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.

Wednesday, July 28, 2010

CAC 40 update: Murder in the Rue Morgue

A bit like the Dax, there has been a tussle going on between bulls and bears in this green zone, between the 3,350 and 3,700 level. On the 25x3 closing chart, it can be seen that the market twice found recent support at 3,350. Since then the bulls have pushed the market higher, but have been rebuffed by the bears on four occasions. The previous column of X's that reversed in to the column of six 0's gave an upside target of 4,175, which is now active. Note the current column of X's filled the 3,650 box, higher than the previous column of X's and giving a double top buy signal.

The less noisy 50x3 closing chart shows a slightly different picture. Here we have an as yet unactivated upside target of 4,100, although I note that this up column of X's was followed by a reversal of seven 0's (175 points) that took the index down below the base of that x column. For this target to become active, we need to see the current column of X's go higher and fill the 3,750 box. Note the red bearish resistance line. This battle should be resolved imminently!

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