Mystery Chart (10-18-2021)

Ian Culley
October 18, 2021

From the desk of Steven Strazza @Sstrazza

*** Click here to read the reveal post for this Mystery Chart ***

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 the price behavior 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:

First and foremost, we're dealing with a big basing pattern that's trying to resolve higher, as price just broke above its former highs but was immediately followed by a throwback to former resistance. Whether or not that level will now act as support is what we care about.

In addition, momentum (as measured by the 14-period RSI) recently reached its highest level ever, adding conviction to the breakout.

While this has all the right characteristics of a rounding bottom reversal pattern, we can't take anything for granted in a market that's been plagued with failed breakouts for the better part of a year. Until we see some follow-through in price, caution is warranted.

So, the question here is easy:

Do buyers have what it takes to defend this level and push prices higher in their second attempt?

Or is price about to fail at these former highs and trap the bulls?

Let us know what YOU are doing: Buying, Selling, or Sitting It Out?

Tweet me at @Sstrazza or shoot me an email to steve@allstarcharts.com.

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

Allstarcharts Team

*** Click here to read the reveal post for this Mystery Chart ***

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