chart, page-14

I'd say that most stocks are hard to judge on TA alone, but I think this dynamic is magnified with spec stocks.

By its very nature this spec stock is a speculation on a successful outcome of management's current prospective (fundamental) activities - whether it's developing a new sensor tech or drilling for minerals, etc... Significant discoveries/break-throughs can result in a sudden and siesmic re-rating of a stock - particularly for a young company like PSY - which can turf TA on its head for a while.

The idea behind TA, in all its varying forms, is the implied promise of being able to identify market opportunities through a somewhat structured behavioural model (ie. manifested as recognisable price patterns) that a market for a stock/commodity might adhere to, which we try to exploit to our advantage. I say 'implied promise' because there are times in which TA works beautifully and other times when it just doesn't.

Personally, I favour a combo of TA and FA. But with spec stocks there's an important third element that is probably more important to be mindful of; speculation that a company-making outcome/event/discovery will materialise and justify the risk capital that we have laid down.