Chapter 7 · Technical analysis and timing
What technical analysis is for
It answers a different question from Chapter 6, and confusing the two is the common error.
Fundamental analysis asks what a business is worth. Technical analysis asks what its price is doing. These are different questions with different time horizons and different evidence.
A company can be excellent and its price can fall for a year. A company can be mediocre and its price can rise for a year. Neither fact refutes the other analysis; they are answering different things.
The dedicated technical analysis section on this site goes much deeper into each method, including how much weight each one can actually carry. This chapter is the practical minimum.
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