Mystery Chart (10-27-2021)

October 27, 2021

From the desk of Steven Strazza @Sstrazza

*** Click here to read the reveal post for this Mystery Chart ***

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:

First and foremost, we're looking at a strong structural downtrend as sellers have steadily pushed prices lower for some time now.

The second development that really stands out is the potential reversal pattern developing as price challenges the upper bounds of its range.

We transitioned from a primary downtrend to a sideways trend. A breakout here would suggest a new uptrend is underway, but we haven’t seen it yet.

Also, notice how momentum recently hit an extreme overbought reading? This indicates that buyers are becoming increasingly aggressive as they try to take out this key level.

So, this week's question is simple:

Does this base resolve higher and complete a bearish-to-bullish trend reversal?

Or will sellers show up at these former highs and knock prices back into their old range?

Let us know what YOU are doing: Buying, Selling, or Sitting It Out?

Tweet me at @Sstrazza or shoot me an email to strazza@allstarcharts.com.

And, as always, check back in later to find out why this chart is relevant.

Allstarcharts Team

*** Click here to read the reveal post for this Mystery Chart ***