These days, one of the great joys of my life is watching the stock markets fall. I don’t get much time to watch TV, but I follow the collapse of the market through the Rediff stocks page. The advantage of this page over other choices is that I get to read the prognostications of the “technical analysts”. Their statements have a zen-like quality to them. For example, at 9:33 AM today, Prakash Gaba, technical analyst has said:
“If the market falls any further, a bounce can be expected”.
How profound!
Also, going by the evidence on this page, Ashwani Gujral, technical analyst is on CNBC Awaaz all the time. I wonder if he gets time to do his job.
I believe there are some activities that we can comment on without actually being good at it. For instance one doesn’t really have to be a great cook to appreciate good cooking. Yes, if you want to be a ‘critic’ of cooking then you should have the necessary skills to know what you are up against.
I am assuming you don’t know much about technical analysis – considering that you found the ‘bounceback’ statement profound and that you actually follow it on Rediff stocks, where as probably even Yahoo! Finance is 100x better portal to track – because I am sure, if Prakash Gaba had said “it will fall further” or “it will find new support / resistance”, or “wave 4 is completed and wave 5 should begin”, you would have found it equally profound and amusing – or should I say it will always be a tinge of zen?
1) I don’t “track” it except for my amusement. I don’t own a single individual stock.
2) I am only dimly aware of technical analysis – I had a course on it during my MBA, and the concept made as much sense to me as astrology.
3) At least in western markets, there is no evidence that technical analysis actually works. It might work in India – but my gut feel is that it works because most investors in India are idiots and treat the stock market like a casino – so someone marginally clued into the market can make money at the expense of those idiots. In other words, what works is not their charts, but their intuitions.