A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits
by Michael C. Thomsett
Value Versus Growth
Most trend analysts focus closely on price trends as if these trends occur in a vacuum. Assigning momentum to supply and demand is legitimate, but that supply and demand interaction results not only from perceptions of market value in a particular stock, but also in the fundamental success (profitability) of a company; changes in dividends paid and payout ratio; and effective management of working capital. These collectively form the essence of fundamental analysis and define companies as value investments or growth investments.
For technical investors deciding between value or growth, a problem becomes evident upon historical analysis. In some years, value investments outperform, and in others, the dominant force is growth. ...
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