Quote from yayt:
also, if anyone can help with the formula to calculate price objective, that'd be a great help as well.
There are two types of methods to project price. One is the vertical count method, and the other is the horizontal count method.
Both methods should only be used after significant bottoms or tops.
First we will talk about vertical column price objectives. Once a stock makes a significant bottom you take the first buy signal off of that bottom and count the columns of that first reversal. Obviously you have to wait for that x column to complete before you can do this. Let's say the buy signal comes from a column that has 9 boxes.
The formula would be as follows 9*box size* reversal size or, in this case (my example will be the stock APC) 9*1*3=27. You would take that 27 and add it to the low point of the 9 box column which in this case is 40. The price projection would be 67.
There was a new significant low on APC in January of this year. Based on the first buy signal after that low APC should make it to 89. We will get to see in real time if it works.
I guess the main problems with these projections is you don't know what a significant high or low is until the move is pretty well under way.
Also as a note, some pnf'ers like Dorsey believe the formula should be column length* box size* 2 for short signals. This is used to account for the natural long bias of the market.
Maybe someone else can do the horizontal count. If not, I will do it when I get back. I am off to Austin, as one of my sons is graduating from the University of Texas today.
For some reason the chart would not upload .
http://clalloys.com/apcVerticalCount.png