David Fuller's view As an asset class, corporate Autonomies - big, multinational leaders of sectors - are Fullermoney favourites for the long-term. They are proven, dominant companies, which usually provide a reasonable dividend.

However, as experienced investors know, every share is prone to periodic and significant overextensions, in both directions. When these are temporary setbacks you can ride them out if you are a long-term investor and confident that the long-term premise for the share's success is intact. Alternatively, you may conclude that the inevitability of market volatility suits an occasional buy-low-sell-high strategy. That is exactly what Warren Buffett and a number of other highly successful investors have done throughout stock market history.

Unfortunately, as many investors discover, buy-low-sell-high is not as easy as it sounds, for psychological reasons. Market confidence will be frayed when a good company experiences a medium-term setback, whether due to overall conditions or a specific problem. In the latter situation it will report unfavourable news and may issue profit warnings. Market sentiment will deteriorate as disappointed investors sell on weakness. Short sellers may talk shares lower in a soft market, just as leveraged longs will talk them higher in a performing market.

Buying when the crowd is selling is a courageous contrarian move, provided that you have some tangible evidence that the decline is not only overextended but also ending. Conversely, lightening positions in a runaway uptrend is a courageous contrarian move, because markets often overshoot, in both directions. Those moves are eventually followed by reversions towards the trend mean.

Fullermoney and most of our subscribers use behavioural, factual technical analysis to identify potentially significant overextensions in markets. The behavioural condition is revealed by market sentiment because most people talk their book. In other words, if people are long they will generally be bullish. Conversely, if they are short they will be bearish.

For evidence that markets have at least temporarily run ahead of themselves, we look for overextensions relative to a medium-term trend mean such as the 200-day moving average, best seen on weekly charts. Consider, Unilever (weekly 10-yr & weekly 5-yr), a successful UK Autonomy which manufacturers branded and packaged consumer goods. It has a significant international presence, particularly in Asia and Africa, and the Americas. It currently yields 4.13%.

Looking first at the 10-year chart above, the overextensions are easy to see, with the first really big one relative to the MA in yearend 2008 and early 2009. The big downside overextension which followed in 4Q 2008 and 1Q 2009 also stands out clearly. The second really significant upside overextension occurred in 1H 2013 and was pointed out by Eoin on 4th April, under the heading: Mean reversion among the Autonomies. A downside overextension is now developing. The third biggest upside overextension occurred at yearend 2009 and checked the uptrend for a considerable period.

Subscribers who understand behavioural, factual technical analysis will note the two big downside weekly key reversals which capped the two biggest overextension peaks cited above. The 5-year weekly chart will enable you to see the key reversal marking this year's May high. As a reminder, it is an outside week, meaning that the week's high exceeded the previous week's high and both the low and week's close were well beneath the previous week's low, producing a downward dynamic and confirming an upside failure. Subscribers who wish to see the even bigger weekly key reversal in early 2008 more clearly can do so easily. Just ensure that your 'Tracking' function is on; then drag your curser across the section of the chart which you wish to magnify, as I did to produce this result.

By the time declines in an important share such as Unilever become newsworthy investors have already missed most of the move, although notification of what went wrong will provide some relevant background information. Also, they indirectly tell us to look for the next buying opportunity which investors may be able to spot by looking at the price chart. Watch for a loss of downside momentum and/or an upward dynamic. You may also be able to find some very informed commentary such as Iain Little's diary below.