A part of Point & Figure charting (P&F) used to calculate share’s (or other indicator) upside target after an extended sideways market and a upside breakout. Essentially, the longer that a share or index moves sideways the greater the upside potential. The Horizontal count method in P&F requires that the share or index has made an upside break of at least one box and it requires an unbroken horizontal count of at least 5 boxes. The upside target is then calculated by multiplying the box size, the reversal and the horizontal count together and then adding them to the lowest point in the sideways pattern. For example, in December 2016 on the S&P500 index, it was possible to obtain an unbroken horizontal count of 9 using a box size of 40 and a reversal of 3. This projected an upside target of 3027 for the S&P when added to the low point in the sideways pattern of 1947 – (3 X 40 X 9) + 1947 = 3027. Consider the P&F chart:


Horizontal Count – Point and Figure Charting

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