I, for one, never trade or invest using charts in isolaton. Firstly I always know the fundamentals well, and continually research them thouroughly. BUT then I look at charts to see how the market actually FEELS about the stock. Otherwise one could be waiting a very long time for a company's price to reach its fundamental potential. And, if you buy too high then you can be underwater for very long time, perhaps forever. It depends on your investment style as always.
There are some good chartists, but there are quite a few appalling chartists. It depends on what methods you use. Those fellows who appear in the Sunday Herald "Investor" liftout seem to fit into the latter category - all using dodgy trend lines and no real analysis by other methods. I think you will find the ones who use Fibbonnaci/Gann/Andrews etc have the better grasp on what's going on. PSA has traded nicely to a fib pattern since it was 24c.
You made the following statement:
"...... there is not enough volume in PSA (or indeed in a lot of other stocks that chartists follow) to enable anyone to come to any conclusions about the stock simply based on charts (which are based on the actions of so few). On stocks like AMP or SRP which trade in large volume and which I have on my watch list, then yes I can see some value in technical analysis. But on stocks like PSA with only 50k traded today I defy anyone to draw any sensible conclusions about the future direction of the stock based on the chart."
My Reply - This is the only time I would disagree with one of your posts Jocam. Your statement is ABSOLUTELY WRONG in a t/a sense. I don't have time explain further, suffice to say the volume is at that level for a reason, and as such is part and parcel of the whole t/a analysis.
Having said that : Go PSA!!!! Have fun at the AGM
Cheers,
Christian
PSA Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
