Why I Stopped Fighting Between Charts and Fundamentals (And Started Making Better Trades)

The Expensive Mistake Most Investors Make

Here's the thing nobody tells you when you're starting out: the whole "fundamental vs. technical analysis" debate is complete BS.

I spent my first few years as an investor firmly planted in the fundamental camp. Balance sheets, income statements, DCF models — that was my world. Charts? Those were for day traders and gamblers, not serious investors.

Then I got crushed.

Not once, not twice, but enough times that I finally had to swallow my pride and admit something: the market was trying to tell me things I refused to hear.

When Charts Saved My Portfolio (And My Ego)

Picture this: You've done your homework. Found a stock trading at 10x earnings when comparable companies trade at 20x. Management seems solid, balance sheet looks clean, growth prospects appear strong. You write up a killer investment thesis and present it to your team.

Before anyone reads your analysis, they pull up the chart. It looks like a ski slope—straight down for months.

"Thanks, but no thanks," they say.

My first reaction? They're idiots who don't understand value investing.

My reaction after getting burned repeatedly? They're absolutely right.

Here's what I learned the hard way: momentum isn't just noise. It's information. And ignoring it is like driving with your eyes closed.

The Chart That Changed Everything

Let me show you what really opened my eyes. Take a company like Visa. Over the past decade, this isn't just a "momentum play"—it's a fundamental powerhouse with the chart to prove it.

Revenue up nearly 3x? Check.

Earnings per share up 4x? Check.

Free cash flow up 4.5x? Check.

Return on invested capital improved from 20% to 34%? Check.

The chart reflects all of this. It's not just squiggly lines—it's a visual representation of value creation over time.

Now flip that around. Those "cheap" stocks I kept buying? The ones at 5x earnings that "couldn't possibly go lower"? They kept going lower because the fundamentals were deteriorating faster than the price.

My New Approach: Let the Chart Tell Me When, Not What

These days, I use fundamentals to identify what to buy and technicals to determine when to buy it.

Here's my process:

1. Find the fundamentally attractive opportunity

I still do all the same research. Financial statements, competitive positioning, management quality, industry dynamics—the whole nine yards.

2. Check the chart before I do anything

If it's a falling knife, I wait. Period. I don't care how cheap it looks on paper.

3. Look for support levels

I want to see where institutional money has stepped in before. These become my reference points for entries and stops.

4. Size appropriately

When technical and fundamental analysis align, I can size bigger. When they conflict, I either pass or go small.

The Daily Habit That Changed My Results

Every morning, I spend 30-45 minutes doing something that would have horrified the old me: looking at charts.

Not randomly, but systematically. Here's my routine:

Current positions first: How are my holdings acting relative to their sectors and the broader market?

Watchlist second: I keep tabs on about 50 stocks I'm interested in but not ready to buy yet.

New highs and lows: This is where the magic happens. I screen for stocks making 52-week highs and lows to spot emerging trends.

This isn't about predicting the future. It's about understanding the present temperature of the market.

The Screen That Finds Money

Here's a simple screen that's made me money consistently:

I look at stocks making new 52-week highs. Not because I'm chasing momentum, but because I'm looking for quality businesses that the market is recognizing.

Then I look at the new lows. These aren't automatically buys—they're often there for good reasons. But occasionally, you'll find a solid company that's been unfairly punished.

The key is context. If everything in a sector is hitting new lows, that's different from one company getting singled out.

When Technical and Fundamental Analysis Disagree

This happens more than you'd think. Here's how I handle it:

Strong fundamentals, weak chart: I wait. The market might know something I don't, or the timing just isn't right.

Weak fundamentals, strong chart: I investigate. Sometimes the chart is anticipating a fundamental improvement I haven't recognized yet.

Both aligned: This is where I get aggressive. When the story and the chart agree, that's when the biggest opportunities present themselves.

Real Examples from My Own Experience

I remember looking at a retail stock that was trading at what seemed like a reasonable valuation. But the chart showed a clear pattern: every time it bounced, it got sold. The market was telling me something about the business that wasn't showing up in the numbers yet.

Six months later, the company announced a major margin squeeze. The chart had been right all along.

On the flip side, I found a tech stock that looked expensive by traditional metrics but was breaking out to new highs. The fundamentals showed accelerating growth that justified the valuation. That trade worked beautifully.

The Tools I Actually Use

I'm not sponsored by anyone, but here's what's in my toolkit:

Finviz: Their free screener is phenomenal. I use it daily for the 52-week high/low screens and sector analysis.

Sector ETFs: I track XLY (consumer discretionary), XLF (financials), and others to understand sector rotation.

Simple moving averages: Nothing fancy. Just 50-day and 200-day averages to understand trend direction.

That's it. I'm not running complex algorithms or using proprietary indicators. Simple tools, consistently applied.

The Mindset Shift That Matters Most

The biggest change wasn't in my methods...it was in my attitude.

I stopped thinking I was smarter than the market. I started listening to what it was telling me.

I stopped fighting obvious trends. I started working with them.

I stopped being stubborn about positions. I started being flexible about timing.

After that, everything started to go my way.

For more, visit my homepage at gregoryblotnick.com.