Explain the difference between technical and fundamental analysis using specific examples. Which type of analysis would...

Explain the difference between technical and fundamental analysis using specific examples. Which type of analysis would be better suited to your strengths and personality?

Expert Solution

Technical Analysis can forecast for short term future price of security whereas fundamental analysis tried to forecast long term future of the security.

Technical analysis only uses past data, volume of trade and trend to predict future price but fundamental analysis takes into account past and future management decision to forecast the financial condition of the company.

Technical analysis uses charts, oscillator, trend, volume, mathematical ratio (fibonacci) to determine target of the security in a given period of time. Fundamental analysis takes into account past CAGR, various financial ratios and future decsion of management to determine the future of the company.

It depends on person to person as per their mentality whether to use technical analysis or fundamental analysis. If an individual is looking to make money in short term he should use technical analysis but whoever looking to invest for long term he/she should use fundamental analysis.

jeff jeffy answered 5 months ago

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