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.
Friday, December 31, 2010
Thursday, December 23, 2010
We have had five columns where the index has risen by between 130 and 170 points before reversing to the downside, starting with that 15 box revesal from March 2009. What has been both notable (and impressive) about the most recent column is that at 17 boxes, it is the largest of the five - even stronger than the recovery off the 09 low. And impressive that it has taken place almost 2 years in to the market recovery.
The last two large columns of X's (15 boxes through to April 10) and 17 boxes (to Nov) have given activated targets to the upside of 1,500, bringing the possibility of an encounter with the 07 all time high. Remember, these targets are not always achieved but that is what the chart is currently saying! We may see a bit of resistance around the 1,270 level, a target given by a previous column of X's back in August 09! Useless for trading but quite handy for giving 'big picture' perspective.
Tuesday, December 21, 2010
For the bears, while the previous high in April has already been filled and there has clearly been resistance around this level, first in April and more recently in November. You can also have double top patterns without them being 'perfect' double tops but clearly to push the bearish case, we would need to see the FTSE consolidate at or below the current 5,850 box, them move lower in the New Year, which is still possible.
For now though the bulls have the ball and are advancing up the field. There are no obvious active downside targets. We therefore can't rule out a possible assault on the 2007 high. Maybe that is where we will see the 'true' double top.
Thursday, December 9, 2010
Activated targets to the upside of $104 and $105.