Why do Technical Analysis and Fundamental Analysis sometimes give differing views?
It is mostly due to time frame. Many times, fundamental analysis is good for the longer time frame whereas technical analysis is good for the shorter time frame. The trend for different time frames can be very different. At market extremes, prices tend to overshoot and sentiment tends to become irrational. Fundamental analysis may be calling for “undervalued” or “overvalued” too early but technical analysis may be able to read the prevailing sentiment and strong trend better.
Related Questions
- I have been investing in stocks using fundamental analysis, how would technical analysis help me in taking better decisions as compared to fundamental analysis ?
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