Fundamental V/S Technical analysis

How about technical analysis of fundamentally sound companies ??

Everything reflated in Price if you know how to find the trend.

Well because balance sheet gives some information about the comp. so one should follow the fundamentals, i couldnot understand this . any ways  friends always look both fundamental as well as technical.Technical will give u edge 85% and fundamental will give 15%.In the month of march i said Cr.oil will touch $75. it has already touched $73.Now time to go down.Gold will also go down, may can touch $750 or$800 , Silver also will go down, copper will also go down, FROM TECHNICAL ANALYSIS I CAN SAY ALL ABOUT THIS MARKET.Rather stock market will also witness a good correction.

Happy Trading friends.

i agree with your point of view. But sometimes short term gain may take to you long term loss. As how do we define science. Anything that has a success of probability more then 50%. The reason technical analysis is choosen bcoz it has a very high success of probability. But u also know that in technical analysis we just try to predict the future by past analysis. Is it the way correct. A better can be we should call a 5-7 year child who is free from market bias and ask him to predict. If any child's guess is right having success of probability more then 70% then there will be a new analysis technique in the industry called CHILOANALYSIS. What i point to tell is that we can mix the blend o technical and fundamental to increase our success rate.

hi,

Dushyant,

In fact short term technical analysis can be used for short term as well as long term.

A trader may use intraday chart and volume.A positonal trader can use daily chart to take care of positonal and short term trend or sectoral trend.

A proper long term investor can buy with the help of weekly chart analysis.

Also the biggest boon or application of technical analysis is stop loss and trailing stop loss.Which can be applied methodically to shortest term(daily) to longest (monthly)term.

In this way a good investor or trader need not be at mercy of big,continous flow of news,balance sheet,other financial enviornmental data.But can looking at chart decide to invest or not to invest.

Because market discounts every thing in price itself.

hi, Sudeep,

To marry both Fundamental analysis and technical analysis is again an independent choice of that Investor.

But as Technical Analys I feel  technical analysis is also enough to take call on Investment decsions.As it is books being cooked is now becoming the most common malpractice these days globally.

And that top 4 or big 4 as they are called consulting auditors or fundamentals are involved(part of the scam) is the biggest flaw in fundamental Analysis in first place.

Diya,

That means fundamental analysis do fail.Fundamental analysis is the cogwheel of capitalism.

The fact that cooked books are are not being able to be identified, is the biggest flaw of fundamental analysis.Why satyam?  Many Companies globally have done like satyam. No fundamental analyst has ever been able to figure out...So far.Insiders and whistlsblower have done this job of identifiying bad and cheat companies.

Unlike technical analysis.The price,volume are real time,they cannot be cooked.

Better to use both the analysis techniques to get the best outcome. Somwhere I feel Technical analysis is more imporatant than fundamental. Market is very volatile and difficult to say which one give best output.

Technical is more appropriate than fundamental, because fundamental is based on experience which may not true all the time, whereas technical is based on data and chances of getting best output is more.

Hello friends ,i do not agree with your view, reason as you say technical is good only for short term traders , is totally wrong, weather short term or long term trade , tchnical analysis give4s you edge in the market.So far speculators are concerned , they only speculate they are not concerned with your analysis, technical or fundamental, they just do speculation. so they loose also.For best trade follow technical as well as fundamental{technical 85%fundamental!%%}you will get best out of this market.

As said debated with Divya..I think it would be very appropriate to say that, look at fundamentals if you must. But a investor or speculator must invest in gaining solid knowledge of technical analysis.

Trading history is as important for a technical analyst as  balance sheets is  to a fundamental analyst.Trading history is not important , is like saying balance sheet has only numbers.

Trading history when reflected from an angle of chart says or speaks a lot about that company to a chartists or technical analyst.

If fundamental analysis is true for understanding the companies in which to invest ,then ,why this satyam fraud happened or go unnoticed,by fundamentals themselves !!!!!!!!!!

No fundamental analyst even whispered about or could understand the irregularity in the basic balance sheet of such a great company.Not even one fundamental analyst could pin point on anything about the whole sordid saga.

As opposed to that a technical analsyt could looking at the chart understood that this stock or scrip of satyam is weak.And looking at the sector indices.A technical analyst, can make out whether the basic trend  up, down and bottomed out or topped much ahead of the fundamentals...

"because if you don't have the technical skills then having fundamentals cleared is a waste."

The fact that you need technical skill is not only must but important clearly validated by your above argument.The current rally in stock market clearly makes it evident that technicals must have jumped and now on process of booking profits.But fundamentals will come with forward earnings details and miss the main rally.

Dear Friend, i never said dont follow fundamentals, we also see fundamentals but totally relieng on fundamentals is wrong.Past results say 90% people loose money in stock markets and 95%people loose money in commodity market, why because they dont have knowledge just speculate.Technicals give 85% and fundamentals give 15% results. the combination of these give +ve results.

Regards

Dear Friend, i never said dont follow fundamentals, we also see fundamentals but totally relieng on fundamentals is wrong.Past results say 90% people loose money in stock markets and 95%people loose money in commodity market, why because they dont have knowledge just speculate.Technicals give 85% and fundamentals give 15% results. the combination of these give +ve results.

Regards

Dear Friend, i never said dont follow fundamentals, we also see fundamentals but totally relieng on fundamentals is wrong.Past results say 90% people loose money in stock markets and 95%people loose money in commodity market, why because they dont have knowledge just speculate.Technicals give 85% and fundamentals give 15% results. the combination of these give +ve results.

Regards

Following the fundamentals only is not correct.Technical analysis gives 85% support and for example NEWS is a fundamental and by the time we here the news markets already had its effects on it. So i strongly trust technical analysis then the fundamentals.It is not that we ignor fundamentals. Some of the items move only by fundamentals for example Cr.Oil.This will move mainly by fundamentals but this is not the case with all products.Before investing one should  look for technical analysis then fundamentals because technical analysis is morefull then fundamentals.

Sucheta, the point you are trying to make makes sense, since fundamentals is about studying past data only, but using proper growth metrics & financial models we could estimate the future, nothing is full proof as such. But if the company has got real profits, income statement looks factual, company has good NPI. Then certainly we should be looking forward to invest. Ur argument reminds me of Peter Druckers Quote "Company's current performance may be a result of past management efforts" The past performance should not be taken as a future indicator. The same logic sets for Technical Analysis too. Its choosing best of the worst. In which best will always be Fundamental analysis.

Dear sir,

For the sake of simplicity ,I would like to put forward my argument in numbers,as each para of being numbered.

1.Technical analysis as a primary tool can be used to identifying blue chip companies using top down trading or investment technique.Top down means first checking the chart of main indices ,followed by industry-sector indices chart,followed by group chart  within that industry sector and finally blue chip stock chart within that group.This can be done with technical tools like RSI,volumes and historical pivot points.

2.Portfolio management is money management technique which is independent of Analysis(technical analysis or fundamental analysis).As one needs to be aware that in any profitable venture of speculation like investment or trading,(50 % is finding the turning points and acting on it and 50% is money management technique like capital preservation,allocating assets,stop loss management).

3.If both fundamental analysis and technical analysis can be married for reasonable gains is an independent choice of that speculator or investor.Which may give reasonable profits or gains.But independently only technical analysis and money management techniques can be applied for reasonable gains also.

4..Why satyam ,----all along no accounting mistakes or accounting frauds world over has never been identified ever by so called fundamental analyst?Have they?Most of great investment,accounting,mutual fund companies have so called great ,blue tie,well educated chartered accountants,despite that ,they have not able been able to come out on time and identify such selfish promoters...have they?

At least a good technical analyst can identify accumulation (manipulated or insiders pooling of stocks when tide is on verge of turning for good for that company)during a bottom formation and distribution(again when insiders,manipulator's are busy distributing stocks to guiless investor ,since tide is turning for worse for the company) at top using-- many technical volume parameters as a technical tool or device ,while using stop loss with the help of technical tool like moving average.

Unfortunately ...for many technical analysis means day trading, tips ,support and resistance.All above argument is done with my knowledge and experience as a financial technical analyst.I have a great respect for you and any other follower of any other kind of analysis.

Ok,But then how fundamental,balancesheet,could not bring to light,the biggest fraud of the decade...satyam computers.....

Fundamental analysis could not call the top of the current stock marekt-jan 2008 nor will they able to call bottom of stock market.....

But in india technical analysis is still esoteric and in general means support and resistance.....only

BUT WHAT ABOUT THE BALANCE SHEET SHOWING FALSE ASSETS AND THAT TOO GETTING PASSED BY TOP RANKED AUDIT FIRM PWC AS SEEN IN SATYAM'S CASE

technical analysis is best tool availabel in laclusture market. wher you can go long as well as short if resistance as well as support levels brokens. every investor should learn technicall analysis. i am telling this with my experience as as broker.

Short terms Traders This Is best way to trade , Momentum trades & good SL at Same time .....