As we discussed on a previous video, the optimal configuration for point and figure relative strength charts is to be on a buy signal and in a column of X’s. In this video, Casey continues the discussion on point and figure relative strength chart configurations.
What does it mean when a relative strength chart is on a buy signal and in a column of O’s?
When a point and figure relative strength chart is on a buy signal, it indicates outperformance over the longer term. When a point and figure relative strength chart is in a column of O’s, it indicates underperformance in the more recent past. So while the longer term performance trend may still be intact, the tides could be changing.
We believe it’s very important to stay abreast of column changes on relative strength charts. The shorter term often spills over into the longer term. Column changes are what lead to signal changes.