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:
First and foremost, we’re looking at a primary uptrend. Buyers have steadily pushed prices higher after resolving to the upside from a basing pattern.
Right now, price is digesting gains and churning sideways below a key Fibonacci extension.
While momentum remains in a bullish regime, RSI-14 has been making lower highs with each subsequent price high. Not only is there a potential divergence in place, but momentum could not even get overbought to confirm the latest highs.
So, this week’s question is simple:
Will buyers have enough power to push prices to fresh highs?
Or will sellers show up and defend this logical resistance level?
Let us know what YOU are doing: Buying, Selling, or Sitting It Out?
Tweet me at @Sstrazza or shoot me an email at firstname.lastname@example.org.
And, as always, check back in later to find out why this chart is relevant.