Some studies have shown that a high percentage of chart patterns may be simply random lines on a piece of paper. Burton Malkiel in [I]A Random Walk Down Wall Street[/I] described an experiment his students participated in, using a hypothetical stock. Each day they flipped a coin, plotting heads as a 1/2-point gain and tails as a 1/2-point decline. The resulting chart from these random coin flips displayed all the classical patterns such as head and shoulder formations, flags, pennants, triangles, etc. There were even indications of cycles.
THIS!
Besides, if a large chunk of traders trust in technical analysis, then it becomes a self-fulfilling prophecy (much like Fibonacci).