Educating Investors

Types of Stock Market Analysis3 min read

If you are a person who is new to the Stock Market and is looking to go through the right way to explore the types of stock market analysis, then this blog is for you.

Stock Markets are highly unpredictable, and they can only be mere a gambling game unless you don’t study and invest in the right manner. Stock Markets would always be unpredictable, but with good research and knowledge, we can make some right decisions that can help us to create wealth.

There are various methodologies through which we can analyze the movement of the market. These methods are purely scientific and involve multiple factors like stock price movements, economy and the industry, chart patterns, company balance sheets and profit and loss statements.

Types of Stock Market Analysis:

  1. Fundamental Analysis
  2. Technical Analysis 
  3. Quantitative Analysis 

Fundamental analysis

Fundamental analysis is the study of a company’s stock prices in relation to the factors affecting the organization such as its financials, revenue sources, profitability, expenses etc. Fundamental analysis of the stock markets is to predict the movement of the stock prices in the long term. 

Three essential steps of fundamental research on any stock that needs to be followed are: 

  1. Analyze the company 
  2. Analyze the industry 
  3. Analyze the economy 

The above steps can be followed in a top-down approach or a bottom-up approach. 

Refer article: How to manage your own investment portfolio

Fundamental analysis involves assessing the ‘fair value’ of a company and then evaluate whether the stock prices are undervalued or overvalued.

‍Technical Analysis

Analyzing the stock prices on the basis of statistical data such as volume, moving average, price movements, chart patterns etc. is called the Technical analysis. These analysts believe that stocks follow certain patterns on the chart which have occurred previously and will again repeat causing an upward or downward movement in the stock price. Technical analysis can be considered more on predicting the direction of the stocks, unlike fundamental analysis.

Quantitative Analysis

The third type of analysis is the Qualitative analysis which uses a mathematical formula to predict the price movement of a stock based on certain conditions, if this formula satisify those conditions then a call of buy/sell is given. Quantitative trading analysts (also known quants) use a variety of data including historical investments and stock market data to develop trading algorithms and computer models. 


All the three types of stock market analaysis have thier own pros and cons and none of them can be said as the only perfect way to analyze the stocks. In many cases it has been seen that for a particular stock a technical analyst mai suggest an upward movement and at the same time a fundamental analyst may suggest a potential downward movement. It is always recommended that investors do thier own research and then invest in the stock market.

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