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.

Tuesday, August 24, 2010

Nikkei Update

It's starting to look grim for the Nikkei, which closed today at a 15 month low of 8,995. The 50x3 (end of day) chart shows a clear breakdown in previous support, a decisive double bottom sell signal and a new activated downside target of 8,300. I don't have any obvious upside targets at this time and would suggest risk is firmly to the downside.

The 100x3 closing chart shows a similar picture. It can be seen that the market had support previously at 9,100 but this has now broken down. It would be better to see some follow through here, as at 9,000 we are only one box below this 9,100 level and could creep back above it. That said, the 50x3 chart above suggests otherwise. The long term bearish resistance line is firmly in place with a shorter term resistance lines overhead.

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