I get moving averages to smooth out volatility, but what is special about that line and why is the slope more significant than the infinite other slopes that could have be drawn?
And what does it tell us about the future to help an investor? I'm guessing it tells us it will either test and break through or test and fall back down. So it will either go up or down. Weeks from now you'll be able to look back and say see it tested this line and broke out or retreated or the slope of the line will be changed.
Technicals, yes, are like a windsock. It's not a crystal ball. For the same reasons many fundamental investors can fail. It's an art form and a science at the same time. It's why I'm a proponent of both if ones so inclined. If you become well versed in both it increases your probabilities to make money and make sound decisions. IMO.
The thing with the specific line I have mentioned here is that price has had many reactions off of it. From the upside and downside. That becomes and makes it more relevant. More tags in certain technical analysis patterns and trend lines, the more useful. That's the general idea based on decades of research. Second, it's a downward slopping trend line with a head and shoulders pattern that signals distribution. What can this do for someone who incorporates both? Many things. If you respect that trend line, then you probably don't put new money to work. If you don't, then you potentially put money to work into these precarious spots and we reject hard off this level. MSM will state it was this, or that.. instead it will be what it always has been. A game of supply and demand. That's what moving averages and well respected trend lines show.
Technicals aren't for everyone. I get it. But, neither are fundamentals.
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