Agree with what you said. The important question is whether you are a Trader or an Investor. A day trader would look at the charts to get his buy and sell signals, cause his/her aim is to make a quick buck wheras an Investor wont be that interested in the charting patterns and instead look at the fundamentals of the company, management, future projects etc.
For instance:- Back in Nov 2012, a day trader like me would have acted on the buy signal when the 50 day SMA crossed the 200day SMA and picked up x number of shares of LNC at 70c to sell them at $3 after forming that double top.
Wheras an investor who gets in the market at the same time as me, who firmly believes in the fundamentals of LNC would not give a damn about what the chart says, and continue his position with the company cause he/she has a sell target in mind, lets say for instance $5 in 2 years. But looking at the kind of stock LNC is, you cant be certain if in 2 years time, it will hit that $5 mark.
All we can do, is making the right choices whether to day trade or invest by looking at the past charts and making reasonable assumptions whether it would be a wise decision to put your money in that company and come back to it later 2 years later.
LNC Price at posting:
$1.50 Sentiment: None Disclosure: Not Held
