I agree with you Mathan. By far the most common way my technical analysis model is used is in combination with fundamental analysis, rather than in isolation. The technicals are a "timing tool" and useful in identifying turning points in momentum / sentiment (which is really what technicals are analysing), particularly when it has moved to an extreme. There are times when fundamentals are not the key driver of share price or market performance, and it is in those situations that technicals are particularly useful. By way of illustration of how the technicals have been effective on the "timing"side, during last year major market turning points were identified - the upward reversal point in US bond yields in August 2016 (at a then yield of 1.58%) and the buy signals on the key European stockmarkets in mid-July 2016.
On Technicals - Dow Jones - at same overbought levels as in 2007 and 1999 -
It has been interesting to note that in mid-August a cluster of gold stocks generated technical sell signals. Commonly, stock technicals lead the related commodity.
On Technicals - Gold - potential for a sell signal to be generated -
The close above 5036, as detailed in my Wire as the key technical level, has activated the technical buy signal.
On ASX200 index technicals – 5036 is the key level to watch -
Day to day movements won’t alter the trend after a signal is generated i.e Just as there is very specific criteria that needs to met to generate a technical signal, very specific criteria needs to be me to invalidate a signal. In the case of brent, a downside break of a key support level would be required to negate the current buy signal.
QMG clients were provided with an early technical alert on 27/4/15, when the AUD was trading at 0.7820, that the potential had emerged for a trend change in the AUD/USD. The break above the 0.7843 resistance barrier during the next trading session satisfied the criteria and activated a technical buy, and it was at that point the AUD technical trend turned positive.
CBA is the major bank stock to have generated a sell signal
As detailed on 9/12/14,WTI oil originally generated a technical sell signal at US$90.69 on 23/9/14. Most recently nominated downside target located at US$60 (detailed in 9/12/14 Wire). If a close below this level occurs, major subsequent support would then be located in the US$56 - 58 band.
As detailed on 9/12/13, WTI oil originally generated technical sell signal @US$90.69 on 23/9/14. Most recently nominated downside target located at US$60.00. Next support band under US$60, if that level is broken on closing basis, is located in US$56 - 58 range.