Point‐and‐Figure Charting
Fibonacci analysis as an alternate means
of price projection
Some practitioners also opt to apply Fibonacci extensions, expansions, projec-
tions, and retracements on Point‐and‐Figure charts. This represents an alternative
way of making price projections, other than using the horizontal and vertical
counts.15.4 Bullish Percent Index and Relative Strength
The Bullish Percent Index is the ratio of all component stocks within a certain sec-
tor or index group currently on a basic Point‐and‐Figure buy signal (i.e., double
top breakout) divided by the total number of stocks in that sector or index group.
A reading of 70 is considered as overbought and 30 as oversold. It is essentially
a market‐breadth indicator. In Figure 15.48, we see that every time the S&P 500
Bullish Percent Index tests the historical 80 percent overbought level, the market
eventually retraces, as seen at Points 1, 2, 3, and 4. There are Bullish Percent In-
dexes for major indexes, sectors, and industry groups.Figure 15.48 S&P 500 Bullish Percent Index versus the S&P 500 Large Cap Index.
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