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, June 21, 2011

FTSE 100 - potential upside to 5,875

The 5,425 target on the FTSE was not hit but remains active. It can be seen that in recent days we have had a 3 box reversal, followed by another 3 box reversal and the index has found a bit of support at 5,650. If we get an intra day high of 5,750, that short term target of 5,875 will be activated by a 'double top buy signal'.

Given that 5,875 was previously a level where the market found support on several occasions (note the blue horizontal line) it would be perfectly reasonable to suggest that this could now become a level of resistance.

I also drew that slightly upward sloping line which shows much more clearly on the candle chart. Conversely, another 3 box reversal and a move below the current support level of 5,650 would be very bearish imo.

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