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.

Monday, October 3, 2011

BHP Billiton (BLT.L)

These patterns need a bit more time to develop but in general terms the most obvious observation here is that BLT is sitting right on its long term support.

On the 25x3 HL chart, we do actually have a new lower low (denoted by the red 0). There is an active target to the downside of 1575p and a new targert of 1050p, activated by this move below the previous column of 0's.

The reason for wanting to see the patterns develop is because the 50x3 chart has not confirmed a new lower low itself yet - it can be seen that at current levels the stock is right on two lines of previous support. A decisive move below this would activate that 900p price target - the 1450p target is already active.

.To the upside there is a target of 2150p but this is not active. We would need to see a three box reversal to the upside and the new column of X's take out the previous high of 1850p.

By the way, RBS published a research note on BLT today, giving the stock a long term (12 month) 'buy' recommendation and price target of 2725p.

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