slstock wrote:Hunter,
I do not mean any offense to you or techincals.
Since I showed up to assist Eagle and I saw your post , there is something
I see you forgot to mention which is crucial.
I tried but I can't go away with a clear conscience not mentioning it.
Sorry. So I came back to make this post.
When a share price is continuously running upwards beating past highs,
technicals are not ideal to follow. AT THAT TIME, the charts/indicators can show the share is bullish as it keep attaining new highs. What the next target
if its at a new high.
So people can blindly follow expecting higher and higher prices.
More importantly most indicators are lagging ( including the lines , patterns
you drew and showed). So people find their mistake or can refer to charts only after the share dropped a lot to say it is a "bad share". What about at Rs 150?
Best solution would be to understand a Share Value
( fundamental analysis) and maybe combine with techincals to enter and exit.
CIND recently hit it all time high at Rs 65. Charts can show bullish signals.
But I made a post on Facebook to say, CIND to me has presently attained its
right fundamental value so not to expect much higher prices
( unless ASI keep going up) until next report shows enough earning
justification.
ps:
For anyone who does not know what lagging means !
Lagging indicator means it can be only seen after some event has happened.
Ex : BLI can be trading at Rs 150 with bullish sentiment ( like when eagle bought it). But only after weeks, months , after BLI drastically dropping in price in a negative tangent we can only see the chart is showing such ( os its lagging)
But at Rs 150 and all time high ?
HUNTER wrote:More often than not, anyone can easily identify Risky shares, very early, by just looking at the price levels over few months.
Simply, pay attention to the direction of general price levels, peaks and troughs.
This patterns is almost always identical with risky share.
I am posting below the visuals of BLI.
Furthermore:
It wouldn't take more than 10 seconds to identify a 'bad' or good share.
(That's the beauty of TA; TA can do things in seconds where FA might take Days or Weeks)
![BLI Investors please who bought shares in 2015 @ 150/- Bli_2010](https://i.servimg.com/u/f20/16/67/25/58/bli_2010.png)
SLS,
No I don't get offended at all.
What you say has a point (as with most of the time), that reading technical/price patterns is not straightforward.
In the first place, if it were straightforward, most of the traders would be now high profit makers.
To make matters complicated; two people can interpret a pattern in two complete different ways. So, you and I may have two complete opposite views of the same price chart.
Anyway, following are my thoughts about what you mentioned and some views in general;
* Analysis, be it technical or fundamental, should be to assist your decision making of a share or market; but most of the time, people tend to think, analysis is about making predictions. Prediction can and will always go wrong.
But using analysis to help your decision will always work for you.
* In that sense, if you objective is to avoid high risky shares, the price patterns will always be there to help you.
Not only the price patterns, of course, fundamental outlook as well. (I use price patterns to save time)
* What you see in patters is Lagging is arguable.
Of course, what the chart show is historical and so it can be called lagging; but if we take the same argument, all other analysis, including fundamental, will be lagging; because all the information we get always is based on something happened in the past.
* Going up of the price will not always lead to the interpretation of a bullish pattern in pattern analysis.
for instance, in CIND short term Elliott wave pattern suggests a drop towards 57~58 in coming days. then taking the next upward wave towards, probably 70.
If observed BLI.N Elliott waves, peak of 70/- was expected in 2016 (70/- must be the normalized price after a split; I guess it equals to, perhaps, 150/- as the peak.
* Finally, trading or investing is not straightforward; just like driving a vehicle. TA is like your Google map; it will assist you in your task. but it cannot predict what you're going to do next, or what you should do next.
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