The PnF Price Objective

I frequently receive questions regarding the PO (Price Objective) given within PnF (Point ‘n Figure) charts and thought I would provide some detail on how this is calculated and give a few examples of how price has reacted to the PO.

PnF_price_objective

Per StockCharts, the price objective is “… general guideline on what to expect based on the strength of the move.” Here is an example of how it is calculated using $GT as an example:

GT_POLet’s take a look at a current few examples on how the Price Objective has/is playing out. First I bring you $NFLX:

NFLX_PnF_BThe Price Objective of 123 has been met but no new pattern has emerged — so no new price objective has been calculated. Now on to an example where the PO is almost achieved. This example comes to you from $NKE:

NKE_PnFAs you can see above, price is within one box of meeting the Price Objective. Oh so close after the post-earnings up move. Finally, an example showing a PO that has yet to be met – with a great distance to achieve it. Here is $VMW:

VMW_PnFBased on the most recent pattern, $VMW has a Bearish PO of 42. Yikes.

 

I noted a link above for a detailed read on the Price Objective from StockCharts and provide it here again.

 

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