Fundamental Analysis vs Technical Analysis and it’s application .

After a company goes public and starts trading on the exchange, its price is determined by supply and demand for its shares in the market. There are two kinds of analysis, fundamental and technical. The end goal of fundamental analysis is to produce a quantitative value that an investor can compare with a security’s current price, thus indicating whether the security is undervalued or overvalued. Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. Stock prices move up and down every minute due to fluctuations in supply and demand. Negative news will normally cause individuals to sell stocks. Positive news will normally cause individuals to buy stocks. Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempts to gain an edge in the markets by making informed decisions. Stock analysts attempt to determine the future activity of an instrument, sector, or market. Penny stocks are those that trade at a very low price, have very low market capitalization, are mostly illiquid, and are usually listed on a smaller exchange. Penny stocks in the Indian stock market can have prices below Rs 10. These stocks are very speculative in nature and are considered highly risky because of lack of liquidity, smaller number of shareholders, large bid-ask spreads and limited disclosure of information. There are three kinds of charts, line charts, bar charts and candlesticks charts.