Anavex Life Sciences Corp (AVXL)

[Gator328]

Technical Analysis can be helpful in the short term to determine if a stock is trading outside of its traditional price channel, but long term investors are better off relying on fundamentals such as balance sheets, sector analysis, and competent management histories.

I use fundamental analysis to decide whether a company is worth buying and technical analysis to help me decide when to buy. As for selling, I generally wait for a seismic shift — a big news event, a stellar earnings report that’s unlikely to be replicated or a similar black swan moment — that renders both fundamental and technical analysis temporarily useless. Sometimes this is a good thing and I’ll sell high, sometimes it’s a negative event and I decide to cut my losses.

Both methods have value. The trouble with TA is that everyone has different metrics and ideas about how to use it.