Fundamental vs Technical Analysis

There are two common approaches to analyzing stocks. Fundamental analysis focuses on company financials and business prospects, while technical analysis studies price trends and chart patterns.

• Fundamental analysis looks at revenue, earnings growth, and management quality to estimate a company's intrinsic value.

• Technical analysis relies on historical price data and trading volume to predict where prices might move next.

Fundamental investors often dig through balance sheets, income statements, and competitive positioning to judge whether a company can keep growing. Technical traders, on the other hand, search charts for breakouts, moving‑average crossovers, or momentum indicators.

Many investors use a blend of both techniques to build a balanced view before making a decision. For example, you might screen for companies with solid earnings growth and then study the chart to find a favorable entry point.

Regardless of your approach, keep notes on why you bought a stock. Reviewing past trades can help refine your strategy over time.