Methods for Stock Analysis

There are different strategies for investing in the stock market. Many people consider the stock market investing as a method to generate some profit on the side, while some others consider it as a full-time job. There are mainly two methods for stock market analysis known as Technical analysis and Fundamental analysis.

Technical analysis

It is mostly employed by the day traders to predict future stock price movements based on past patterns. Technical analysts use many charts to capture market movements at different time points.

Fundamental analysis

It is also known as Value investing. It was advocated by Benjamin Graham and was the investing strategy of the renowned investor Warren Buffet over a long period of time. The Intelligent Investor, a book authored by Benjamin Graham, is one of the best resources to get insights on this method. These analysts believe that each stock has an intrinsic value driven by numerous macro and micro factors. The preferred method is to estimate the value of a stock considering different factors and then compare this price with its current price. If the current price is lower than the estimated price, the stock is a buy.

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