Tom Carroll,
Actually, there have been many technical traders that are consistently profitable over the long term. Just refer to Jack Schwager's book, Market Wizards, for several good examples of futures traders that use technical systems to beat the market. While it is true that Peter Lynch and Warren Buffet receive much more attention in the press, there is more than one way to skin a cat. The market is a dynamic place and many different trading and investing styles work.
I wouldn't necessarily recommend technical indicators to investors with a long time horizon. I think it's imperative to choose a style that fits your own objectives and capabilities. For example, I'm a short-term trader, and technical indicators tend to be more useful in the short term, whereas fundamental analysis increases in importance over longer time horizons. It also helps me to temper the technical indicators with my assessment of the market's dynamics.
In the case of CORL, for example, it's not just that the technical indicators are negative, but it's also that the perception on the street is that CORL is a weaker play than RHAT or LNUX. It doesn't matter what the reality is in the short term, because the perception is the reality. In the long term, CORL could be a better Linux company...honestly, I don't know (nobody does). But this just highlights another trading tenet: Don't fight the trend. |
