top stock chartwise, page-8

Announcements come out of the blue but charts do give a measure of market sentiment, insider trading.

The rounded bottoms for example are what happens when you have a set of people selling that is getting smaller over time in approximately a linear manner occurring at the same time as a set of people buying that is getting bigger in an approximately linear manner. When you do the math you end up with a circle

what it tells you is that the people who wanted out are pretty well gone and that there is an increasingly large set that finds it attractive. At some point the sellers dry up and the buyers will take over.

Its a standard pattern - occurs over and over.

All charts do is describe the behavior of a crowd of people trying to buy something. Which if you recall boxing day sales is unruly - but predictable.

Think of all the different scenarios - price capping, insider trading, a takeover perhaps and think of what people are actually doing when they place an order in each scenario - they will all affect the price slightly differently

That doesn't mean everyone who looks at a chart knows what they are doing of course