It takes a big foundation to build a big house. In technical terms we use the term "base" to represent what we feel looks to be major support forming in a stock. Often times, the break out or break down from a prolonged period of basing can spell a major and prolonged move for a stock. Most often, the bigger the base the bigger the move. If that's the case, then here's a stock that longer-term investors and even short-term traders should be keeping an eye on.
Vintage Petroleum (VPI) - $0.50 and $1 box
The current vertical count (green arrow) indicates a bullish price objective for VPI as $29.50. I don't think we've ever covered the "horizontal count" (pink arrow). The horizontal count uses the same principles as the vertical count, except here we would count horizontally across the base. If we feel the stock has been basing since December (red c) we would count across 15 columns, then multiply by 3, then multiply by the scale (0.5) and add that to the base of $18.50. In his book "Point and Figure Charting" Thomas Dorsey describes the base and horizontal count similar to that of a powder keg. If the horizontal count of $41 comes to fruition, I'd say the size of the powder keg for VPI might be that of a land mine! I'd have a stop at $17.50 even though vertical count is bullish and indicating the bias is to the buy side.