okelly,
Technically, IOM has just passed the 'official' vertical count price objective (VPO) which is $8.25 a share.
Using the rules documented by Michael L. Burke in his book on P&F. Burke says to take a count of the X's in the first column of X's after the last 'sell' signal. In IOM's case, the last 'sell' signal bottomed out at $3 and the next column (X's) was 7 boxes tall. So, you get 7 boxes x 3 boxes per reversal x $.25 per box = $5.25 which you add to the sell signal bottom; 3 + 5.25 = $8.25 for the VPO.
But IOM is now at $8.50???? And, on heavy volume, it appears to be breaking through it's long term Bearish Resistance Line.
So, with regard to the VPO, you are in a situation of 'been there, done that'. BUT what does this say? "get out now cause we got to the Price Objective" or "OK we climbed that wall, is there more to go?".
Another school of p&f technical analysis thought says that you can calculate a VPO based on the size of the column that contains the first 'buy' signal after the last 'sell' signal. This is the condition that IOM is in right now. This is a 'developing' vertical count, since the current column is the column that is giving the first buy signal.
Based on last night's chart, which now has X's up to the $8 box, the vertical count goes like this (are you listening East Pole?):
4 boxes from 4-5 so: 4boxes x 3 box reversal x $.25 per box = $3
PLUS
6 boxes from 5.5-8 so: 6 x 3 x $.50 per box = $9
Therefore you get $3 + $9 + $3(where the last sell signal bottomed out) = A current(may change upward again today, I hope) Vertical count price objective of $15.00 for IOM.
Think I got that right ;-))
Ben A.
ez-pnf.com
This was an interesting example because it traversed two price/box ranges that we don't cross very often and it allows to different views of VPO to be looked at. |
