Sorry Corn, it's just that I have dealt with so many questions like this, it gets tiring. You might do yourself a favor, and get a more in depth answer by reviewing the last 10 months of posts by me, and checking out the corresponding movements in OO.
Having said that......
TA and fundamentals are related only by coincidence. I filter my picks through a fundamental screen. EPS 70 > and RS 80 >. This is to get me into a group of stocks that are performing better than the general market, and are for long trading. You could add an IBD accumulation/distribuion rating of "A" as well. Then I use TA to pick and time which stocks I want to trade.
I have to tell you, once my computer spits out the symbols, that is all I want to know about a company, PERIOD!!! I don't want to know about news, rumors, analysts, brokers, etc. All I want to know is price and volume.
The reason, as far as I am concerned, all the fundamental info in the world, and a dime, won't even get you a cup of coffee. I could go through hundreds of examples, but one of the best is this with OO. (by the way, you can go back through my posts, and see the in depth version of this).
Two weeks before OO started its hemmoraging on the way to 8.50, it was trading at 48.00 (pre-split). Opphenheimer & Co came out with a recommedation for the stock with a target of 60.00. Now, if you believed the FA, you would have kept holding OO as it was hammered relentlessly, and would have lost massive amounts of money. Look at the posts on this thread starting around the time that the bottom began to fall out. The Fundamental theories were flying. All of them worth crap. Oakley has Jordan. Oakley is buying its stock back. Oakley has never come in below analysts estimates. SO F***ing what. The stock was being hit with 2, 3, 4 point drops, and leading the NYSE volume board with +7,000,000 days. Remember, OO actually started its tanking on the day it announced earnings that were 2 cents ABOVE analysts expectations.
SO, the point is, if you had a TA approach you would have been out of OO on either you signals, or worst case scenario, on your money management rules. Either way, you would have avoided a 66% loss.
TA is concerned with facts only. Price and volume. There is no ambiguity to that. It is not subjective. It is reality. FA deals with info, that if you can somehow verify that it is factual, still can be interpreted twenty different ways. Nobody knew till weeks later the problems with Sunglass Hut and their extent. But if you used TA, you didn't care why the stock was tanking, all you cared about was that it WAS tanking, and you got out.
TA wants to know WHAT is happening. Not WHY people think it is. Because unless you are Peter Lynch or Warren Buffett, by the time you get the real fundamental info, your stock has already made its more, especially if it is a move down.
Would a TA reccomendation still hold. If the technicals hold then yes.
You see, who knows if the OO shoes thing will be good or bad in the end. I think it won't, but there are some out there who think it will. And maybe it will. But right now, the stock movement is telling you that the market thinks it is a non-event or possibly slightly bad. And the market it always right.
Look at the crash on Friday. Were the fundamentals of this market any different on Friday than they were on Thursday. No!!! But the technicals were. If you sat there on Friday and said, "well I am going to buy because the fundamentals are still good," you would have gotten creamed. You can't fight the market (read:reality).
Now, I had a stock on Friday, that I bought a couple of weeks ago. As the stock market was tanking over 200 points, my stock was down 1/8 (really down zero, as the last price just switched from ask to bid), and was sitting on the support that I had bought it on. So I bought more before the market closed. My TA was telling me that there was some real strenth in this stock. And if the market crashing all around it couldn't knock it below support, it was ready to move up when the market turned around. The story (fundamental) on the stock didn't change.
What else to you want to know?
BCL |
