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Subject:
Tehcnical Analysis versus Fundamental Analysis
Category: Business and Money > Finance Asked by: rammu79-ga List Price: $2.00 |
Posted:
01 Nov 2004 10:56 PST
Expires: 01 Dec 2004 10:56 PST Question ID: 423004 |
I want to know whether there are concrete examples of stocks in which a much higher rate of return would have been obtained by using technical analysis-instead of fundamnetal analysis EG: When Short Covering takes place even a dud stock has a temporary rally Are there other specific instances like this where tehnical factors outweigh fundamental factors Please give me examples of stocks in which this has happened |
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There is no answer at this time. |
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Subject:
Re: Tehcnical Analysis versus Fundamental Analysis
From: dr_bob-ga on 02 Nov 2004 09:41 PST |
Over the long haul fundamentals always outweigh technical factors. ALWAYS. If a company is worthless, whether or not the paper is oversold is irrelevant. Now, there are plenty of examples where technical analysis has outweighed fundamental analysis over the short term. Look at the stock charts for: TASR KKD AMZN Now lets look at the dead and buried DOT-COM's. These were all turd companies with no intrinsic value, just pipe dreams and hot air. Aside from some buttwipe analyst's metric for valuation, what metric would you apply? You can analyze the size of a potential market, but until a product exists and you have a buyer, is there really a market? So what metric do you apply? As a result, when there is no real metric, and a short supply of stock, technical factors can easily detect an outstrip of demand for a stock. Thus the idiocy with stocks like KKD, and TASR which trade at insane multiples. If you can find the stories, you can be successful by looking at where a stock is headed, when it has topped out, and knowing what the real value is. Bob |
Subject:
Re: Tehcnical Analysis versus Fundamental Analysis
From: exotic_options-ga on 03 Nov 2004 06:31 PST |
Fundamental Analysis is a Lagging Indicator whereas Technical Analysis is a Market Indicator. For Example: Hindustan Lever is a Great Company. I don?t think anyone disputes that. Hindustan Lever was trading around Rs.182 on 19th February 2004 when it broke its Long Term Moving Averages. This is a Indication about weakness in the Stock. But there was no news from the Company for such a Bearish view of the Stock. Only when the stock had come down to 140 levels (I have forgotten exact rate) was the news that P&G had cut the Price of its main line detergent brands and HLL would follow the same. This in-turn would impact the Gross Margins / Profit Margins of the Company. Again over the last few weeks, HLL has outperformed the market, but its only yesterday (17th September 204) that news has come in of P&G and HLL raising prices of Detergents sold in Sachets. The above example clearly shows that using Technical Analysis is the best way of Analyzing stocks for Investments into them. After all, we Invest in a Company to make profits on our Investments. The above example is of a Indian Company - Hindustan Lever Limited which inturn is a subsidiary company of Unilever. Yahoo Code for HLL : HLL.BO Hope this helps. Regards XO |
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