Is This TA Or FA?

[David Sklansky]

The technique, that used to work and maybe still does (but that doesn't matter to this question) of buying (or shorting) a stock a few minutes after surprising earnings come out, (though still after the almost instantaneous price adjustment.) The idea being that only about 93% or so of the eventual move happens immediately, so there is a little more to pick up, on average, in the next week or two.

If you use that strategy is it TA or FA? It could be called FA because it is based on earnings. Except you aren't analyzing those earnings. You are using an historical fact about people's reactions to them. On the other hand can it be called TA if you are looking at more than price and volume type data?

[DcifrThs]

[ QUOTE ]
The technique, that used to work and maybe still does (but that doesn't matter to this question) of buying (or shorting) a stock a few minutes after surprising earnings come out, (though still after the almost instantaneous price adjustment.) The idea being that only about 93% or so of the eventual move happens immediately, so there is a little more to pick up, on average, in the next week or two.

If you use that strategy is it TA or FA? It could be called FA because it is based on earnings. Except you aren't analyzing those earnings. You are using an historical fact about people's reactions to them. On the other hand can it be called TA if you are looking at more than price and volume type data?

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this is the type of thing i had in mind when i said "there are grey areas"

i honestly don't know. i would classify it as TA though as my old employer would never let an indicator like that into his system.

Barron

[Zygote]

if you're just basing the judgement on historical actions then its technical analysis.

If you say that because the markets and capital flow are structured and influenced in such a way to give rise to thise phenomenon persistently then one would consider this fundamental.

[CrushinFelt]

It can't be FA, perhaps an argument can be made for TA.

Also, this has historically not worked. Yes, there are significant "drifts" after the inital reaction.

However, one can never know in which direct the price will drift, and historically the drift has not been predominantly in any direction for any type of surprise.

[stinkypete]

this is TA, not close

[kimchi]

FA is concerned with valuing a market whereas TA is concerned with the price.

As decyfrths said, there are grey areas. Your example uses statististics to profit from fundamental events (earnings). Since you are not concerned with how those earning influence the value of the company, and only concerned with how they influence the price, then I'd say it is TA.

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