xxLionxx's lines of thinking in his analysis of ARL sp chart make more sense to me than pure TA, which I admit I do not understand. Lion's analysis has a strong FA flavour, because the factors discussed refer to actual economic/social/political events occuring in the relevant industry.
The sense I get on reading the theory of TA is that TA doesn't delve much into the details of these factors; its primary data are more on the bigger picture of repeatable cyclical trends. But I could well be way off mark here.
To me, operationalising the effects of greed and fear in the sharemarket into a chart-based TA trend forecast is sailing a bit too close to the woo world of Clif High's language of tension and release, or to the data/signals of remote viewers Daz Smith and Dirk Allgire. I have much respect for these gentlemen, and I have even completed an expensive course in remote viewing just to understand how it works. Even so, I have to draw the line when it comes to even the irrational sharemarket. My gut feeling tells me to stick with the rational analysis and logic of the left brain function. My left brain is most probably dominant.
Many TA practitioners stated that they made much profit using the technique/science/art. As have Clif, Daz and Dirk, all of whom stated they made lots of moolah too. Does the accuracy then increases when TA is combined with remote viewing as a double-whammy predictive instrument? Maybe one day, it will be revealed.
My main intellectual resistance to TA is that no one has satisfactorily explained why only FA, and not TA, is employed in bringing out the PFS and DFS.
I don't expect TA to do the work of FA, but surely its inclusion into relevant aspects of the PFS/DFS might have a persuasive role to attract funding? Yet its potential voice is silenced, despite having many advocates in financial institutions.
The current practice is that the forecast prices in the PFS/DFS do not rely on the assumptions of repeatable cyclical trends, but on the analysis of the expected rise or fall of demand/supply of specific materials/goods. It would be difficult to convince the potential funding entity that the rise and fall has a cyclical trend, rather than being caused by a non-level playing field ruthlessly exploited by the well-resourced, and which opportunity might not be repeated.
For new businesses, there is clearly no historical trend for reference, which suggests that TA cannot be applied to forecast the sp of these businesses.
Then there is the anticipated JV between ARL and the JC, which by using FA one can factor in the likely re-rating to ARL's sp. Eg. by using the price to earnings ratio.
How does TA do it? Or does it? And could TA predict the effect on sp of a rumoured corporate activity?
The other aspect of Lion's analysis touches on the selling of ARL shares.
When holding ARL shares very tightly and over the long term, it doesn't matter what happens to the sp during the period leading to the target event date. All it matters is that the LT shs have done their own thorough DD and are fully confident to hold tightly and long term. That's the Warren Buffett way of investment that gave him the Oracle status.
Of course, it would be nice to see the sp go up consistently with just a bit of sideway movement now and then. But this ideal scenario doesn't offer the sort of value-for-money top-up opportunities that is offered by the brutal actions of short sellers and weak hands. Having been given such opportunities, why get annoyed then?
A volatile and under-rated sp does not guarantee a collapsing company. A consistently high sp does not guarantee a successful company. There are enough real life cases out there as evidences.
When the target event date arrives and on looking back, the LT shs can say to themselves that, no, they did not miss out on their capital gains. In fact, their gains have even increased thanks to the short sellers and weak hands who are the ones actually missing out.
The other thought I have in this connection is whether the sophs have been topping up. They bought in at the cr higher prices, and when the weak hands capitulated in the 30c - 50c range in the last year or so, were most of the relatively cheaper shares taken off the market by the sophs?
Also probable that they were not interested in the pips to be made from buying the few hundred thousand shares when they deal in the millions. They do not show their cards, especially on such a tight register.
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