Fundamental Analysis:

Focus on Intrinsic Value: Fundamental analysis is primarily concerned with assessing the intrinsic or true value of an asset, such as a stock or a bond. It aims to determine whether an asset is overvalued or undervalued in relation to its fundamentals.

Data Sources: It relies on a wide range of financial and non-financial data, including company financial statements (income statement, balance sheet, cash flow statement), economic indicators, industry trends, and company-specific information (management quality, competitive advantage).

Long-Term Perspective: Fundamental analysis is typically used by long-term investors who are interested in holding assets for an extended period. It helps them make decisions based on the long-term growth potential of a company.

Valuation Models: Analysts often use valuation models like the discounted cash flow (DCF) model or the price-to-earnings (P/E) ratio to estimate the fair value of a security.

Events and News: Events like earnings reports, economic releases, and geopolitical developments can have a significant impact on fundamental analysis. Investors pay attention to such events to assess their impact on a company’s fundamentals.

Technical Analysis:

Focus on Price and Volume: Technical analysis is primarily concerned with studying historical price and volume data of an asset. It aims to identify patterns, trends, and potential price reversals based on historical price movements.

Data Sources: It relies heavily on price charts, technical indicators (e.g., moving averages, RSI, MACD), and volume data. These are used to identify patterns, support and resistance levels, and potential buy/sell signals.

Short to Medium-Term Perspective: Technical analysis is often used by short to medium-term traders who are looking to profit from price movements within a relatively short time frame. It is less concerned with the long-term fundamentals of an asset.

No Intrinsic Value Consideration: Technical analysis does not take into account the intrinsic value of an asset or the underlying factors affecting a company’s financial health. It assumes that all relevant information is reflected in the price.

Emphasis on Trends: Technical analysts believe that historical price trends tend to repeat themselves, and they use this belief to make predictions about future price movements.