Posts filed under “Technical Analysis”

Apprenticed Investor: Tracking Elephants, Part II

Tscm_1The latest "Apprentice Investor" column is up at TheStreet.com. Its called  Tracking Elephants, Part II.  The subhead is "The non Technicians Guide to Technical Analysis," and that’s a pretty good description. Charts have something of value to add to even pure fundamentalists. In a way, its the opposite of the Wisdom of Crowds.

Starting this week, I’ll also be adding a podcast, giving some additonal background and flavor to each column: 



Of course, the ubiquitous excerpt:

"Here’s an interesting question: If you could look at one and only one source before buying your next stock, which would you choose: a fundamental analyst’s report (with no charts in it), or the chart
of your choosing?  While I like having access to both, I cannot ever
imagine buying something without first looking at the chart.

And so we wade into the ongoing battle between technical and
fundamental analysts. Frankly, it’s one of the sillier debates in
investing. But I’ve heard so many bad arguments and misleading theories
about technical analysis that I decided to weigh in."

Before we wade too deeply into the controversy, ask yourself: "Why
do I need to choose?" Why wouldn’t you use any tool that can be shown
to have value? You wouldn’t build a house using only a hammer, but no
drills or saws. Why limit yourself away from a tool that can assist you
as an investor?

Here are some charts illustrating these points:

Apple Breaks its Uptrend
click for larger graph

062905aapltask

GM Breaks Support
click for larger graph

062905gmtask

eBay Risk/Reward entry points
click for larger graph

062905ebaytask

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Category: Investing, Podcast, Psychology, Technical Analysis

Apprenticed Investor: Tracking Elephants, Part I

Tscm_1The latest "Apprentice Investor" column is up at TheStreet.com. Its called  "Tracking Elephants, Part I." 

Don’t be fooled by the title to this piece: "Tracking the Elephants" could just have easily been named "The non Technicians Guide to Technical Analysis (in two parts)." The idea was to reveal to fundamentalists a few of the more significant ways they can use charts to improve their results.

Podcast:

Here’s the ubiquitous excerpt:

"Here’s an interesting question: If you could look at one and only one source before buying your next stock, which would you choose: a fundamental analyst’s report (with no charts in it), or the chart of your choosing?  While I like having access to both, I cannot ever imagine buying something without first looking at the chart.

And so we wade into the ongoing battle between technical and fundamental analysts. Frankly, it’s one of the sillier debates in investing. But I’ve heard so many bad arguments and misleading theories about technical analysis that I decided to weigh in."

Before we wade too deeply into the controversy, ask yourself: "Why do I need to choose?" Why wouldn’t you use any tool that can be shown to have value? You wouldn’t build a house using only a hammer, but no drills or saws. Why limit yourself away from a tool that can assist you as an investor?

In the column, I used a chart of Ford — but it could have been just about any company , from JDSU to Lucent to World Con or Enron.
>

Ford’s Downtrend
click for larger graph

Fordaiannotated

Prior columns can be found here.

To keep the column a modest length, a discussion about Janus Funds
selling of AOL Time Warner was edited out.  For your reading
pleasure, that section is here.

Podcast:

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Category: Markets, Podcast, Technical Analysis

John Murphy’s Ten Laws of Technical Trading

StockCharts.com’s Chief Technical Analyst, John Murphy, has created another set of trading rules:   “Ten Laws of Technical Trading:” “Which way is the market moving? How far up or down will it go? And when will it go the other way? These are the basic concerns of the technical analyst. Behind the charts and graphs and…Read More

Category: Rules, Technical Analysis, Trading

Where’s the Conviction ?

Category: Markets, Technical Analysis

Dollar Rebound ?

Category: Currency, Technical Analysis

Levels Matter

Category: Technical Analysis

Will April Showers Bring May Flowers?

Category: Markets, Technical Analysis

Chart of the Week: China M2 Money Supply vs. Chinese GDP

Category: Economy, Markets, Technical Analysis

Sell in May (but don’t go away) Part II ?

Category: Markets, Technical Analysis, Trading