🎯 Price Targets & Practice

The vertical method calculates the price target from the height of the first rising column after a buy signal.

Formula: Price target = lowest point of the first X column + (number of X's in column × reversal amount × box size)

Example: First X column after buy signal has 8 X's. Box size = $2, reversal = 3.
Lowest point = $90.
Price target = 90 + (8 × 3 × 2) = 90 + 48 = $138

The vertical method yields the more conservative price target and is easier to apply. It is the preferred method for beginners.

The horizontal method calculates the price target from the width of the base (consolidation zone).

Formula: Price target = base level + (number of filled cells in the longest row × reversal amount × box size)

Example: Base zone has 5 columns. The longest row has 5 filled cells. Box size = $2, reversal = 3.
Base level = $90.
Price target = 90 + (5 × 3 × 2) = 90 + 30 = $120

The horizontal method requires a clearly identifiable consolidation zone (base). With narrow bases it is less reliable than the vertical method.

A P&F price target is stronger when it coincides with a classic support/resistance level from the candlestick chart. This convergence (analogous to the time/price/pattern convergence from Module 6.9) increases the probability that the price will react at that level.

Procedure: calculate the P&F price target, then check in the daily chart whether a significant resistance level lies nearby. If both align (e.g. price target $138, next resistance in the daily chart at $137–$139): the price target is high-quality.