TA works best when it functions as a self fulfilling prophecy. What I mean by this is that TA only works when a large group subscribe to it. A stock falls below a triple bottom, TA gurus say get out, TA followers take that dictum to heart and lo and behold the stock falls well below the triple bottom. They then say: "See how well TA works?"
Not to diminish it, only to try and explain it. TA is simply a roadmap that, if followed, becomes a canon. If followed by a larger group, it's predictions become axiomatic...simply because the followers help reinforce it.
Analogy: Most short squeezes appear to work not because shorty covers. Shorters of bulletin board stocks most often are illegally shorting. Put the shares in cert form, who cares. They don't have to cover. But investors THINK they do. So....they buy up the stock awaiting the "squeeze" and the stock price responds. But did a shorter cover. Of course not. They are pros. They wait for the plateau AND SHORT AGAIN!!
The reason the TA gurus say TA can't be used for the little stocks is that, historically, they haven't had the following, thus, the TA can't work as well. However, as more and more people start to think it can work with BB stocks, guess what, it will start to work. Was it Sartre or TG who said: "I think (it will work) therefore I am(help make it work)"
TG |
