Replies to post #14588 on VirTra Inc (VTSI)

[justanotherfool]

CB,

basically: for a penny stock, yes. Charts are of very limited value.

Penny stocks are extremely volatile, and can vary -80% to + 500% on news in one week, and sometimes in 1 day.

Slow trends up or down are of greater interest, for example, to the belief that DAL will go bankrupt.

The slow down trends are sometimes caused by a pattern of shorting and coverage, with some "re-investing profits" at each 10% down etc.

Since there are no shorts on penny stocks, that rule dows not apply.

Similarly, gradual market share improvemnts and large press coverage may tell you if the trend in AMD or Intel is interesting.

There is no significant coverage and no analysts for penny stocks.

So:

You have to work on hunches much more than TA or charts IMHO.

Fool.

[dlh29]

charlie bunny,

TA patterns, like head and shoulders, actually are simplified pictorial representations of certain supply and demand patterns. Very few folks who consider themselves TA's understand that volume patterns must correspond to these chart patterns to give them relevance. I feel even fewer appreciate the difference between supply and demand patterns in products that are traded for consumption and products that are not. IMO, this distinction is why TA in stocks is not the best basis to drive one's decisions - particularly over a longer term.

The stock TA crowd has also developed enough different TA triggers to where they can always find one that will explain what happened. This is kind of like economists - there's enough different opinions out there we'll always find someone who was right and this person will tell the others they were simply not giving the appropriate weight to one or more of the variables. This is why I frequently say TA is a wonderful method for predicting the past.

However, this aside, there are certainly times when TA will foretell what is to come. This is especially true now that there are so many people who swear by the read of a chart pattern they don't really understand. In short term swings, these patterns will often lead to self-fulfilling prophecies. This is exactly what I'm hoping will happen with ZRAN. Essentially, I feel TA will lead to and feed over-reactions in both directions.

Regards
doug