Education & Information
Bullish Percent Charts
Recording the NASDAQ
Bullish Percent Chart
- There are times in which the NASDAQ is conducive for asset growth and
there are times it is not. The NASDAQ BP Chart helps guide your overall
approach toward this market.
- It helps identify the risk level of the broad NASDAQ market.
- It charts the percent of stocks on the NASDAQ that are on a buy signal
on their point & figure charts, thereby giving you a snapshot picture
of the number of issues being controlled by demand relative to those
being controlled by supply.
- Each box on the chart constitutes 2% of issues traded on the NASDAQ.
- Xs are used to record an increasing percentage. Os are used to record
a declining percentage.
- We use the 3-box reversal method to reverse columns.
- Hypothetically, let’s assume there are 100 issues on the NASDAQ.
50 are on buy signals meaning the NASDAQ BP Chart is 50%. Let’s
also assume the percentage is increasing, so we are in a column of Xs
at 50%.
- The next day, there are 8 stocks that give new buy signals, while 6
gave new sell signals. We now have 52 out of 100 issues on buy signals,
or 52%. We would then put an X at the 52% level in the column of Xs.
- The next day 5 give new buys, while 4 give new sells. The percentage
moves up to 53%, but that is not enough to put another X in that column.
- The next day 2 give new buy signals and none give new sells. The percentage
is 55%. Record Xs in the 54% box in the current column.
- As long as the percentage on buy signals continues to increase we will
continue to record Xs in this column. If it begins to decline, we would
look for a 6% change (3-boxes X 2% per box) to reverse to a column of
Os.
- Anything less than a 6% change is considered minor and irrelevant market
fluctuations. A 6 percent change is considered significant enough to
indicate a change in the supply and demand relationship is beginning
and, therefore, we should change our overall market approach.
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