Fundamental and technical analysis of stock market pdf

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fundamental and technical analysis of stock market pdf

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Technical Analysis is the forecasting of future financial price movements based on an examination of past price movements. Like weather forecasting, technical analysis does not result in absolute predictions about the future. Technical analysis is applicable to stocks, indices, commodities, futures or any tradable instrument where the price is influenced by the forces of supply and demand.

Fundamental Analysis Vs Technical Analysis in The Egyptian Stock Exchange – Empirical Study

To browse Academia. Skip to main content. By using our site, you agree to our collection of information through the use of cookies. To learn more, view our Privacy Policy. Log In Sign Up. Download Free PDF. Ahmed S. Hassan Ismail Hassan Ismail. Download PDF. A short summary of this paper. To in the rate of variance in the stock market, then the achieve this objective, the study used the Pooled Cross- forecasting function in the future trend of the stock prices, is Sectional and Time Series Analysis.

In this paper, we have considered as a very accurate function [23]. Importance of the Study yearly periods. This can be done through a comparison between the reports and statements, in addition to the impact of the non- results of technical analysis and fundamental analysis by economic aspects.

This result matches with some of the studies applying on the Egyptian stock market. This helps in which were applied in the emerging financial markets. Introduction III. Research Problem There are pioneering methods to analyze the shares in the scope of investment decisions. Nevertheless, We found the The Study attempts to solve the study problem, which can scope of using these tools has double points of view i. The important question is: Which of Which of the method of analysis of stock movement the used methods is more credible in forecasting the value of techniques technical analysis or fundamental analysis is the shares in the stock market?

To answer this question, we more credible in its results for using to predict values prices must test the forecasting potentiality of the used methods to and returns of shares in the Egyptian stock market? Egypt 2. There is No significant difference between the technical analysis results and the fundamental c analysis results concerning the stock return.

Methods of the Fundamental Analysis are applied the investment decisions. It has the following two methods for long periods of time i. Fundamental Analysis Approach 4. The Technical Analysis is more sensitive to changes in prices, where they can produce many signals buying or selling during the daily trading. The only difference is that a general framework which takes the form of studying each of these two methods attempts to get nearer to solve the expected economical forecasts reaching the sectors this problem from a different point of view [17].

Consequently, the strength of the companies is studied financially based on the historical financial Murphy [17] believes that if the fundamental analysis is information and their current conditions and measuring reflected in the market price, then there is no necessity to the efficiency of their management, and their study these fundamental analyses.

This is followed by a summarized model of fundamental analysis. Technical Analysis Approach analysis in the market. This is in reverse of the technical C. Technical Analysis versus analysis, which has one step only, which it takes, where the reflection of information in the market. The Technical Fundamental Analysis Analysis studies the market which gives it an advantage feature to many in the financial world.

In a different Lo, et al. Both use different types of historical information, fundamental analysis in the various financial markets. The results of and the volume factors. The Fundamental Analysis looks at the shares on both the Technical analysis and Fundamental Analysis to prices linked to the intrinsic value, and comparing expect the movement of the exchange rate in the future on it with the market value to reach whether it is the various range; whereas on the short-term, there is a estimated at less than its intrinsic value i.

This is reached by Oberlechner the technical analysis depends on the prices and [19] study was aimed at studying the importance of the trends. The accounting rules on the numbers stated in the accounting results proved that most traders use all the technical and reports, where the Egyptian Government implemented its fundamental expectation trends; and whenever the scope of new accounting standards on the basis of the International expectations is short, the more important the technical Accounting Standards in year [21], where this series analysis is.

The results show that the importance of the - is divided into two periods followed up Chung technical analysis may increase over the decades. As for based on Fung, et al. Where Pi,t express the expected closing stock price for Finally, Cohen, et al.

The test t. In a contrast to Bettman, it's shown as: et al. The study results concluded that both previously calculated, Pi,t-1 expresses the previous annual methodologies provided statistical and economical stock price of company i at the end of period t This is consistent with the findings of the Neely, et al.

Emprical Study models are predictable. R-squared which equals In order overcome a wide range of problems for the Fundamental Analysis Model. Moreover this table i. Homgeneity, Multicollinearity, and Biases. We find that dividing the study period into two Panels: the first panel; is a testing period and So, we move on to the second period to test the estimate of the forecast model Panel 1 - Estimation: — predictive ability for both models, accordingly, comparing 1.

The second period; forecast period of the estimated those values forecasted values with the corresponding values Panel 2 - Prediction: Then, is followed values Actual Values , to determine which of the two by a comparison between the forecasted value estimated models is more credible.

Consequently, it becomes clear This period shows testing and estimating two models through table II for each model as follows: for forecasting the future stock prices which is shown in Table I. R-squared 0. Sum squared residual Analysis 0. This indicates the Firstly, the results of Table I show the results of F- decrease in errors resulting from the estimated values Stat.

Table III near to Zero , if compared with that result from the shows the statistical indicators which show the potential of Fundamental Analysis which equals 0. This shows that the models to forecast and which produce two models for the forecasted values are becoming near to the actual values forecasting the future values Returns. So we rejected hypothesis 1. Intercept 0. On the other side, this table shows better results in favor of the Technical Analysis where this technique is superior over the Fundamental Analysis technique in terms of the Adj.

Which equals That means a relative difference in favor of the Technical Analysis. To verify this, we followed the same methodology model Model These results show the initial superiority of Therefore, we see that it is possible to divide the study the Technical Analysis Model over the Fundamental period into two periods i.

Two Panels. The First Period: Analysis Model. This is the test period and estimation of the forecast model; Panel 1 - Estimation: — 2.

The Second Period: This is the forecast period of the estimated values; Panel 2 - Prediction: — This is followed by the comparison between the forecasted values estimated and the market values Actual , to answer the following question: Is the forecasted value using the fundamental analysis technique by model 2 close to the market value actual value , or the forecasted value using the technical analysis technique by model 4 nearer to the market value for the share?

This is shown as follows: a The Estimation Period 3 2 We began from , because it was taken two previous periods lag t-2 for independent variables Sample adjusted : — Period included: 8.

Cross-sections included: Period included: 9. Findings and Conclusion Bias Proportion 0. We find that its value for the Fundamental Analysis Model B. The Credibility of the results of the Technical equals 0. It is considered much less Analysis Method in forecasting the future stock compared to the Technical Analysis Model whose results returns compared to the results of forecasting using give measures which are 0.

So it is the Fundamental Analysis Method. As well as in The Bias Analysis Method in its ability to forecast the future value of Proportion stated in Table IV shows that the bias the share prices or returns , it also matched the previous proportions are almost equal for each model.

In Table IV , we find that the variance value of the share prices or returns - as expressed by the proportion resulted from using the Technical Analysis Fundamental Analysis concept - There are due many reasons equals 0. Scarcity of information and its financial efficiency, the equals 0. This shows the credibility of using the consequence of non-presence of financial efficiency in Technical Analysis Method over the Fundamental Analysis.

This agrees with many studies which were applied in the Egyptian Market Based on all what presented above, we can conclude that such as [21]. Large variations in the issue of reports and financial Analysis results and the Fundamental Analysis results statements about the financial companies listed in the concerning the stock return in favor of the Technical Egyptian Stock Exchange, and a delay in making that Analysis.

So we rejected hypothesis 2. This can be information available for all investors and illustrated by the Fig. The influence of the non-economic reasons political, Evaluation Standard , is referred to the Symbol R , at each social, behavior, …. This reason is seen as the consequence of the theoretical study, whose influence is reflected on the results of the current applied study.

Bettman, J. Sault, , and L. Technical analysis: Substitutes or complements? Oberlerchner, "Importance of technical and fundamental analysis in the European foreign exchange market," International Journal of [2] B.

Blatagi, "Econometric Analysis of Panel Data," 3rd ed..

A Study on Fundamental and Technical Analysis

The purpose of this paper is to investigate the technical methods that investors in the Kuwait Stock Exchange use to evaluate ordinary shares. The research examines the extent of investors' use of technical analysis, and the technical indicators and the sources of technical information employed by investors. Further, it compares the valuation methods and the sources of information employed by Kuwaiti investors with those used by investors in other developed and emerging stock markets. Technical analysis is commonly used among research participants, particularly when timing their entry and exit points. The participants use a mixture of trend and pattern seeking; the Moving Average Rule was heavily used in the market but the Filter Rule Approach was not.

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; Lin ). A stock market is a place for trading stocks (equity) and other financial instruments. of public listed companies, where.


Fundamental Analysis 101: A Beginner’s guide to Fundamental Analysis.

You cannot invest without analyzing the stocks and the underlying companies. That would be akin to running on the highway blindfolded. There are many kinds of share market analyses. Read further to know about fundamental and technical analyses.

What is Fundamental Analysis? Fundamental analysis mostly refers to the use of economic data to predict forex price movements. While technical analysis focuses on historical price action and repeating behavior, fundamental analysis takes into consideration the demand and supply for a currency based on the current and expected return in holding it. Demand and supply of a currency are influenced mostly by central banks and monetary policy. When a central bank decides to add to money supply or lowers interest rates, the value of the local currency goes down since there is more of it in circulation and the rate of return on assets denominated in that currency is lower.

Show full item record. JavaScript is disabled for your browser. Some features of this site may not work without it. Date: Abstract: Fundamental analysis and technical analysis are two different school of thoughts of analyzing stocks, that often investors perceive them as substitutes, one over the other.

Fundamental Analysis Vs Technical Analysis in The Egyptian Stock Exchange – Empirical Study

Skip to Main Content. A not-for-profit organization, IEEE is the world's largest technical professional organization dedicated to advancing technology for the benefit of humanity. Use of this web site signifies your agreement to the terms and conditions. Integrating Fundamental and Technical Analysis of Stock Market through Multi-layer Perceptron Abstract: We use Multi-layer Perceptron and propose a hybrid model of fundamental and technical analysis by utilizing stock prices from to and financial ratios of Technology companies listed on Nasdaq. Our model uses data discretization and feature selection preprocesses. The best results are obtained through topology optimizations using a three-hidden layer MLP. It is found that the hybrid model successfully predicts the future stock movements.

Information Efficiency on the Stock Market 2. Efficient Market Hypothesis 2. Definition and Theoretical Assumptions 2. Efficiency Forms 2.

Nowadays, there are two types of financial analysis oriented to design trading systems: fundamental and technical. Fundamental analysis consists in the study of all information both financial and nonfinancial available on the market, with the aim of carrying out efficient investments. By contrast, technical analysis works under the assumption that when we analyze the price action in a specific market, we are indirectly analyzing all the factors related to the market. In this paper we propose the use of an Evolutionary Algorithm to optimize the parameters of a trading system which combines Fundamental and Technical analysis indicators. The algorithm takes advantage of a new operator called Filling Operator which avoids problems of premature convergence and reduce the number of evaluations needed. Unable to display preview. Download preview PDF.

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