Last weekend I was talking with an artist/painter. In our conversation, I said I thought in general people tend to be either strong in the 'detail' instinct/orientation or happen to see the 'larger picture'. I also said that I thought combining the two seems to be the challenge to most. She pointed out that "everything starts at the detail level". I agreed with that observation.
Fundamental Analysis or Technical Analysis? Which is more important?
Both are important!
I regard the question to be more of an academic one and suited for debating, and good for learning.
Both have an important 'place' and 'role' when it comes to playing the stock market 'game'. Both are required regardless of what kind and style of trading/investing and time horizon one may have. F/A is 'fundamental' and T/A a necessary tool for achieving one's goals and objectives to the best of one's preparation meeting their own unique situation and circumstances.
Even to shareholders who have a long term investment horizon, one has to have the knowledge of 'cycles' and the know-how when to 'fold'. A modicum of knowledge in T/A and in Cycle are necessary, imo. The dynamic nature of the process requires it.
We know that the market either overvalues or undervalues stocks. This is no brilliant discovery. That is the market.
F/A is important. And, an ongoing follow-up and updates are essential in order to keep up with what's happening with the company. For example, charts are little help when a company is heading to bankruptcy when a company is mismanaging before it happens.
However, F/A is not enough when it comes to predicting periods of overvaluation and undervaluation.
This is mainly in the domain of T/A. Overvaluation and undervaluation is reflected in stock price changes and detecting it is in the domain of T/A.
To detect the changes in the market, one needs to use the right tool(s) to assess the 'action' as it unfolds. Pattern recognition and detecting the prevailing trend and the changes thereof are all in the domain of T/A whether one's horizon is for ST, IT or LT. GLTA
