I often hear people swear that they make money using the rules of technical analysis. Do they really? The answer, , is that they do. People make money and profit indeed by using all sorts of strategies and techniques . The real question is: Do they make more money than they would investing in a blind index fund that mimics the performance of the market as a whole? Do they achieve excess returns? Most financial theorists doubt this, but there is some tantalizing evidence for the effectiveness of momentum strategies or short-term trend-following. Economists Narasimhan Jegadeesh and Sheridan Titman, for example, have written several papers arguing that momentum strategies result in moderate excess returns and that, having done so over the years, their success is not the result of data mining. Whether this alleged profitability—many dispute it—is due to overreactions among investors or to the short-term persistence of the impact of companies’ earnings reports, they don’t say They do seem to point to behavioral models and psychological factors as relevant.William Brock, Josef Lakonishok, and Blake LeBaron have also found some evidence that rules based on moving averages and the notions of resistance and support are moderately effective. They focus on the simplest rules, but many argue that their results have not been replicated on new stock data.