Technical Chartist or Fundamental Data Analyst?

Technical Chartist or Fundamental Data Analyst?

When it comes to deciding which is superior, there can be no conclusive answer as each approach has its fair share of supporters and detractors. What about you?

Which school do you belong to?

Fundamental data analyst

A trader who prefers to analyse company financial statements, products, management, competitors, markets and economic environment to determine the value of its stock is more of a fundamentals data trader. Both historical and present data is used, with the ultimate aim of forecasting how the stock will move in the future.

Data that is commonly used in fundamentals analysis would be revenue, profits, earnings per share, assets, liabilities, book value, dividends, cash flow and projected earnings growth rates. Key ratios include price/earnings ratio (P/E), dividend yield, dividend payout ratio, and return on equity.

A fundamentals analyst would evaluate the data and ratios in comparison to the other stocks available. The goal of the investor is to invest in those companies with the best prospects given the current price.

Technical Chartist

On the other hand, Technical Analysis involves the ‘forecasting’ of the future price of a stock using historical price data. Technical analysts opine that all pertinent information is already reflected in the price; making fundamental analysis unnecessary. Information from historical price data is used to predict what the future price will be.

Popular technical indicators like moving average, Bollinger Bands and candlestick charting are used to make forecasts of future prices by tracing price patterns and price trends. The central idea is to estimate the direction of price movements and take positions accordingly.

When evaluating price, technical charting proponents frequently use overall trend, areas of support and resistance on the charts, price momentum, volume to determine buy/sell pressure, and relative strength compared to the market.

Whether you are strictly a fundamentals analyst or a technical chartist, or a bit of both, OSK188 equips you with the necessary tools to make trading decisions every day.

Go to our research website now to view technical and fundamental reports