Change of Heart

Can an investor profit by trading based on stock chart analysis?  Some unabashedly claim they can.  More importantly, can I profit from analyzing charts?  With 99% confidence, I say the answer is no.  But that remaining 1% possibility lingers, alright festers, in the back of my mind.  The Fiat Fantasy portfolio can't settle the issue-- too many constraints.  To gain insight and have some fun, we hatched a new portfolio at tickerspy.com titled Change of Heart.  Within this new portfolio we are long CVBK, SRDX, and CGA and short KRO and TIBX. 

The Change of Heart portfolio is contrarian-- it attempts to fade the trend.  We'll try to select stocks that have had strong directional moves that are now weakening.  For example, if a stock's price has been rising strongly, we're going to attempt to go short at an opportune time.  Like stepping in front of the bus as they say.  Take a look at this BPT chart courtesy of stockcharts.com:

After a phenomenal run, much loved BPT was off 4.7% today.  Is this the end of the road for BPT?  We'll see, but this is the type of bet we'll be placing within the Change Of Heart portfolio.

Happily, Change of Heart is strictly a game-- no money is involved.  For me, playing the game beats watching Dancing with the Stars, but still, there are time constraints.  Tickerspy.com will track Change of Heart results daily.  The reports here on Change of Heart performance will be sporadic, but I'll give updates from time to time.  Incidentally, the Fiat Fantasy portfolio is also represented at Tickerspy, but only a rough approximation because of Tickerspy limitations.