Fundamental and Technical


Do not worry. This won't induce nose bleeding.


I was kinda doubtful about how technicians(aka technical analysts) predict the stock prices and investor's emotion by just using charting techniques.

Projecting the prices and tracing the price trends based on ratio-to-moving average method or through a specific regression process and based on by volume traded would be more reliable since real data are being utilize in those manners. However, Using charting techniques such as just looking at the, say for instance, a head-and-shoulder figure trend on a specific time period in a graph or just looking for a neckline figure would be, personally, ridiculous in projecting stock prices.(Try looking a head and shoulder figure on the graph below and project the price for the next 5 quarters)




Figure was taken from Seeking Alpha (Leveraging the price of silver)

In my own belief, the best way to project the price is to combine Fundamental analysis with technical analysis-- which is using some external factors aside from prices (e.g., political, supply, demand, etc.) and using some techniques such as computing for the Solvency and liquidity of a certain company you want to price-project.

However, I am still intrigued on how technicians become a million dollar men in an instant by just merely saying that they used charting techniques in predicting or projecting a specific stock price.

Well, I guess they are just lucky or better yet afraid of saying that they had used fundamental analysis since their job title (as a technical analyst) might be affected.

** By the way congratulations to Anitokid for his Work about Apple's iPhone that was featured at Seeking Alpha. Great Job!!!!

THE ANiTOKiD said... said:

April 24, 2007 at 9:39 AM

Much much thanks bro! You're the best!

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