Stock Market Forecast – Fundamental and Technical Analysis
Market forecasting is a challenging part of stock market analysis as market forecasting has become the most complex task of an analyst. Market forecasting helps a trader choose the type of security, when to buy or sell a security, and the amount that he should invest in that security.
The type of analysis used by traders or market analysts falls into two main categories:
Both of the above methods are based on some information that comes from various news sources, analytical data, or investment charts.
Fundamental analysis involves a careful study of the financial operations, economic situation, assets, debts, management, products and completion of the company. Thus, fundamental analysis is based on the study of a company’s financial and industry information to predict the movement of its share price. Fundamental analysis is often useful in long-term investing and is not highly trusted by day traders. However, some believe that studying fundamentals and technique simultaneously may be better for day trading.
Technical analysis is the method of evacuating stocks by analyzing stock charts. It includes the analysis of market data, volume and open interest to predict the future trend of a stock. Analysts study the past performance of the company and study the charts to see if there is any pattern in the price of that security. Information about a stock’s price, volume, and other important information can be displayed on a chart. There are various software where the study of such chart can be done very effectively and easily to study the patterns and trends. These patterns are also used to determine when to buy or sell a security.