USEC, Inc. (USU)

MGDG (94.61) Submitted: 10/30/07 7:46 PM

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Nice move on the swing trade Craig. That's the way to use the charts.

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jonconnery (32.64) Submitted: 3/13/08 3:05 PM

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Chart keepers remind me of Gypsy fortune tellers at carnivals or Witch Doctors in the jungles ... Charts make as much sense as throwing bones on the ground or using a deck of cards or palm reading to judge a company... ??? Total foolishness !!! This company is a MONOPOLY in the U.S. , being a former government entity.. It is the only U.S. source of Nuclear fuel.... and I make no bones about that one !!! LOL Fundamental... Fundamental Fundamental ...

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CraigCa (87.85) Submitted: 4/04/08 7:03 AM

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Jon,

Chart reading, (at least as it relates to Moving Averages Analysis), is simply a momentum trade. If people are buying/selling the stock and driving the price up/down, you simply go along for the ride. When the buyers start selling or the sellers start buying, you jump off the ride and pocket whatever cash you earned along the way. This works best if you either do very short-term analysis, (and very frequently), on volatile stocks or find some long-term cyclicals, (with peaks and valleys years apart), and ride the waves. It's more definative than reading bones, since you are watching what others are doing and doing the same, instead of looking at bones and trying to make interpretations. The price movement on a chart can be tracked and analyzed. It has a direct correlation with what you are looking for, (the movement of the stock making you money). This differs to throwing chicken bones in a pan and trying to predict an earthquake, as the bones and the earthquake have nothing to do with one another.

All that being said, in real life, I do look at fundamentals, and only use moving averages to let me know when the best time to buy is. If I like a company and think it has a lot of good potential going forward, but notice that the stock is in the midst of a sell-off, I will not buy the stock then as I know I can get it cheaper in the future. Also, if it is in a big sell-off, I will redo my analysis to see if I overlooked something that is leading to the sell-off. If after further review, I still like the stock, I will wait until the sell-off subsides and buy at the much better price that the market afforded me now as opposed to what I thought was a good price then. If watching the chart can let me buy a stock at $15 that I thought was a good buy at $20, I would be rather foolish not to take advantage of waiting to get the $15 price and be able to buy more shares, which will lead to larger future gains, (if my analysis pans out).

Thanks for the response and have a nice day.

Craig

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abbeymoney (89.32) Submitted: 6/17/08 7:07 PM

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I hope this article helps you be more Foolish. Technical analysis does not work historically.

http://www.fool.com/investing/value/2008/06/16/avoid-the-mistake-that-cost-buffett-8-years-of-bet.aspx

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