While several investors keep trying to look at the company earnings and the macros to make sense of the the future direction of the stock market prices, a curious category of investors pour over the charts and keep looking for evidence in the apparently random squiggly lines that the charts of stock prices over time make. This group of analysts are known as the technical analysts. So what exactly do the technical analysts look for in the charts of the the stock prices and why do they even attempt to predict the markets when essentially every academician on earth deems the price movements to be nothing but a random chance and any attempt to predict it as an exercise in futility?
Well, having been an investor for more than a decade and going through the drudgery sometimes of stock picking and building a portfolio, I have often used Technical Analysis as a tool to help me make what I believe are some very important decisions at the overall level of a portfolio or even decisions pertaining to the asset allocation. Some people would frown at the idea of using technical analysis to make such decisions but I have found them to be incredibly useful and in this article I will show a few places they prove to be absolutely indispensable.