What are the basic differences between fundamental analysis and technical analysis that affect investment in the stock market?
Fundamental analysis and technical analysis are approaches to stock market investment that consider different factors and data to make investment decisions.
Fundamental analysis involves evaluating a company’s financial and economic fundamentals, such as its earnings, revenue, assets, liabilities, and industry trends, to determine its overall financial health and future growth potential. The goal is to determine the intrinsic value of a stock and whether it is undervalued or overvalued.
On the other hand, technical analysis focuses on analysing charts and market data to identify patterns and trends in the stock price and volume to predict future price movements. Analysts use various technical indicators, such as moving averages and trend lines, to make investment decisions.
In conclusion, fundamental analysis looks at a company’s underlying financial and economic factors to determine its value. In contrast, technical analysis looks at market trends and patterns to predict future price movements.
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