Welcome to EV's point and figures. This blog is dedicated to the use of point and figure charts in technical analysis.

Although P&F first appeared in charts in the 1930's, it is an often overlooked techique for analysing stocks and charts. A poor relation compared to line and bar charts and their range of momentum indicators. Yet few charts provide a clearer picture of the daily battle between bulls and bears for market control.

Like most methods, it should not be used in isolation. It should form part of an analysts 'tool box' and be used with other techniques to help form an overall view.

The charts that appear on this blog and any accompanying comments are purely for information purposes only - my own personal take on where the prices may be heading. They do not constitute investment advice.

Thursday, June 17, 2010

17th June 2010: double top buy signal on FTSE 100

And there we have it! Following on from the previous update, the (25x3) FTSE 100 chart now shows that the box of 5,225 did close, giving a confirmed double top buy signal and an activated upside price objective of 5,700. That gives about 6% upside from current levels and given that BP's shares could put in some sort of rally following yesterday's dividend suspension, that target could be met quite easily. Still lots of headwinds (and is a 6% gain worth the risk) but this is the new upside target.

Should the index move back up towards the previous high, we could see some sort of double top formation similar to that seen in the summer of 2007. At a fundamental level, the question remains what catalysts are going to push these equity indices up to new multi year highs?

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