Fundamental and technical analysis (sapm)
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This document provides information on fundamental analysis and technical analysis. Fundamental analysis examines quantitative and qualitative factors that may impact a company, industry or economy to assess a stock's intrinsic value. Technical analysis uses past stock price and volume data to predict future price movements. Some key differences are that fundamental analysis focuses on long-term investing based on financials while technical analysis focuses on short-term trading based on price trends and momentum.
Fundamental and technical analysis (sapm)
- 1. NAME- GAURAV KUMAR RAI CLASS- MBA(FM) SEMESTER- IV SUBJECT- SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT PROFESSOR- Prof. A. R. TRIPATHI UNIVERSITY- BANARAS HINDU UNIVERSITY
- 4. FUNDAMENTAL ANALYSIS Fundamental analysis is a strategy used for a comprehensive examination of the fundamental factors that can impact the interest of a company, industry, and the entire Economy. This analysis is used to assess the Intrinsic Value of a stock or a share by computing the financial, economic and other factors (both quantitative and qualitative) to comprehend the chances where the share’s value differs from the current market price. If you are choosing this analysis, you must execute: • Economic analysis • Industry analysis • Company analysis.
- 5. TECHNICAL ANALYSIS Technical analysis, on the other hand, is a methodology that helps to predict the future price of a stock or a share active in the market. All of this prediction is highly based on the previous performance statistics of the stock. And, for this specific purpose, the price changes of the stock are ascertained to comprehend how the value will alter in the coming days. If using technical analysis, there are three golden rules that you would have to keep in mind, such as: • Prices discount every information that is available for the public • Price movements will not be random, and trends behind the actions of price can be implemented with the help of technical tools • Price trends can repeat themselves.
- 6. Basis of difference between Fundamental Analysis and Technical Analysis • Objectives • Function • Relevance • Decision making • Focus On • Form of Data • Value of Shares • Type of Trader • Impact of external news • Methodology
- 7. Fundamental Analysis To identify the intrinsic value of the stock. Technical Analysis To identify the right time to enter or exit the market.
- 8. Fundamental Analysis It is used for investment related function. Technical Analysis It is used for Trading related function
- 9. Fundamental Analysis It is relevant for long term investments. Technical Analysis It is relevant for short term investments
- 10. Fundamental Analysis Decisions are based on the information available and statistic evaluated. Technical Analysis Decisions are based on market trends and prices of stock. Decision Making
- 11. Fundamental Analysis It focus on both Past and Present data. Technical Analysis It focus on Past data only.
- 12. Fundamental Analysis In this data is sourced from economic reports, news events and industry statistics. Technical Analysis It this data is sourced from technical tools like Point and Figures, Bar and Line Charts, Moving Averages and other Modern tools.
- 13. Fundamental Analysis The fundamental analyst estimates the intrinsic value of shares and purchases them when their market price is less than the intrinsic value. He sells the shares when the market value of shares is more than the intrinsic value and earns profit. Thus, he works on long-term basis. Technical Analysis The technician believes that there is no real value to any stock. According to him, stock prices depend on demand and supply forces which in turn are governed by rational and irrational factors.
- 14. Fundamental Analysis It is preferred by long term position trader. Technical Analysis It is preferred by the swing as well as the short term day trader
- 15. Fundamental Analysis It remain unimpacted by external news. Technical Analysis It get impacted due to external news.
- 16. Fundamental Analysis It helps in examination of ongoing industry trends, financial data, economic outlook and the performance of competitor companies. Technical Analysis It is used for examining the market psychology as well as price movement.