NEW YORK (TheStreet) -- One of the most challenging aspects of value investing is refraining from buying a stock before the full distress of other investors is over.
Take Sprint (S), for example. Investors that bought the stock a little over a year ago had a long and painful road in front of them. Once the market understood that Sprint was oversold and held much greater value than its sub-$3 share price, the stock moved up quickly. Even so, many investors are just breaking even or worse, despite the exuberant increase in share price since June.
Sprint demonstrates that being right about a stock is never enough. You must also have the correct timing, or risk a price drop shaking you out of your position. It may be nearly impossible to time your entries perfectly every time, but that doesn't mean you can't give your portfolio every advantage possible.
Over the long run, fundamentals dictate the value of any given stock or security. But in the short run, prices are ruled by emotions. Fortunately, the emotions of investors are rather predictable and technical analysis helps us predict the odds.Once you combine technical analysis with fundamentals, you have a potentially very powerful and alpha-creating edge for your portfolio. Once discipline and effort are added, the deck becomes stacked in your favor. It's no easy feat aligning everything, but it can be done. The biggest problem with chart reading is that it's a lot like sex. Most people think they are a lot better at it than they really are. It doesn't need to be that way, though. With study, effort and by taking the time to learn the skills needed, instead of rushing in, technical analysis can be very satisfying. Consider these four stocks, which came to my attention through a screening process that weighs a combination of company fundamental factors and my own variation of technical analysis, based in part on DeMark market-timing indicators:
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