(To whom it may concern) TA does work if you know what it is good for. One should always try to ride the horse before one says it don't know the way home. If you run a bunch of TA indicators such as momo crossing its own MA, 11 week MA compared to 21 week MA, 14 week volume compared to 52 week high, exp MA crossing MA over select period, add volume when up, subtract when down (OBV), prev day to today high&low direction/magnitude comparison (DMI), MA of Volume times Price making new highs, and other patterns like key reversal*, you will find that they are, especially when combined, very predictive of stock moves.
It is based on the fundamental principle that when there are more buyers than sellers the prices move up and vice versa. You could add that when volume is weak and price is up slow, the stock is being held. etc...
The question is, why the black magic. The answer is, it isn't majic at all. It is simply identifying when people are buying a lot of stock before the price changes markedly. Who would these people be? People who want to accumulate a stock at lower prices. i.e. the pro group. Now you are edjumikated bout the TA market. People move stocks on purpose and take positions in them. They can't hide their buying. You can with a computer and by electro-scanning the market find them.
* Following an uptrend, any day in which a new high is made, yet prices close near their lows (and preferably on high volume).
Following a downtrend, it is any day in which a new low for the trend is made, but prices close near their daily high (again, preferably on high volume).
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