Fundamental Analysis vs Technical Analysis

In the investment field, there is always a tug of war between those with a fundamental viewpoints versus those with a technical one. Fundamental analysis seeks to find shares which have a high probability of either increasing or decreasing in value based on announcements, company balance sheets, and profit and loss forecasts. However, even a company with a good track record does not necessarily mean the company’s share prices will go up. It is the public’s perception of the company that drives the share prices. The market moves up or down based on the emotions of the players. Positive announcements to the press are often already factored into a company’s share price. Strong profit results will not necessarily lead to a bullish upmove.  Even those using fundamental analysis for your investing strategy can still use charting skills in order to time your entry into the market.

It is important to develop skills in charting whether you choose fundamental or technical analysis. It involves reviewing price and volume action o f a share price in order to reach conclusions about the future direction. Technical analysis uses formulas, and indicators based on share prices to estimate the future share price direction. When technical analysis and charting are used together, they help crystallise the market sentiment with visual displays on a chart. Trading rules can be developed around charting patterns, as well as technical indicators.

Below is a chart showing the global search volume on Google for 'fundamental analysis' vs 'technical analysis'. Looks like Technical analysis is the more popular search term!

Fundamental analysis. Technical analysis.
fundamental vs technical analysis

Fundamental Analysis Countries

Data provided by Google Trends on Dec 18 2011.
What's notable is that India & Singapore lead the way when it comes to Technical analysis stock research.

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