Fundamental

Vs Technical Analysis

Technical analysis and fundamental analysis are the

two main schools of thought in the nancial
markets. Technical analysis looks at the price
movement of a share and uses this data to predict
its future price movements. Fundamental analysis,
on the other hand, looks at economic factors,
known as fundamentals.

By looking at the balance sheet, cash ow statement

and income statement, a fundamental analyst tries to
determine a company's value. In nancial terms, an
analyst aAempts to measure a company's intrinsic
value. In this approach, investment decisions are fairly
easy to make - if the price of a stock trades below its
intrinsic value, it's a good investment.

 Fundamental analysis takes a relaCvely long-term

approach to analyzing the market compared to
technical analysis. While technical analysis can be
used on a Cmeframe of weeks, days or even
minutes, fundamental analysis oFen looks at data
over a number of years.

Although technical analysis and fundamental

analysis are seen by many as polar opposites - the
oil and water of invesCng - many market
parCcipants have experienced great success by
combining the two. For example, some
fundamental analysts use technical analysis
techniques to gure out the best Cme to enter
into an undervalued security.