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.

Monday, July 26, 2010

FTSE 100; Summer 2010 vs Summer 2007

Here we are in the summer of 2007....

I wonder if we are about to see some sort of double top scenario in the FTSE 100 similar to that seen in the summer of 2007. If this is an inverse head and shoulders on the current chart (see below), we have a target of c 5,800, very close to the high seen in March/April 2010. The current slow stochastic is sky high having moved up from the recent oversold level and see that in the current rally the market has managed to close above its weighted 200 day moving average. It did this in 2007, formed the double top then moved back down, helped by a collapsing Northern Rock and a general log jam in the global financial system.
This has been an impressive thrust but has it exhausted the bulls or is there more left to go? Worth keeping an eye on and I guess we'll find out soon enough!

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