Many times, technical analysis gets a bad rap but unfairly so in our view. In fact, when one accepts the pretence that share-price action on the technical chart informs the investor of everything, then investing can become a whole lot easier. We believe that every possible piece of information be it fundamental, psychological has already been digested by the market or the share-price behaviour on the technical chart. This is especially true on long-term charts because we are dealing with far more information.
We aim as much as possible to invest in what is in front of us and not what the fundamentals may necessarily say. This is the Achilles heel with respect to just investing in a company for fundamental reasons in that one may have to wait years for a bullish trend to finally get underway. Studying the technicals however in conjunction with the fundamentals brings clarity to the situation as the technicals inform us when a trend may be changing for example.
Hello Group´s. (MOMO) long-term MACD is very close to giving a long-term buying signal. We have vetted this company and MOMO continues to report strong profitability, has robust cash levels and is trading for pennies on the dollar. Suffice it to say, this MACD crossover has a strong possibility of playing itself out here. Let´s see what happens.
Verdict & Plan Going Forward for MOMO: Remaining long until the monthly technicals get back to oversold levels. The firm´s valuation with an ultra-low book multiple of 1.2 has plenty of runway for gains here before we return to a more normal valuation for this stock