Distinguish between Fundamental and Technical Analysis

Fundamental v/s Technical Analysis : Technical analysis differs from fundamental
analysis in many respects. A fundamental analyst looks forward whereas the technical
analyst looks backward. A fundamental analysts attempts to forecast company earnings
through the company earnings, dividends of its shareholders. These earnings are then
discounted to obtain the intrinsic value of a security by determing an appropriate rate of
discount. The technical analyst believes that all relevant factors are reflected in the market
price and volume of trading. He studies the historical price and volume patterns that
provide clues for his future purposes and sale and profit from timely entering and exiting
from the market.
A fundamental analyst thinks that stock market behaviour is 90 percent logical and 10
percent psychological whereas, a technical analyst thinks that it is 10 percent logical and
90 percent psychological. Fundamental analysis provides a long run view of security
pricing whereas the technical analysis usually provides a short run view of security
pricing.