Point and Figure Charting Tips

When using Point and Figure charting on any service don’t be afraid to change box size, or to vary how you are viewing it.

Active traders, for example, may want a smaller box size, while a trader trying to see a long range picture with “no noise” will do best viewing a traditional 3:1 ratio chart.

Many traders watch to sell when the bullish percentage on a PnF chart moves above 70-80%, and just begins to reverse down.

If a stock is at it’s highest high and pulls back from a triple top breakout on PnF chart there is a high possibility of a strong pullback.

At www.bluechipoptions.com we often follow a “long tail down” on a Pnf Chart.

A long tail down is a sharp down move in the stock, due to news, or earnings, and if not catastrophic , it’s quite probable to see the stock “bounce back” quickly from the long tail down, for quick profit taking.

We watch for a Pnf Chart ‘High Pole” . A high pole is a move by the stock of more than 3 standard boxes above the breakout price (the pole) and greater than a 50% correction (the high pole)

A high pole is a long string of O’s exceeding over half the preceding column of X’s.

1. A high pole is a warning signal in a bull trend.

2. Analyze whether previous high polls worked

3. Note the high pole often leads to a sell signal.

The tip is: Study point and figure charting