Technically, MasterCard Looks Like a Short

By Sean Hannon, CFA, CFP, of Covestor.com

Broadly speaking, there are two main groups of investors. Those using fundamentals will analyze a company's business prospects, growth potential and financial structure with the hope of finding stocks that the market has mispriced. Technical investors will rely upon chart patterns and trading activity to decide when to buy and sell securities.

In the current bear market, both groups have faced problems with determining the next move. Fundamentalists have seen cheap stocks become even cheaper. As they deployed capital, losses have mounted and frustration reigns.

With the large drop in stock prices over the past few months, technicians also find themselves in unchartered waters. These investors find themselves looking back many years to determine what the next level of support should be. ...