To critics, technical analysis is snake oil, purporting to find order in markets when none exists. New research says using charts as the basis for trading decisions actually works -- when investors are at their least rational. In a study titled “Sentiment and the Effectiveness of Technical Analysis,” researchers found that hedge funds that leaned on technical analysis beat their peers by an average of 5.3 percent per year during stretches when investor optimism was elevated. One reason: price momentum overwhelms influences like earnings and the economy in times of market euphoria. The study, to be published in the ... (full story)