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Technology Stocks : Micron Only Forum
MU 265.92+7.0%Dec 19 9:30 AM EST
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To: TREND1 who wrote (28618)2/18/1998 6:29:00 PM
From: yard_man  Read Replies (1) of 53903
 
Here goes: FA involves fundamentals (brilliant aren't I?). Fundamental economic or business conditions affecting the near to long term future prospects of a company being profitable and to what extent. Especially important is the prospective rate of change expected in earnings. This is why a company that has lost money in a recent quarter may, based on fundamentals, have a stock price that is moving up rapidly, right? Now the essential problem is perceptions of those prospects which may vary substantially from the reality over short periods of time (unkown by most if there is such a variation -- I don't believe markets are necessarily efficient). These effects are seen over longer periods of time - months to years. Any advantages here have to come from being able to see trends (business & economic ones -- not stock price) before many others. If one can do so he will obviously have to buck a stock price trend to some extent.

In the shorter term I believe TA can be helpful. Personally, I have found it very difficult to pick tops using either FA or TA. Bottoms however -- especially where there is what I call a 2-stage drop consisting of a very pronounced and severe initial drop -- followed by a smaller drop in which there is very large volume and "support" have been quite useful to me personally in trading.

Best use of TA is when issues have been way "oversold" or "overbought." Look at the last spike in MU -- obviously unsustainable even if you didn't have a clue about the direction of memory prices. I went short then, but didn't ride it all the way down -- unfortunately.
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