BPT is in a longterm downtrend. You can see from the chart that it is now worth less than half what it was 4 years ago. It is of course possible to make money trading such a stock, but as a "buy and hold" candidate, it has been a disaster. The longer you have held it, the more you have lost. Nevertheless, it is in a short-term uptrend and is currently neither overbought nor oversold.
Not at all! Just because BPT is in a downtrend doesn't mean that TA is inapplicable or useless! In fact, it is easy to find indicators that enable you to profitably trade falling stocks such as this. Let's apply the most commonly used oscillator (Relative Strength Index) using its default period of 14 days. As you can see from the chart, this has signalled a total of 5 trades over the last 4 years, 3 winning and 2 losing, giving an overall gain of 71%. I admit that this is nothing spectacular, but a gain of 71% beats the hell out of the 52% loss worn by those that held BPT over this period. Just 5 trades in 4 years is not a lot and it is easy to see that the RSI default period of 14 days is too long for this stock. If we use a shorter period of, say, 9 days, the results are even better, giving 8 wins and 2 losses for a gain of over 105%. It is not good practice, though, to act on the signals of any single indicator and the use of other indicators in conjunction with the RSI gives a more robust system with greater gains and more consistent results.
http://i602.photobucket.com/albums/t...sPB/BPT421.gif
Do you still value BPT at $4.33 Tricha? It would appear that the market values it at a lot less than that. This is one of the problems with FA, of course. Even in the unlikely event that you are right, unless the market agrees with you, such a "valuation" means nothing.
You are entitled to your opinion, Tricha, and if you choose not to use TA at all, that is your loss. The above example shows that TA can make you money even on a losing stock such as BPT, but of course we both know that a single example of a single indicator on a single stock hardly constitutes proof of TA's efficacy. For that you would need to go to much larger more comprehensive studies, such as this one :-
http://mpra.ub.uni-muenchen.de/9871/...paper_9871.pdf
The maths involved is beyond the comprehension of most of us, but the conclusion is clear enough. TA works.