Thursday, December 27, 2012

Point & Figure Charting

I will be a guest on BNN’s Market Call at 1:00 pm December 31, 2012. The host will be Michael Hainsworth who has developed some good technical skills over the past several seasons. I hope I don’t get too many requests for Vancouver penny stocks because they do not chart well with the main driver being the “compelling story”. I am sure that most of us have been burned by those compelling stories that seem to expand in proportion to the growing losses when holding the losers.

The technical analyst will try to accumulate a stock before the story is compelling and then sell to the investment sheep when the storey is compelling. I have learned from experience that point & figure charts should always be used when bottom fishing among those out of favour stocks. A few weeks ago I accumulated some Bombardier at the $3.05 level based on the lack of a compelling story and several positives on a point & figure chart. Can you spot them?


Anonymous said...

The Bomber was the first stock I ever purchased and I've broken all trading rules with it ever since, notably, averaging down, I believe I am finally at the break even point. It's been an unhappy learning experience over the years. Looks like higher lows with resistance starting in 2011, capitulation at 3 bucks, judging by volumn. The X's in the last column may suggest a new breakout. Could this be it?? I don't know what the additional letters and numbers mean. Happy New Year to all those who follow this blog.

Anonymous said...

No penny stock questions? But you;ll take the penny stock ad revenue? Time to cut the chord...your reputation is worth more than the piddly amount google must be paying your site.

edmagee said...

Dear Mr. Carrigan,

I think you were interrupted on BNN yesterday by the POTUS before you could discuss P&F charting.

Could you comment on the positives in the Bomber P&F chart? I can not spot them.

Ed (overstayed the gold party) Magee.

Anonymous said...


The NYSE Advance/Decline line has broken out to new highs.

The DJIA is at 13,435, more than 1,000 points above the 12,4000 DJIA Dow Theory sell signal and the point and figure chart has a preliminary bullish price objective of 14,450.

The DJTA is at 5,534, more than 684 points above the Dow Theory sell and the point and figure chart indicates a preliminary bullish price objective of 6,850.

Does any of this change your outlook?