I hope you have an open mind as to the possible validity of technical analysis. I see no contradiction between these forms of analysis. I often use technical analysis as an adjunct to fundamental analysis—I may like a market sector or individual stock for fundamental reasons, for example, computer use is on a path of explosive growth. I
might then use technical analysis for or because of :
- Market timing—when to get in, for example, a pullback to a trendline
- Risk control—judging where to place protective stop (liquidating) orders, for example, on a break of a major trendline
- An end to a trend—applying criteria for when a trend may have reversed, for example, a decisive downside penetration of a stock’s 200-day moving average
There are other reasons to use charts, of course, even if you don’t use technical analysis techniques, such as for seeing price and price volatility history.
Not only do I not see the two means of analysis to be complementary, but I also consider technical analysis to be a shortcut or an efficient way to do stock market fundamental analysis! I may not be able to or want to study everything about the ongoing progress of a company whose stock I own.
However, there are always an interested body of people who trade the stock and make informed investment decisions because they know the company or business quite well. I can ascertain what the informed opinion is on a stock
by seeing what is going on with the price and volume patterns on the chart. I assume that the market judgment on a stock is right until proven otherwise.


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