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Sunday, 19 July 2015

Differences between Fundamental and technical analysis

Fundamental Analysis
Technical Analysis

Fundamental analysis refers to the analysis of investment alternatives by calculating the stock value using past and projected financial data.

Technical analysis is short term analysis of the investment alternatives by analyzing the price movement of security in past to predict future price movements

In fundamental analysis data are gathered from financial statements such as income statement, cash flow statement etc.

In technical analysis data are gathered from the Charts, graphs etc such as NEPSE index.

Stock is bought or investment is made on stock when price falls below intrinsic value.

According to the technical analysis the stock is bought when trader believes they can sell it on for a higher price.

Fundamental analysis is Long-term approach.

Whereas technical analysis is short-term approach.

In fundamental analysis looks backward as well as forward while analyzing making investment decision.

Technical analysis looks only backward while making investment decision.

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