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Charting relies on accepting that market psychology determines the trend rather than appreciating financial projections.

If fundamental analysis worked then prices would not gyrate, as the correct level would be agreed by all and prices would only move when rationalised changes in discounted future earnings did.

However, that is not the real world. The market exists to bring buying and selling into equilibrium, but the motivation for either is often based solely on an irrational belief that the price is likely to rise or fall.

More times than they care to admit fundamental analysts are left scratching their heads in disbelief as the market does the exact opposite of what they say it ‘should’ do.

However, because the market is all-powerful and governed by the actions of investors large and small, it can never be wrong, only the analysts can.

So, this week I look at three stocks on which it is currently rather hard to find much positive ‘conventional’ commentary.

However, from the chart perspective, it’s a different story.

C&C (CCR)

Press commentary on the maker of Irish cider brand Magners seems pretty dire but no one seems to have told the market. Over the past year the shares have declined by well over three-quarters to a mid-January low of €3.20, but panning in shows that while the sirens stay bearish, the market has produced a saucer-shaped base on the chart, helped by rising momentum. An early break of the bear trendline at the turn of the year has been followed by an upmove above the 50-day average in the third week of January that was subsequently tested for support and confirmed by the price bouncing off the average. Current activity is pressuring congestion at €4.80. However, provided the price remains in the 400s, I favour further gains toward the 50% retracement of the recent selloff and a likely coinciding with the 200-day average close to €6.95.

BUY at €4.76 • Stop Loss €3.98 Target €6.95

Bovis Homes (BVS)

Again, plenty of commentary says house builders are to be avoided but clearly the chart and therefore the market does not agree. Despite the continuing bearish comments, it shows that having declined by some 60% in eight months, the shares spiked to test historic congestion close to 490p, a support level that can be seen to have limited the downside for much of 2004 before regaining the other key level near 600p, which acted as resistance in 2004 and support in 2005. Momentum has given a positive signal and volume suggests the spike could well have marked final capitulation by the weak holders. It is early days but it could be that an inverse head and shoulders bottom pattern is forming that would help build a case for the shares climbing toward the 830p-to-850p area.

BUY at 619p • Stop Loss 585p • Target 830p

PartyGaming (PRTY)

Gambling is probably largely recession-proof and the market for online products has yet to mature globally. But the US clampdown fallout has a huge impact on PartyGaming’s shares and, like many stocks that once seemed capable of producing exponentially growing returns, when the bubble bursts the market takes no prisoners.

Most brokers and analysts may prefer not to recommend the stock for fear of opening old wounds, but some features on the chart might yet produce winnings for the brave. It’s clear where the bulls should run for cover. Should the shares drop below obvious support at 22p then all bets are off. However, the break of the long-run bear trendline suggests a test of resistance from congestion and the descending 200-day average in the 31p zone that, if successful, would herald a move up to 40p and then a retest of the April 2007 high at 60p.

BUY at 28p • Stop Loss 22p • Target 60p