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StockCharts.com - ChartSchoolLearn more about Technical Analysis
and Charting Terminology
You are here: StockCharts.com & Figure Chart Basics
ChartSchool
Chart Analysis
Point & Figure Horne Page Point
Point & Figure Chart BasicsIntroductionPoint & Figure
charts consist of columns of X's and O's that represent filtered
price movements. X-Columns represent rising prices and O-Columns
represent falling prices. Each price box represents a specific
value that price must reach to warrant an X or an O. Time is not a
factor in P&F charting. These charts evolve as prices move. No
movement in price means no change in the P&F chart. In classic
3-box reversal charts, column reversals are further filtered
requiring a 3-box minimum to reverse the current column. The 3-box
Reversal Method is the most popular P&F charting method.
Articles in the StockCharts.com ChartSchool are base on this
method. P&F charts provide a unique look at price action that
has several advantages. P&F charts: Filter insignificant price
movements and noise Focus on important price movements Remove the
time aspect from the analysis process Make support/resistance
levels much easier to identify Provide automatic and subjective
trendlines
echnology Select Sector SPDR (XLK) NYSE 31-Mar-2011, 14:52 ET,
daily, 0;26.07 H;26.15 L;26.02 C;26.09 V;4,010,860 Chg;-0 .. 2 0
User-Defined, (0.50 x 3) chart Bullish Price Obj. (Revised): 39.00
C StockCharts.com28.50 28.00 27.50 27.00 26.50 26.00 25.50 25.00
24.50 24.00 23.50 23.00 22.50 22.00 21.50 21.00 20.50 20.00 19.50
19.00 18.50 18.00 17 .50 17.00 16.50 16.00 15.50 15.00 14.50 14.00
13.50 13.00 12.50 12.00 11.50 11.00
+
BOx
+
I I I I I
I
Classic Text P&F Chart+ + x + 56+ x 0 + X 0 + 4 0 X + + + o
o o o o 0 x x x x x + 0 0 0 0 0 + +
I I I I2 x 3 x lOX x 0 X B 0 4 x 5X X 0 X X A
o x
+ 1 +
o CO 0 0 0 0 0 OX
x
Ox2xOx9 OxOX780 Ox 0 x 0
x C x 0x 0x x x a 0 x 0 x 0 x 0 x 8 xA030xO 6 0 X 0 9
I
o x 3 OX + +- 0 X 0
9 2 0 0 o x 0 I 8 7 + x + x I + + 7 I + A + X + o x + 6 + o X 0
x + I + o X 0 x a + I + x OxOxOxO 4 + I OXOxOxO x I x x + o X 0 o x
0 x C 1 X 0 X + 0 o x 0 x 0 x 0 2 0 X + 0 o x 0 x 0 Ox + 0 o x o x
+ 0 J + I I + I
I
I I
I I I
I
i08
i09
I
I
IIII
28,50 28.00 27.50 27.00 26.50 26.00< 25.50 25,00 24.50 24.00
23.50 23.00 22,50 22.00 21.50 21.00 20.50 20.00 19.50 19.00 18.50
18.00 17.50 17.00 16.50 16.00 15.50 15.00 14.50 14.00 13.50 13.00
12.50 12.00 11.50 11.00
10
11
+ = bearish resis~ance line + = bullish support line
HistoryP&F charting has a long history. One of the first
references to Point & Figure charting came from an anonymous
writer named "Hoyle", 1M'i0 wrote The Game in Wall Street and How
to Successfully Play It in 1898. Early Point & Figure Charts
'lVE!re drawn using numbers. Hence, they were simply referred to as
"Figure Charts". These figure charts evolved into charts with X's
and a few numbers. A.W. Cohen is credited with the classic 3-box
Reversal P&F charts with X's and as. Cohen wrote several books
on this "Three-Point Reversal Method" and became the editor of
ChartCraft. Before computers, P&F charts were popular because
it was simple to maintain a large collection of charts. Using just
a pencil, a newspaper and some graph paper, P&F chartists were
able to update and analyze 50 or more charts every day - in less
than an hour. There is a certain feel one gets lM'ien updating
chart by hand. However, this classic paper and pencil-based method
was largely put aside as technology made charting easier.
StockCharts.com offers three different Point & Figure charting
options as 'lVE!1I the ability to scan 1000s of stocks for as
specific patterns.
Creating a P&E ChartOn a P&F chart, price movements are
represented with rising X-Columns and falling Q.. Columns. Each
column represents an uptrend or a downtrend of sorts. Each X or 0
occupies 'htlat is called a box on the chart. Each chart has a
setting called the Box Size, 'htlich defines the price range for
each box. Each chart has a second setting called the Reversal
Amount that determines the amount that a stock needs to move in the
opposite direction to warrant a column reversal. Whenever this
reversal threshold is crossed, a new column is started right next
to the previous one, only moving in the opposite
direction.Afnazon.com, Inc. (AMZN) P&F PatternUselDefined.
Bullish Ascending Tliple , Nasdaq Global Select II/Ikt.
31t~lal. 15:42 ET. daily. 0: 179.31. H: 181.57. L: 178.50, C:
180.495, V: 4.11\11. hg: +1.075 CTop Bleakout on 29I\I!al2011 1.0
ptsJbox 3 box leversal chart
Price Obj. (Rev.): 198.0
stocxcnarts.com
User Defined
The "reversal distance" is the box size multiplied by the
reversal amount. A box size of 1 and the reversal amount of 3 would
require a 3 point move to warrant a reversal (1 x 3). An X-Column
extends as long as price does not move dOIM1more than the "reversal
distance". Similarly, a stock in a downtrend will cause a
descending Q..Column to appear. Only 'htlen the stock changes
direction by more than the reversal distance will a new X-column be
added to the chart.
High-Low MethodThere are two pricing methods available: the
High-Low Method and the Close Method. Each method only uses one
price point. Obviously, the Close Method uses the closing price
only. The High-Low Method uses the high or the low, but not both.
Sometimes both are ignored. Here are the rules for the High-Low
method. When the current column is an X-Column (rising):o
oo
Use the high when another X can be drawn and then ignore the
low. Use the low when another X cannot be drawn and the low
triggers a 3-box reversal. Ignore both when the high does not
warrant another X and the low does not trigger a 3-box
reversal.
When the current column is an O-Column (failing):o
Use the low when another 0 can be drawn and then ignore the
high. o Use the high when another 0 cannot be drawn and the high
triggers a 3-box reversal. o Ignore both when the low does not
warrant another 0 and the high does not trigger a 3-box
reversal.PowerShares QQQ Trust (QQQ)
Nesdeq Global L: 57.15,
Mid. C: 57.398. V: 35.0M. Chg: +0.048
311111.11.15:33 ET. daily. 0: 57.25, No New P&F P attetn
user-neflned. Bullish
H: 57.46,
1.0 ptslbox 3 box reverser chart
Price Obj. (Rev.): 89,0
StockChans.com
COlnstructions
I Q Understanding I ~Print
I About
P&F Alerts
I
About Price Objectives
IP
Chart Attributes:
International31!vlaf.
Business Machines (IBM)
NYSE c. 163.62. V: 2.21v1. Chg: +0.02
15:39 ET. daily. 0: 163.40. H: 164.06, L: 163.22. Low Pole
Reversal on 21lvlaf2011 1.0 ptsJbox3 box reversal chart
P&F PatternUser-Defined,
Bearish Price Obj. (Rev.): 136.0
StockCharts. com
October
December
StockCharts.com P&F ChartsStockcharts.com offers three
different Point & Figure charting styles: Graphical, Text and
Dynamic. Graphic charts were used in the examples above. Trendlines
and other indicators can be found in the Chart Overlays section
just below each P&F chart. Text P&F Charts are classic
old-school style with plus signs (+) marking the 45 degree
trendlines. Dynamic P&F Charts allow chartists to dynamically
adjust the box size, the reversal amount and draw their own
trendlines. Links to the other styles can be found just above each
P&F chart. Links to articles on P&F Alerts and Price
Objectives can be found below each P&F chart. Click here for a
live P&F chart.
Enter TIcker:
[SPY""
~in: W~~~ __ ..!..:.J
or choose from: ( Update Chart)
S&P 500 SPORs (SPY) NYSE23""'.11, 16:00 ET. d.ally. 0:
128.03. H: 130.00. L: 128.32.
c. 129.66.
V: 148,41"", Chg: +0.37
,~o New P&f Patt"nbollC Ilv.",1 ohart Bullish Puee Obj.
(Rev.); 108.0 Tladition.1I.3
siocxcnarts. com
09
OJlnstructions
P&F ScansP&F Pattern Alerts can be found at end of the
Predefined Scans Page. These are based on daily data.
StockCharts.com provides daily alerts for more than 15 P&F
patterns on various exchanges, including the TSX and LSE. Some of
these are sholNll in the image below. Note that there were over 100
NYSE stocks with Triple Top Breakouts.
P&F' Patterns,P&F Bull Trap Alerts P&F Bear Trap
,Alerts,
Predefined
Scans
INYSE : 11 ,: 23
J
Nasdaq
J:1 :2
AMEX
: 11:12 :10:2
P&F Bulmsh Catapult ,A~erts P&F Beartslh Catapult
Alerts, P&F Bullish 1iiriiangle Arerm, P&F Bearish
T:ri:angle AI:erns; P&F long Ta'UDow.n p'(lerts P&F tHigh
P-o:leAfelli:s, P&F low Pal'e AI~erts
: 1:2
:2:1:1 :1
:1: 30 :2
:13: 15 :4 : 133 : [63
:4: 175 , : 106,
,,
:0:9
: 17
Chartists can also scan for specific P&F patterns using
daily data and the drop-down menu for user-defined scans. Over 20
P&F patterns and criteria are included as "Predefined Chart
Patterns". Users can combined these P&F patterns with other
non-P&F criteria to create truly unique scans.
(Update Criteria.)
rPredenned Chart Patterns~ -- None --,P&F Paftems. Bullish
Catapult
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Learn MorePoint & Figure Charting by Thomas Dorsey:. This
book starts with the basics of P&F charting and then proceeds
to the key patterns. Dorsey keeps his P&F analysis simple and
straight forward, much like the work of P&F pioneer AW. Cohen.
As a relative strength disciple, Dorsey devotes a complete chapter
to relative strength concepts using P&F charts. These concepts
are
StockCharts.com - ChartSchoolLearn more about Technical Analysis
and Charting Terminology
You are here: StockCharts.com)} ChartSchool Page P&F Scaling
and Timefrarnes
Chart Analysis Point & Figure Home
P&F Scaling and TimeframesIntroductionEven though intraday
charts are normally associated with short-term analysis, chartists
may be surprised just how far back intraday data can extend on
Point & Figure charts. It is this time extension into the past
that determines the analytical timeframe. In general, charts that
extend back just one month would be short-term oriented. Charts
that extend several months would be mostly medium-term oriented.
Charts that extend more than a year would be suited for long-term
analysis. The amount of past data shown on a Point & Figure
chart is not fixed. Instead, this look-back period is subject to
the number of price reversals, which in turn are influenced by box
size, reversal amount and data interval. This article will show a
few different P&F settings to help chartists choose the time
interval best suited for their analysis.
Basic P&F SettingsUsers can adjust the scaling method, box
size and reversal amount to change the overall timeframe covered on
the chart. This article is not designed to explain the different
scaling methods. Please see our See our P&F support article for
details other charting options Too keep it simple, this article
will use Graphical P&F charts percentage of the scaling method
and a classic reversal amount (3). Percentage scaling means the box
size will be a specific percentage of price. Interval refers to the
data periods (daily, 60 minute, 30 minute etc ... ). The box-size
and data interval will be changed to affect the look-back period on
the P&F chart. Basically, P&F charts with smaller box sizes
and shorter data intervals have shorter look-back periods. P&F
charts with larger box sizes and longer data intervals have longer
look-back periods.
ll(lJndElrstancGng
I ~Print
I About
P&F Alerts
I
About Price Objectives
I Past
Data
The Russell 2000 P&F chart shows the key settings in the
Chart Attributes section and the Chart Scale section. Notice how
the numerical value of the boxes changes. The difference between
the top two boxes is 8.36 (844.04 - 835.68) and the difference
between the bottom boxes is 4.69 (473.94 - 469.25). Despite
different sizes in absolute
numbers, the boxes are equal in percentage terms (1%). 8.36 is
1% of 835.68 and 4.69 is 1% of 469.25.
Percent versus User-DefinedPercentage based scaling allows a
one-size-fits-all setting for a group of charts. Google (GOOG)
trades above $600 a share and Intel (INTC) trades below $25 per
share. Obviously, a $1 box would produce relatively few reversals
for Intel and many for Google. Intel rarely moves more than 2$ per
week, while Google rarely moves less than $10 per week. Percentage
scaling levels the playing field. Setting the percentage box size
at 1% means a 1% move in Intel will be around .21 (21 Cents) and a
1% move in Google will be wonh around 6 (6 Dollars). The charts
below show Intel with a Percentage box size (1%) and user-defined
box size (20 cents). Intel Corp. (INTC)Nesdeq Global Select Mkt. C:
21.15, V: 13.91v1,Chg: 0.06
OSMal. 10:27 ET. daily. 0: 21.26, H: 21.26, L: 21.02. No New
P&F' P ettem
StockCharts. com
Intel Corp. (INTC)P&F Pattern
Nesdeq Global Select Mkt.
OSMal. 16:00 ET. daily. 0: 21.26, H: 21.26, L: 21.02.
c. 21.13,
V: 57.01v1, Chg: 0.08
Double Bottom Bleakdown on 07-l\Ilar2011
StockCharts. com Daily UserDefined 20 Cent Box Size
The user-defined scaling method sets the box size at a specific
value. No matter how high or low the price, this value stays the
same. A box of 1 would be worth 1 poi nt on the S&P 500 and $1
for a stock or ETF. A box worth .50 would be worth a 1/2 point on
the S&P 500 and 50 cents for stock or ETF. A smaller box size
(.50) llllill result in more reversals and a shorter look-back
period. A larger box size (1.00) llllill result in fewer reversals
and a longer look-back period. Chartists preferring a set box size
can usually set the box size at around 1% of the current price.
Intel is trading around 21 and would warrant a box size of 21
cents. Google is trading around 592 and would warrant a box size of
$6. These numbers can even be rounded to allow for easier counting.
The charts below show Google llllith a percentage box size (1%) and
a user-defined box size of 5 points (Dollars). There are some
differences between the percentage chart above and user-defined
charts below, but these differences are small and the charts are
quite similar overall.
6oogle,lnc. (600G)
Nasdaq Global S.I.c'
Mkt.
stocxcnarts. com
6oogle,lnc. (6006)
Nasdaq Global S.I.c'
Mkt. C: 592.31, V: 2.2M. Chg: +0.65
08flll'H. 16:00 ET. daily. 0: 592.93.
H: S97,9a. L: 590.20.
P&F Patter.lPrelim. Bearish
Double Bottom Breakdown on 07Mar2011
stocxcnarts. com
Daily User-Defined 5 Dollar Box Size 3 Box Reversal
9-24 Month ChartsThe amount of time shOIM)on a P&F chart
depends on the number of 3-box reversals on the price chart. On a
P&F chart with 1% boxes, a 3-box reversal occurs each time the
price reverses by 3%. The reversal amount is actually a little
above 3% for advances and just below 3% for declines. This is
because 3% of 60 (1.8) is more than 3% of 57 (1.71). Securities
that trade sideways with numerous 3% reversals INiIi fill up the
P&F chart quite quickly and cover a shorter timeframe.
Securities that develop trends and forge a modest number of 3%
reversals INiIi cover more ground (time) on a P&F chart.
Generally speaking, a 3-box reversal P&F chart with 1% box size
will extend 9-24 months. Increasi ng the box size INiIi increase
the time covered on the chart. The first P&F chart below shows
VF Corp (VFC) based on a 3-box reversal and 1% box size. This chart
extends from August 2009 to March 2011 (around 18 months). The red
9 on the far left marks the end of August and beginning of
September. The second chart shows Urban Outfitters with the same
settings, but the chart extends from July
2010 to March 2011, just nine months.Urban Outfrtters, P&F
Patter.)Lon
1"1' (URBC)
Nasdaq Glob.al Select fvlkt.
OgMa,2011. 16:00 E . daily.
: 31.54. H: 31.90. L: 30.91. C: 31.17. V: 7149914. Chg: 0.49
(.1.55*")
Tail Down on 08Ma,2011
Pelcentage. 1.0%Jbox3 box levers.)1 chart Prelim. Bearish Price
Obj. (Rev.): 22.66
stockcnerts.com
VFCorp (VFC)
NYSE
09tlllal. 16:00 ET'daily,IO: 96.35, H:98.08. L: 95.85, C: 97.65,
V: 1.2M. Chg: +1.59No New P&F' Pettem Pelcentage. 1.0%Jbox3 box
leversal chart
.8
stocxcnarts. com
High-Low MethodBefore moving on to intraday data, it is
important to understand the difference in P&F pricing
methodologies. There are
two
pricing methods available: the High-Low Method
and the Close Method. Each method only uses one price point.
Obviously, the Close Method uses the closing price only. The
High-Low Method uses the high or the low, but not both. Sometimes
both are ignored. Here are the rules for the high-low method. When
the current column is a column of X's (advance):o
oo
Use the high when another X can be drawn and then ignore the
low. Use the low when another X cannot be drawn and the low
triggers a 3-box reversal. Ignore both when the high does not
warrant another X and the low does not trigger a 3-box
reversal.
UrbanOlrtfrtter~URBN)ogr~1af. 6:00 ET~O: 1 ~ Percenteae.
O.5%Jbox3 . ',.
Nesdeq Global
Select Mkt.
30,96. H: 31.18, L: 30,93. C: 31.17. V: 1.4M. Chg: +0.21 akdown
on 08Mal2011 chart box reverser
Bearish Price Obj. (Rev.): 25.17
StockCharts. com
End December Begin
3 months
VFCorp(VFC) P&F Patter'l
NYSE
OgllI1af2011. 16:00Tli
El, 60IvlN.P:Ie To
97.87. H: 98.08. L: 97.60. C: 97.65, V: 332127. Chg: 0.21
(0.21%)
Breakout on 0811I1a,2011
StockCharts.com
5.6 months
End Octoher November
ConclusionsWhile daily P&F charts are best suited for
long-term analysis, intraday intervals are often needed to achieve
a medium-term outook. The next analytical step (short-term) would
be to decrease the interval and box size even further. A 15-minute
chart using a box size of .25% would cover around one month of data
for many securities. Starting analysis with the longest look-back
period allows chartists to define the bigger trend. Keep this in
mind when moving to shorter periods. Trading results can be
improved by looking for short-term bullish setups when the
long-term trend is up. The settings shown above are meant as
general guidelines. Chartists are invited to tweak these settings
to find those that produce charts best suited for their
analysis.
Creating P&E Charts
Stockcharts.com offers three different Point & Figure
charting styles: Graphical, Text and Dynamic. Graphic charts were
used in the examples above. Trendlines and other indicators can be
found in the Chart Overlays section just below each P&F chart.
Text P&F Charts are classic old-school style with plus signs
(+) marking the 45 degree trendlines. Dynamic P&F Charts allow
chartists to dynamically adjust the box size, the reversal amount
and draw their own trendlines. links to the other styles can be
found just above each P&F chart. Links to articles on P&F
Alerts and Price Objectives can be found below each P&F chart.
Click here for a live P&F chart.
Enter TIcker: Spy or choose froLm-:----' ( Update Chart)S&P
500 SPDRs (SPY)No New P&F Pattem Traditional. 3 box reversal
chert
I
in:NYSE
23llIlal, 16:00 ET. daily. 0: 128.93. H: 130.00. L: 128.32. C:
129.66, V: 148.41\11. hg: +0.37 C
Bullish Price Obj. (Rev.): 196.0
stockcnarts.com
CEhnstructions Q
P&F ScansP&F Pattern Alerts can be found at end of the
Predefined Scans Page. These are based on daily data.
StockCharts.com provides daily alerts for more than 15 P&F
patterns on various exchanges, including the TSX and LSE. Some of
these are shown in the image below. Note that there were over 100
NYSE stocks with Triple Top Breakouts.
P&F Patterns
Predefined Scans
INYSEI
I_
Nasd!a~
J:1I
AMEX,I I I
P&F Bull Tra,p A!Iell1s P'&F Bear Trap Arerts P&F
Bullish Catba,puU Alerts P&F BeariiSh Ca.1a,putt Aileris,
P&F P&f' P&F P&F Bullisih Ttriallllgie .Alleris,
Beari;sh Trian!:.l~e .Allerts, long 'Iail Down A!lern; IHigh Pale
.AI~em15,
I I
11
: 11I
:23I II I I
: 1:2
12 1
:10:2I
:2 :2
,
I I I I
:1I
,
: 30
:2:4II I I
: 1.3 :5:4I
:1
I I I I
:1:0I
,I I
175106
:133I
:17I
,
,
I
P&F low PaleAlIens
I I I II
: 63I II
:9I II
I I I I
,
Chartists can also scan for specific P&F patterns using
daily data and the drop-down menu for user-defined scans. Over 20
P&F patterns and criteria are included as "Predefined Chart
Patterns". Users can combined these P&F patterns with other
nonP&F criteria to create truly unique scans.
( Update Criteria)
o o o
days ago is days ago is days ago is [ true ~:
1
Further StudyPoint & Figure Charting by Thomas Dorsey:. This
book starts with the bastes of P&F charting and then proceeds
to the key patterns. Dorsey keeps his P&F analysis simple and
straight forward, much like the work of P&F pioneer A.W. Cohen.
As a relative strength disciple, Dorsey devotes a complete chapter
to relative strength concepts using P&F charts. These concepts
are tied in with market indicators and sector rotation tools to
provide investors with all they need to construct a portfolio.
There is also a section on using P&F charts with ETEs. The
Definitive Guide to Point and Figure by Jeremy du Plessis:. This
book lives up to its title and is required reading for the
Chartered Market Technician exam. Chartists can learn about t-box
P&F patterns/counts, 3-box patterns/counts and various trading
strategies. du Plessis also shows how to apply P&F charting
techniques to other analysis tools, such as relative strength and
Fibonacci retracements. Plenty of real world examples are provided
throughout the text.
Send us your Feedback!
StockCharts.com - ChartSchoolLearn more about Technical Analysis
and Charting Terminology
You are here: StockCharts.com Page P&F Trendlines
ChartSchool
Chart Analysis Point & Figure Horne
P&F TrendlinesIntroductionTrendlines on 3-box Reversal
P&F charts are drawn at 45 degrees up and 135 degrees down. An
ascending trendline is called a Bullish Support Line and a
descending trendline is called a Bearish Resistance Line. Because
these lines are drawn at specific angles, they represent a specific
rate of ascent or descent. Chartists can use P&F trendlines to
define the overall trend and look for signals in the direction of
that trend.
Changing TrendlinesThere is always a Bullish Support Line or
Bearish Resistance Line present. After a break above the Bearish
Resistance Line, a Bullish Support Line will be drawn from an
important low. Extending up at a 45 degree angle, this line will
remain in force until broken. Once broken, the Bullish Support Line
will cease and a new Bearish Resistance Line will be drawn from an
important high near the break. Extending down at a 135 degree
angle, this line will remain in force until broken.
Noble Drilling Corp. (NE)28Maf2011. 16:00 ET. daily. No New
P&F' P attern
NYSE
Bearish Resistance lines (red) Bullish Support lines (blue)
Traditional. 3 box reversal chart Bullish Price Obj. (Rev.):
rlllet(41.0)
StockChans. com
Break
The chart above shows Noble Drilling (NE) with four trendlines.
The Bearish Resistance Line extended through 2008 and was broken in
early 2009 (red 2). At this point, the Bearish Resistance Line
ended and a Bullish Support Line was drawn from the low. This line
extended the rest of the year and was broken in April 2010 (between
red 4 and red 5). A new Bearish Resistance Line was then drawn from
the high and remained until the October 2010 break (red A).
Bullish Support LineIn general, an uptrend is present when
prices are above the Bullish Support Line. This line extends up at
a 45 degree angle to insure a certain rate of ascent. Sideways
price action or a slower rate of ascent will lead to a trendline
break. According to P&F theory, bullish signals should be taken
when above this trendline and bearish signals should be ignored.
This is trading in the direction of the bigger trend.
Agilent Technologies, Inc. (A)
NYSE Chg: 0.08 (0.1804)
28Maf2011. 16:00 ET. daily. 0: 44.24. H: 44.67. L: 43.87. C:
43.96, V: 2984107. No New P&F' P attern Traditional. 3 box
reversal chart Bullish Price Obj. (Rev.): 59,0
stockcnens.com Bearish Signal Reversed
Above Bullish Support Line (blue)
The chart above shows Agilent (A) with a blue Bullish Support
Line. There were at least three bullish signals above this
trendline. There were
two
Triple Top Breakouts in
2009 and then a Bearish Signal Reversed Breakout at end of 2010.
The red "A" on the chart marks the Double Top Breakout that
confirms the Bearish Signal Reversed pattern. This red "A" also
marks the month of October.
Bearish Resistance LineA downtrend is present lMlen prices
remain below the Bearish Resistance Line. This line extends down at
a 135 degree angle, lMlich is just a 45 degree angle turned upside
down (180 - 45
= 135). This angle requires
a certain rate of descent
Sideways price action or a slower decline would lead to a
trendline break. According to P&F theory, bearish signals are
preferred lMlen below the Bearish Resistance Li ne. Bullish signals
should be ignored or used to take profits on short positions.
QUALCOMM Inc. (QCOM) Nasdaq Global S.I.c' Mkt. 28Mal. 16:00 ET.
daily. 0: 52.95, H: 53.28, L: 52.10, C: 52.18, V: 10.21vl, Chg:
0.57 No New P&F P atternTraditional. 3 box reversal chart
Bullish Price Obj. (Rev.): 84.0
stockcnens.com
Below Bearish Resistance line (red)
BreakDown
The chart above shows Qualcom (QCOM) with a Bearish Resistance
Line in the latter part of 2008. Well after this line was
established, the stock forged a Spread Triple Bottom Breakdown and
a Triple Top Breakdown in October. The red "A" marks the beginning
of October and the red "B" marks the beginning of November.
Trendline AdjustmentsIt ain't broken until it's broken. There
are times when an ()'Column declines right tothe trendline and
reverses back up. Technically, this is not a trendline break.
However, a new trendline is required to reflect this test. The
chart below shows rvlcDonalds (MCD) touching trendlines three times
in 2009. A red 3, a red 5 and an 0 printed in the boxes that
coincided with the trendlines. Because these trendlines were not
broken, the line shifted down one box to reflect an adjusted
rate-of-ascent.
McDonalds Corp. (MCD)
NYSE Chg: 0.25 (0.33%)
28Maf2011. 16:00 ET. daily. 0: 75.55. H: 75.63. L: 75.00. C:
75.00. V: 3081829. No New P&F' P attern Traditional. 3 box
reversal chart
Bullish Price Obj. (Rev.): 113.0
stockcnens.com
Trendline Touches, But not Break
The same holds for Bearish Resistance Lines. Sometimes an
advance extends to the same box as the Bearish Resistance Line, but
does not break this trendline. After the subsequent downturn, a new
Bearish Resistance Line is added based on this new reaction high.
The chart below shows CME Group (CME) hitting the Bearish
Resistance Line a few times in the middle of 2010. Despite
challenging these trendlines. there was never an actual breakout,
After the reversal back down, a new trendline was drawn one square
higher.
CME Group Inc. (CME) P&F PattemTfaditional,3
Nesdeq Global Select Mkt.
28flllal. 16:00 ET. daily. 0: 295.41. H: 298.18. L: 294.57. c.
295.50. V: 42S.2K. Chg: 0.36Low Pole Reversal on 23!v1af2011 box
reverser chart
Bearish Price Obj. (Rev.): 264.0
StockCharts. comBut not Break
ConclusionsTrendlines drawn on 3-box Reversal P&F charts are
more objective than trend lines drawn on bar or line charts.
Chartists can use this objectivity to establish a trend biased
based on the trendline displayed. A bullish bias is present when
the current trendline is a Bullish Support Line. A bearish bias is
present with a Bearish Resistance Line. Daily P&F charts cover
a fairly long timefrarne. Chartists can use the daily P&F chart
to establish a big trend bias and then turn to 30 minute P&F
charts to look for signals in harmony with that trend.
Creating P&E ChartsStockcharts.com offers three different
Point & Figure charting styles: Graphical, Text and Dynamic.
Graphic charts were used in the examples above. Trendlines and
other indicators can be found in the Chart Overlays section just
below each P&F chart Text P&F Charts are classic old-school
style with plus signs (+) marking the 45 degree trendlines. Dynamic
P&F Charts allow chartists to dynamically adjust the box size,
the reversal amount and draw their own trendlines. Links to the
other styles can be found just above each P&F chart. Links to
articles on P&F Alerts and Price Objectives can be found below
each P&F chart. Click here for a live P&F chart.
Enter TIcker: Spy or choose froLm-:-----' ( Update Chart
)S&P 500 SPDRs (SPY)No New P&F P attem Traditional. 3 box
reversal chert NYSE
I
View All Favorites
23llIlal, 16:00 ET. daily. 0: 128.93. H: 130.00. L: 128.32. C:
129.66. V: 148.41\11.Chg: +0.37
Bullish Price Obj. (Rev.): 196.0
StockChal1s.com
CDlnstructions
Q
Chart Overlays: If Trend Lines( - None( -- None --
I:
~: )
I:)
P&F ScansP&F Pattern Alerts can be found at end of the
Predefined Scans Page.
StockCharts.com
provides daily alerts for more than 15 P&F patterns on
various
exchanges, including the TSX and LSE. Some of these are shown in
the image below. Note that there were over 100 NYSE stocks with
Triple Top Breakouts.
P&F Patterns,P&F Budl Tmp rueris P&r: Bear Trap
Aleris,
Predefined Scans
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Chartists can also scan for specific P&F patterns using the
drop-down menu for userdefined scans. Over 20 P&F patterns and
criteria are included as "Predefined Chart Patterns". Users can
combined these P&F patterns with other non-P&F criteria to
create truly unique scans.
(UlPdate
Criteria. )
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StockCharts.com - ChartSchoolLearn more about Technical Analysis
and Charting Terminology
You are here: StockCharts.com Page P&F Bullish Breakouts
ChartSchool
Chart Analysis Point & Figure Horne
P&F Bullish BreakoutsIntroductionThere are five bullish
breakout P&F patterns. The most basic P&F buy signal is a
Double Top Breakout, which occurs when an X-Column breaks above the
high of the prior X-Column. From this basic pattern, the bullish
breakout patterns become more complex and wider. The wider the
pattern, the better established the resistance level and the more
important the breakout. This article will look at the five key
breakout patterns in detail and then show measuring techniques for
Price Objectives.
Double Top BreakoutIn the P&F world, Double Top Breakouts
are bullish patterns that are confirmed with a resistance break.
With bar charts, on the other hand, Double Top Breakouts are
bearish patterns that are confirmed with a support break. These
patterns are not contradictory. They are simply different patterns
with similar names.
As noted above, the most fundamental P&F buy signal is when
an X-Column breaks above the high of the prior X-Column. These two
columns are separated by an 0Column. X-Columns denote rising
prices, while O-Columns signify falling prices. The first rising
X-Column establishes direction. The middle O-Column represents a
bounce that establishes support. The third X-Column triggers the
higher high. The ability to break above the prior high shows
strength associated with an uptrend. As the most common signal in
the P&F universe, Double Top Breakouts are also the most prone
to whipsaw and failure. Double Top Breakouts should be viewed in
the context of the bigger picture. It is important to employ other
aspects of technical analysis when using signals as common as
Double Top Breakouts. The chart below shows Diamond Offshore (DO)
with several Double Top Breakouts over the last two years.
Diamond Offshore Drilling,lnc. (DO) P&F Pattern
NYSE
10rlllal2011. 9:52 ET. daily. 0: 74,95, H: 74.95, L: 73.77. C:
73.92. V: 167537. Chg: 1.99 (-2.62%) High Pole Walning on
10!v1ar2011 Traditional. 3 box reversal chart Bullish Price Obj.
(Rev.): rlllet (76.0)
stockcnens.com
Double Top Breakouts
Triple Top BreakoutThe Triple Top Breakout takes the Double Top
Breakout one step further by adding a resistance column. Two
consecutive X-Columns define resistance with reaction highs. The
third X-Column breaks above the prior Columns and
two
equal
two
X-Columns to forge
the Triple Top Breakout. Classic Triple Top Breakouts are five
columns wide: three X-
two
O-Columns.
These patterns can mark reversal breakouts or continuation
breakouts. Distinguishing between reversal and continuation depends
on the prior move. A Triple Top Breakout that forms as a base after
a decline would be deemed a reversal pattern. A Triple Top Breakout
that forms as a consolidation after an advance would be viewed as a
continuation pattern.
Computer Sciences Corp. (CSC) P&F PatternTraditional.
NYSE
1Qllllar2011. 10:07 ET. daily. 0: 47.47. H: 47.69, L: 47.10, C:
47.16, V: 91345. Chg: 0,92 (-1.91.4)High Pole Warning on OQFeb2011
3 box reversal chart
Bullish Price Obj. (Rev.): 79,0
stockcnens.com
Triple TopBreakout
The chart above shows Computer Sciences (CSC) with a reversal
Triple Top Breakout at the end of 2008 and then
two
continuation Triple Top Breakouts. While it
is sometimes difficult to distinguish between reversal patterns
and continuation patterns, the Triple Top Breakout itself is easy
to identify.
Spread Triple Top BreakoutAs its name implies, the Spread Triple
Top Breakout is an expanded version of the Triple Top Breakout A
Spread Triple Top Breakout contains at least
two
extra and an
columns, which means it is at least seven columns wide. An extra
~Column
extra X-Column form highs below the actual breakout or
resistance level. These columns in effect add space or width to the
Triple Top Breakout. As with a normal Triple Top Breakout, a Spread
Triple Top Breakout is confirmed with a break above the highs of
the than
two
X-columns. Ideally, a Spread Triple Top Breakout forms as a
Triple Top Breakout with
two
extra columns. In reality, this pattern can form with more
two
extra columns.
Monsanto Co. (MON)P&F PatternTraditional. Descending
NYSE Triple Bottom Breakdown on 10Mar2011
10llIlal2011. 9:54 ET. daily. 0: 68.88. H: 68.88, L: 68.35, C:
68.65, V: 572934. Chg: 0.75 (.1.08.4)3 box reversal chart
Bearish Price Obj. (Rev.): 65.0
stockcnens.com
Spread Triple Top Breakout
L-----------------------------------------------~The chart above
shows Monsanto with
two
Spread Triple Top Breakouts. The first one
(2009) is suspect because of the distance between the first two
X-Columns and the breakout X-Column. In fact, there is a clear
downtrend between these columns. The second Spread Triple Top
Breakout is a continuation pattern because is formed after a long
X-column. The pattern is seven columns wide, lMlich makes it the
ideal length for a Spread Triple Top Breakout.
Ascending Triple Top BreakoutAn Ascending Triple Top Breakout is
basically back-to-back Double Top Breakouts. These breakouts form
three X-Columns that ascend with each breakout. Because there are
three X-Columns and
two
O-Columns, the pattern is just as wide as a
classic Triple Top Breakout. The ability to forge back-to-back
higher highs shows underlying strength that is indicative of an
uptrend. As with the other patterns, this Ascending Triple Top
Breakout can form as a continuation or reversal pattern.
Rockwell Collins (COL) "YSE1QMaf2011. 9:56 ET. daily. 0: 63.90.
H:63.95. L:63.33, C: 63.80, V: 63148, No New P&F' P attern
Traditional. 3 box reversal chart Bullish Price Obj. (Rev.):
80.0
Chg: 0.82 (.1.27~)
stockcnens.com
Trilile Top Breakout
The chart for Rockwell Collins (COL) shows an Ascending Triple
Top Breakout at the beginning of 2010. The red lines mark
back-to-back Double Top Breakouts. Also notice that the stock
established support with
two
equal O-Columns during the pattern
formation. The combination of solid support and higher highs
reinforced the strength of the pattern. A failed Spread Triple Top
Breakout is shown on the far left.
Quadruple Top BreakoutThe Quadruple Top Breakout is just like
the Triple Top Breakout, only with an extra XColumn to mark
resistance and an extra O-Column to widen the pattern. Three
consecutive X-Columns define resistance with three equal highs. The
fourth XColumn breaks above the prior three X-Columns to forge the
Quadruple Top Breakout All told, Quadruple Top Breakouts are seven
columns wide with four XColumns and three O-Columns. These patterns
can mark reversal breakouts or conti nuation breakouts.
Corning, Inc. (GLW)14Mar,
NYSE
16:00 ET. daily. 0: 21.19, H: 21.58, L: 21.15, C: 21.42. V:
10.01v1,Chg: +0.11 Triple Top Breakout on 13Dec201Q
P&F Patter.l
Traditional, 3 box reversal chart Prelim. Bullish Price Obj.
(Rev.): 34.5
stockcnens.com
Breakout
The chart above shows Corning (GLW) with a reversal Quadruple
Top Breakout in February 2009. This reversal pattern also resembles
an inverse head-and-shoulders. The second Quadruple Top Breakout is
a bullish continuation pattern. Whether conti nuation or reversal,
resistance levels are clear with a Quadruple Top Breakout and the
breakout point is definitive.
Measuring TechniqyesFirst and foremost, be careful with Price
Objectives. They are really just rough guidelines. Chartists should
use other aspects of technical analysis to confirm objectives and
continuously monitor the state of the trend/breakout The horizontal
count method can be applied to Triple Top Breakouts, Ascending
Triple Top Breakouts, Spread Triple Top Breakouts and Quadruple Top
Breakouts. Simply measure the width of the pattern, multiply by the
box size and then by the reversal amount. Add this total to the
pattern low for a Price Objective. The wider the pattern, the
bigger the expected move. Triple Top Breakouts are five columns
wide (3 Spread Triple Top Breakouts are seven columns minimum. The
vertical count method can be applied to Double Top breakouts. After
the breakout, chartists must wait for a 3-box reversal to FIX the
height of the breakout
x-
Columns and 2 O-Columns), Quadruple Top Breakouts are seven
columns wide and
column. The breakout column is subject to change until there is
a reversal. This reversal is considered a pullback as long as it
does not extend too deep. Count the number of filled boxes in the
breakout column. multiply by the box size and then by the reversal
amount Add this product the pattern low for an upside Price
Objective.Intuit,lnc. (INTU)Nesdeq Global Sele ct Mkt.
14M;u2011, 16:00 ET. daily. 0: 49.24. H: 49.98. L: 48.84, C:
49.43, V: 2190471, Chg: 0.03 (-0.06%)
P&F PattertlT'aditional,3
High Pole Walning on 10Mar2011 box reversal chart
Bullish P,ice Obj. (Rev.): rv1et(41.0)
StockChal1s.com
7 X 1 X 3 = 21 34 + 21 = 55
4.5 X 3 = 13.5 18 + 13.5 = 31.5
The chart above shows Intuit (INTU) with three different
patterns and price objectives. The first is a Double Top Breakout.
The height of the breakout column is 7 boxes, but these boxes have
different sizes (50 cents below 20 and $1 above 20). Therefore.
chartists must simply subtract the high from the low of the
breakout column to measure the height (23 - 18.5
= 4.5).
Multiply this height by the reversal amount (3)
and add the total to the low of the pattern (lowest O-Column)
for the Price Objective. The Triple Top Breakout and Quadruple Top
Breakout use the horizontal count method. First. the width of the
pattern is multiplied by the box size and reversal amount Second.
this total is added to the low of the pattern (lowest O-Column).
Establishing a Price Objective only covers the reward part of the
risk-reward equation. Chartists should also study the chart to
assess risk. A move below support or the pattern low would clearly
negate a breakout. The box just below the pattern low often marks
the worst-case level for a pattern failure. Similarly, a Double
Bottom Breakdown or a contradictory P&F pattern would argue for
a reassessment. There
Enter TIcker: Spy or choose froLm-:----' ( Update Chart )S&P
500 SPDRs (SPY)No New P&F P attem Traditional. 3 box reversal
chert NYSE
I
View All Favorites
23llIlal, 16:00 ET. daily. 0: 128.93. H: 130.00. L: 128.32. C:
129.66. V: 148.41\11.Chg: +0.37
Bullish Price Obj. (Rev.): 196.0
StockChal1s.com
CDlnstructions
Q
P&F ScansP&E Pattern Alerts can be found at end of the
Predefined Scans Page. StockCharts.com provides daily alerts for
more than 15 P&E patterns on various exchanges, including the
TSX and LSE. Some of these are shown in the image below. Note that
there were over 100 NYSE stocks with Triple Top Breakouts.
P&F Pattarns,P&F Budl Tmp rueris
Predefined Scans
INYSEI I
JI I I I I I I
Nasdaq
II
AMEXI I I I I I I
11
11 12 10 13
P&F Bear i rap Aens, P&F 811.dli5'hCarta,pult
Anems.P&F Bea.ri:sh Ca1a,pulll.A!lefts, P&F
BII.dliis'hiriall'llgle Afell1!i P&F Bea.rish Triangle P&F
High Pdle Anerts, P&F Lew Pal,a .Alerts AI~erts P&F L.ong
Tail Down Ailerts
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115106
133 : 63
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Chartists can also scan for specific P&F patterns using the
drop-down menu for userdefined scans. Over 20 P&F patterns and
criteria are included as "Predefined Chart Patterns". Users can
combined these P&F patterns with other non-P&F criteria to
create truly unique scans.
( Update :Criteria.)
,
-- None--
IPredefined Chart Pati.p,rns I ; , ~ day.s. ,agQ tS ( '~rue
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Further Study
StockCharts.com - ChartSchoolLearn more about Technical Analysis
and Charting Terminology
You are here: StockCharts.com ChartSchool Page P&F Bearish
Breakdowns
Chart Analysis Point & Figure Horne
P&F Bearish BreakdownsIntroductionThere are five bearish
breakdown P&F patterns. In fact, these five are the exact
opposite of the five bullish breakdown patterns. The most basic
P&F sell signal is a Double Bottom Breakdown, which occurs when
an O-Column breaks below the low of the prior O-Column. From this
basic pattern, the bearish breakdown patterns become more complex
and wider. The wider the pattern, the better established the
support level and the more important the subsequent breakdown. This
article will look at the five key breakdown patterns in detail and
then show measuring techniques for Price Objectives.
Double Bottom BreakdownIn the P&F world, Double Bottom
Breakdowns are bearish patterns that are confirmed with a support
break. With bar charts, on the other hand, Double Bottoms are
bullish patterns that are confirmed with a resistance break. These
patterns are not contradictory. They are simply different patterns
with similar names.
As noted above, the most fundamental P&F sell signal is when
an O-Column breaks below the low of the prior O-Column. These two
columns are separated by an XColumn. O-Columns denote falling
prices, while X-Columns signify rising prices. The first falling
O-Column establishes direction. The middle X-Column represents a
bounce that establishes resistance. The third O-Column triggers the
lower low. The inability to hold the prior low shows weakness
associated with a downtrend. As the most common signal in the
P&F universe, Double Bottom Breakdowns are also the most prone
to whipsaw and failure. Double Bottom Breakdown signals should be
viewed in the context of the bigger picture. It is important to
employ other aspects of technical analysis when using signals as
common as Double Bottom Breakdowns. The chart below shows Avery
Dennison (AVY) with several Double Bottom Breakdowns over the last
few years.
Avery Dennison Corp. (Avy)
NYSE
15llIlal. 12:07 ET. daily. 0: 40.49, H: 40,91. L: 40.30, C:
40.638, V: 320.0K. Chg: 1.052
P&F PatternTraditional.
High Pole Warning on 03Feb2011
3 box reversal chart
Bullish Price Obj. (Rev.): 53.0
stockcnens.com
Double Bottom
Triple Bottom BreakdownThe Triple Bottom Breakdown takes the
Double Bottom Breakdown one step further by adding another support
column. Two consecutive O-Columns define support INith two equal
lows. The third O-Column breaks below the lows of the prior two
O-Columns to forge the Triple Bottom Breakdown. Classic Triple
Bottom Breakdowns are five columns INide: three O-Columns and two
X-Columns. These patterns can mark reversal breakdowns or
continuation breakdowns. Distinguishing between reversal and
continuation depends on the prior move. A Triple Bottom Breakdown
that forms as a top after an advance would be deemed a reversal
pattern. A Triple Bottom Breakdown that forms as a consolidation
after a decline would be viewed as a continuation pattern.
Dupont Co. (DO)15llIlar2011.
"YSEChg: 0.58 (1.09%)
12:13 ET. daily. 0: 51.70, H: 52.50, L: 51.30, C: 52.44. V:
2862735. High Pole Warning on 11!v1ar2011
P&F Patter.l
Traditional. 3 box reversal chart Bullish Price Obj. (Rev.):
tv1et(54.5)
stockcnens.com
The chart above shows Dupont (~O) with a reversal Triple Bottom
Breakdown in the first half of 2008 and then a continuation Triple
Bottom Breakdown in the second half. While it is sometimes
difficult to distinguish between reversal patterns and conti
nuation patterns, the Triple Bottom Breakdown itself is easy to
identify with a clear support break.
Spread Triple Bottom BreakdownAs its name implies, the Spread
Triple Bottom Breakdown is an expanded version of the Triple Bottom
Breakdown. A Spread Triple Bottom Breakdown contains at least
two
extra columns, wtIich means it is at least seven columns wide.
An extra X-Column
and an extra O-Column form lows above the actual support level
or breakdown point These columns in effect add space or width to
the Triple Bottom Breakdown. As with a normal Triple Bottom
Breakdown, a Spread Triple Bottom Breakdown is confirmed with a
break below the lows of the two O-columns. Ideally, a Spread Triple
Bottom Breakdown forms as a Triple Bottom Breakdown with only
two
extra columns. In
reality, this pattern can form with more than two extra columns.
International Paper Co. (IP)P&F PatternTraditional,3 NYSE
15Mar, 12:30 ET. daily. 0: 24.93, H: 25.675. box reversal
chart
L: 24.88, C: 25.65. V: 2.Sfvl, Chg: 0.29
High Pole Warning on 15Mar2011
Bullish Price Obj. (Rev.): 51.5
StockChans.com
Spread Triple Bottom BreakDown
Bottom
~----------------------------------------------~The chart above
shows International Paper with two Spread Triple Bottom Breakdowns.
The first one in 2008 marked a continuation of the downtrend. The
second Spread Triple Bottom Breakdown triggered in August 2010, but
resulted in a whipsaw (bad signal). First, the breakdown did not
hold long. Second, the X-Column broke above the high of the
breakdown column (O-Column).
Descending Triple Bottom BreakdownA Descending Triple Bottom
Breakdown is basically back-to-beck Double Bottom Breakdowns. These
breakdowns form three O-Columns that move lower and lower with each
breakdown. Because there are three O-Columns and two X-Columns, the
pattern is just as wide as a classic Triple Bottom Breakdown. The
ability to forge back-to-back lower lows shows underlying weakness
that is indicative of a downtrend. As with the other patterns, this
Descending Triple Bottom Breakdown can form as a conti nuation or
reversal pattern.
Monsanto Co. (MON)
NYSE
Bearish Price Obj. (Rev.): Met (65.0)
Triple Bottom Breakdown
The chart for Monsanto shows three Descending Triple Bottom
Breakdowns. The first
two
occurred after a Triple Bottom Breakdowns (blue lines), which
makes then
conunuauon patterns. The third formed after an advance that
peaked in early 2011. This is a reversal pattern.
Quadruple Bottom BreakdownThe Quadruple Bottom Breakdown is just
like the Triple Bottom Breakdown, only with an extra O-Column to
mark support and an extra X-Column to widen the pattern. Three
consecutive O-Columns define support with three equal lows. The
fourth 0Column breaks below the lows of the prior three O-Columns
to forge the Quadruple Bottom Breakdown. All told, Quadruple Bottom
Breakdowns are seven columns wide with four O-Columns and three
X-Columns. These patterns can mark reversal breakdowns or
continuauon breakdowns.
FedEx Corp. (FDX)
NYSE Triple Bottom Breakdown on 15Mar2011
15llIlal2011. 12:08 ET. daily. 0: 86.02. H: 88.92. L: 85.97. C:
88.87. V: 1586539, Chg: +0.24(0.27")
P&F Patter.lTraditional.
Descending
3 box reversal chart
Bearish Price Obj. (Rev.): 77.0
stockcnens.com
Quadruple Bottom
The chart above shows FedEx (FDX) with a reversal Quadruple
Bottom Breakdown in May 2010. This reversal pattern also resembles
a head-and-shoulders. Notice the relatively equal highs for the
shoulders and the spike high for the head. Confirmation is clear
with the Quadruple Bottom Breakdown.
Measuring TechniquesFirst and foremost. be careful with Price
Objectives. They are really just rough guidelines. Chartists should
use other aspects of technical analysis to confirm objectives and
continuously monitor the state of the trend/breakdown. The
horizontal count method can be applied to Triple Bottom Breakdowns,
Descending Triple Bottom BreakdolM1s, Spread Triple Bottom
Breakdowns and Quadruple Bottom Breakdowns. Si mply measure the
width of the pattern, multiply by the box size and then by 2/3 the
reversal amount. Tom Dorsey and A. W. Cohen advocated 2/3, but some
P&F chartists simply use the full reversal amount. Subtract
this total from the pattern high for a Price Objective. The wider
the pattern, the bigger the expected move. Triple Bottom Breakdowns
are five columns wide (3 O-Columns and 2 X-Columns), Quadruple
Bottom Breakdowns are seven columns wide and Spread Triple Bottom
Breakdowns are seven columns minimum. The vertical count method can
be applied to Double Bottom Breakdown Breakdowns, After the
breakdown, chartists must wait for a 3-box reversal to FIX the
height of the
breakdown column. The breakdown column is subject to change
until there is a reversal. This reversal is considered a mere
bounce as long as it does not extend too far. Count the number of
filled boxes in the breakdown column, multiply by the box size and
then by 2/3 the reversal amount. Subtract this product from the
pattern high for a downside Price Objective.Monsanto Co. (MON)
P&F PatternTraditional, Descending NYSE L: 64.29, C: 67.81, V:
4.61v1, Chg: +0.75 Triple Bottom Breakdown on 10Ma,2011
15llIlal. 16:00 ET. daily. 0: 64.88, H: 68.407. 3 box reversal
chart
Bearish Price Obj. (Rev.): Met (65.0)
stockcnens.com
Bottom BreakDown 5 x 1 x 2 = 10 85 -10 = 70
Triple Breakdown 5 x 1 x 2 = 10 82 10 = 72 Double Bottom
Breakdown 9 x 1 x 2 = 18 -18 = 44 Triple Bottom Breakdown 5 x 1 x 2
= 10 75 -10 = 65
The chart above shows Monsanto (MON) with four bearish breakdown
patterns and four downside price objectives. The blue arrows mark
the pattern high, from which the extension estimate is subtracted.
The first. a Descending Triple Bottom Breakdown, came just after a
Triple Bottom Breakdown. Even though the pattern is near the top,
it is considered a continuation pattern because it follows the
previous breakdown. The second, a Triple Bottom Breakdown, is
clearly a reversal pattern because it formed at the prior high. The
third, a Double Bottom Breakdown, formed withi n a downtrend. The
vertical count method was used to find a price objective of 44,
which missed the bottom by one box. The most recent pattern is a
Descending Triple Bottom Breakdown with a downside price objective
of 65. Establishing a Price Objective only covers the reward part
of the risk-reward equation. Chartists should also study the chart
to assess risk. A move above
Enter TIcker: Spy or choose froLm-:----' ( Update Chart )S&P
500 SPDRs (SPY)No New P&F P attem Traditional. 3 box reversal
chert NYSE
I
View All Favorites
23llIlal, 16:00 ET. daily. 0: 128.93. H: 130.00. L: 128.32. C:
129.66. V: 148.41\11.Chg: +0.37
Bullish Price Obj. (Rev.): 196.0
StockChal1s.com
CDlnstructions
Q
P&F ScansP&E Pattern Alerts can be found at end of the
Predefined Scans Page. StockCharts.com provides daily alerts for
more than 15 P&E patterns on various exchanges, including the
TSX and LSE. Some of these are shown in the image below. Note that
there were over 100 NYSE stocks with Triple Top Breakouts.
P&F Pattarns,P&F Budl Tmp rueris
Predefined Scans
INYSEI I
JI I I I I I I
Nasdaq
II
AMEXI I I I I I I
11
11 12 10 13
P&F Bear i rap Aens, P&F 811.dli5'hCarta,pult
Anems.P&F Bea.ri:sh Ca1a,pulll.A!lefts, P&F
BII.dliis'hiriall'llgle Afell1!i P&F Bea.rish Triangle P&F
High Pdle Anerts, P&F Lew Pal,a .Alerts AI~erts P&F L.ong
Tail Down Ailerts
:23I I I
1 :2I I
t21
:2I I I
I I I
I
:2
1
I I I
: so::2
I I
I I
:4I I I I I I I I
:5
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1 1 17
I I
,,I I I I I I
:4I I I I
:0I I I I
115106
133 : 63
: '9I I I
I I I I I
I I I
Chartists can also scan for specific P&F patterns using the
drop-down menu for userdefined scans. Over 20 P&F patterns and
criteria are included as "Predefined Chart Patterns". Users can
combined these P&F patterns with other non-P&F criteria to
create truly unique scans.
( Update :Criteria.)
,
-- None--
IPredefined Chart Pati.p,rns I ; , ~ day.s. ,agQ tS ( '~rue
I;)
-pi,Ei F PaUems-, . 8ums h Catapult Bea rislh Carta.putt
- EIdays ,ago 'j:s ( trueE]daysI I
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Bull ..SitgrnalRave'raa.1Bear. Scgrna.l ,Reversa:1
EIdays. ,ago i:s ( 'true,agQ iis ( 'true
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Bumsh lriaiill~l[eBearislh lIriiangle. long 'tai'I'D'own [.
TrilPile'Trop TriPle B,atttomI
Sp~ead Trip.l~e Top Spr;ead 'Tri,pfe Bot Asc.ending Triple
lop
!set,& Peri~od
I Mu ltiplier~I
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I Dese. "rriiple Bottom Qu'adll'upI1e'Top I QUlaOlr'Ulpre Bottom
BldllTw.ap I Be'arTrrap Double To.p [ Doublel Bottem
Days
,
IJ ago. " I: J.390
~I I I I I I I I
IlJays
.... ....
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Further Study
StockCharts.com - ChartSchoolLearn more about Technical Analysis
and Charting Terminology
You are here: StockCharts.com Page P&F Signal Reversed
ChartSchool
Chart Analysis Point & Figure Horne
P&F Signal ReversedIntroductionAs their names imply, the
Bullish Signal Reversed and Bearish Signal Reversed patterns
reverse existing trends with a counter signal. A Bullish Signal
reversed occurs when a series of higher highs is reversed with a
Double Bottom Breakdown. A Bearish Signal Reversed occurs when a
series of lower lows is reversed with a Double Top Breakout. As
with many P&F patterns, these patterns can form as reversals or
continuation patterns. As a continuation pattern, a Bullish Signal
Reversed looks similar to a rising flag breakdown on a bar chart,
while a Bearish Signal Reversed looks similar to a falling flag
breakout.
Bullish Signal ReversedA Bullish Signal Reversed pattern starts
with a series of higher highs and higher lows. X-Columns denote
rising prices and O-Columns denote falling prices. A higher high
forms when an X-Column moves above the high of the prior X-Column.
A higher low forms when an O-Column holds above the low of the
prior O-Column. This combination of higher highs and higher lows
forms an uptrend, which is the "bullish signal". It takes at least
two successive higher highs to have an uptrend working. The first
XColumn sets the initial high and two subsequent X-Columns forge
successive higher highs. Each X-Column is followed by an O-Column
or decline. The second O-Column forms a higher low by holding above
the low of the first O-Column. The "reversed" signal occurs when
the most recent O-Column breaks below the low of the prior 0Column.
The bullish signal (uptrend) has been reversed with a Double Bottom
Breakdown. The chart below shows Lam Research (LRCX) with a pair of
Bullish Signal Reversed patterns. The first formed with
Breakdown.
two
higher highs (green arrows) followed by a Double
Bottom Breakdown. The second formed with five higher highs and a
Double Bottom
Lam Research Corp. (LRCX) P&F PatternT,aditional.3
Nasdaq Global select Mid.
16Mar2011. 16:00 ET. daily. 0: 51.88, H: 52.67. L: 50.50. C:
51.06, V: 2119841. Chg: -1.10 (2.11%)Bullish Signal Reversed on
11Ma,2011 box reversal chart
Prelim. Bearish Price Obj. (Rev.): 40.0
StockChans. com
higher highs
lowsSignalReversed
lows
The next chart shows 1. Rowe Price (TROW) with a pair of Bullish
Signal Reversed patterns. The first formed with !'MJ higher highs
and then a Double Bottom Breakdown. The second formed with three
higher highs and a Double Bottom Breakdown. Notice that the second
pattern traced out higher highs that were significantly higher than
the prior highs. Higher highs do not have to be uniform or
marginally (1-box) higher. The pattern simply requires a series of
higher highs and higher lows that are reversed with a Double Bottom
Breakdown.
T. Rowe Price Associates,lnc. (TROW) P&F
PatternTraditional,3
Nasdaq Global Select Mkt.
16Mar2011. 16:00 ET. daily. 0: 61.94. H: 62.66, L: 60.58, C:
60.83, V: 2154791. Chg: 1.13 (-1.82%)Bullish Signal Reversed on
10Mar2011 box reversal chart
Prelim. Bearish Price Obj. (Rev.): 51.0
StockChans. com
Signal Reversed
higher highs higher lows
Reversals and ContinuationsThe reversal versus conn nuation
aspect depends on the direction of the prior move and relative
price levels. A Bullish Signal Reversed pattern that forms just
after a new high would clearly be a reversal pattern. The chart
below shows Haliburton (HAL) vvith a breakout at 35 and then a
series of higher highs extending to 48. With a new high forming
just before the Double Bottom Breakdown, this would be considered a
reversal pattern.
Halliburton
Co. (HAL)8ullish
NYS E L: 42.52. C: 42.94. 11-Mar-2011
15Mar. 16:0.0. ET. daily. 0: 44.18. H: 44.43.
(rever.s~81 )higher highs higher lows
PM PatternTraditional,3.
Si9.F'lal R.eversed
i'llM
box reversal ;l'Iart
Prelim. Bearish Price Obj. (R.ev..):3.7.0.
StockCtl8,ns.com
Bullish Signal Reversed
A Bullish Signal Reversed pattern that retraces a portion of the
prior decline or forms as a bounce within a bigger downtrend can be
considered a continuation pattern. In bar chart terms, such
patterns would be similar to rising wedges or flags. The chart
below shows Dreamworks (DWA) with a continuation Bullish Signal
Reversed pattern triggering in March 2011. The stock declined
sharply from its prior high, retraced part of this decline with
higher highs and then signaled the continuation lower with a Double
Bottom Breakdown.
DreamWorks Animation SKGInc. (OWA)
Nesdaq Global Select Mid. Chg: 0.26 (0.980.4)
16fII1ar2011. 16:00 ET. daily. 0: 26.43. H: 26.68. L: 26.18. C:
26.19. V: 1037172.
P&F Patter.l
Bullish Signal Reversed on 13Dec2010
Traditional. 3 box reversal chart Prelim. Bearish Price Obj.
(Rev.): 14.0
StockChans.com
(continuation) higher highs higher lows
higher highs higher lows
Bullish Signal Reversed
Bearish Signal ReversedA Bearish Signal Reversed pattern starts
with a series of lower lows and lower highs. A lower low forms when
an O-Column moves below the low of the prior O-Column. A lower high
forms when an X-Column fails to exceed the high of the prior
X-Column. This combination of lower lows and lower highs forms a
downtrend, which is the "bearish signal". It takes at least two
successive lower lows to have a working downtrend. The first
0Column sets the initial low and the two subsequent O-Columns forge
successive lower lows. Each O-Column is followed by an X-Column.
The second X-Column forms a lower high by failing to exceed the
high of the first X-Column. The "reversed" signal occurs when the
most recent X-Column breaks above the high of the prior X-Column.
The bearish signal (downtrend) has been reversed with a Double Top
Breakout The chart below shows Atheros (A1HR) with a pair of
Bearish Signal Reversed patterns. The stock traced out two lower
lows in the first pattern and reversed this decline with a Double
Top Breakout. The second pattern formed withtwo lower lows and a
Double Top Breakout It may be possible to extend this pattern all
the way back to the 2010 high at 43 (black arrow). Price action to
the left of the green box was not included because it was part of a
Triple Bottom Breakdown (blue line). Such judgment calls are the
reason technical analysis is part art and part science.
Atheros Communications,
Inc. (ATHR)
Nasdaq Global Select Mirt.
17Mar2011. 11:24 ET. daily. 0: 44.68, H:44.68, L: 44.63, C:
44.65, V: 619833. Chg: +O.04(O.09~)
P&F PatternTraditional,3
Bearish Signal Reversed on Q4Nov-2010 box reversal chart
Prelim. Bullish Price Obj. (Rev.): 87.0
StockChans. com
Bearish Signal
Reversed
lower lows lower
lower lows lowerThe next chart shows Big Lots (BI G) with a
Bearish Signal Reversed pattern that failed to hold. The first
signal reversed the lower lows with a breakout, but breakout failed
to hold and the stock moved sharply lower with a long O-Column. Not
all signals work. The second pattern formed with three lower lows
and then a Double Top Breakout on the most recent X-Column (far
right).
BigLots, Inc.(BIG) NYSE17rv1af2011. 11 :30 ET. daily. 0: 42.67.
H: 42.67. L: 41.85, C: 42.06, V: 910647. Chg: 0.28 (-0.66%)
P&F PatterllTraditional,
Bearish Signal Reversed on 07F'eb2011
3 box reversal chart
Prettm. Bullish Price Obj. (Rev.): 74.0
stcckcnarts.com
Bearish Signal Reversed
lower lows lower highs
lower lows lower highs
Reversals and ContinuationsThe reversal versus conti nuation
aspect depends on the direction of the prior move and relative
price levels. A Bearish Signal Reversed pattern that forms just
after a new low would clearly be a reversal pattern. The chart
below shows Websense (WBSN) hitting a new low in early 2009. This
low was part of a Bearish Signal Reversed pattern because the stock
forged a Double Top Breakout just after this new low. The second
pattern is a bullish continuation pattern because it formed as a
correction after a new high. Notice how the stock forged a
multi-year high in April 2010 (red 4).
Websense, Inc. (WBSN) P&F Patter.)
Nesdeq Global Select 1v1kt. Chg: 0.38 (1.66%)
171111.112011.11:22 ET. daily. 0: 22.95. H: 22.96. L: 22.38. C:
22.47. V: 262723. High Pole Warning on 17Mar2011 Traditional. 3 box
reversal chart Bullish Price Obj. (Rev.): 31.5
StockChans. com
Bearish Signal Reversed lower lows lower highs
lower lows lower highs
A Bearish Signal Reversed pattern that retraces a portion of the
prior decline or forms as a correction within a bigger uptrend can
be considered a continuation pattern. In bar chart terms, such
patterns would be similar to falling wedges or flags. The chart
below shows Avnet (AV1) with tw:> continuation Bearish Signal
Reversed patterns. The first formed a low well above the 2008 low
and reversed with a Double Top Breakout After a big advance above
30, the stock corrected again with a Bearish Signal Reversed
pattern in 2010. This pattern was reversed later in the year with a
Double Top Breakout in October 2010 (red A).
Alllle!, Inc. (AVT) NYSE171II1al2011. 11:19 ET. daily. 0: 32.63,
H: 32.75, L: 32.19, C: 32.65, V: 218899, Chg: +0.77 (2.42%)No New
P&F' P attern Traditional. 3 box reversal chart
Bullish Price Obj. (Rev.): 66.0
StockChans.com
Bearish Signal Reversed
lower lows lower highs
lower lows lower highs
Objectives and RiskChartists can use the Horizontal Count Method
or the Vertical Count Method to establish Price Objectives. These
are detailed in separate ChartSchool articles. Price Objectives are
not hard targets. Instead, they simply provide a guesstimate for an
upside or downside objective. Chartists should also study the chart
to assess risk. For example, a move below support or the pattern
low would clearly negate a breakout. The box just below the pattern
low often marks the worst-case level for a pattern failure.
Similarly, a Double Bottom Breakdown or a contradictory P&F
pattern would argue for a reassessment. There are sometimes failure
clues before price hits the worst-case level. Chartists should also
employ other technical analysis techniques to measure risk and
monitor the unfolding trend.
ConclusionsEven though Bullish and Bearish Signal Reversed
patterns can mark reversals or continuations, they are probably
best used as continuation patterns. A pullback after a long
X-Column would form a classic Bullish Signal Reversed setup, while
a correction after a long O-Column would form a classic Bearish
Signal Reversed setup. These are more powerful because they signal
a resumption of the bigger trend.
Enter TIcker: Spy or choose froLm-:----' ( Update Chart )S&P
500 SPDRs (SPY)No New P&F P attem Traditional. 3 box reversal
chert NYSE
I
View All Favorites
23llIlal, 16:00 ET. daily. 0: 128.93. H: 130.00. L: 128.32. C:
129.66. V: 148.41\11.Chg: +0.37
Bullish Price Obj. (Rev.): 196.0
StockChal1s.com
CDlnstructions
Q
P&F ScansP&E Pattern Alerts can be found at end of the
Predefined Scans Page. StockCharts.com provides daily alerts for
more than 15 P&E patterns on various exchanges, including the
TSX and LSE. Some of these are shown in the image below. Note that
there were over 100 NYSE stocks with Triple Top Breakouts.
P&F Pattarns,P&F Budl Tmp rueris
Predefined Scans
INYSEI I
JI I I I I I I
Nasdaq
II
AMEXI I I I I I I
11
11 12 10 13
P&F Bear i rap Aens, P&F 811.dli5'hCarta,pult
Anems.P&F Bea.ri:sh Ca1a,pulll.A!lefts, P&F
BII.dliis'hiriall'llgle Afell1!i P&F Bea.rish Triangle P&F
High Pdle Anerts, P&F Lew Pal,a .Alerts AI~erts P&F L.ong
Tail Down Ailerts
:23I I I
1 :2I I
t21
:2I I I
I I I
I
:2
1
I I I
: so::2
I I
I I
:4I I I I I I I I
:5
I I
1 1 17
I I
,,I I I I I I
:4I I I I
:0I I I I
115106
133 : 63
: '9I I I
I I I I I
I I I
Chartists can also scan for specific P&F patterns using the
drop-down menu for userdefined scans. Over 20 P&F patterns and
criteria are included as "Predefined Chart Patterns". Users can
combined these P&F patterns with other non-P&F criteria to
create truly unique scans.
( Update :Criteria.)
,
-- None--
IPredefined Chart Pati.p,rns I ; , ~ day.s. ,agQ tS ( '~rue
I;)
-pi,Ei F PaUems-, . 8ums h Catapult Bea rislh Carta.putt
- EIdays ,ago 'j:s ( trueE]daysI I
I;)
Bull ..SitgrnalRave'raa.1Bear. Scgrna.l ,Reversa:1
EIdays. ,ago i:s ( 'true,agQ iis ( 'true
I ~.)I;)
Bumsh lriaiill~l[eBearislh lIriiangle. long 'tai'I'D'own [.
TrilPile'Trop TriPle B,atttomI
Sp~ead Trip.l~e Top Spr;ead 'Tri,pfe Bot Asc.ending Triple
lop
!set,& Peri~od
I Mu ltiplier~I
... 1 I Days I'"J agoI Day,s.I
I Dese. "rriiple Bottom Qu'adll'upI1e'Top I QUlaOlr'Ulpre Bottom
BldllTw.ap I Be'arTrrap Double To.p [ Doublel Bottem
Days
,
IJ ago. " I: J.390
~I I I I I I I I
IlJays
.... ....
-'
1:- ]a9O'
I
I I :xD xl I xl Ix
I
Further Study
StockCharts.com
- ChartSchool
Learn more about Technical Analysis and Charting Terminology
You are here: StockCharts.com Page P&F Catapults
ChartSchool Chart Analysis Point & Figure Horne
P&F CatapultsIntroductionP&F Catapults form with two
consecutive P&F signals in the same direction. A typical
Bullish Catapult forms with a Triple Top Breakout, a pullback and
then a Double Top Breakout. The ability to continue higher after
the pullback shows underlying strength. A typical Bearish Catapult
forms with a Triple Bottom Breakdown, a bounce and then a Double
Bottom Breakdown. Selling pressure reasserts itself after a weak
bounce to affirm the prior bearish signal.
Bullish CatapultA Bullish Catapult forms with an initial
breakout, a short pullback and a second breakout. While the ideal
Bullish Catapult starts with a Triple Top Breakout, Quadruple Top
Breakouts or Multiple Top Breakouts are also possible. After the
initial Triple Top Breakout, prices reverse and move back into the
pattern. The initial breakout or resistance break is usually just
1-3 boxes. Prices move high enough to break resistance and there is
not much upside after the initial breakout. A 3-box reversal then
forms and a new O-Column declines back into the Triple Top pattern.
This is just a pullback because the O-Column does not break below
the low of the pattern or forge a Double Bottom Breakdown. Prices
then turn back up with a new X-Column that exceeds the prior
X-Column to complete the catapult (Double Top Breakout). The
pullback into the pattern represents indecision among the bulls.
The ability to overcome this indecision with another breakout shows
renewed strength.
Williams Sonoma,lnc.
(WSM)
NYSE
21Maf2011, 16:00 ET. daily. 0: 38.77. H: 39.35. L: 38.49, C:
38.74. V: 1453772. Chg: +0.71 (1.87")
P&F Patter'lTraditional,
Bullish Catapult Breakout on 15lvlar2011
rT.:r::i::-'i'='
3 box reversal chart
Bullish Price Obj. (Rev.): 59,0
Top Breakout Double Top Breakout
+
Multiple TOil Breakout + Double Top Breakout
The chart above shows Williams Sonoma (WSM) with three Bullish
Catapults. As with most P&F patterns, catapults can form as
reversal or continuation patterns. It simply depends on the prior
trend. The first Bullish Catapult reversed the downtrend with a
Spread Triple Top Breakout in February 2009 and a Double Top
Breakout in March. Notice that the breakout was t-box and the
pullback held above the low of the prior0Column. The second Bullish
Catapult occurred with a Multiple Top Breakout, a fourbox pullback
and a subsequent Double Top Breakout. The third is a classic
Bullish Catapult within an uptrend, which makes it a continuation
pattern.
Bearish CatapultA Bearish Catapult forms with an initial
breakdown, a short bounce and a second breakdown. While the ideal
Bearish Catapult starts with a Triple Bottom Breakdown, Quadruple
Bottom Breakdowns or Multiple Bottom Breakdowns are also
possible.
After the initial Triple Bottom Breakdown, prices reverse and
move back into the pattern. The initial breakdown or support break
is usually just 1-3 boxes. Prices move low enough to break support
and there is not much downside after the initial breakdown. A 3-box
reversal then forms and a new X-Column advances back into the
Triple Bottom pattern. This is a weak bounce because the X-Column
does not break below the high of the pattern or forge a Double
Bottom Breakout. Prices then turn back down with a new O-Column
that exceeds the prior O-Column to complete the catapult (Double
Bottom Breakdown). The bounce back into the pattern shows the bulls
giving it one more go. However, the bounce is weak and the second
breakdown puts the bears in full control.FedEx corp. (FDX)NYSE Chg:
+0.58 (0.65%)
21llI1af2011. 16:00 ET. daily. 0: 90.37. H: 90.48, L: 89.61. C:
89.86. V: 2140560.
P&F Pattertl Beat Frap on 17r~lal2011Tladitional.3 box
reverser chart Bearish Price Obj. (Rev.): 80.0
StockCharts.com
Triple Bottom Breakdown + Double Bottom Breakdown
The chart above shows FedEx (FOX) with a Bearish Catapult
consisting of a Triple Top Breakdown and a Double Bottom Breakdown.
Because the pattern includes the high at 97, it would be considered
a reversal pattern. Notice that the bounce carried all the way to
the prior high (X-Column), but did not exceed it to negate the
pattern.
Unum Group (UNMI P&F PattertlTraditional,
NYSE
21Maf2011. 16:00 ET. daily. 0: 26.03, H: 26.34. L: 25.91. c.
26.25. V: 1727287. Chg: +0.58 (2.26%)Triple Top Breakout on
06Jan2011 3 box reversal chart
Prelim. Bullish Price Obj. (Rev.): 42.5
stockcnens.com
Triple Bottom Breakdown + Double Bottom Breakdown
The chart above shows Unum Group (UNM) with a classic Bearish
Catapult. This would be considered a bearish continuation pattern
because the breakdowns occurred after a couple of Double Bottom
Breakdowns and the high formed just before this pattern.
Objectives and RiskThe Horizontal Count Method is the preferred
method for these patterns. In short, the width of the pattern is
multiplied by the box size and reversal amount to form an estimated
extension. This is added to the low of a Bullish Catapult or the
subtracted from the high of a Bearish Catapult for a Price
Objective. Details and examples can be found the ChartSchool. Price
Objectives are not hard targets. Instead, they simply provide a
guesstimate for an upside or downside objective. Chartists should
also study the chart to assess risk. For example, a move below
support or the pattern low would clearly negate a breakout. The box
just below the pattern low often marks the worst-case level for a
pattern failure. Si milarly, a Double Bottom Breakdown or a
contradictory P&F pattern would argue for a reassessment. There
are sometimes failure clues before price hits the worst-case level.
Chartists should also employ other technical analysis techniques to
measure risk and monitor the unfolding trend.
ConclusionsBullish and Bearish Catapults are at least seven
columns wide. which makes them above average in width for P&F
patterns. Width is an important aspect of the pattern. Wider
patterns indicate a longer congestion phase that makes the
subsequent breakout or breakdown all the more important. It is
sometimes possible to anticipate a catapult pattern with the 3-box
reversal that forms the last column. This would be the seventh
column for a classic catapult. The chart below shows FedEx with a
possible Bearish Catapult unfolding. After a Triple Top Breakdown,
the stock bounced back into the pattern with a 4-box X-Column. The
next 3-box reversal down (O-Column) could be used to anticipate
further weakness below the prior O-Column. It would take a 5-box
O-Column to forge a Double Bottom Breakdown and complete the
Bearish Catapult pattern (red dols).FedEx Corp. (FDX)21M;u2011,
NYSE Chg: +0.58 (0.65%)
16:00 ET. daily. 0: 90.37. H: 90.48, L: 89.61. C: 89.86, V:
2140560. Beal Frap on 17llIlal2011 box reversal chart
P&F Patterl)Tladitional,3
Bearish Price Obj. (Rev.): 80.0
stockcnerts.com
Bottom BreakDown
Creating P&F ChartsStockcharts.com offers three different
Point & Figure charting styles: Graphical, Text and Dynamic.
Graphic charls were used in the examples above. Trendlines and
other indicators can be found in the Chart Overlays section just
below each P&F chart. ~ P&F Charts are classic old-school
style with plus signs (+) marking the 45 degree trendlines. Dynamic
P&F Charts allow chartisls to dynamically adjust the box size,
the reversal amount and draw their own trendlines. Links to the
other styles can be found
just above each P&F chart. Links to articles on P&F
Alerts and Price Objectives can be found below each P&F chart.
Click here for a live P&F chart.
Enter TIcker: Spy or choose froLm:-:----' ( Update Chart )
S&P 500 SPDRs (SPY)NYSE
I
231111.11,16:00ET. daily. 0: 128.93. H: 130.00, L: 128.32. C:
129.66. V: 148.41\11.Chg: +0.37 No New P&F P attem
Tladitional,3 box reversal chart
Bullish Price Obj. (Rev.): 196.0
StockChans.com
CEhnstructions Q
P&E ScansP&F Pattern Alerts can be found at end of the
Predefined Scans Page. StockCharts.com provides daily alerts for
more than 15 P&F patterns on various exchanges, including the
TSX and LSE. Some of these are shown in the image below. Note that
there were over 100 NYSE stocks with Triple Top Breakouts.
P&F Pattarns,P&F Budl Tmp rueris
Predefined Scans
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Chartists can also scan for specific P&F patterns using the
drop-down menu for userdefined scans. Over 20 P&F patterns and
criteria are included as "Predefined Chart Patterns". Users can
combined these P&F patterns with other non-P&F criteria to
create truly unique scans.
( Update :Criteria.)
,
-- None--
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Further Study
StockCharts.com
- ChartSchool
Learn more about Technical Analysis and Charting Terminology
You are here: StockCharts.com Page P&F Triangles
ChartSchool Chart Analysis Point & Figure Horne
P&F TrianglesIntroductionTriangles form as prices contract
on a P&F chart. The X-Columns (up) form successive lower highs
as the O-Columns (down) form successive higher lows. The inability
of prices to break from this contracting range reflects a standoff
between buying pressure and selling pressure. This standoff is
resolved with the next P&F signal. A Double Top Breakout makes
the triangle bullish, while a Double Bottom Breakdown makes the
triangle bearish.
Triangle WidthTriangles have at least five columns. The first
four columns form the triangle and the fifth column marks the
breakout or breakdown. There are at least two X-Columns with the
second column forming a lower high. There are at least two
O-Columns with the second column forming a higher low. Triangles
can extend more than four columns as long as subsequent X-Columns
continue forming lower highs and subsequent 0Columns form a higher
low. Triangles are neutral patterns dependent on the breakout or
breakdown for the signal.
Triangle BreakoutA Double Top Breakout signals a bullish
resolution to the triangle pattern. Note that a trendline break is
not enough. A basic P&F buy signal, such as a Double Top
Breakout, is required to complete the triangle and trigger the
bullish signal.
Chesapeake Energy Corp. (CHK)
NYSE Chg: +0.08 (0.24%)
221II1af2011, 11 :29 ET, daily, 0: 33.89, H: 34.00, L: 33.55, C:
33.83, V: 3197707, No New P&F' Pattern Traditional. 3 box
reversal chart
Bullish Price Obj. (Rev.): 64.0
stockcnens.com
The chart above shows Chesapeake Energy (CHK) IMth a triangle
forming in 2010. The blue lines ouUine the triangle. Note that
these lines do not appear on the chart. They were simply added to
make the pattern more visible. There weretwo O-Columns IMth higher
loINS and one X-Column with a lower high. This pattern turned
bullish with the Double Top Breakout at 25.
ProShares Uhra QQQ Fund (QLD)
NYSE
22llI1al2011. 11 :39 ET. daily. 0: 84.30, H: 84.42. L: 83.56, C:
83.81. V: 1394370. No New P&F' Pattem Traditional. 3 box
reversal chart Bearish Price Obj. (Rev.): 65.0
Chg: 0.19 (0.23%)
stockcnens.com
The chart above shows the ProShares Ultra QQQQ Fund (OLD) with a
triangle forming after a sharp advance towards the end of 2010.
This triangle represented a consolidation within an uptrend. Even
though such consolidations are typically continuation patterns,
they are still dependent on a breakout before turning bullish.
After a lower high and higher low, the ETF forged a Double Top
Breakout to confirm a Bullish Triangle.
Triangle BreakdownA Double Bottom Breakdown signals a bearish
resolution to the triangle pattern. Note that a trendline break is
not enough. A basic P&F sell signal, such as a Double Bottom
Breakdown, is required to complete the triangle and trigger the
bearish signal. The chart below shows Anas Air (AWWW) with a long
X-Column and then a triangle.
While this pattern might be viewed as a potentially bullish
continuation pattern, the triangle depends on a break for
confirmation. After two lower highs and a higher low, the triangle
broke to the downside with a Double Bottom Breakdown.Atlas Air
Worlwide Hldgs (AAWW)Nesdeq Global S.I ec t Mkt.
221111.112011.11:27 ET, daily. 0: 67.15, H: 67.44. L: 66.02. C:
66.20, V: 72002. Chg: 0.88 (-1.31.4) P&F Patterll Low Pole
Reversal on 181111.112011Traditional, 3 box reversal chart Bearish
Price Obj. (Rev.): 54.0
StockChans. com
The chart below shows F5 Networks (FFIV) with a long O-Column
that forged a Triple Top Breakdown. A consolidation formed after
this long column and a triangle evolved. After a higher low and
lower high, the stock continued lower with a Double Bottom
Breakdown to turn the triangle bearish.
F5 Networks, Inc. (FFIV)P&F PatteruTfaditional,3
Nesdeq Global Select
Mkt.
22flll.u. 10:48 ET. daily. 0: 95.17. H: 96.60, L: 93.83, C:
93.98. V: 2.5M. Chg: 1.62Triple Bottom Breakdown on 171\11.112011
box reverser chart
Bearish Price Obj. (Rev.): 62.0
StockCharts. com
Objectives and RiskChartists can use the Horizontal Count Method
or the Vertical Count Method to establish Price Objectives. These
are detailed in separate ChartSchool articles (click here). Price
OOjectives are not hard targets. Instead, they simply provide a
guesstimate for an upside or downside objective. Chartists should
also study the chart to assess risk. After an upside breakout, a
move below the low of the last O-Column would produce a Double
Bottom Breakdown and invalidate a triangle breakout. Chartists
should also employ other technical analysis techniques to measure
risk and monitor the unfolding trend.
Enter TIcker: Spy or choose froLm-:----' ( Update Chart )S&P
500 SPDRs (SPY)No New P&F P attem Traditional. 3 box reversal
chert NYSE
I
View All Favorites
23llIlal, 16:00 ET. daily. 0: 128.93. H: 130.00. L: 128.32. C:
129.66. V: 148.41\11.Chg: +0.37
Bullish Price Obj. (Rev.): 196.0
StockChal1s.com
CDlnstructions
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