"In a bear market you need an unbiased viewpoint."
Sometimes the charts just don’t cut it as a way to get useful information about what the future price of a particular stock might be. And sometimes the fundamentals don’t cut it either. When markets are in bear territory, it’s hard to tell which way to turn, as investors on the Hathor Exploration (TSX: V.HAT, Stock Forum) Bullboard understand all too well. Here is Stockhouse community member pandf on the subject, with words edited for clarity:
Obviously we disagree on the value of technical analysis. Sometimes charts offer insight and other times they have nothing to contribute and a common trap is to go "chart hunting" to find something that supports your bias or opinion. That said the charts have been correct in identifying the recent downtrend in HAT and the fact that it now seems to be following the rest of the uranium sector.
As for the traditional understanding of fundamentals, at the present time HAT is an exploration play and although showing great potential has no fundamentals. No production, no cash flow, etc. In a bear market you need an unbiased viewpoint. Charts can sometimes provide just that whereas news releases are obviously biased toward making the company look as good as possible in all situations.
The same investor also contributed the following thoughts on the value of studying price and only price with respect to a company’s share price prospects:
The price does have all the relevant information. It is the price that you are really interested in. The chart indicates price, trend, momentum, insider knowledge, market psychology, etc. based on historic experience and probabilities. It is an unbiased indicator which for me is better than hunches, tips, news releases (stale information all dolled up for the drooling masses), or astrology and so on and so on. It's just another tool in the box and relevant whether the trend is up or down or flat.
Another investor on the Bullboard, sharkit10, contributed some variations and different opinions on the subject:
My comments were directed at charting during volatile market shakedowns as we are seeing now Pandf. There is no way you can factor charting when mass psychology comes into play. During these times everything regardless of how good it is gets thrown out due to panic selling. HAT is a prime example of this. They have continued to prove up the pounds in the ground yet panic selling is underway with a possible recession looming.
Your comments about mass psychology and charting are untrue. All other factors such as price and trend are true, and as far as momentum goes well there is a high degree of speculation that gets ramped in and where the stock price stops up or down is hard to determine through charting.
Fundamentals are still present. HAT is continuing to prove up the resource and in my eyes will continue to do so.
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