Mystery Chart (03-31-2020)
Here’s this week’s chart.
Click on the chart to enlarge view.
Similar to last week's Mystery Chart, we're looking at another long-term downtrend. What's different about this week's though, is that buyers recently defended support at key prior lows instead of breaking down.
Another encouraging characteristic is that while price recently undercut its most recent low, momentum diverged positively and remained out of oversold condition. Even more encouraging is that momentum just registered an overbought reading on the rally off these lows, confirming the higher high in price.
But we must remember, the more times a level is tested the more likely it is to break, and this is now the fourth test of these lows.
What to do with a chart like this really comes down to your timeframe. As we have signs of a near-term bottom and a well-defined risk level to trade against, buying this chart in the short-term makes sense. At the same time, we can't ignore that this is a strong structural downtrend so another retest and potential break of the lows is possible, even likely.
We want to know what you'd be doing here.
Tweet me @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.