The Hall Market Report

Head On A Swivel – Financial Market Blog

Squiggly Line Theory versus the Quarterly Book of Optimism??

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 Technical versus Fundamental?

Although it is frequently debated, our opinion is that security analysis is not a mutually exclusive view of fundamental analysis versus technical analysis, it is fundamental analysis with technical analysis.

The value of in-depth fundamental analysis is evident, however we believe that it represents only one part of a thorough analysis strategy. Often over looked is technical analysis, which complements the latter by bringing the conversation of risk to the table, which is not available from a fundamental only balance sheet review. Fundamental analysis is a review of a company (‘what’ is happening and ‘why’) and searches for an intrinsic value, while technical analysis is about the stock (‘how’ the stock is behaving and ‘when’) and searches for the right time to implement a fundamental strategy. Technical analysis looks at key items such as oscillators, volume, price movements, and the all important primary and secondary trends, support and resistance levels. Question – if you like a stock at $50.00 do you like it more at $45.00? Perhaps, perhaps not, and as the last 18 months has shown there are plenty of bad times to own good companies. Use technical analysis to help separate the good  from the bad and if you include 2008, the really, really ugly times.

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Written by thehallmarketreport - Head on a Swivel

January 3, 2010 at 1:32 pm

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