AKP Chart Thread, page-74

I am quite convinced that TA/charting is valid and very useful.

But one has to be aware that, at its best, charting always represents the rational evaluation by the market of a business that is functioning sufficiently consistently to generate an ongoing data stream that punters can evaluate rationally - i.e. based on actual business results. When a stock is traded based on potential likelihoods of it doing business at a certain level then that rationality can only be based on speculation, and while that is hopefully well researched and well informed speculation, it is speculation nonetheless.

In AKP's case there is a good technical background on the product that is firming up increasingly with time. Successive reports of progress are substantial and encouraging. The projected time to revenue is also becoming a little clearer. All of this inspires increasing confidence in the speculative expectations that are formed around it. At this point in time the average sentiment around AKP in the market is improving, and that is what is behind the shifts in SP and volume traded. But the market is incredibly fickle with regard to speculative stocks, especially at this stage in their life. So the charting appears to show a good blend of confidence, particularly by LT holders who have watched its progress carefully, and by shorter term traders who are betting on much shorter term tics. TA under such conditions may be useful, but it is not the same as watching the TA of the big blue chips or well established businesses that have formed the basis of TA.

To predict the future price of a stock based on erratic and possibly random past movements of that stock, risks becoming subject to rapid feedback of the signal back to the trigger. i.e. traders may end up jumping at their own shadows. In a small market where everyone is watching everyone else, and they are all thinking the same way, the attention given to the tiny artefacts in the signal is basically turning the gain up way too high, and the resulting feedback loops can be about as pleasant as a too-loud singer in a noisy bar.

This is especially so when the stock is subject to the manipulations of bots that sporadically do lightning raids on the unsuspecting by trying to crash the price and shake out stop-loss triggers.

Good luck to anyone who relies too heavily on charting is all I can say.

DYOR, and keep your powder dry!