We have heard numerous analyst on TV or read about their stock picks in newspapers or magazines. Some of them are called fundamental Analyst and some are known as Technical Analyst. Fundamental Analyst are those who refer fundamental analysis of a stock and similarly, those who refer technical analysis are known as Technical Analyst. Now question rises what is the difference between Fundamental analysis and Technical Analysis?

Fundamental Analysis refer to the process of analyzing a stock by looking into the financial health of it. Financial refers to its Profit and Loss statement, its earnings, profit, interest rates, debt, its management and factors like economy and Geo-political situation are also considered. It also involves looking into PE ratio and EBITDA. Fundamental Analyst believe that a stock may trade at a incorrect price in short term but eventually price will correct to achieve the correct level.

Technical Analysis refer to the process of analyzing a stock based upon its historical price movement. They are studied on a chart and various indicators are used in this study to judge the correct stock and its entry and exit points. Some of the popular indicators are MACD, Bollinger band etc. Technical Analyst believe that the markets or stock moves in a particular cycle and they pass through the same stages and cycles for numerous time. These cycles and stages are influenced by the fear,greed and emotional factor of the investors or traders.

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