Technical Analysis

Technical analysis can be helpful in determining when to buy a stock or sell a stock, but as a system, technical analysis is overrated and far from perfect, particularly when it comes to rating smaller-caps. I have seen technicals that indicated “Strong Buy” and the stock proceeded to move southward. Always examine the balance sheet and the income statement of any company before purchasing the stock. Look at the management team. What is their history of experience in the industry the company operates in? Are there industry pros on their board of directors? Be sure the company has enough cash to fund operations for the next 12 months, and if not, determine whether they are capable of getting funding by examining their 10-Qs and 8-Ks for past fundings.