clappy....in an efficient and directional market, ta has a great deal of merit....it tends to become a self fulfilling prophesy.
we are currently faced with a less then efficient market, little or no direction, reacting to emotions. without logic ta has less impact.
over analysis be it ta or fundamental can oft times lead to incorrect conclusions. i tend to look purely at momentum, which a slow stochastic indicates. applying this to short(daily), intermediate (weekly) and long (monthly) term charts can give you a fairly accurate take on direction and oversold/overbought conditions. the difficult part is to recognize a trend reversal, be it bottom or top.....to increase your ability to see the changes, i find it best to concentrate at any given time, on a very limited number of stocks....three to five are about all i can fathom.....the more intimate you become with an individual stock price action, the better you are able to discern nuances....
in the present market environment, a company with strong fundamental growth and consistent profits has little or no specific risk.........but a tremendous amount of "market risk".........in essence "throwing the baby out with the bath water".......look for issues that move up strongly on up days, but relatively stable on down days......this is an indication of what may lead, when the market becomes a bit more efficient....better to remain cautious, hold for confirmation of a market reversal.....less stressful!
take care...ed |
