Anavex Life Sciences Corp (AVXL)

[Chart Reader]

I have not stated that TA is being replaced by algos. They often work together but the difference is that algos key on support and resistance levels and on MA's (mainly the 200's) for the simple reason that these supply "specific" entry and exit points while the rest of TA supplies the general outlook.

Let me give you an example using RSI and Stochastic overbought and oversold indicators. Those two indicators can be resolved with the stock not going anywhere or even moving in the opposite direction for a few days without breaking the support and resistance levels. For example and using LWLG. The stock is oversold and that suggests that further downside (at this time) is not likely to happen or be limited. If the stock trades around 3.60 (below the now "weekly close" resistance level at 4.10) or even moves back up from 3.60 to 4.10 (to retest the breakdown), the oversold condition will be resolved and yet the reality is that support has been broken. This scenario fits in with almost all TA indicators, even things like Bollinger bands.