Libby:
This sentence of yours explains, very concisely, the essential problem of fundamental analysis:
"AIG seems to have supporters believing that it is a "buying opportunity" at this level, and others who feel it is going to trade much lower as other possible "disclosures" are revealed."
FA is stories, usually based on stale numbers, or future numbers derived (in some fashion) from stale numbers. In volatile, painful stocks like AIG, the stories are more intense (buying oppo, load up the truck, great core value VS derivatives nightmare, accounting shenanigans).
Every single FA analysis (future price of oil based on Chinese demand, refining capacity, rig counts, rig rates) is subject to this sturm und drang. FA types are, at bottom, story-lovers.
TA as it is misunderstood, has its own problems. It doesn't predict anything, at best it can report, very close to real time, and it can indicate certain likelihoods or probabilities. Coupled with money management, good instincts and a willingness to learn and keep learning, that can be enough to make money in non catastrophic times.
I just heard a report on home improvement stocks. HD is a good candidate for a solid downtrender here, as are LOW FAST and BMHC. Maybe the best downtrender here is FAST, with a downside target, within a reasonable timeframe, of $50.00.
As of yesterday's close, breakdowns:breakouts on my scan was 4:1.
Kb |
