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Timing Solutions for Swing Traders: A Novel Approach to Successful Trading Using Technical Analysis and Financial Astrology by Peter Tryde, Robert Lee

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FUNDAMENTAL AND TECHNICAL ANALYSIS

When a stock price is compared to its intrinsic value, it is termed as “fundamental analysis.” When the stock price is looked at from the angle of supply and demand, it is known as “technical analysis.” Each method of analysis is just as useful and important as the other, and both methods should be used in combination when reading the market and selecting stocks. However, it must be remembered that all analysis serves as a means to estimate the value of stocks.

Fundamentals refer to the financial information reported by the listed companies, which is always historical. A fundamental analyst calculates the stock’s future worth based on the company’s past reports, and projects its value and relative earnings. Fundamental analysts study the change in profitability of the corporation relative to its revenue trend, costs, and expenses, which will include an analysis of its business competition, its capitalization, and the strength of its business sectors. Fundamental analysts should be aware of the potential risk of change between the company’s latest report and its current situation. It takes generally at least three months from the cutoff date of the financial statements to have the audited results published. During that period, many things can happen and, as a result, the published results may not reflect the current state of the company’s financial position. Nonetheless, one would be foolish to ignore all fundamental analysis.

Fundamentals are ...

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