Fundamental Analysis
A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and company-specific factors (like financial condition and management).
The end goal of performing fundamental analysis is to produce a value that an investor can compare with the security's current price, with the aim of figuring out what sort of position to take with that security (underpriced = buy, overpriced = sell or short).
Technical Analysis
The methods used to analyze securities and make investment decisions fall into two very broad categories: fundamental analysis and technical analysis.
Fundamental analysis involves analyzing the characteristics of a
company in order to estimate its value. Technical analysis takes a
completely different approach; it doesn't care one bit about the "value"
of a company or a commodity. Technicians (sometimes called chartists) are only interested in the price movements in the market.
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