Fundamental vs Technical Analysis Objective

It is nearly impossible to prioritize only one type of analysis when evaluating the future value of a financial market asset. Both analysis shall go hand on hand.

Fundamental Analysis Objective is to evaluate’s stock, currency, bonds, etc and creates future value expectations.

Evaluating Bonds: Can be done by looking at economic factors, such as interest rates, overall state of the economy, and information about the bond issuer like credit ratings.

Evaluating Stocks: Focus in financial statements. Revenues, earnings, future growth, return on equity and profit margins.

Evaluating Currencies: Economic indicators are periodically (weekly-Monthly) released by most governments. Political stability, interest rates, gross domestic product (GDP), inflation rates, trade balances retail sales, consumer confidence, consumer price Index (CPI), industrial production and demand for the currency are some of the aspect to look for.

Technical analysis focus more on determine current market phase/trend, finding possible confirmation signals, predicting possible outcome/movement/support and /or resistance levels.

Technical analyst have a variety of tool at their disposal. To determine current market phase/trend tools such as Dow Theory, Trend Lines, Chart Patterns, MACD, Stochastic Oscillator, Support-Resistance, Mov Ave, Momentum Oscillators are used.

Whether to find possible confirmation signals tools like MACD, RSI, Chart Patterns, Stochastic Oscillator, many tools are versatile and can be used for different purposes.

Finally to predict possible outcomes Fibonacci Projection, Support-Resistance, Chart Patterns, Mov Ave are some of the most common tools, probably thanks to their reliability.

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