Jeff,
First and foremost, almost all technicals are results of fundamentals, and various technical indicators or a combination of technical indicators produce buy and sell signals. There are a lot of small and large investors that use technicals as an additional tool. And don't forget that most institutions and brokerage houses use technical programs as well. Now that being said, one can see where technicals are self fulfilling. (ie... A stock trades at a 52 week high or low and a 1-2-3 top or bottom is formed, a stock breaks out of a channel, a 52 week high or low is broke through, etc) Once these occurrences happen, if any of the aforementioned investors/traders are tracking said stock, then one can see what effect the technical indicator can and will cause.
One doesn't have to believe in technicals, but they are used by the big boys and it is the big boys that more times than not cause the market to move. Use technicals as a tool, but I never use them as a be all to investing. I research a stock first and fore most on fundamentals, and if I like the stock I then take a look at the charts, and that helps me determine an entry price, and various points of resistance and support and then I act from there.
Good luck and go THQI!!!!!!
Brian H. |
