While on the topic of charts I thought I would chime in with my...

While on the topic of charts I thought I would chime in with my thoughts. One thing I feel that gets misunderstood about Technical Analysis (TA) is that it is about forecasting. This is somewhat true, however, many experienced technical analysts would use TA more as a trade management tool on setting entry and exit strategies using money management principles. Hence, TA becomes more about using probability to manage trades and getting into high probability trades and identifying trends rather than forecasting specific prices.

I think many accuse TA of not being able to forecast prices when actually it is the other way around with most people who use FA doing that.

I personally like and use both FA and TA as I won't artificially limit myself to something useful.

I have posted a chart and my take on LYC is that it is in a downtrend with a descending triangle pattern on the weekly chart. I view this as bearish. The reason is that you can also view the market in terms of psychology and what this chart says to me is that there is currently a floor on the price of around 55c where people are willing to buy. However, you will also notice that as this is a descending triangle the price where people are willing to sell is actually getting lower and lower. Back in late August/early September the sellers started coming in at 90c. Then in October/November the sellers then came in at around 75c. This tells me the market psychology on this stock is bearish.

Using TA one might buy on support at 55c and sell near the top of the triangle and using money management techniques also put a stop below 55c as if the price broke below the support this might point to a continuation of the downtrend. On the other hand others might look at the triangle and wait for it to break out of the top and buy there and subsequently put a stop below the trendline.

To limit oneself to either FA or TA is to artificially limit your progress in being successful in the markets.

*this post is not investment advice or any advice*