That strikes me as just a bit dogmatic. I think that TA has its place. It can work under the following conditions:
- The stock price is driven entirely by sentiment. That means the internal and external fundamentals affecting the company are basically static.
- There are enough trades from enough participants with sufficient volume and value to represent a sample large enough to make statistically significant predictions.
Under other conditions, TA will always miss the "moment" because:
- Investors using fundamentals will observe a change and adjust their positions.
- The change in trading activity will drive a change in share price.
- Technical analysis software will then observe the change in share price.
This is why most chart-related posts are backward-looking and refer to past movements such as share prices "rebounding from (or breaking) support", or "refusing resistance".
The other key issue is that most technical analysts are looking at very small changes relative to the prevailing price. The charts exaggerate the size of the movements by basing the graphs from a value other than zero. For example, I was looking at a
@Nez chart based at 50c. If you re-base it from zero, the highlighted opportunities look a lot smaller.
I guess that if you make your money from trades where you turn over a lot of money for pips then TA might work.
My opinion is that Droneshield is not a good subject for technical analysis because:
- While sentiment runs high here on HotCopper, in the real world the market is primarily driven by fundamentals: sales announcements, news of conflicts, civil instability etc.
- The trading activity would barely represent a sufficient sample to allow reliable predictions even when the fundamental conditions were stable.
(20min delay)