Compared to point and figure trend charts, point and figure relative strength charts are much more straightforward. Rather than identifying patterns, like the bearish signal reversal or bullish triangle, we are simply looking for two things: the chart’s current column and signal.
A point and figure relative strength chart can be on a buy signal or a sell signal, and it can be in a column of X’s or O’s. We’ve previously discussed that a relative strength chart’s current column tells us about its shorter term performance, while its current signal tells us about its longer term performance.
The four configurations that a point and figure relative strength chart can have are:
– Being on a buy signal and in X’s
– Being on a buy signal and in O’s
– Being on a sell signal and in X’s
– Being on a sell signal and in O’s
These chart configurations can tell us a lot about a security’s relative strength. We will be discussing each relative strength chart configuration in more depth during upcoming videos.