Charts can be very useful and it's true they aren't guaranteed. Having said that, I don't use them in a void of other information.
It's necessary to use multiple indicators. When talking about a trend, simply saying something is oversold according to RSI isn't sufficient indication that something will reverse. Same goes with overbought conditions. There are other things you have to look for in a trend reversal.
Also have to take into account fundamentals and potential catalysts.
--Several of those examples on that link reflected the recession. That was something that economists were warning about since 2007. BTW, we are due for another one in the coming years.
--If a stock is overvalued on hype with respect to its balance sheet, then a shareholder should realize that a correction will be on the horizon eventually.
--A biostock with $5M in cash while being deep in clinical studies and a high quarterly burn rate is going to have an offering eventually which may drag down the price. BLRX is in a strong cash position for awhile, so this isn't a concern for me in the near term with the stock.
Better to trade most stocks instead of invest in them, esp in the case of biostocks because of the high risk potential that clinical studies do not meet expectations. There's a chance that BLRX's clinical studies do not meet expectations. That's where the buy on rumor, sell on news comes into effect.
I've found that the biggest hurdles for many investors are having a solid plan and not being too greedy. Plus, too many have an emotional attachment to these companies.
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