Technical Analysis is nothing but sum total of how and what investors, traders, HNIs, Institutes, Funds and other participants of market perceive the particular stock or commodity. It is overall picture of crowd behaviour and their average reaction to different circumstances. This includes fundamentals as well. I mean how crowd responds to change in fundamentals.
We all have experienced greed in case of excellent fundamentals and fear in case of poor fundamentals. But what are the limits of greed or fear? What defines the limit of greed or fear in any market? Why some of the best commodities or stock stop responding beyond certain point or worst stock refuse to fall below certain level? Why particular stock falls after posting extra ordinary results? Why worst currency or commodity bounce back after pathetic fundamentals?
Technical Analysis tries to answer above question. It is simply study of how crowd has reacted in history in similar situation of circumstances. Underlying assumption in TA ( Technical Analysis) is crowd will react in same manner as in past when thrown to similar situations in future. There might be some deviation and there is no 100% guarantee of result. But odds are in favour of similar behaviour in future rather than new one.
I have studied most of the l top rated veterans both on Fundamental as well as Technical Analysis. My conclusion is do not follow fundamentals blindly. Put your money in stock or commodity when fundamentals are supported by TA. Otherwise there are chances that you will block your fund for years to gather, if not loose.
Have you ever experienced that you buy a stock at peak and sell at the bottom? If you follow TA, I am sure this will not happen to you in future.