Technical analysis price forecasting software attempts to use daily prices, determined by independent, coincidentally connected variables, to predict future prices.

To make the jump from daily prices, determined by these variables, to predicting future prices because of the position of prior data price dots does not follow.

Each day in the stock market is independent of the prior days' stock prices in the same way selected lottery numbers are independent of the past; it cannot be said that because a number has been picked in the past, regardless of the number of times it has been picked, that previously selected lottery numbers have a greater probability of being selected in the future; the same is true for stock prices.

Think about this:

Step 1: Reflects the closing price of a stock on its first day of trading based on the stock market price variables discussed above.

Step 2: Illustrates two days' closing prices with day two's closing price being determined by stock market price variables and not because of the position of the first day's price data dot.

Step 3: There is no basis whatsoever to suggest that the price of a stock will close @ A, B, or C based on the position of the prior two days' closing prices; the fatally flawed leap of faith assumption that technical analysis would have you accept:

Furthermore, technical analysis mistakenly makes much of the reflective not predicative relationship between a stock's daily price and any one of a number of moving averages, 20 Day Moving Average illustrated below, for example.

Daily Prices and a 20 Day Moving Average are nothing more than mathematically connected; with the 20 Day Moving Average simply being generated by, a function of Daily Prices.

Therefore, to suggest that a day's stock price will behave in a particular way because of its relationship to a moving average is absurd.

Both are simply ways to record price trends; but, neither predicts price trends.