I won't answer for Blue but I'd like to make a comment. Charts tell you about past performance. Folks use this to try and predict future performance. The only reason it generally works is due to some key factors.
1) they tend to work during periods of neutral static, meaning when no news good or bad can mitigate the outcome of a days trading
2) they work because the people who use them desperately need to make sense of things and provide rules for that which generally defies rules. This is as human as any human flaw, to seek patterns, such as in lotto numerology.
3) they work because others have bought into the idea of using them which has created a wag the dog scenario where the dog, (the stock PPS) is wagged by the tail (tm traders).
4) tm traders need this during these information less and news less periods where other pps moving variables are not there. This allows TRADERs, (those who don't hold onto stocks) the opportunity to seek a pattern within a selected time frame to look for entry and exit conditions that suit their trading.
5) this does not work when a stock is in a state of flux due to mitigating events such as news releases, industry events, national crisis, etc... Any newsworthy event can and does causes stocks price to behave erratically and defy the TA historical data.
6) this can be viewed as market manipulation. Case in point, the recent PPS spike to $5.44 in fnma. After the spike and the sell off the stock did temporarily stabilize over $3 but was then systematically walked back down over a period of weeks, why? Because TA traders HAD, (in their minds), to fill these imaginary gaps in the PPS.
There are no rules that say that these gaps must be filled. They are observations that allow for manipulation and therefore create an opportunity for volatility which creates an opportunity for profit. The recent example worked because there will always be foolish and scared people who enter the market with nothing more than a buy in $ and a tip from someone or the media or whatever. Without proper dd they can be easily enticed into losing money out of fear.
7) when fnma resumes the move up towards its real and intrinsic value I will guarantee that you will not see any gaps filled in areas where it is perceived by traders that a gap was opened. You won't see this because with news the stock automatically is restored to its full book value at a minimum. After that it will trade on future value based on perception until such point as the Dow Theory resumes and all past, present, and future events are baked into the price as dictated by the overall market.
8) at that point traders will re enter and another phase of TA trading may resume to provide liquidity during major news drought periods.
I don't doubt that when used at the right time TA can assist traders and investors in selecting more opportune moments to enter or exit. But these are trends not laws or rules. When a stock moves on fundamentals and news TA becomes invalid. In fact I would not be surprised at all to hear a TA trader confirm this notion and use that as a marker in their own evaluation of TA markers.
Essentially very few people can say that they always and only do one thing i.e. day trade, swing trade, momentum trade, go long, go short, etc. Som skilled folks do it all and know when to do so.
At the end of the day we all react to the collective emotional reaction of the market at large. Being as such and humans being emotionally unstable that's where the opportunity to bank is created for those who's only rule is that there are no rules and much like a fight must be ready to adapt to the conditions as or ideally in advance of the collective consciousness of the public.
This is a thinking mans game for those who make money every day, not just on runs up or down.
