Christopher: TA can spark constructive discussion. I looked back at some of your TA predictions. In general, your comments about the downward direction of the NASDAQ and the DOW have proven partly correct and partly incorrect - you said in mid-February they were going down - they have, but they have also gone up since then. The DOW has achieved an all-time high since then. Most in the professional TA community were predicting much more severe falls for both the NASDAQ and the DOW . Some of those TA's are now changing their minds and predicting a rally, or at least two-way volatility. Acompora is "predicting" a strong rally (unless it falls).
Your comments about DELL going down have been generally correct, but it has not gone as low as you seem to have suggested (you were predicting the low $60's, at least - low $30's post-split). Of course you could answer that there is still time, and if you did I would agree with you but on a fundamenal valuation basis.
Your comments about CPQ have been mixed. In mid to late February you said it would seek support at $40 and then $35 (you may have mentioned $30 or $23 before, but I can't find where you did). You also said that the smart money i.e. institutional money was moving from DELL to COMPAQ
Message 7863823
As far as I can see, if CPQ were to go back to where it was two days ago - $35 1/2 and hover around that for a couple of days, most TA's would start changing their minds about the short-term direction.
I'm not criticising you: I think you use TA fairly and honestly, and it is helpful to get a TA point of view. I know you have heard this before - but isn't it rather a statement of the obvious i.e. that if it is going down, then it will go down in stages, and the stages will be A, B, C, D. On the other hand if it goes up etc etc etc. I wonder if TA can ever be "wrong" within its own terms of reference. For example, if $31 proves to be the bottom for CPQ then would a TA say it has tested $30? (Furthermore, TA does not seem to have been able to predict that not only would CPQ test $40, but it would be knocking at the door of $30 within two days, in what was virtually a single movement down.)
The fact is that CPQ went down not because of inexorable law of numbers but because EM told an analyst that the company may not be as valuable at the next earnings as the analyst had predicted it would be. So the analyst and most of his colleagues changed their valuation of the company and the market took fright. CPQ will go down further, not because of any inherent dynamics in its graph, but if further negative fundamental news is forthcoming or if the general market turns down sharply. CPQ will go up, if the general market turns up sharply or if there is positive fundamental news.
On a "technical" note I am surprised that $23 would be considered support on your definition of what support is. It touched $23 momentarily, in a final selling climax and I would guess the volume of buying on $23 was only a fraction of the volume on $25, $26, $27, $28, $29 or $30. |
