Technical Analysis Stocks

robertbanking

Hello you wonderful and intelligent people that make up this forum. I sincerely hope you are having a nice weekend and doing well.

I was reading a book recently that put alot of emphasis on Technical Analysis, looking for chart patterns in bull markets to know when to buy a stock. As it mentioned that even stocks with strong fundamentals and growing earnings, can act unpredictably, such as falling. It made me wonder why do we research companies so much, the stock market seems to move depending more on the economy, bull market cycles and the volume in a stock. Do you think it would be important to put more emphasis on the Technical Analysis side of things please? I would be forever grateful and thankful for your support with this it would mean the world to me. 

It got me wondering when i am researching companies and buying stocks with growing earnings, good business models, but the share price falls and does not act rationally, why not just focus on the Technical Side of the market.

Sending you lots of good wishes and thanks to all the amazing people on this forum who are wonderful. Hope you have an amazing life and all the best to you as always. 

Richard1212

I know nothing but the basics of TA but have never been impressed. Far more important is to pass on to you what both my Wealth Manager and Portfolio Manager say about Technical Analyses when looking to advise on the purchase of shares.  These two very knowledgeable and highly qualified experts are in complete agreement : they see no worth in the idea at all, not as a whole nor any of its component elements. Market "psychology" is just not something that works unless by sheer accident. Company share prices are far more "clever" ( I mean complex, fickle and  disparate ) than any TA could ever decipher. As you said , quite rightly, share prices do not act " rationally" so what use is it to apply a TA that is based on rationality ??

I have a share portfolio covering about 50 companies ( on average) covering 8 or 9 market sectors as well as properties and collectibles. All the shares have been acquired using as much knowledge as possible about the companies---their structure, their personnel, their financial security, their investment attraction to reliable sources, their place in the greater scheme of market trends and too many other aspects to go into here. 

I hope this might be of help, especially in view of your very polite and interesting post  ( such posts being a rarity on this forum). Good luck. 

coastline

robertbanking said

It got me wondering when i am researching companies and buying stocks with growing earnings, good business models, but the share price falls and does not act rationally, why not just focus on the Technical Side of the market.

What I understand has taken me decades as years ago there was only the library and weekend press to gain information. I've never been a great reader anyway. Today the internet has opened it all up and new investors are in a sound position. I'm still learning to be honest.
Share price movements are controlled by many situations . The company fundamentals, growth prospects , cash or debt levels, paying an increasing dividend, sector prospects and more. There's some for starters. Then we have valuation , the sector itself , the base country and world valuations. Throw in interest rates , inflation and world events and we still haven't covered it. So I've narrowed it down a bit and call it the company prospects , world events and our main driver the US markets. Basically a share can move 50% in a year when the main market has moved 10 or 20%. Difficult game. 
So you've done all your research and picked a company with good prospects , increasing earnings etc then bang it's going down !! That's what happens . Could be a bit of what I've tried to explain above ( usually the US markets ) or it's just ran out of steam after a great run. Well this is where your TA comes into it and you either believe in it or don't ( probably 99% don't). I use it and have better results than just throwing money in overnight.
Bought TESCO at 246 on Friday as it's oversold sort term. Better than buying at 280 surely.

Tesco PLC, UK:TSCO Advanced Chart - (LON) UK:TSCO, Tesco PLC Stock Price - BigCharts.com (marketwatch.com)

Bought HSBA at 586 again for similar reasons. 

HSBC Holdings PLC (UK Reg), UK:HSBA Advanced Chart - (LON) UK:HSBA, HSBC Holdings PLC (UK Reg) Stock Price - BigCharts.com (marketwatch.com)

Here's the SP500 well oversold. Might even crash . What do I know . At least I'm buying at lower levels with potential of rising shortly.

S&P 500 Index, SPX Advanced Chart - (S&P US) SPX, S&P 500 Index Stock Price - BigCharts.com (marketwatch.com)

robertbanking

Thank you so very much for your responses, i have been trying to figure this out for so many years, i truly appreciate your support. You are very lovely people and your responses are very helpful to me.

Richard1212 i am truly thankful for your reply and you mentioning that your shares have been acquired using as much knowledge about the company, their structure, their personnel, their financial security, their place in the greater scheme of market trends. I truly appreciate your support, i understand that getting as much knowledge on a company is helpful, especially such as how it fits into market trends. I really appreciate your reply.

coastline thank you so much for your response, it means the world to me. It has taken me years trying to figure out investing successful and realising that it is much more complicated than simply selecting a strong company. Your post was enormously helpful and you have really helped clarify things for me. Technical Analysis is the missing piece of the puzzle i have been looking for. Can i kindly please ask what software or website you use for doing your Technical Analysis please? Can i kindly ask what in particular you look for when timing your entries within Technical Analysis? If you kindly had time to answer these questions it would mean the world to me. However your explanation is something that has also taken me years to realise that Technical Analysis combined with good stock fundamentals is key to increasing your success.

Hope you continue to do well in your investing and have a wonderful life. Thanks also for taking the time to support me, it really has helped me enormously. I will continue reading up on these areas. Very best wishes as always.  

coastline

First website I look at daily. See how the DOW JONES is moving and influencing the rest of the world . The UK closes at 4.30pm but the US markets run until 9pm and futures market overnight and daytime until 2pm opening again. People wonder why shares are rising and falling early morning (UK time).They are guided in general by the US futures. Just shows the strong connection with the US.

 United States Stock Market Index (US30) - 2023 Data - 1896-2022 Historical (tradingeconomics.com)

There's many others worth a visit for daily information ( too many) but you'll need something. EG.

MarketWatch: Stock Market News - Financial News - MarketWatch

Even a bit of TA on this one.

Investing.com UK - Financial News, Shares, Quotes & Charts

Some twitter feeds are decent for economic data but again way too many ( one feed will lead to another basically )

Charlie Bilello (@charliebilello) / X (twitter.com)  This one has a weekly video link and good for basic economic data.

Tis But a Flesh Wound | The Week in Charts (8/21/23) | Charlie Bilello | Creative Planning - YouTube     19th AUG.

Daily Chartbook (@dailychartbook) / X (twitter.com)

Ben Carlson (@awealthofcs) / X (twitter.com)

Liz Ann Sonders (@LizAnnSonders) / X (twitter.com)

Lisa Abramowicz (@lisaabramowicz1) / X (twitter.com)

Jurrien Timmer (@TimmerFidelity) / X (twitter.com)

Yardeni Research (@yardeni) / X (twitter.com)

FactSet (@FactSet) / X (twitter.com)

Have a look at markets , news and insights from the investment banks.

Goldman Sachs | Intelligence

Fidelity Investments - Retirement Plans, Investing, Brokerage, Wealth Management, Financial Planning and Advice, Online Trading.

Homepage | Schroders global

Insights | J.P. Morgan Asset Management (jpmorgan.com)

Citi Global Insights | Citi ICG

TA if you want basics ( I never pay for anything) have a look at these.

Chart Learning

StockCharts.com | Advanced Financial Charts & Technical Analysis Tools

ChartSchool | Technical Analysis Education | StockCharts.com

Free Financial Charts | Charts & Tools | StockCharts.com

Investopedia   From the menu look at investing and trading.

TradingView — Track All Markets

This one is updated daily with posters set ups all in one place . Once you understand more you can follow a few.

 Public ChartLists | StockCharts.com








 

coastline

I've never read any books or paid for TA so I'm not an expert but I've made use of some of the many tools. There's way too many set ups to use so I've narrowed it down to what works for me. Nothing works all of the time that's the first thing to understand. I keep it simple and use the oscillators and lower indicators then throw in a tight moving average as a guide. Lower indicators tend to move with the waves of the market so I run with probability within that timeframe. My main indicators are Slow Stochastic and %WilliamsR (why well that's just me) . The 10 day moving average is there as a kind of stop loss or trigger for selling. The link below in a daily timeframe is basically how I'm set up. Lower indicators are usually marked 80 overbought and 20 oversold. Once overbought it can remain overbought and that's where the 10 day moving average comes in as a stop loss. Once triggered it's a sell. Buying is of course at the lower end of the indicators at 20. Again it can remain oversold so the moving average will act as the trigger . Maybe switch to 5day MA at the bottom end. Sometimes I just buy when it's really oversold as today. So as I've said earlier I'm playing the probability game. 

 S&P 500 Index, SPX Advanced Chart - (S&P US) SPX, S&P 500 Index Stock Price - BigCharts.com (marketwatch.com)

On this link simply set up as I've explained and leave RSI above chart. Slow stochastic and Williams %R below and 10 day moving average.

$SPX | SharpCharts | StockCharts.com

Same here so you've got a few websites for free ( maybe need a simple log in )

SPX 4369.72 ▼ −0.01% (tradingview.com)

FTSE 100 Index chart, prices and performance - Investors Chronicle  Nicely coloured on the indicators.

FTSE 100 (^FTSE) Charts, Data & News - Yahoo Finance  Nicely coloured to keep you focused .

Basic company forecasts I use the following then away I go with the TA. Remember it's forecasts you need not historical results as the markets always look forward. Probably why many are confused with market moves. It's not easy .

Rolls-Royce Holdings plc : Financial Data Forecasts Estimates and Expectations | RR. | GB00B63H8491 | MarketScreener

Rolls-Royce Holdings PLC (RR.:LSE) Share price, analysis, charts, news, dividends, EPS forecasts, annual reports and RNS - Investors Chronicle

Rolls-Royce Holdings PLC, UK:RR Advanced Chart - (LON) UK:RR, Rolls-Royce Holdings PLC Stock Price - BigCharts.com (marketwatch.com)

Rolls-Royce Holdings plc (RR.L) Interactive Stock Chart - Yahoo Finance

Check the sector against your shares . If the shares are up or down maybe its the sector ?

Market Summary | StockCharts.com

Bookmark these ready made set ups..

$SPX | SharpCharts | StockCharts.com

$NYA | SharpCharts | StockCharts.com

Weekly timeframes..

$SPX | SharpCharts | StockCharts.com

$NYA | SharpCharts | StockCharts.com

Daily blog..

Trading Sunset

GazzaBloom

I'm glad you don't paint the picture of market trading in the same way that Greg Secker does with his endless YouTube adverts for his Learn To Trade courses, peddling the glamourous lifestyle of helicopter flights, 2nd homes on estate in Scotland with infinity pools and the like, all funded by 10 minutes a day currency trading over coffee in the morning.