Irene, I repeat what I've posted here before: nothing (not TA and not FA) is statistically predictive of price movements. I am always interested in hearing negatives about a company I'm invested in, because if the fundamentals look bad I want to get out. The point I'm trying to make is that TA is useless. It's predictive of nothing.
As to your questions about the price movement, let me answer it this way. I don't know, and neither does anyone else. A number of explanations come to mind. For example, it is possible that most investors had already priced in the good news, and so it failed to generate an increase in interest. Or, it might be that what you perceived as good news was perceived negatively by investors. Or the fact that CLE was planning to buy back their stock was priced into the stock, so that a decision to rescind was received negatively. As to why the company isn't buying back their own stock, again, you'd have to query the board, but here are several possible and divergent explanations: they are conserving cash for an acquisition; they are conserving cash for a large dividend; they view the price of CLE as too high. Again, I don't know the answer, and I suggest that TA doesn't provide the answer.
Because I believe that the fundamentals remain positive, and have even improved due to the Asian currency problems does not mean that I predict that the price of CLE will go higher. Fundamental analysis is best used to eliminate companies that have potential problems. For example, I used fundamental analysis to get rid of OXHP from my portfolio (at a nice profit and well before it took a swan dive) when I saw potential problems in it's payable system, premiums receivable, and other areas.
To suggest that I can't keep my emotions in check is quite laughable. I am more than willing to engage in a discourse on this material provided we restrict ourselves to documented fact and informed opinion. Anecdotal evidence just doesn't hack it.
Regards,
Paul |
