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, September 28, 2010

Goldman Sachs: still triangle-ish!

I've been keeping an eye on Goldman Sachs, which I flagged up in early September as a possible forming triangle.

At first glance, (although the long and short term bullish support lines are undeniably in tact) this chart does not look particularly bullish. GS is nowhere near its pre-flash crash level of $182.5 and since that decline in April, the bulls efforts to push the share price back up have been thwarted on two occasions now. We had reversals at $155 and more recently at $152.5.

Its not a perfect forming triangle but we are reaching a point where the price should move out of this area. To the downside, look for support at $137.5 and $132.5. If these levels are taken out, that target of $102.5 comes in to play. The mega bearish price target of $32.5 is unactivated and will only become active if the price falls below the bottom of the column of 20 0's (ie filling a box below the $132.5 level). That sort of level sits more comfortably with the Prechter doomsday view of Dow Jones 1,000-3,000. As i've said before, these are just targets that may be achieved, You never know!!

To the upside, we have an unactivated upside target of $182.5. For this to be activated, we need to see the $155 box get filled, which would give a higher column of X's than the previous column of X's.

This was the previous observation on 13th Sept. Note that the shares got beaten down at the previous level of resistance, as denoted by the red oval.

And this from 7th Sept, when the idea of a possible forming triangle was flagged up.

No comments:

Post a Comment