Forum Archive Index - July 2001

[hugh.webber@clear.net.nz]

"That wasn't a small dip in Frucor's share price. The
 uptrend was over. For the first time in two months there were lower peaks and
lower
 valleys - the usual definition of a downtrend. Whether the stock went up, down
or
 sideways from here on would not alter the fact that there had been an uptrend,
and
 it had ended."

The part that puzzles me is that if charting doesn't predict then what is the
point of it? It doesn't analyse in terms of the things that matter i.e. the
quality of the management, the product, the market characteristics,the gross
yield %, the nta per share, the p/e, the yield on shareholders funds, the growth
of earnings per share.
So, if it doesn't predict and it doesn't analyse why bother doing it? Its just
a diversion of energy and reources from the things that do matter to serious
investors.
Is the apparent info that the 'uptrend has ended' useful? Not unless it can
be relied on (highly doubtful) or that there is a rationale for it that can
be analysed in meaningful terms e.g. a competing product has come on the market
- but surely that sort of info will have become apparent much earlier from 
elsewhere
without relying on charts.
"Whether the stock went up down or sideways from here...." So what's the point
of saying the uptrend had ended if the stock then resumed its upward movement?
It might have been caused by say the chairman having a heart attack and then
recovering but the chart doesn't tell you that. 


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