Mystery Chart (05-12-2020)

Steve Strazza
May 12, 2020

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.

Today, we're looking at what WAS a structural uptrend until just recently when price violated its long-term trend line before plunging below former resistance at prior highs.

While there has definitely been some structural damage, not all is broken. Buyers stepped in at a logical level after the recent selloff, defending support at prior lows.

With that said, this is likely a bullish to neutral trend shift at best as momentum just spiked to one of its most oversold levels of all-time... not something we see in uptrends.

For now, it looks like price is trapped in no-man's land but at an important inflection point as it tests potential resistance at key former highs.

Does price break higher here and this counter-trend rally potentially materializes into something more?

Or do we fail at this logical level of overhead supply, leaving price in a sideways range and likely to retest the lows?

Which do you think it is? We want to hear your thoughts!

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

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