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Technical Analysis is a methodology embraced by some market participants that believe that the best way to estimate the future performance of a stock is to look back, that is, looking at the historic volume and price data popularly referred to as charting, in essence, they believe that history will repeat itself. Chartists as they are called who employ extensively technical analysis do not consider the underlying value of a stock.
Fundamental Analysis on the other hand, is a methodology of selecting a stock that seeks to estimate the future performance of a stock by uncovering the underlying value behind the stock. Fundamentalist as they are called who employ fundamental analysis, carry out rigorous analysis of the fundamentals that drive stock movements by looking at the past earnings, leverage, asset quality, turnover, etc and also try to anticipate future values of these variables and based on these analyses estimate the likely movements of a stock…
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