MBA (Finance) – IV Semester, Investment and Portfolio Management, Unit 3.1
Technical Analysis and Fundamental Analysis
Fundamental analysts’ analyses the stock based on the specific goals of the investors. They study the financial strength of corporate, growth of sales, earnings and profitability. They also take into account the general industry and economic conditions.
Technical Analysis and Fundamental Analysis
Fundamental analysts’ analyses the stock based on the specific goals of the investors. They study the financial strength of corporate, growth of sales, earnings and profitability. They also take into account the general industry and economic conditions.
The technical analysts mainly focus the attention on the past
history of prices. Generally technical analysts choose to study two basic
market data-price and volume.
The fundamental analysts estimate the intrinsic value of the shares
and purchase them when they are undervalued. They dispose the shares when they
are overpriced and earn profits. They try to find out the long term value of
shares.
Compared to fundamental analysts, technical analysts mainly predict
the short term price movement rather than long term movement. They are not
committed to buy and hold policy.
Fundamentalists are of the opinion that supply and demand for
stocks depend on the underlying factors. The forecasts of supply and demand
depend on various factors.
Technicians opine that they can forecast supply and demand by
studying the prices and volume of trading.
In both the approaches supply and demand factors are considered to
be critical. Business, economic, social and political concern affects the
supply and demand for securities.
