Been reading this thread with some interest coming from a...

Been reading this thread with some interest coming from a statistical background.

Good old wiki:http://en.wikipedia.org/wiki/Technical_analysis

From what I gather, there is some conjecture whether TA actually "works". "Of 95 modern studies, 56 concluded that technical analysis had positive results."

These are complex systems and it would seem they are more applicable in some markets/stocks than others.

Imperfections in market knowledge, big changes in trends, and reasons why history wouldn't repeat itself would surely test the applicable of TA. Maybe not make it completely invalid, just reduce reliability.



Is it applicable to PLV?

-Imperfections in market knowledge; I think most investors would have a pretty good idea of where PLV sits, particularly with the transparency of management. OK

-Big changes in trends/reasons why history wouldn't repeat itself; Is PLV the same company after the trading halt as it was before? I don't quite understand how TA accounts for these sudden fundamental changes in conditions - maybe this is a hole in my understanding. Does this not distort patterns that TA relies on?


I feel TA as more of a steady state tool. If the conditions of the stock/market remains steady and the market is left to it's own fluctuations in supply and demand then TA maybe more reliable.

Picking the bot at 15c on a TA basis seems logical (I averaged down here) because not much changed after the refloat, since then jumps in price are news driven. Can TA indicate when news is released or how the market will respond? Seems like around 25c is major resistance/support in the past, we are dealing with a different company (read producing IO) now so is this still applicable?

If the influence of supply and demand are relatively weak compared to changes in market conditions maybe it is not so applicable? RMS is another I follow and felt fine buying at 40c on a triple bottom based on TA as the conditions were constant.

End of the day I think the fundamentals have to be there, but providing everything is steady, simple TA can prove very useful to find a entry/exit point.

Just my thoughts.