A Point and Figure Price Objective is the price that a stock should reach based on recent P&F chart signals.

Important: Price objectives should not be used as the sole reason for buying or selling a stock - it is just a guide based on what the current P&F chart is saying. Stocks frequently move past the price objective and just as frequently reverse before getting to the price objective. The best way to use a price objective is as a cautionary sign - if prices get to the price objective, it might be prudent to monitor the stock more closely and move stops closer in case the move is done.

StockCharts.com supports two different techniques for calculating P&F price objectives - the Breakout method and the Reversal method. By default, the Breakout method is used.

Both techniques rely on two important concepts - Bullish alert columns and Bearish alert columns.

• A bullish alert column is any column of X's on a P&F chart where the highest X begins above the top of the previous column of X's on that same chart.
• Similarly, a bearish alert column is any column of O's where the lowest O is below the bottom of the previous column of O's.

First, find the most recent column on the chart that contains an alert - either a bullish alert column or a bearish alert column.

If the most recent alert was a bullish alert, move left along the chart from that bullish alert until you find a bearish alert column. Now move right along the chart until you find a bullish alert column. That bullish alert column is called the price objective column. It is often - but not always - the column that you started from.

To find the bullish price objective, subtract the value of the box just below the bottom of the price objective column from the value of the box at the top of the price objective column and then multiply that difference by the reversal amount for the chart (which is typically set to 3). Finally, add that result to the value of the box at the bottom of the price objective column to determine the actual bullish price objective.

If the most recent alert was a bearish alert, move left along the chart until your find a bullish alert column. Now move right along the chart until you find a bearish alert column. That bearish alert column is the price objective column and is often - but not always - the column that you started from.

To find the bearish price objective, subtract the value of the box at the bottom of the price objective column from the value of the box just above the top of the price objective column, and then multiply that difference by two thirds of the reversal amount for the chart. Finally, subtract that result from the value of the box at the top of the price objective column to determine the actual bearish price objective.

First, find the most recent column on the chart that contains an alert - either a bullish alert column or a bearish alert column.

If the most recent alert was a bullish alert, move left along the chart from that bullish alert until you find a bearish alert column. The next column to the right on the chart is the price objective column.

To find the bullish price objective, subtract the value of the box just below the bottom of the price objective column from the value of the box at the top of the price objective column, and then multiply that difference by the reversal amount for the chart (which is typically set to 3). Finally, add that result to the value of the box at the bottom of the price objective column to determine the actual bullish price objective.

If the most recent alert was a bearish alert, move left along the chart until your find a bullish alert column. The next column is the price objective column.

To find the bearish price objective, subtract the value of the box at the bottom of the price objective column from the value of the box just above the top of the price objective column, and then multiply that difference by two thirds of the reversal amount for the chart. Finally, subtract that result from the value of the box at the top of the price objective column to determine the actual bearish price objective.

If the most recent column on the chart that contains an alert happens to be the next to last column on the chart, then the price objective will be calculated based on the final (right-most) column on the chart. Since the right-most column on any chart can still change (i.e., when X's or O's are added to it), any Price Objective that is based on that column can also change. When this situation occurs, we add the tag (Prelim.) to the Price Objective line at the top of the chart.

Once a stock's price reaches its price objective, the word "Met" appears next to the price objective. Once an objective has been met, a new price objective will not appear until the stock reverses enough to generate a new bullish or bearish alert column on its chart.

Note: "Met" price objectives are often considered to be an indication that a stock may reverse soon.

• Understanding Point and Figure Charts