How to Select Stocks Utilizing Fundamental and Technical Analysis?

As when investing money into stocks for trading it’s essential that we carefully study them prior to selecting any. Analysing stocks primarily utilizes two approaches- Fundamental analysis and Technical analysis.

Fundamental analysis is a method for identifying the intrinsic value of stocks. By doing this, one can assess if their price is reasonable or excessive.

Technical analysis helps in forecasting future price movements by using charts such as line, bar, and candlestick charts to forecast them. Furthermore, technical analysis offers us tools such as indicators and patterns which enable us to accurately predict any further price movements.

Let us look more closely at both methods as ways of selecting stocks suitable for trading:

1. Fundamental Analysis: Fundamental analysis can be used to determine whether the stock is cheap or expensive by calculating its intrinsic or fair value, which requires both qualitative and quantitative examination of companies.

Quantitative Analysis: Quantitative analysis entails studying financial reports to ascertain a company’s intrinsic value and understand its performance over the years prior to investing in that firm.

To gauge the performance of companies, we need to analyze their financial statements such as balance sheets and profit and loss accounts contained in annual and quarterly reports.