What is Fundamental and Technical Analysis ?

 

What is Fundamental and Technical Analysis ?

 

Hello friends and welcome to all of you once again on www.financesikho.com. Today I am going to tell you about Fundamental and Technical Analysis. If want to know about Fundamental and Technical Analysis then all of you keep reading this article very carefully. If want to invest in some good stocks you need to firstly analyze the stock previous performance and history of that stock. Without any analysis there are many chances you may invest in poor stock and you may suffer huge loss.

So, today I am going to provide you the relevant information about Fundamental and Technical Analysis which will help you to taking decision before investing in the Stock Market.

Basics:

There is a two way to analyzing the stock markets:

1) Fundamental Analysis 

2) Technical Analysis

 

Fundamental Analysis:

• Fundamental Analysis means analyzing stock by it's intrinsic value. Intrinsic value is determine by the considering various factors which can effect the security value.

• Fundamental Analysis relevant for Long Term Investments

• The main objective of Fundamental Analysis is to identify the intrinsic value of the stock

• Decision is based on Past and Present information available

• Predict Future prices on the basis of the Past and Present Profitability and Performance

• Fundamental Analysis is used by Long Term Trader
  

 

Fundamental overview:

1) Stock P/E & Sector P/E: Price Earning

2) Stock P/B & Sector P/B: Price to Book

3) Stock Dividend Yield & Sector Dividend Yield

4)  Annual Financial Statement Analysis: Profit & Loss Statement and the Balance Sheet

5) Beta of Stock

6) Market Cap

7) 1 month , 1 year, 3 years and 5 years return

8) Related news and information 

 

 

Technical Analysis:

• Technical Analysis means predict future price of stock by using charts to identify the pattern and trends

• Technical Analysis is used for short term investments

• This is used for trading purpose not for investing in long term

• By using Technical Analysis traders find which time is better to enter in market and which time is better to exit with profit or loss 

• Decision is based on trends and current price of stock and also by using support and resistance level
  

• Mainly focus on past data

• Predict future price on the basis of charts and indicators

• Technical Analysis is used by Swing Trader and Short Term Day trader    

   

Some of the popular indicator used in Technical Analysis are:

1) Bollinger Bands  

2) Relative Strength Index (RSI)

3) Moving Average Convergence Divergence (MACD)

4) Stochastic

5) Average Directional Index (ADX) 

 Example given below

 

 

About The Post 

Through this article, I shared with you some information about Fundamental and Technical Analysis. If you like this article then share with your friends so that they can Fundamental and Technical Analysis from today. Apart from this if you have any problem or suggestion or feedback, then tell me in the comment section below, I will try to help you.

Disclaimer: The information in this article is provided for educational purposes only. Make your own decisions about risk, or consultant a professional financial advisor.