Oh yes, underneath all this technical information all professionals know that someday the company must make money. All the technical work tells us that there are people out there who think that eventually this company will be profitable. Technical analysis draws our attention to this flow of information and then the flow of money that follows. It's a great time saver. But, there is a problem for today's investor.
Information moves much faster and there are many more informed investors today.
So what we see is a mass of investors trying to hit the same entry point at the same time. If nothing else it creates frustration as a stock moves quickly out of its prime entry point. Here is a strategy for you to consider using our basketball analogy once again. If, as a defensive player, I can move my opponent out just slightly from his normal position, I can cause that player to be a lot less effective. What we want to do is beat the other investor to that spot on the floor.