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| Lesson 2: |
Part 2 - Price Objectives - Horizontal Count. |
Bearish horizontal count.
Once a sell signal is given, count across the base the stock
has built.
Multiply the number of columns across the formation by 2 and
then multiply that product by the value per box.
Subtract this number from the top of the base.
As with the bearish vertical count we multiply the bearish objective by 2.
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Let's break it down.
1:
Make sure there is a sell signal off an accumulated base. |
2.
Find the widest part of the base unbroken, that can be counted. |
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3:
Count the columns. |
4:
Find the top of the base. Sometimes this is a judgment call . |
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5:
Calculate the PO.
Formula: (# boxes across)(2)(box size)- Top of base = PO
Widest part of formation is 8
boxes.
8 x 2 (bearish is 2) = 16
16 x 1 (box size) = 16
Subtract 16 from the top of the base which is 34
34 -16 = 18
Horizontal Price objective is 18.
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