re: TA has nothing to do with the fundamentals of this company.
Superficially, that's true, by definition.
Since the company is essentially profitless at the moment, the stock price will be determined entirely by expectations of future profits. Not by this quarter's profits, sales, market share, margins, etc., etc. And not near-term future profits, but by profits more than 12 months in the future, so far into the future that the precision of our guesses about that future is very poor. So, at the moment, whether the stock is at 5 or 15 is a matter of sentiment: which way the wind blows, the daily change in the balance of fear and greed. With NTAP, there is a lot of both fear and greed (= volatility). Given that, TA is better than FA. Why? Because TA is the concrete expression, in lines on a chart, of the summation of all investors opinion of NTAP. And if the chart is telling you something that your FA analysis isn't saying, then........maybe there is something you don't know. Remember, the professionals will get info on the company and industry before you do. That is an inherent disadvantage you have, as an individual investor. So, if a chart "breaks down", and you don't know why, maybe that's because it isn't going to be in the Wall Street Journal till next month, but the Fidelity Tech sector funds managers already know it. Chart-reading can give you clear warning signs when something like this is happening. So, there is a connection between TA and FA, and both are useful tools for an investor. |
