Mystery Chart (03-10-2020)
Here’s this week’s chart.
Click on chart to enlarge view.
In this week's Mystery Chart we're looking at a consolidation pattern that formed following the breakout from a large base within the context of a structural uptrend.
Here are some things I think are important to note about this chart...
The underlying trend is clearly higher.
The prior breakout level was successfully defended twice as resistance turned into support.
Price is currently pressing on all-time highs, making this the fourth test since breaking out from its larger base pattern. What do we know about the more times a level is tested?
Momentum just spiked to its highest level since breaking out of its last base. In addition, the chart has been in a bullish momentum regime and not registered an oversold reading for some time now.
So while yes, we are pushing up against potential resistance at prior all-time highs, we believe there are a lot more positives than negatives here, and this continuation pattern eventually resolves higher. Price may need to digest this recent move and absorb some of the overhead supply that likely exists at current levels, so we're being patient and waiting for a sustained breakout before we're officially buyers.
Do you think we've got this right?
Tweet me your thoughts @Sstrazza or email me at strazza@allstarcharts.com and check back on Thursday to find out why this chart is relevant.
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Allstarcharts Team.