the chart is that after a period of prolonged consolidation, price action resolved to the upside. So the underlying trend is definitely higher here.

Immediately following this breakout price made a swift leg higher and rallied to a logical level of overhead supply at the 261.8% Fibonacci extension level.

Price has been consolidating in a wide range between our two objectives ever since.

It's currently attempting its third test of the upper bounds of this continuation pattern. You know what we like to say around these parts...

The more times a level is tested, the more likely it is to break

All of these developments have taken place under a bullish momentum regime, which speaks to the resilience of the primary uptrend.

These are the options we're left with...

Will the third time be the charm for this chart and it finally resolves higher in the direction of the underlying trend?

Or, do we want to bet on price failing at these levels yet again in which case it likely retraces back toward the first extension level.

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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