How to Calculate Price Objectives – Calculating the Bullish Price Objective

[YP Investors]

There are a lot of investing, trading, and swing trading strategies out there today, but do any of them actually consistently work or are they all either luck or a fad? At YP Investors our strategy is based on the laws of supply and demand which have been consistent for more than 100 years. Point and figure charting is based on historical prices of a security, and then plots these prices out showing the relationships between supply and demand allowing you to predict the future stock price with a high probability.

This means that it is based on facts and not dependent on companies books which can be altered as Wall Street has seen numerous times in the past. This is what has made the difference for us at YP Investors. We know that there is a high probability of a stock price going up or down based on point and figure charting. Now don’t get me wrong, we have seen plenty of times when a stock price goes the exact opposite direction it should be going, but as all investors, traders, and swing traders know, the market will do what it wants to.

Point and figure charting gives us high probabilities of where a stock price should be going and in using these charts we have been able to have successful returns-easily beating the market returns of 7-10% annually. Some key attributes to point and figure charts are visualizing the long-term and short-term trend of a stock, buy and sell signals, as well as calculating a stock’s price objective. The price objective is what allows you to hold onto a stock and ride the gains up to a specified objective price and this is key in any investing, trading, or swing trading strategy.

A stocks price objective is a calculated price that the stock should get to based on the momentum and strength it has when it changes direction (a security/stock was rising in price but now falling, or was falling and now rising).

A Price Objective is either Bullish or Bearish based on the most recent Buy or Sell signal in the point and figure chart. If the most recent signal is a Buy signal then there is a Bullish Price Objective (price is trending higher.) On the other hand, if the most recent signal is a Sell signal then there is a Bearish Price Objective (price is trending lower.)

A Price objective does not mean the stock price is guaranteed to hit that price, and in some cases it can exceed that price objective! This is a general calculation with high probability, but always remember with the stock market-there are no guarantees.

Calculating the Bullish Price Objective
•To calculate the bullish price objective, find the most recent buy signal off of the bottom. This means the first buy signal after there has been at least one sell signal.

•Now use this column of X’s with the buy signal. Count the number of boxes in this column of X’s.

•Multiply the number of X’s by 3.

•Next multiply that total by the box size (ex 0.25, 0.50, 1, 2, or 4)

•Finally add that total to the price that aligns with the bottom X in the column. This is the Bullish Price Objective.

Note: There is one important step that was not mentioned. If the Box size changes in the column of X’s then split the calculation into 2 separate calculations, one for each box size.

Example: The bottom of the most recent X column with the first buy signal off the bottom is $3.50 the top is $7.50.
There are 12 total X’s and 7 are in $0.25 box range (3.50 through $5.00) and 5 are in the $0.50 box range ($5.50 through $7.50).

Splitting the calculation into 2 equations: 7 x 3 x ($0.25) + 5 x 3 x ($0.50) = $5.25 + $7.50 = $12.75.
Now add the total to the bottom of the X’s ($3.50): $2.50 + $12.50 = $16.25.
$16.25 is the Bullish Price Objective.

The bullish price objective is a very useful calculation that we at YP Investors use in every investment or trade. Check out our Stock Selector and Point and Figure Carting Tools to use this calculation. We hope you learned how to calculate the Bullish Price Objective and you use our tools in your investments and trades so you can continue to grow your wealth!

• This topic was modified 1 year, 4 months ago by YP Investors.

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