What is TA?

Some sharing on what is technical analysis and what it is not.



It is:
- one of the many methods which could be used to control losses in trading/investing
- based on price action which reflects underlying tug of war in supply and demand,
- contributed by public sentiment, institutions' fair valuations, insiders-trading
- made up of different sub-methods, for me I use price behavior and trendlines
- required to know its strengths and weaknesses before consistent application
- like other methods, where profits are made from less experienced players


It is NOT:
- a method that make profits 10/10 nor do I believe anything like that exists
- meant for anticipating long term trends, which are ruled by fundamentals
- all that is to it, the right psyche and risk management comes before TA
- required to know all the TA methods, but it is important to specialise
- trading all the time, only when the specialised opportunity appears
- a sure ticket to easy money as time, effort, patience are required

Quick Note II

Just drop by again to say please ignore my buy call below.. Those who bought, your stocks would have gone up 5-10% past week. But market is still quite news driven, and nobody can be 100% sure. So just ignore the post and do your own homework k..

How technical analysis (TA) can help
identify major turning points in market:

The sell call in Oct 2010 for STI 3300 when it was still at 3150. As it happens, STI crossed 3300 and started a 25% correction to 2500.

The buy call in Mar 2009 on HSI and stocks for a major bull run. This signal was from a TA program I wrote. A 1.5-year bull run started.

In Oct 2008 bear market, estimate the bottoming of bear market to take place around Mar-Jun 2009.  Which it did in Mar 2009.

Quick Note

Those looking to invest in stocks, think its time to consider looking at market again. Eg counters like Cosco, Indoagri, etc. Midterm trend is still down exercise caution, cut if it turns out not yet ripe for improvement in market fundamentals.

Drop by to post a quick note. It's been a really busy year with work. This year, I have move on to a new job after being with my first for around 5 years. And as many of you already know, I don't trade actively now. I outsource to a friend I trust let him manage.

He's been doing great so far.. So those of you who's looking for a good fund manager let me know. I prefer to have more personal time over having follow market closely. Alright that's all post again next time!

Updated 30th Oct:
Just a follow-up note to my buy call. Friday 28th Oct looks like a sell point to me, it could be churning distribution. Stock prices could go up much higher nobody knows for now but this is fair sell point in my opinion. Can always wait for next clear opportunity again.

Updated 5th Nov:
Stocks really dropped badly after the sell call above, erasing most of the earlier gains if one was still holding. Just a note Thursday 3rd Nov looks like a potential buy point to me, with cutloss few bids below day's low.

Updated 13th Nov:
After another round of rally, told some that 9th Nov looks like clear sell again, because there is no strength to break through overhead resistance. Market is not yet ripe to advance.

Market poo with bad news from Europe. With this flush-out, I would think a vibrant bullish backdrop next week could be a potential buy again, with cutloss few bids below last week's low.

Updated 30th Nov:
Looks like a buy today in market for next wave of stock rallies. As usual, if no strength to follow through and rally on a good technical formation that is the reason to sell.