{"id":7754,"date":"2022-05-08T16:05:41","date_gmt":"2022-05-08T08:05:41","guid":{"rendered":"https:\/\/slashtraders.com\/?p=7754"},"modified":"2025-09-29T17:40:09","modified_gmt":"2025-09-29T09:40:09","slug":"fundamental-analysis-vs-technical-analysis","status":"publish","type":"post","link":"https:\/\/www.slashtraders.com\/en\/blog\/fundamental-analysis-vs-technical-analysis\/","title":{"rendered":"Fundamental vs Technical Analysis: How We Combine Both to Pick Value Stocks"},"content":{"rendered":"<p class=\"wp-block-paragraph\">Do you want to know how professional investors pick stocks through analysis?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Today SlashTraders will show you what fundamental analysis and technical analysis are, and our shortcuts to picking bullish value stocks.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Is Fundamental Analysis?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Fundamental analysis is a method that uses financial data and market forecasts to analyse a company's market capitalisation and its stock's Fair Value.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Value investors use financial reports such as Balance Sheets and Income Statements to understand a company's assets, debts and cash flow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">These data are useful in determining the company's operational capabilities, including <a href=\"https:\/\/slashtraders.com\/en\/tools\/dividend-stock-screener\/\" target=\"_blank\" rel=\"noreferrer noopener\">Debt to Equity and EPS<\/a>, then use P\/E Ratio to find the stock's Fair Value.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">Fundamental analysis through financial reports is especially useful for determining the value of a stable and profitable company like Microsoft.\n<a href=\"https:\/\/www.trefis.com\/company?hm=MSFT.trefis\" target=\"_blank\" rel=\"noreferrer noopener\">Trefis estimates<\/a> the stock Fair Value through the investment and profitability of different Microsoft divisions:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Intelligent Cloud contributes 37.4%.<\/li>\n\n\n\n<li>Productivity and Business Processes contribute 33.5%.<\/li>\n\n\n\n<li>More Personal Computing contributes 26.1%.<\/li>\n\n\n\n<li>Around $86 billion in cash contributes 3.1%.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"750\" height=\"427\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/05\/msft-trefis-price.png\" alt=\"msft trefis price\" class=\"wp-image-7758\" srcset=\"https:\/\/www.slashtraders.com\/wp-content\/uploads\/2022\/05\/msft-trefis-price.png 750w, https:\/\/www.slashtraders.com\/wp-content\/uploads\/2022\/05\/msft-trefis-price-300x171.png 300w, https:\/\/www.slashtraders.com\/wp-content\/uploads\/2022\/05\/msft-trefis-price-18x10.png 18w\" sizes=\"(max-width: 750px) 100vw, 750px\" \/><figcaption class=\"wp-element-caption\">The Trefis estimate of MSFT stock price.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The estimate shows MSFT is worth around $371 in intrinsic value, meaning there is an Upside of 34.9% from the current $275 market price.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Future projection of a particular industry can help estimate a company's worth through future market growth and whether the company has leadership status. Tesla's leadership in high growth electric car and renewable energy markets contributes to its high market valuation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the downside of such speculative analysis means every financial analyst seems to have a different perspective on the market prospects, leading to the massive fluctuation in electric car company valuations, and unpredictable trends.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Is Technical Analysis?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Technical analysis is a method that uses past stock price fluctuation patterns to deduce bullish and bearish signals to help us predict short and medium-term trends.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">Common technical analysis indicators came to popularity through <a href=\"https:\/\/slashtraders.com\/en\/blog\/thinkorswim-backtesting-options\/\" target=\"_blank\" rel=\"noreferrer noopener\">extensive backtesting<\/a> to find consistent winning signals:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Simple Moving Averages use 50-day, 100-day and 200-day stock price averages to minimise the impact of short term stock movement to find medium and long term price trends.<\/li>\n\n\n\n<li>Momentum indicators like RSI use price movements to find Oversold and Overbought conditions that predict bearish or bullish trends.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">We can see clear bullish signals from recent META stock price charts:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>When the stock price stays below 50-day, 100-day and 200-day MA lines, with small signs of 50 MA curling up, there is a high probability that the stock price will revert to a bullish trend next.<\/li>\n\n\n\n<li>RSI shows the stock has recently transitioned from Oversold to Overbought.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/05\/fb-technical-chart-analysis.png\" alt=\"fb technical chart analysis\" class=\"wp-image-7763\" srcset=\"\" sizes=\"(max-width: 1024px) 100vw, 1024px\" data-srcset=\"\" \/><figcaption class=\"wp-element-caption\">Technical chart analysis can predict META's bullish timing.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Both signals show a high probability of a bullish outlook for the Meta stock price.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Is the Difference Between Fundamental and Technical Analysis?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Fundamental analysis and technical analysis provide guidelines to predict long term and short term directions of movement.<\/p>\n\n\n\n<table id=\"tablepress-37\" class=\"tablepress tablepress-id-37\">\n<thead>\n<tr class=\"row-1\">\n\t<td class=\"column-1\"><\/td><th class=\"column-2\">Fundamental analysis<\/th><th class=\"column-3\">Technical analysis<\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\">Method<\/td><td class=\"column-2\">Estimates intrinsic value through financial data and operational health<\/td><td class=\"column-3\">Uses historical data to find consistent trending signals<\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td class=\"column-1\">Strategies<\/td><td class=\"column-2\">Long term investment<\/td><td class=\"column-3\">Short to medium term trading<\/td>\n<\/tr>\n<tr class=\"row-4\">\n\t<td class=\"column-1\">Cons<\/td><td class=\"column-2\">Unpredictable valuation based on market speculation<\/td><td class=\"column-3\">Future price trends may not follow past trends<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<!-- #tablepress-37 from cache -->\n\n\n\n<figure class=\"wp-block-image aligncenter size-full\"><a href=\"https:\/\/www.slashtraders.com\/en\/pricing\/?utm_source=blog&amp;utm_medium=banner\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" width=\"971\" height=\"120\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/03\/slashtraders-trial-banner.png\" alt=\"slashtraders trial banner\" class=\"wp-image-7387\" srcset=\"\" sizes=\"(max-width: 971px) 100vw, 971px\" data-srcset=\"\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Our Shortcut to Picking Bullish Value Stocks<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">When we find a trading system that combines fundamental and technical analyses that provide consistent results, we can find undervalued, bullish value stocks in seconds.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">The <a href=\"https:\/\/slashtraders.com\/en\/tools\/best-value-stocks\/\" target=\"_blank\" rel=\"noreferrer noopener\">Bullish Value Stocks<\/a> can help us find highly undervalued, blue-ship stocks that are great for investing long term.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"498\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/05\/best-value-FB.png\" alt=\"best value FB\" class=\"wp-image-7772\" srcset=\"\" sizes=\"(max-width: 1024px) 100vw, 1024px\" data-srcset=\"\" \/><figcaption class=\"wp-element-caption\">Bullish Value Stocks provide results to both fundamental and technical analyses.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Fundamental analysis of FB stock shows the Fair Value as $398, with an Upside of 95.5%, meaning it is extremely undervalued. Technical analysis shows FB's Long Signal happened 7 trading days ago.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, both analyses are in agreement with a bullish outlook for FB, meaning right now is a great time to buy and hold the value stock.<\/p>\n\n\n\n<p class=\"has-ast-global-color-4-background-color has-background wp-block-paragraph\"><a href=\"https:\/\/www.slashtraders.com\/en\/blog\/slashtraders-vs-sp500\/\" target=\"_blank\" rel=\"noreferrer noopener\">SlashTraders vs S&amp;P 500: 450% Outperformance, Verified Trades and How to Copy Every Alert<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Professional investors pick stocks through analysis. We show you what fundamental analysis and technical analysis are, and our shortcuts to picking bullish value stocks.<\/p>","protected":false},"author":1,"featured_media":7757,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"plain-container","ast-site-content-layout":"normal-width-container","site-content-style":"unboxed","site-sidebar-style":"unboxed","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":"","_wp_rev_ctl_limit":"5"},"categories":[3],"tags":[56,12,64,22,58,45,59,11],"class_list":["post-7754","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-cn","tag-en","tag-es","tag-fb","tag-invest","tag-msft","tag-stocks","tag-tw"],"_links":{"self":[{"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/7754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/comments?post=7754"}],"version-history":[{"count":5,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/7754\/revisions"}],"predecessor-version":[{"id":13933,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/7754\/revisions\/13933"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/media\/7757"}],"wp:attachment":[{"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/media?parent=7754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/categories?post=7754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/tags?post=7754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}