This is the basic differences between Fundamental analysis and technical Analysis and the pros and cons of both

  • : The Price of a stock changes according to the buyers and sellers in the market and Demand and Supply in the market. If a stock has more demand it means there are more buyers for the stock than the sellers. If a Stock has more supply, it means there are lot more sellers than buyers
  • : Fundamental Analysis is when we analyse a company's Financials and Value the company to arrive at it's Intrinsic Value. Value Investors aim to buy stocks that are undervalued in the market aiming for the price to go up and this analysis is equipped by them.
  • : Technical Analysis is a process where we study the market rather than studying the company. We importantly see the price action of a particular stock
  • : Pros is that Fundamental Analysis is easy to do and doesn't require taking much risk. Cons is that the internal functioning of the company is unknown to the general public and thus we cannot blindly trust the news, which means that before the news came to us it is already available to the employees of the company
  • : For Fundamental Analysis, Balance sheets, Cash flow statements and P&L Statement is required to asses the company. But in technical analysis we only need the market price so we could decipher it using a charting tool such as Trading view
  • : All the 3 might give hope in some buyers that the stock will go up and they could create a long position. But some buyers could exit the position knowing that there target price is acheived and thus the price may go down. Thus all 3 might have effect in the market that doesn't go in one way for sure
  • : The average turnover is Rs. 18000 crores on a daily basis. Foreign Institutional Investors(FII) have a lot of holdings in companies and their decision could affect the stock market if they decide to enter or exit. No one could manipulate the stock price but FII could affect in majorly
  • : Pros of technical analysis is once we get to know the market Sentiment. It would be easier to trade Cons is that not all our analysis might be right and some trades out of many trades might be wrong
  • : Its beacuse that the companys financials are down and the reason that the trading volume of the company is Low.
  • : Line chart, Bar Chart, Heisinki Ashi, Candlestick chart.
  • : It's easier to comprehend what happens in a day rather than a bar chart or a line chart which might confuse as to how much buyers and sellers came in at what particular point.
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