Chart, page-1435

Hi Dtcope,
IMO technical analysis is a bit like an imperfect treasure map. It provides guidance and possible actions but it is not a given. The more you use it the better you get at reading and drawing conclusions from it. There is some amazing indicators / technic's that when you study them will take your breath away how accurate they can be (i.e. fibonacci). So I believe and use Technical analysis in option trading as its about momentuem and price reaction etc however... and here is the big caveat, it has limited value in certain stocks, it will still help guide but it is less reliable. Why? Well other factors are at play such as low liquidity, highly speculative news driven stocks (i.e. Bio Tech's), low priced stock (penny dreadfuls), arguably these are far more unpredictable and sensitve to events. Index's, commodities, currencies and highly liquid and mature stocks tend to be more momentum based and generally follow a rythm that makes technical analyse very useful.

Arguably PAR does not work with Fundamental (no earnings / history) nor Technical, it is asymetrical. It will either work or it wont and the price in between is nothing more than a representation of whatever someone is will pay for it. I would argue that reviewing in-depth research, understanding (as best we can) the market size and calcualting the potential revenue will give you an idea of how cheap the stock is relevant to its future price (if everything goes right). Personally I think de-risking it (which is what Mozz and others do by researching and posting their findings) helps me sleep at night and "risk the debit paid" whilst we wait for the "blast of". Till that time the market action is just noise. One thing is certain I dont want to be caught with my pants down for the sake of scalping $0.10 - $0.20 by trading the dips.... (gee wish I sold at $4.50 and brought back at $1.08 though).

Thursday Afternooon Poolboy ramblings..