CHAPTER 5USES—TIMING ANDSELECTION
The basic uses of technical analysis are for timing (when to buy or sell) and stock/sector selection (what to buy or sell).
Market Timing
Will Rogers said it first:
“The way to make money in the stock market is this: You buy some good stock and hold it until it goes up; then sell it. If it don’t go up, don’t buy it.”
Technical analysts believe that there is a time to buy and a time to sell even the best stocks.
No stock goes up forever. Its price goes up and down in cycles. Markets repeat themselves according to a logical progression that can be measured over time. They trend up and trend down. They cycle through periods of optimism, followed by periods of pessimism.
Bob Farrell said it best: “History never repeats ...
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