Can the Past Be Used to Predict the Future?
As one statistical text puts it, “The fisrt step in forecasting the business or economic future consists,thus,of gathering observations from the past”(Freund and Williams).
Chart analysis is just another form of time series analysis, based on a study of the past, which is exactly what is done in all forms of time series analysis.
So it seems that the use of past price data to predict the future in technical analysis is grounded in sound statistical concepts.