Point & Figure Chart Breakouts

Point & Figure charts reflect the law of supply and demand. When demand overwhelms supply, more buyers than sellers, a Bullish Price Breakout will occur on the P&F charts. Conversely, when supply overwhelms demand, a Bearish Price Breakout will occur. Market Edge gives you all of the significant Point & Figure chart breakouts on a daily basis.

A Point & Figure chart consists of alternating columns of X's and O's. X's represent increasing prices while O's represent decreasing prices. Unlike Bar charts, Point & Figure charts don't take time into consideration, only price. The significance of Point & Figure chart breakouts lies in identifying price trends and reversals.

Market Edge uses the Chartcraft standard box size and a three point reversal when constructing Point & Figure charts. Under this method, the box size varies at different price levels: Between $5 - $20, one box = $ .50; between $20 - $100, one box = $1.00 and between $100 - $500, one box = $2.00. The most profitable Point & Figure trading formations are the Double Top-Bull Pattern/Double Bottom-Bear Pattern formations, Triple Top/Triple Bottom formations and Quadruple Top/Quadruple Bottom formations.

Double Top Bullish Signal Formation:

      B 
O X   X 
O X O X  BULLISH SIGNAL A Double Top formation and the
O X O X  FORMATION      most recent O column made a 
O X O                   higher bottom than the previous 
O                       O column.

Double Bottom Bearish Signal Formation:

X  
X O X   
X O X O  BEARISH SIGNAL A Double Bottom and the most
X O X O  FORMATION      recent X column made a lower top 
  O   O                 than the previous X column.
      S                  

Triple Top Formation:

        B  TRIPLE TOP  The most recent column is an
X   X   X  FORMATION   X column. This X column exceeds the 
X O X O X              previous two X columns.
X O X O X 
X O   O
X  

Triple Bottom Formation:

 
O X   X    TRIPLE BOTTOM The most recent column is an
O X O X O  FORMATION     O column. This O column exceeds
O X O X O                the previous two O columns.
O   O   O 
        S 

Point & Figure Early Alert

Point & Figure charts reflect the law of supply and demand. When demand overwhelms supply, more buyers than sellers, a Bullish Price Breakout will occur on the P&F charts. Conversely, when supply overwhelms demand, a Bearish Price Breakout will occur. The significance of Point & Figure chart patterns lies in identifying price trends and reversals. The uniqueness of the P&F Breakout Alert is that it isolates stocks that are IN THE PROCESS OF FORMING any of the above formations and identifies at what price the stock must reach in order for an actual BREAKOUT to occur on the P&F charts. On a daily basis, Market Edge identifies these patterns enabling traders the opportunity to play the BREAKOUT as it occurs on an intraday basis.

A Point & Figure chart consists of alternating columns of X's and O's. X's represent increasing prices while O's represent decreasing prices. Unlike Bar charts, Point & Figure charts don't take time into consideration, only price. The most profitable Point & Figure trading formations are the Double Top-Bull Pattern/Double Bottom-Bear Pattern formations, Triple Top/Triple Bottom formations and Quadruple Top/Quadruple Bottom formations.

Market Edge uses the Chartcraft standard box size and a three point reversal when constructing Point & Figure charts. Under this method, the box size varies at different price levels: Between $5 - $20, one box = $ .50; between $20 - $100, one box = $1.00 and between $100 - $500, one box = $2.00.

Position

A measurement of the stock's closing price within the price range during the previous twenty trading days. Values range between 0 and 100. A reading of 100 means that the stock's closing price is at its high for the period, while a 0 reading would mean that the stock closed at its low. A reading of 50 denotes that the stock closed in the middle of the twenty day trading range.

Pos OBV (Positive OBV Index)

Positive OBV Index relates an increase in volume to the change of a stock's price. When volume increases from the previous day, the P-OBV is adjusted by the percentage change in the stock's price. The P-OBV only changes on days when volume increases from the previous day and is displayed as either bullish (BL) or bearish (BR), depending whether today's volume figure is above or below its 24 day moving average.

Power Rating

The Power Rating is a proprietary indicator comprised of seven non correlated technical indicators properly weighted so as to label stocks as being either in a strong or weak technical condition. Readings vary between -60 and +100. Plus 60 and higher is regarded as bullish and will trigger a Long Opinion, while readings of -27 and lower will generate an Avoid Opinion. As the Power Rating crosses zero, a Neutral Opinion is generated. A Long rating is a recommendation to Buy. No action is recommended on stocks with a Neutral rating, and stocks with Avoid ratings may be considered short sale candidates.

Preferred Shares Outstanding

Number of preferred shares issued by a company. A preferred stock is class of stock on which a company must pay a dividend before any dividend can be paid on the company's common stock.

Pretax Income

With regard to banks, this term refers to the amount remaining after operating expenses are deducted from income, including gains or losses on security transactions. For industrial companies, it includes operating and non-operating revenues (including extraordinary items not net of taxes), less all operating and non-operating expenses, except income taxes and minority interest, but including equity in non-consolidated subsidiaries. For insurance companies, it is total operating income before income taxes and security gains or losses, generally including any equity in income of subsidiaries.

Price/Book Ratio

This indicates the relationship of a stock's market price to book value. It is obtained by dividing year-end book values into the yearly high/low range.

Price/Earnings Ratio

The P/E, or price-earnings ratio, is a stock's price divided by annual earnings of each share of common stock outstanding. If a company earns $5 a share and its stock price is $40, the P/E ratio is 8.

As a Stock Search Criteria entry, the P/E ratio is the ratio of the current stock price to the current year earnings per share estimate when available, or, if not available, to earnings per share for the last 12 months. P/E ratios can vary widely among companies.

Price/Sales Ratio

Determined by dividing current stock price by revenue per share (adjusted for stock splits). Revenue per share for the P/S ratio is determined by dividing revenue for past 12 months by number of shares outstanding.