I could not AGREE with you MORE !!
Absolutely NO OFFENSE taken.
I am glad you made the points.
I have prefaced almost all my technical comments with the admonition that once an investor comes to an investment decision based on Fundamentals, that charts and technical criteria can be used to fine tune and or help determine the conviction to act (bullishly or bearishly) to initiate, accumulate of liquidate some or all of a position(s).
In the perfect world - at least from an academic, theoretic point of view - the last price supposedly represents where supply and demand meet: the collective wisdom of the buyers and sellers in the market - using either or both fundamental and technical criteria.
By observing charts and other "technical" analysis, an investor can help determine the extent to which such fundamentally derived bullish or bearish sentiment is already discounted and or "in the stock".
I totally agree that based only on technical analysis, any decision made to buy or sell ANY stock is VERY DANGEROUS. That is why an examination of criteria from long term (one to ten year) charts on virtually all stocks in all industries are usually ones which demonstrates (coincidentally perhaps) an increasing number of bullish Moving Average criteria in the early stages of a growth trend - and likewise, usually bearish criteria can be found near the tops of such major moves BEFORE the headlines tell the fundamental reasons why.
Thus, those who use charts feel that certain criteria are in themselves either bullish or bearish.
The more bullish the various technical criteria the more conviction that the fundamentally derived investment decision to buy becomes actionable.
Ideally, an investor moves into a stock when other (industry or whatever) criteria are also bullish.
Thus, I usually keep an eye on other stocks which are similar (to NAT for example).
I also like to accumulate (buy) securities when "the market" or index is also showing bullish criteria.
Can you imagine if BOTH my stock pick and the relative "market" or index is also showing equally bullish (or bearish) criteria.?
When used together with fundamentally derived bullish or bearish conclusions, the fact that there often times - but not always - may be confirming technical criteria just helps the investor with the timing and or the relative size of the position to initiate or continue to accumulate or liquidate.
Test: ask a friend to pick a ten year chart with 50 and 200 day moving average lines. use my criteria - one at a time - to buy and sell. Probably not too bad - even if a few whipsaws. If combined, even less whipsaws. If combined with market criteria, even less. And if only acted upon when fundamentals are in line, not too bad. And even fewer whipsaws.
Fundamentally? I'll be watching the (a) rolling 3 and 6 months average prices of tanker rates as well as (b) past 3 and 4 quarters total dividends (now on the increase) to signal a possible change in the fundamentals. And I'll pay attention to the outstanding fundamental data which comes accross this site from folks like yourself.
By the time the decision is made to renew or not renew (and is officially announced to joe six pack and all those not watching for signs of such a decision on such an informed board such as this, a lot of the news will have been discounted in the price of the stock. So amlot of the "risk" of such a decision will have been discounted prior to the time it will be known as a fact. And no one will ring the bell when the highest tanker rate is paid. So such technical analysis is just one more means of putting relatively simple criteria into the decision making process.
I use the charts from the following web site which was previously suggested by another user of the OMM site to help with the timing of adds and liquidations.
I like it since it shows past 3 years and includes both the 50 and 200 day Moving Average line.
using the 4 criteria suggested in msg #3401, it is interesting to note that of the following 4 tanker stocks (NAT, VLCCF, TK and OMM) two of them have all 4 criteria positive: The current price of OMM and TK are above Both the 50 and 200 day MA line AND both the 50 and 200 day MA line are trending UP.
In the case of NAT and VLCCF, three of the 4 criteria are positive. Although close, the 200 Day MA line is still not trending up. Flat maybe but not yet UP.
Be sure to note the price action of TK when it recently exceeded its previous (last year) high. It "gapped" open and added almost 10%.
And now OMM is within 10 cents of exceding it's 2002 high.It will be intereswting to note what it does as it hits the number: PROFIT TAKING or RENEWED BUYING?
Nat and VLCCF are 75cents to 1 1/2 bucks away from their 2002 highs respectively. In addition, unlike TK and Omm which pay only minimal dividends, NAT and VLCCF are due to pay a big dividend and might decline from short term profit taking immediately following the ex date - due "shortly".
what with improving and or favorable expectations regarding rates and dividends, it appears that all 4 are under accumulation on dips. Some investors using technical data, will continue to hold and accumulate as long as the current price remains above one or preferably both of the 50 and 200 day MA line AND as long as one or both of the two MA lines are trending up.
It will be interesting to see how this all turns out.
No promises. Just one method of attempting to monitor and invest and stay in strong stocks and liquidate and/or avoid stocks as they roll over and become weak.
Back in msg 3401 and 3416 I suggested using Moving Average lines to help time accumulations and profit taking and ended with the comment:
"what with improving and or favorable expectations regarding rates and dividends, it appears that all 4 (stocks discussed in 3416) are under accumulation on dips. Some investors using technical data (Moving Average criteria discussed in 3416), will continue to hold and accumulate as long as the current price remains above one or preferably both of the 50 and 200 day MA line AND as long as one or both of the two MA lines are trending up." (Obviously the more of the criteria are bullish, the more confidence one can have especially if both the short and longer term criteria are both showing bullish trends).
The following is the chart service I use:
As you can see:
NAT price rose above the 50 DAY MA line in early November signaling an initial buy.
The 50 Day line moved up within a week. Second positive signal.
NAT price closed above the 200 Day in early December - the third positve signal.
The 50 day moved above the 200 day in January - 4th signal.
In Feb the price fell below the 50 Day (first profit taking for traders since 3 criteria still bullish. The NAT price stayed above the 200 day so no need to take any more profits. But when the NAT price went back above the 50 Day in mid Feb, one could have added back the fourth position.
I suspect that there will be a few "fake out/whip saw signals" but assuming you feel the fundamentals are still bullish, no need to take anything but partial profits (based based on purely technical MA analysis) until the NAT price falls below the 50 day and would liquidate full position if and when the NAT price falls below both the 50 and 200 day MA lines and or especially if and when the two MA lines trend down.
By the way, the last of the 5 "signals" has not (yet) turned bullish: it is when the 200 Day line begins to trend UP. It has been in a down trend for almost two years (since early JUNE of 2001) at a price of around 19.5/sh BUT IT IS GETTING PRETTY FLAT now with the last 200 Day MA level being at 12.55/share.
Get an updated level from the chart.
More to the point, the MA criteria will be all bullish if and when BOTH the 50 and 200 day lines are trending up AND the NAT price is ABOVE both lines AND the 50 day line is ABOVE the 200 day. A total of Five criteria.
The above is just one interpretation of how one can use MA levels to help discipline entry and exit points on stock you want to own based on a lot of DD and fundamental analysis.
Every person using these criteria should use or emphasize one or more of the long and or short term criteria based on their own investment objectives.
Now, back to more fundamentals.
It helps those who tend to fall in love with a company and or a stock and have a hard time saying "Bye Bye, It's been a nice ride. See you next time around."
It gives up to 5 "excuses" to get into a position and 5 to get out. Plenty of excuses.
does it strike anyone other than me that NAT and VLCCF pay such fat dividends because they don't care about being around after their contracts expire?
There has GOT to be a reason why TK only pays 21.5 cents but the two limited-purpose, single-customer entities that are effectively financing deals for oil majors partial ship owning needs are paying out divies - LIKE THERE'S NO TOMORROW - maybe because the companies realize there is no tomorrow?