Another tool that a stock trader may possess during this stock war is by knowing technical analysis. Unlike fundamental analysis, technical analysis does not rely much on the company's current situation. Although some may argue that they are related, some also believes that they are independent to each other.
Technical Analysis is defined as the practice of interpreting charts of a stock's past performance in order to predict future actions.
Technical analysis maintains that all information is reflected already in the stock price. Trends 'are your friend' and sentiment changes predate and predict trend changes. Investors' emotional responses to price movements lead to recognizable price chart patterns. Technical analysis does not care what the 'value' of a stock is. Their price predictions are only extrapolations from historical price patterns.
Investors can use any or all of the fundamental analysis(FA) or technical analysis(TA) but somewhat complementary methods for stock picking. For example many fundamental investors use technicals for deciding entry and exit points. Many technical investors use fundamentals to limit their universe of possible stock to 'good' companies.
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