To identify support or resistance, analyse regions where figures (Xs or Os) halt and move in the opposite direction. Take a look at the picture below. Can you spot the support and resistance levels ?
Here is my interpretation:
Lets first identify support. I’ve spotted two locations at regions A and B. The fact that A and B are vertically apart by only 1-box suggest that this zone is of significance.
Lets identify resistance. It is clear that region C is a zone of resistance. Whenever a triple top appears, take note. It often signals strong resistance. Where should the resistance zone end ? When in doubt, look left. Left of region C are a number of double tops. I’ve spotted a double top just to the left of region C and at the beginning of the resistance zone (far left).
If price manages to break above region C, this informs me that the bulls are in control since they’ve managed to gather enough momentum to break strong resistance. However, this is not the case. Notice what happens at D. At D, price broke below regions A and B. Given that price managed to break significant support and heavy resistance has developed at region C, it is fair to suggest that the bears are in control. In other words, there is a higher chance that price falls to lower levels of support.
Point-and-Figure charts are great at showing support and resistant levels, right ?
I hope you’ve found this useful !