I am starting this thread to show difference between fundamental and technical analysis. According to me if we discuss it more all can understand usability of those terms.
Technical analysis is based on only price on the other hand Fundamental analysis is based on companies’ growth, sales, NP, NP margin, EPS, P/e, assets, liabilities, reserves, book value, net worth, equity, face value and so many other parameters.
Fundamental analysis gives investor more information on company. On the other hand technical analysis gives only price pattern.
I don’t want to make point that technical analysis is not good for investor, but my point is technical analysis shows only the time to buy any stock. But the stock which we buying should be strong company then and then only in any market condition one can make money and his risk is limited.
It is proven that when market goes down sharply fundamentally strong companies don’t fall as sharply as other companies. And also fundamentally strong companies recover sharply when market gets stabiles.
I think though one is making long/short term investment he should do fundamental analysis first over technical analysis.
Fundamental analysis can be done as follows-
1. One can analyze NP, Sales, P/e, EPS, assets, liabilities, reserves, book value, net worth, equity.
2. After analyzing above, those figures can be compared with companies within same sector.
3. One can also ascertain fundamental price of company. And then compare with market price.
4. If fundamental price is less than market then one can go for technical analysis to buy that stock on right time.
5. When we buy asset we analyze all basic things from location to luxury. Shares are also Asset so don’t go on calls issued by your friend/ service provider.
6. Even though you tracking calls from others try to understand the fundamental value of that company
In short –
Fundamental analysis gives investor-
• Right company to invest
• Right value to invest in company.
Technical analysis gives investor-
• Right time to invest.
Please comment.
[email protected]
http://fundamentalysis.blogspot.com/
Technical analysis is based on only price on the other hand Fundamental analysis is based on companies’ growth, sales, NP, NP margin, EPS, P/e, assets, liabilities, reserves, book value, net worth, equity, face value and so many other parameters.
Fundamental analysis gives investor more information on company. On the other hand technical analysis gives only price pattern.
I don’t want to make point that technical analysis is not good for investor, but my point is technical analysis shows only the time to buy any stock. But the stock which we buying should be strong company then and then only in any market condition one can make money and his risk is limited.
It is proven that when market goes down sharply fundamentally strong companies don’t fall as sharply as other companies. And also fundamentally strong companies recover sharply when market gets stabiles.
I think though one is making long/short term investment he should do fundamental analysis first over technical analysis.
Fundamental analysis can be done as follows-
1. One can analyze NP, Sales, P/e, EPS, assets, liabilities, reserves, book value, net worth, equity.
2. After analyzing above, those figures can be compared with companies within same sector.
3. One can also ascertain fundamental price of company. And then compare with market price.
4. If fundamental price is less than market then one can go for technical analysis to buy that stock on right time.
5. When we buy asset we analyze all basic things from location to luxury. Shares are also Asset so don’t go on calls issued by your friend/ service provider.
6. Even though you tracking calls from others try to understand the fundamental value of that company
In short –
Fundamental analysis gives investor-
• Right company to invest
• Right value to invest in company.
Technical analysis gives investor-
• Right time to invest.
Please comment.
[email protected]
http://fundamentalysis.blogspot.com/
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