One of the best things about thinking about price action in a silo is that it allows an attempt at an objective consideration of the ‘observable evidence’.

There is no analyst note, message board chatter or water cooler pitch to be processed, rather just the cold, hard facts of the aggregate of buyers and sellers over a given period.

It can be a relief.

Especially the larger the valuation, or the more esoteric the business.

I’m surprised it took this long, but in this context I present you with Brainchip Holdings (ASX:BRN).

All ~$850m worth of it.

It is a fantastic trading stock, in uptrend over two years, and with a tendency to put huge runs on the board every so often (in both directions mind you!)

The September run of 2020 is still the best in recent times, and famously led then CEO Louis DiNardo to express genuine surprise as to its extent.

What is notable currently is the way the 15- and 50-day simple moving averages in yellow and green are coinciding with the 200-day exponential in blue, right around the levels that form the point of a longer term triangular consolidation (depicted in black trend lines on the chart).

brn-asx
Which way will Brainchip (ASX:BRN) go this time?

The tighter it winds, the more dramatic the resulting break is likely to be (or so the theory goes).

We won’t speculate today as to which way it will break.

But we will be there to entertain a trade in either direction when it does.

The liquidity is there, and we believe the opportunity is likely to follow.

Steve Collette of Collette Capital Pty Ltd (ABN 56645766507) is a Corporate Authorised Representative (No. 1284431) of Sanlam Private Wealth (AFS License No. 337927), which only provides general advice.

Collette Capital only makes services available to professional and sophisticated investors as defined by the Corporations Act, Section (s)708(8)C and 761G(7)C.

The Collette Capital Wholesale IMA Strategy has returned +25.61% p.a. net of all fees as at the end of July 2021 since inception in January 2015 ( using the Time Weighted Return method of calculating returns ).

Learn more at www.collette.capital

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