Technical vs Fundamental Analysis: Which is Best for Stock Market Investing?

Introduction

When it comes to investing or trading, one of the first questions beginners ask is:
👉 “Should I use technical analysis or fundamental analysis?”

Both are powerful tools, but they serve different purposes. To succeed in the stock market, you need to know how they differ, when to use them, and whether one is better than the other.

At The MONEYTUDE, we teach both approaches, helping traders combine them effectively. Let’s break this down step by step.

What is Fundamental Analysis?

Fundamental Analysis (FA) focuses on the true value of a company by studying financials, industry trends, and economic conditions.

Key Factors in FA:

• Revenue & Profit Growth

• Debt Levels

• Management Quality

• Industry Trends

• Economic Conditions

👉 Example: If Infosys shows strong profit growth, low debt, and expanding international clients, FA suggests it’s a strong long-term investment.

What is Technical Analysis?

Technical Analysis (TA) studies price charts, patterns, and indicators to predict future movements. It assumes that “price reflects everything” and focuses on market psychology.

Key Tools in TA:

• Candlestick Charts

• Moving Averages (MA)

• Support & Resistance Levels

• Relative Strength Index (RSI)

• MACD (Moving Average Convergence Divergence)

👉 Example: If Reliance stock forms a “double bottom” pattern on the chart, TA suggests a potential bullish reversal for traders.

Real-World Implementation:

• Fundamental View: Strong IT sector growth, good quarterly results → Long-term buy.

• Technical View: Stock near resistance at ₹1,600 → Wait for breakout before buying.

👉 This shows how FA and TA can give different answers based on perspective.

Strengths of Fundamental Analysis

✅ Helps identify undervalued stocks.
✅ Useful for long-term wealth building.
✅ Reduces risks by focusing on strong companies.

Weaknesses of Fundamental Analysis

❌ Time-consuming – requires deep study of financials.
❌ Not useful for short-term price movements.
❌ Market sentiment may override fundamentals temporarily.

Strengths of Technical Analysis

✅ Quick decision-making tool for traders.
✅ Helps identify entry & exit points.
✅ Works in all asset classes (stocks, forex, crypto).

Weaknesses of Technical Analysis

❌ Can give false signals.
❌ Requires discipline and practice.
❌ Doesn’t reveal the “real value” of a company.

Which One Should You Use?

The truth is: It’s not about FA vs TA—it’s about FA and TA.

👉 Example:

• Use Fundamental Analysis to choose quality stocks like HDFC Bank, TCS, Infosys.

• Use Technical Analysis to decide when to buy or sell those stocks.

This combination is called the “FA + TA Hybrid Approach.”

Beginner Tip – Start Simple

• If you’re a long-term investor → Focus on FA first.

• If you’re a short-term trader → Focus on TA first.

• But eventually, learning both will give you the edge in the markets.

Conclusion

Both Fundamental Analysis and Technical Analysis are valuable, but their power lies in using them together.

At The MONEYTUDE, we train beginners and professionals to master both approaches—so you don’t just pick the right stock, but also buy it at the right time.

👉 Ready to level up your analysis skills? Join Our Stock Market Courses