Basically fundamental analysis & technical analysis are two different methods for stock market analysis. Both method are work in a different way. Both Method have different way of study a Stock. Investor or Traders has option to choose which method is suitable for his Strategy.
Types of Stock Market Analysis.
Fundamental Analysis: Fundamental analysis examine the basics of company.
Technical Analysis: Technical analysis focus on price & volume data.
What Is Fundamental Analysis?
1. Fundamental Analysis Helps to study or determine the economical condition of company, Future growth of company. From past result or real data fundamental analytic can evaluate the securities value.
2. Actually fundamental analysis means evaluating securities on the basis of macroeconomic factors, overall economy, industry conditions,company-specific factors like financial condition, management,interest rates, production, earnings, employment, GDP, housing, manufacturing & management.
What Factors I Need To Study In Fundamental Analysis?
1. Profit predictions.
2. P/E ratios.
3. Economic projections.
4. New products.
5. Product recalls.
6. Management shake ups.
7. Earnings.
Parameters
1. Focus: Quantitative & qualitative factors.
2. Data: Financial statements.
3. Time Period: Long-Term.
4. Goal: Investing.
What Affects Fundamentals of Company?
| Good Factors | Bad Factors |
| Slower inflation | Interest rate cut |
| Lower economic growth | higher economic rate |
| Interest rate hike | Faster inflation. |
| Stable government | Political Crises |
Types of Fundamental Factors.
Economical Fundamentals: Economical Fundamentals are those reflect growth, trade & production. These include most of the news in the forex.
Market – Traded or Inter-market Fundamentals.
Inter-market Fundamentals includes interest rates, equity yields, relative strength, commodity prices & sentiment information; like institutional commitment & volatility.
What Are Excessive?
1. Can predict the price accurate at efficient & semi efficient market.
2. can give the logic reason to take decision.
3. Can give the clear information about the company operations.
More Useful Article
