Technical analysis leads to an active trading approach based on short term price fluctuations and momentum. Fundamental investors are often called value investors, while technical traders are often called price or momentum investors. Fundamental analysis seeks to locate stocks with an intrinsic value higher than their market price – bargains where the intrinsic value exceeds market price. A moving average is calculated by taking the average of a certain number of past data points. The most common time periods for moving averages are 20, 50, and 200 days. It is important to note that technical analysis is not an exact science. There are no guarantees when it comes to making predictions about the future. However, many investors find technical analysis to be a helpful tool in making investment decisions. Technical traders seek to achieve high returns by capturing the turning points of short term price swings and movements. Fundamental analysis evaluates whether...
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