Point and Figure Charts

Point and Figure Charts plot the change in prices without any consideration for time. If a stocks price does not change for a day, a week, or even a month, then the chart does not get changed for that time, it gets left the way it is.

  • As I stated on my Stock Charts page, X's are displayed showing a rise in price which means that demand exceeded supply, and O's are displayed when a price declines, showing supply exceeded demand.
  • Whenever a price rises or declines by the amount of a single box, whether it be in one day or two months, another X or O is placed on the chart.
  • As long as the price continues in the direction it has been going, meaning rising or declining, the X's or O's are placed in the same column.

point and figure chart

Once a price reversal occurs, meaning going from rising by the amount of a single box, to declining by the amount of a single box, or the other way around, only then will a new column be started.

This makes each column only show X's or O's. On occasion you will see a single X and a single O in the same column showing a quick reversal. This change in columns from X's to O's shows price reversals or a trend change.

point and figure chart

You will also see the numbers 1 through 9 and the letters A, B and C on Point and Figure Charts. These represent the months of the year with 1-9 representing January through September. A, B and C are used for October, November and December to save space in the boxes on the chart.

On our examples shown, you will also notice blue and red trend lines. These trend lines represent support and resistance levels based on previous price points.

A rising blue trend line is shown when a column of X's rises above a previous column of X's high point. A declining red trend line is shown when a column of O's drops below a previous column of O's low point.

As with any type of chart, once you decide to use any particular one(s), it is best to learn as much as possible on that particular type to help give you the most benefit.

Point and Figure charts courtesy of StockCharts.com

Return From "Point and Figure Charts" to "Stock Charts"

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