From the desk of Steve Strazza @Sstrazza
New Mystery Chart!
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?
Here’s this week’s chart.
Click on chart to enlarge view.
In this week’s Mystery Chart we’re looking at a large rounding bottom which is one of the more reliable long-term reversal patterns. Prices built a healthy base and despite failing at resistance several times, the tests eventually became more frequent and prices began to stabilize at higher lows. Just recently, prices finally resolved higher and successfully retested former resistance from above.
So, have buyers absorbed all the overhead supply at this level and are now ready to drive prices higher? Or should we not trust this breakout just yet?
At All Star Charts, we’re huge fans of bases like this one so we’d be remiss if we weren’t buying this breakout all day. After all, “the bigger the base, the higher in space,” right?
Tweet me your thoughts @Sstrazza or email me at firstname.lastname@example.org and check back on Thursday to find out why this chart is relevant.