Gonçalo Moreira, CMT
Independent Analyst
The strong retracement from the mini top at 1.3940 allowed to establish a downside vertical count and the next column of Xs confirmed it. This count is still valid and targeting the 1.3400 figure. The 45º support line which gave this chart an objective bullish tone was broken during March with a double-bottom breakout followed by another double-bottom suggesting that a bearish trend had started (market A and B on the chart). At this point, observation told us that the length of columns of Xs and Os started to balance one another out in what seemed a dissipation of upside momentum rather than price action turning into a new bear trend.
This mild bear trend was then erased with the current column of Xs which also printed a double-top buy signal on the break of the 45º bearish trend line drawn from the March top at 1.3940 (point C on the chart). This reaffirmation of the bull trend is celebrated by those traders expecting for the count of 1.3980 – which is still valid as long as the low of 1.3480 remains intact- to be achieved and eventually exceeded.
This new double-top buy signal confirms the trend and must be taken to either re-open a closed position or add to the existing holding. Each double-top would be a “add to the position” signal, which is one of the great advantages of Point and Figure charts.
The low of 1.3680 allowed the drawing of a new support 45º line threatening the bearish count of 1.3400 to be cancelled with an X above 1.9840.
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