010801060104010201000990980970960950940930920910900890880870860850840830820810800790780770760750740730720710700690680670660650640630620610600590580390380370
...........X.......................................................XO.........|........... 1480...........XO......................................................XO.........|........... 1460...........XO....................................X...........X.X.X.XO.........|........... 1440...........XO....................................XO..........XOXOXOXOX........|........... 1420___________XO____________________________________XO__________XOXOXOXOXO___________________ 1400...........XO....................................XO..........XOXOXO.OXO.......|........... 1380.........X.XO....................................XOX.........XOXB...O.O.......|....X...... 1360.........XOXO................................X.X.XOXO........XOX......O.......|....XO..X.X 1340.........XOXO................................XOXOXO9O........XOX......OX......|....XOX.XOX 1320_________XOXO______________________________X_XOXOXO_OX_______XO_______OXO________X_XOXOXOX 1300.........XOXO....X.........................XOXOXOX..OXO....X.X.......+OXO.....|..XOXO2OXO. 1280.........XOXO....XO........................XOXOXOX..OXOX...XOX......+.OXO.....|..XOXO.O... 1260.........XOXO....XO........................XOXOXOX..OXOXOX.XOX.....+..OXO.....|..XOX...... 1240.........XOXO....XO........................XOXOXO...OXOXOXOXOX....+...OXOX....|..XO....... 1220_________XO_O____XO________________________XOXOX____OXOXOXOXO____+____O_OXO______X________ 1200.........X..O....XO......X...............X.XOXO8....O.OXOXOA....+.......OXO...|X.X........ 1180.........X..O....XO......XO..............XOXO.O.......O.O.O....+........OXO...|XOX........ 1160.........X..O....XO......XO............X.XOX..................+.........OXO..X|XOX........ 1140.........X..O....XO......XO............XOXO7.................+..........OXO..XOXOX........ 1120_________X__OX_X_XO______XO____________XOXO_________________+___________OXO__XOXOX________ 1100.........X..OXOXOXO......XO............XOX.................+............CXO..XOXOX........ 1080.........X..OXOXOXO......XO..........X.XOX................+.............OXO..XOXOX........ 1060.......X.X..OXO4OXO......XO....X.....XOXOX...............+..............O.O..X1XOX........ 1040.......XOX..OXO.O.O......XOX...XO....XOXO...............+.................O..XO.O......... 1020_______XO3__OX____O______XOXOX_XOX___XOX_______________+__________________OX_X____________ 1000.......XO...OX....OX.X...XOXOXOXOXOX.XOX..............+...................OXOX|........... 990.......X....OX....OXOXO..XOXOXOXOXOX6XOX.............+....................OXOX|........... 980.......X....OX....OXOXO..XOXOXOXOXOXOXO.............+.....................OXOX|........... 970.......X....OX....OXOXO..XOXO.OXOXOXOX.............+......................O.OX|........... 960_______X____OX____OXOXO__XOX__OXOXOXOX____________+_________________________O_____________ 950.......X....OX....OXOXO..XOX..OXOXO.OX...........+............................|........... 940.....X.X....OX....OXOXO..XOX..OXO...OX..........+.............................|........... 930.....XOX....O.....OXOXOX.XOX..OX....O..........+..............................|........... 920...X.XOX..........OXOXOX5XOX..OX..............+...............................|........... 910___XOXOX__________OXOXOXOXO___OX_____________+____________________________________________ 900...XOXOX..........OXOXOXOX....OX............+.................................|........... 890...XOXOX..........OXOXOXOX....OX...........+..................................|........... 880...XOXOX..........O.OXOXO.....OX..........+...................................|........... 870...XOXOX............OXOX......OX.........+....................................|........... 860___XOXOX____________OXOX______OX________+_________________________________________________ 850...XOXOX............OXOX......OX.......+......................................|........... 840...XO.2X............OXOX......OX......+.......................................|........... 830...X..OX............OXOX......OX.....+........................................|........... 820...X..OX............OXOX......O.....+.........................................|........... 810___X__OX____________OXOX___________+______________________________________________________ 800...X..OX............OXOX..........+...........................................|........... 790...X..OX............OXOX.........+............................................|........... 780...X..O.............OXOX........+.............................................|........... 770...X................OXOX.......+..............................................|........... 760___X________________OXOX______+___________________________________________________________ 750...X................OXOX.....+................................................|........... 740...X................OXOX....+.................................................|........... 730.X.X................OXOX...+..................................................|........... 720.XOX................OXOX..+...................................................|........... 710_XOX________________OXO__+________________________________________________________________ 700.XOX................OX..+.....................................................|........... 690.XOX................OX.+......................................................|........... 680.XOX................OX+.......................................................|........... 670.XO.................O+........................................................|........... 660_X__________________+_____________________________________________________________________ 650.X............................................................................|........... 640.X............................................................................|........... 630.X............................................................................|........... 6201X............................................................................|........... 610OX________________________________________________________________________________________ 600OX............................................................................|........... 590O.............................................................................|........... 580..............................................................................|........... 390------------------------------------------------------------------------------0----------- 380------------------------------------------------------------------------------1----------- 370
Here again, you can see how well the p&f 45 degree trend lines confine price movements. Thelow from April 2000 defines a bullish support line which holds during most of the rest of theyear, and once broken gives way to an accelerated down move.
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The Complete Guide to Point-and-Figure Charting
Chart 2.10 – Bullish support with Elan Corp [ELN.L]ELN.L / 3 box rev, / 2000.01.04 to 2000.10.27470046004500440043004200410040003960392038803840380037603720368036403600356035203480344034003360332032803240320031603120308030403000296029202880284028002760272026802640260025602520248024402400236023202280224022002160212020802040200019801960194019201900188018601840182018001780176017401720170016801660164016201600158015601540152015001480146080757065
...................................................................... 4700...................................................................... 4600______________________________________________________________________ 4500...................................................................... 4400...................................................................... 4300...................................................................... 4200...................................................................... 4100_______________________________________________________X_________X____ 4000.......................................................X9........XO... 3960.....................................................X.XO........XOX.. 3920.....................................................XOXO........XOXO. 3880.....................................................XOXO........XOXO. 3840_____________________________________________________XOXOX___X___AO_O_ 3800.....................................................XO.OXO..XOX.X..O. 3760.....................................................X..OXOX.XOXOX..OX 3720.....................................................X..OXOXOXOXOX..OX 3680...................................................X.X..OXOXOXO.O...OX 3640___________________________________________________XOX__OXO_OX______OX 3600...................................................XOX..OX..O.......OX 3560...................................................XOX..OX..........OX 3520...................................................XO...OX..........OX 3480...................................................8....OX..........OX 3440_______________________________________________X_X_X____O__________+O_ 3400...............................................XOXOX..............+... 3360...............................................XOXOX.............+.... 3320...............................................XOXOX............+..... 3280...............................................XOXOX...........+...... 3240_____________________________________________X_XOXO___________+_______ 3200.............................................XOXO............+........ 3160.............................................XOX............+......... 3120.............................................XOX...........+.......... 3080.............................................7O...........+........... 3040_________________________X___X_X___X_______X_X___________+____________ 3000.........................4O..XOXO..XO....X.XOX..........+............. 2960.........................XO..XOXOX.XO....XOXOX.........+.............. 2920.......................X.XO..XOXOXOXO....XOXO.........+............... 2880.......................XOXO..XOXOXOXO..X.XOX.........+................ 2840_______________________XOXOX_XOXOXOXO__XOXO_________+_________________ 2800.......................XOXOXOXOX5.OXO..XOX.........+.................. 2760.......................XOXOXOXOX..OXO..XOX........+................... 2720.......................XOXOXO.O...OXOX.XO........+.................... 2680...................X...XOXOX......OXOX6X........+..................... 2640___________________XOX_XO_OX______O_OXOX_______+______________________ 2600...................XOXOX..OX........O.OX......+....................... 2560...................XOXOX..OX..........OX.....+........................ 2520...................3O.OX..OX..........OX....+......................... 2480...................X..OX..O...........O....+.......................... 2440___________________X__O___________________+___________________________ 2400...................X.....................+............................ 2360.................X.X....................+............................. 2320.................XOX...................+.............................. 2280.................XOX..................+............................... 2240_________________XOX_________________+________________________________ 2200.................XO.................+................................. 2160.................X.................+.................................. 2120.................X................+................................... 2080...............X.X...............+.................................... 2040_____________X_XOX______________+_____________________________________ 2000.............XOXOX.............+...................................... 1980.............XOXOX............+....................................... 1960.............XO.OX...........+........................................ 1940.............X..O...........+......................................... 1920_____________X_____________+__________________________________________ 1900.............X............+........................................... 1880...X.X.......2...........+............................................ 1860...XOXO......X..........+............................................. 1840.X.XOXO......X.........+.............................................. 1820_XOXOXO______X________+_______________________________________________ 1800.XOXO.O......X.......+................................................ 1780.XOX..O......X......+................................................. 1760.XOX..O......X.....+.................................................. 17401.OX..O....X.X....+................................................... 1720__O___O____XOX___+____________________________________________________ 1700......OX...XOX..+..................................................... 1680......OXOX.XO..+...................................................... 1660......OXOXOX..+....................................................... 1640......OXOXOX.+........................................................ 1620______O_OXOX+_________________________________________________________ 1600........OXO+.......................................................... 1580........O.+........................................................... 1560...................................................................... 1540...................................................................... 1520______________________________________________________________________ 1500...................................................................... 1480...................................................................... 1460......................................................................80______________________________________________________________________75---------------------------------------------------------------------70---------------------------------------------------------------------65
The Elan chart, like the ShirePharma chart on page 87,clearly demonstrates howtrend lines support forecastingof future price movements.The trend line was drawnbased only on the informationuntil January 2000, yetsuccessfully defined pricedevelopment up to November2000.
Note: trend lines generated with bar charts are continuously changed and are therefore much lessuseful for forecasts and are often used for explaining the past.88
Interpreting the Charts
Bullish resistance linesThe bottom side of a bullish channel is defined by a bullish support line while the top of thetrend is bordered by a bullish resistance line drawn from the lower right corner of the lowestexposed O in a wall (highlighted) of two or more exposed Os at a 45 degree angle from lowerleft to upper right.The bullish channel can be nicely observed on the Ericsson [ERIC.ST] chart below. You can seethat the line is touched twice – in February 2000 – before it eventually breaks or gets penetrated.Chart 2.11 – Bullish resistance by Ericsson AB [ERIC.ST]17316816315915414914514113713312912512211811511110810510299969390888583807876747169676563626058565553525049474644434241403837363534333231302929282726252524232322212120
...........|........|.........|.......................|.................|...............+._______________________________________________________________________________________+__...........|........|.........|.......................|.................|.X...........+..............|........|.........|.......................|.................|.3OX........+...............|........|.........|.......................|.................|.XOXO......+................|........|.........|.......................|.................|.XOXO.....+X.....__________________________________________________________________________XOXOX___+_X5__X_...........|........|.........|.......................|.................|.XOXOXOX+..XOX.6O...........|........|.........|.......................|.................|.XO.O4OXO..XOXOXO...........|........|.........|.......................|.................|.X..O.OXOX.XOXOXO...........|........|.........|.......................|.................|.X...+OXOXOXOXOXO__________________________________________________________________________X__+_O_OXOXOXOX_...........|........|.........|.......................|.................|.X.+....OXO.O.OX............|........|.........|.......................|.................|.2+.....OX....O.............|........|.........|.......................|.................|.X......OX..................|........|.........|.......................|.................|+X......O........________________________________________________________________________+_X_______________...........|........|.........|.......................|................+1.X..........................|........|.........|.......................|...............+.XOX..........................|........|.........|.......................|..............+X.XOX..........................|........|.........|.......................|.............+.XOXOX...............___________________________________________________________________+__XOXOX_______________...........|........|.........|.......................|...........+...XOXOX..........................|........|.........|.......................|..........+....XO|OX..........................|........|.........|.......................|.........+.....X.|O...........................|........|.........|.......................|........+......X.|.................______________________________________________________________+_______C___________________...........|........|.........|.......................|......+........X.|................+...........|........|.........|.......................|.....+.........X.|...............+............|........|.........|.......................|....+..........X.|..............+.............|........|.........|.......................|...+...........X.|.............+..._________________________________________________________+____________X______________+.___...........|........|.........|.......................|.+.............X.|...........+................|........|.........|.......................|+..............X.|..........+.................|........|.........|.......................+...............B.|.........+..................|........|.........|......................+|...............X.|........+........____________________________________________________+_________________X_________+_________...........|........|.........|....................+..|...............X.|......+.....................|........|.........|...................+...|...............X.|.....+......................|........|.........|..................+....|...............X.|....+.......................|........|.........|.................+.....|...............X.|...+............._______________________________________________+________________7___X_X____+______________...........|........|.........|...............+.......|.........XO..X9X.|.+..........................|........|.........|..............+........|.........XOX.XOX.|+...........................|........|.........|.....X.......+.........|.........XOX8XOX.+............................|........|.........|.....XO.....+..........|.........XOXOXOA+..................____________________________________XO____+_____________________6OXO_O+___________________...........|........|.........|...X.7O...+............|.........XO...+...............................|........|.........|...6OXO..+.........X.X.|.........5...+...|............................|........|.........|...XOXO.+..........XCXO|...X.X...X..+....|............................|........|.........|...XOXO+...........XOXOX...2OX3X.X.+.....|.................________________________________X_XOXOX___________XO_OXO__XOXOXOX+________________________...........|........|.........|.XOXO.8XO..........X..OXO..XOXO4OX.......|............................|........|.........|.XO5..OXO..........X..O1OX.XO.OXO..+.....|............................|........|.........|.4O...O.O..........X..OXOXOX..OX..+......|............................|........|...A.....|.3......OX.........X..OXOXOX..OX.+.......|.................______________________X_XO______X______OXO______X_X__OXO_O__+OX+__________________________...........|........|.X8XOX...|.X......OXO....X.XOX..O|....+.O+.........|............................|........|.XOXOBO..|.X......9.O....XOXOB...|...+..+..........|............................|........|.XOXOXOX.|.2........O....XOXO....|..+..............|............................|........|.79.OXOXO|.X........OX.X.XOX.....|.+...............|.................______________________X__OXOXOX_X________OXOXOXO_______+__________________________________...........|........|.X..OXOXOXOX........OXOXOX.......+.................|............................|........|.X..OXO.CXOX........OXO.OX......+|.................|............................|........|.6..O...O1OX........OX..AX.....+.|.................|............................|........|.X......O|OX........O...OX....+..|.................|.................____________________X_X________O_____________OX___+_______________________________________...........|........XOX.......|..............OX..+....|.................|............................|........3OX.......|..............OX.+.....|.................|............................|........XOX.......|..............OX+......|.................|............................|........X45.......|..............O+.......|.................|.................____________________XO_______________________+____________________________________________...........|........X.........|.......................|.................|............................|........X.........|.......................|.................|.................------------9--------9---------9-----------------------9-----------------0----------------------------6--------7---------8-----------------------9-----------------0-----------------
173168163159154149145141137133129125122118115111108105102999693908885838078767471696765636260585655535250494746444342414038373635343332313029292827262525242323222121
Interestingly,intheEricsson chart the priceruns through the long-termbullish resistance line, aftertouching it twice, thenretracts and finds newlevels just below the line.Some months later – as weall know – it broke stronglythrough the bullish support.On the Ericsson chart wehave continued the firstbullish support line. Itshows how this line getsreinstated after it has beenbroken. Just after thepenetrationthelinestraddles two columns andthen towards end of 99becomes a valid supportagain.It is amazing how wellthese trend lines actuallywork!
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The Complete Guide to Point-and-Figure Charting
Chart 2.12 – Bullish resistance by ABB [ABB.ST]
ABB.ST / 3 box rev, log1/ 1997.01.02 to 2001.08.24290285280275270265260255250245240235230225220215210205200195190185180175170165160155150145140138136134132130128126124122120118116114112110108106104102100989694
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