Yes, definitely Technical analysis is good. It helps you in finding the high probability entry or exit point to any stock.
You can have your own fundamental view on any stock, but the fundamental analysis could tell us what stocks to buy, but its only Technical analysis that tells us when to buy.
Also
its equally important what is your objective ? You want to do intraday?
short term positional trading? or Long term investment?
Say, you wanna try out Intraday or short term trading, you check the news, trying to find what HOT now. You end up seeing Reliance Jio
news. After listening to the Jio announcement, you are excited now, as
Reliance Jio is going to disrupt the Telecom industry with its great
tariff plans and you are sure its going to increase its market share
substantially. And finally your analysis says, since Reliance Jio is a
subsidiary of Reliance Industries, Reliance stock price is going to
climb up, so you wanna buy it.
If
you could check the chart, the stock price climbed up from 1050Rs. to
1070 Rs., however it could not raise further as there is big resistance
at that level, hence it started declining and after breaking support of
1050Rs. it went down further to Rs.1030.
If you
had followed the news, you would have lost money on this intraday
trade. If you had followed the chart, you would have gained money
irrespective what the news says.
Now consider the same Reliance Industries for another example,
a
most trusted Company in India, with a market capital of more than 3 lac
crores, almost all mutual funds in India have invested in this Company,
with such a stunning fundamental aspects, anybody would say Reliance
Industries is great long term investment.
But
if you do a technical analysis on the stock, it clearly shows you the
stock has been stuck in range for more than 3 years now. The stock price
neither appreciated much nor depreciated much. Its just stays there. No
much movement.
This
is where Technical analysis helps, telling you when to buy this stock.
Until there is a real breakout of above Rs.1100, we cannot expect
further upmove. No matter whatever Reliance does, (let it launch Jio,
Bio, Trio) but I will not enter into this stock until the chart says so!
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