Investor Challenge

Before a fundamentally oriented investor casts off technical analysis – or chart reading – as a flawed ‘black box’ approach, he or she may want to consider the advantages of implementing such a strategy. A few simple technical signals may spot optimal entry points into those high-performance company stocks.

Eventually, a stock will indeed be valued appropriately, for better or worse. It’s the interim periods that hold opportunities for investors though. An undervalued stock is a bargain, and an overvalued stock is likely to be a short-term exit opportunity.

The big challenge for most investors, however, is determining when a stock is undervalued and ripe for a rebound. Conversely, the other challenge for investors is determining when a stock is overvalued and on the verge of a pullback. After all, there are no industry-standard values or norms for either … only market opinions.