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, May 27, 2011

FTSE 100

Looking at the 25x3 H/L chart above post today's action, the market touched an intra day high of 5,951, so the 5,950 box got filled (ie the market moved from 5,925-5,950). There remains overhead resistance at 6,000 and I remain of the view that the recent break of support at 5,875 was significant. So despite today's action, the pattern remains more bearish. But the bears need to get the market down on Monday, ideally from this level or from 6,000 at worse. If we get a pump up above 6,025, i'll have to go back to the drawing board.

On the 25x3 chart based on the closing price, the index finished the day at 5,938, so we ignore the intra day high. Today's action has disrupted that nice downward sloping pattern of lower highs. Again, I think that recent move below the horizontal blue line after so much support is significant but the bears need to get back in with a 3 box reversal - a fill of the 5,825 would confirm the short term bearish trend. If it moves higher on Monday/Tues, i'll have to re-assess.

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