Will Fundamental Analysis of Stocks work for forecasting its share price?

There are many opinions on analyzing stocks. The tools of analyzing a stock price is fundamental analysis and Technical Analysis. These two tools are different forms of analysis. One doesn’t depend on other.

Some people say, Technical Analysis is the best method to forecast the share price but some say fundamental analysis is the best way. Let us discuss the pros and cons of these two methods.

Technical analysis is done based on historical price movement of the Stock. This price is the ultimate result of the demand and supply. No individual can alter the demand and supply on his own. So, the price will always reveal the real value of that particular stock at that particular time. Any expert on Technical analysis can some what predict the stock market.

In case of Fundamental analysis, the data cannot be reliable as it can be subject to manipulation. The previous years performance can not be repeated this year also. A good growth projected based on demand and supply of its products cannot be also reliable. Even if it happens as per the projections, it need not be reflected in the share price.

We have seen many quality stocks haven’t moved inspite of bull market in other stocks and we have seen many fundamentally worst performing stocks moving up. The inference is, fundamental analysis doesn’t the have the edge to project the future prices.