From the desk of Tom Bruni @BruniCharting
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?
To me, this looks like one of the many failed breakouts we’ve seen across the US and globally. While it’s not ready yet, my assumption would be that it consolidates and then resolves to the upside like many of the other leaders we’re watching.
Click on chart to enlarge view.
I can also see the case for taking a short position against the former highs as the reward/risk is skewed in that direction and risk is very well-defined.
Given the environment we’re in, I don’t think this failed breakout is a surprise. With that said, I’d much rather be erring on the long side and buying the subsequent breakout rather than getting cute on the short side.
That’s my opinion, what do you think?
Tweet me @BruniCharting or email firstname.lastname@example.org and check back in Thursday to find out why this chart is relevant.