What Does the Column of a Relative Strength Chart Tell Us?

by | Jun 22, 2015 | Videos, Chart School, Technical Analysis

During a previous video, Tim explained that on point and figure relative strength charts, we care less about patterns and more about column and signal. I recently took some time to describe what the column of a point and figure relative strength chart tells us.

It’s easy to identify what column a point and figure relative strength chart is in. There are only two options: it’s either in a column of X’s or O’s. As simple as this seems, it’s one of the most important attributes we look for on any relative strength chart.

What’s the Significance of a Relative Strength Chart’s Current Column?

A relative strength chart’s current column tells us about the security’s short term performance.

– If it is in a column of X’s, it’s been experiencing near term outperformance
– If it is in a column of O’s, it’s been experiencing near term underperformance

On a similar note, fresh X’s or O’s being added to the same column of a point and figure relative strength chart signifies a continuation of its trend. So additional X’s represent continued outperformance and additional O’s represent continued underperformance.

Just remember that when it comes to the column of a point and figure relative strength chart, we’re learning about its short term performance.

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