Price Projection
Combining CACT chart patterns and predicted highs and lows it is possible to project forward price direction and define potential price targets.
Whether it's a price projection for the next week or further into the future, chart techniques can be applied to different markets.
For use in investment decisions, strategic planning, or simply stress testing a corporate business model, forward price projection is a powerful facet of the trading tools featured on this web site. The key is their application to higher time frame (quarterly and yearly) charts.
The price call by David Patterson for crude oil to reach $144 when the concurrent price was in the $30's was a measured procedure both in time and price. The entire history of oil price data showed that congestion was a feature of hydrocarbons in higher time frame charts. Once trending up (as defined by CACT) was identified in higher timeframe charts (monthly, quarterly) this was a rare event. Trend means change. Once the yearly chart confirmed trending up on 2004 on Brent crude the high price target envisaged several years before suddenly came into the realm of the possible. Closing above the yearly predicted high at the end of 2004 added to the bullish case on oil.
The shares of some large US banks set monthly trending down (a very rare event) before the banking crisis became fully apparent. Was the chart pattern an early warning bell of things to come?
Price Projection – Excerpts from the ITI lecture at the Singapore Management University
• Using CACT trading tools to project forward market
expectations.
• The ingredients of the call for $144 oil made several years
before it happened.