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Non-Tech : Dorsey Wright & Associates. Point and Figure
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To: Lost1 who wrote (2682)12/9/1999 12:46:00 PM
From: Ms. X  Read Replies (3) of 9427
 
For PnF newbies....

Basic PnF stuff.

Buy signal:

X <--buy signal.
X X A column of X's exceeds
X O X a previous column of
X O X X's.
X O
X

A buy signal shows demand is
in control of the stock. The
stock was bought past a
previous area of resistance.

Sell signal:

O Where a column of O's
O X exceeds a previous
O X O column of O's
O X O
O O
O<--sell signal.

A sell signal shows supply is in
control of the stock. The stock
has sold past a previous area
of support.

Patterns are developed through the price action of a stock. Volatility.
Charts move up and down creating support and resistance levels and
eventually a buy or sell signal is created. It is always asked if PnF
uses volume in developing the charts. To answer simply, whatever is
driving the stock whether fundamentals, volume or news will show on
a PnF chart.

Double top

X X The chart creates
X O X resistance at a level
X O X with two column of X's
X O
X

Double top buy signal

X The second column
X X of X's exceeds the
X O X previous column of
X O X X's. Demand is in
X O control of this stock.
X

Double bottom

O The chart has created
O X support at a level with
O X O two column of O's.
O X O
>O O <--

Double bottom sell signal.

O The second column of O's
O X has exceeds the previous
O X O column of O's creating the
O X O sell signal. Supply is in
O O control of this stock
O <---

Triple top.

X X X Three times the stock
X O X O X has risen to a price
X O X O X level creating hard
X O O resistance.
X

Triple top buy signal.

X Finally the stock has
X X X enough demand to buy
X O X O X past the level of
X O X O X resistance creating the
X O O buy signal. A very
X strong signal.

Triple bottom

X X Three times the stock
O X O X O has fallen to a price
O X O X O level creating a strong
O O O support level.

Triple bottom sell signal.

X X Supply comes into the
O X O X O stock and the price falls
O X O X O below the support level.
O O O This is usually an ominous
O sign for a chart.

We'll be going through DWA and PnF charts etc. The walk through of DWA will take a couple of weeks. Please feel free to ask questions.

If you are just learning PnF and don't have Tom Dorsey's book you are missing the boat. "Point and Figure Charting". I think the best price is through buy.com but Amazon has it too.

dorseywright.com
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