From the desk of Steven Strazza @Sstrazza
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:
This pattern shouldn’t look at all unusual by now. We’ve been joking recently about just how many charts look similar to this one. A nice basing formation coming out of a primary downtrend.
Momentum is in a bullish regime and nearing overbought as price looks to test key resistance at its recent highs and upper bounds of the base.
Do buyers win out and this reversal pattern resolves higher? Is it too soon to tell?
Or with price still trapped beneath a significant area of supply are we getting ahead of ourselves?
Maybe these bullish characteristics are just a tactical development and this consolidation eventually resolves lower with the underlying trend.
In that case, we should be fading this here.
So let us know what you are doing!
And as always, check back later in the week to find out why this chart is relevant.