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Lesson 2:	Part 2 - Price Objectives- Horizontal Count.

Horizontal Price Objective.
The Horizontal Price Objective is determined by measuring the base that a stock has created and broken. Stocks that have formed a large base lend themselves to the horizontal count. Otherwise we would use a vertical count. When a stock creates a large base, we measure its width. The base of the formation must be unbroken. In other words, you must be able to count horizontally the columns filled with X's and O's without any spaces in between. Find the widest part of the base that is unbroken to count. In general, a horizontal count is a judgment call. There are no minimum columns required but you will see many charts where a large area of accumulation was created and then the chart broke out. These are the charts where a horizontal count is most effective - we think of them as powder kegs. The more it builds up the more explosive the breakout can be.

Bullish horizontal count. Once a buy signal is given, count across the base the stock has built. Multiply the number of columns across the formation by 3 and then multiply that product by the value per box. Add this number to the bottom of the formation.

Let's break it down.

1: Make sure there is a buy signal off an accumulated base.	2: Find the widest part of the base unbroken, that can be counted.
3: Count the columns.	4: Find the bottom of the base. Sometimes this is a judgment call too.

5:
Calculate the PO.

Formula:
(# Col. across the base)(3)(box size ) + bottom of base = PO

Widest part of formation is 7 boxes.
7 x 3 (three box reversal) = 21
21 x 1 (box size) = 21.
Add 21 to the bottom of the base
which is 20
21+ 20 = 41.

Horizontal Price objective is 41.

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