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I just have no faith in this so called Technical analysis. Indian Share Market went up by 923 points on 14-11-2007. It went up by about 800 points on October 23rd. Did anyone predict that ? No. From that day to 15th November, minimum 2 shares of well established companies go up by 8 to 15% on any given day [ but not others in the same sector ]. Anyone predicts that ? No. Spinning a coin is as scientific as some of the predictions / comments in the Indian Business channels.

Did they predict or suspect the January 2008 crash ?

Why ?

The so called Technical Analysis is an examination of the past movement of mainly the share prices, to predict the future movement of shares / indices and the likely market movement

 The basic assumption that the past share prices have accounted for everything upto the present minute is unwarranted. To me,

 the Technical Analysis, due to the above basic in built defect, is a Farce

 

The 2 TV channels at times ask 2 Analysts at the same time, to give their opinions about 4 or 5 different stocks. With the same software / Elliot's wave charts, these 2 will have same views on 2, differing views on 2 others and a vague nonsense like a Politician on the last one.

Do you get that ? - Same methodology, market conditions and data - yet differing views. What does it mean ? It is not an analytical and scientific interpretations - as they may wish the public to believe

but a Qualitative, subjective assessment without reasonable foundation. The views do not account the fundamental financial facts in the Balance Sheet, the present Marketing realities or the known growth accelerators / decelerators for the performance of that share in the near future. The Market has already accounted for all these is a critical and unwarranted assumption

Invariably they have no stake in the shares that they comment upon but would not mind if the viewers take their views and put their money in or out of a share.

The analysis lacks clarity and conviction. Do you want to risk your Money and Time ? Star One runs a very enjoyable Laughter Challenge Program. And that is a really sincere, mind relaxing, fun program
 
 

There is no fool proof mechanism / software anywhere in the World to predict the share price movements correctly on all occasions

Two Economists, Noble prize winners, along with others, attempted to develop a sophisticated gadget / software to predict the share price movements. They did and invested. And they went bankrupt. This was a news in Outlook Magazine in October 2005

The Depth

It is easy to give an expert view on these channels. If the ruling price of a share is, say 100, an expert with the computer chartered colourful lines in Yellow and white would say first that there is good support at 95. It is simple common sense that it has support at 95 for otherwise it could not have touched 100.

The joke does not end there. The next upward level is 110. This is 2nd class arithmetic. The upward numbers after 100, can only be 101, 102 ....110. The analyst cannot say when this level will be reached - that is his safety / catch. The Joke continues. Once the price barrier of 110 is breached, the next level will be 120 to 125. Fantastic, what logical interpretations !

Let us say, that I have bought a ticket from Ahmedabad to Bombay. Once the train crosses Baroda, it will go towards Surat. Once it passes Surat, it will reach Bulsar. If everything is fine at that level, it may reach Bombay. Compare this with the Technical Analysts presentation on CNBC TV 18 or ND profit. Hardly any difference, if the phrases are changed.

If these experts are really that 'knowledgable about the stock movements' could they not sit in their offices and make more money than come to the Channels personally or otherwise for a lesser sum ? For Publicity - yes. I had come across one person who got guided by a Technical Expert and lost about 10 lakhs in 2002

 

The channels should put a disclaimer that the views are as reliable as the hourly changes in weather and anything can change in the next 30 minutes or earlier.

The predictions are normally meant for 5 trading sessions. Do the common public / investors normally buy shares for 5 days, 10 days or 4 weeks ?

Traders / Speculators may buy for a short period of intra day to 5 days. Do the Channels specify the audience for whom 'suggestions of the Technical Analysts' are intended ?

 

Mumbai got bombed on 11th July 2006. Infosys showered the Market with stunning results on July 12, 2006. Market Zoomed despite the tragic news on the earlier day. Can any analysis account / provide for such things ? No analyst predicted anything favourable earlier to the results

HDFC, TCS, Satyam and ACC came out with very good quarterly results between 17th to 21st July, 2006. Did any of the Analysts predict fall of these shares ? No.

Rajat Bose, one of the regular analysts in CNBC channel, predicted a jump in VSNL share prices on one day. That day, that share price went down. He too lost and he admitted that towards the end of that date. Most others do not

 

CNBC - US

CNBC 18 channel must have some collaboration / technical / marketing assistance from CNBC - US. There are no 'technical Analysts' to sum up the 'Closing bell session' of the US market.

Why CNBC India subject the Indians to these ordeal, when their collaborator do not ?

 Just listen to the Technical Analysts views on 10 shares for just 5 days. Note them down in a piece of paper. Go through the recommendations after 2 weeks. The figures will speak. Even for intra day or intra week speculation, it is not an infalliable scientific tool.

Proof: Simple. If these analyst can predict at 11 AM, the likely price for 5 shares that will gain around 2% by 2.30 PM, they can make a Million in a month with just 10000 capital. One can buy 50 times the investment in intra day dealing. That is 5,00, 000 per day. At 2% profit, the first day's profit will be 10000 and the second day's trading can be 10,00,000 and profit, 20,000.

If they make enough and more, they would not be wasting our time through TV channels
 

24th July, 2006

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