CHARTS only Optical Illusions, Wishful Thinking and reflections of sentiment that is illusory, transitory, and lacking in certitude.
Fundamentals.. If I hadn't look at them in September I might have actually held some semblance of a "porfolio" in the tech sector. The charts did not reflect the fundamentals back in September.. I wholeheartedly agree, but eventually because I saw the incredibly lagging fundamentals, we decided that the incredibly "GOOD" charts were an illusion. And now you might say the chart predicted the drop from end of September but IT DIDN'T. We use charts for intraday and micro trading and yes for strong companies to catches bounces of rising 20, 50 and 200 day moving averages. We use them just as any other trader, but if you are looking for more than 1/4 or 1/2 point on a overbloated stock, its the fundamentals and incredible p/e levels that pointed clearly to this mass overevaluation. If you are looking for a chart to predict a possible price move per the chart for the next week or two, forget it.
What did the chart do? When there was an upgrade almost daily, the chart went up, because there were buyers in the particular stock, the demand was created, as the upgrades poured in the charts were moving still higher.. very healthy looking indeed. Artificially. So now we got some interesting calls of "bottoming" from our technical analyst geniuses at end of December and then again end of January/ Early February. Because the charts were showing the ARTIFICIALLY propped up stocks which only reflected the Fed interest cut. Left to its own devices the charts would have looked like the chart of AVNX, JNPR and all the others.
Charts are only blueprints. I've seen some interesing bullish engulfing charts lately that are jokes. The next day the stock is killed 15 to 20%.. Charts are fine.. for intraday price move, after stock is slaughtered 15% you can use a chart to determine a dead cat bounce. Or on an upgrade of a good earnings report or deal, sure you get a bounce. That is all. |
