Mike,
>Is this just a chart people move or do the insiders and insider friends know that things are finally turning around for them.<
Actually, my experience with GAC was one of the motivating factor that got me learn how to read charts. GAC's move down from $60 to $2 was not a result of chart people. It is a result of poor management, overly optimistic analysts, and post Y2K aftermath which all enterprise companies including SAP, CA, GIB and GAC.
I learned from GAC's case that fundamental analysis alone is not enough. And definitely, we cannot depend on analysts who tend to only issue buy recommendations. If you recall, they had Strong Buy on GAC from $60 to $20, before they disappeared and became silent. There were lots that went on at GAC tbat we'd never know. However, we do have the chart.. which gives us a picture of the supply and demand forces on the stock.
Take for example the recent run up. There are no news releases, yet the stock suddenly doubled with high volume. Small institutional brokers are buying. So they must know something that we don't. Their research analysts could have spoken to management, or checked around GAC's customers, etc. All we have is the chart, which shows a high probability that the stock has turned around and is now on an uptrend. Of course, charts are not 100% right. But without the chart, there are no news to inform us that things are changing for the better inside the company.
>With the internet I wonder if there is more chart people investing then fundamentalist?<
Don't know if there are more people using technical analysis than fundamental analysis, but IMO, it sure helps to know both. |
