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Which method do you believe is better to perform before deciding whether to buy the stock of a company or not? Fundamental Analysis or Technical Analysis?
Fundamental analysis is generally based on the sum of factors currently prevailing in market which either in short term or long term affect the prices, for example, production prospects, overall supply and demand situation, export import scenario. Technical analysis however mostly based on the analytical tools, which helps the investors to foresee the impact of fundamental factors on prices by considering the historical data and past trend
fundamental analysis is different from technical analysis because technical analysis show how perfect you are in the subject and it shows your grip on the technical idea.whereas fundamental analysis explains us about your mind that you are present at the work and it gives us strong felling that one can solve the problem.
Technical Analysis describe the historical investors behavior and how they response to the market conditions and use of statistics and equations to predicts the future markets moves in comming short and long terms Fundamental Analysis a methodsof securities valuation that involve examining the company financial and operations specially sales earninng growth potintial assets debts management products and competition
Investors use techniques of fundamental analysis or technical analysis (or often both) to make stock trading decisions.
Fundamental analysis calculates future price movements by looking at a business’s economic factors, known as fundamentals. It includes economic analysis, industry analysis and company analysis.
Technical analyses look only at charts, as it believes that all of a company’s fundamentals are reflected in the stock price.
When you look at a stock there are two perspectives:
1. The Momentum and associated Crowd Psycology
2. The true intrinsic Value
Technical analysis is a structured process (A collection of mathematical analysis tools) to guage the specific short term prospects of the stock.
Fundamental anaysis strikes at the very basics of the associated business, govenment policies, furture outlooks, and the company strategy to arrive at a decision.
So, its not the question of comparing the two methods in terms of better or worse. The two together actually complete the process of valuation.
