that trends exist in the movements of the market and they identify trends through
the price charts that they are known to love. Technical analysts are criticized for
identifying trends too late and acting on them after much of the action has
already occurred. Still, there are those that choose the technician's view on the
importance of price and price movements over the views of the other forms of
market analysis [6].
3.2. Fundamental Analysis
Fundamental analysis is quite a different breed of market analysis. While
technical analysts are consumed with price charts, fundamental analysts tend to
pay more attention to other factors. Where technicians believe that the current
price is a result of all available information, fundamentalists believe no such
thing. Fundamentalists believe that the price is not based on any readily
available information and instead think that it is only based on past prices. Thus,
fundamentalists believe that the market's efficiency is weak [5].
Fundamentalists look at very long term trends. Patience is a necessary
trait for every fundamental analyst. Fundamentalists group companies together
into “industry groups” of some related nature. Fundamentalists believe that the
stocks of companies that are closely related will move together. With this
strategy, fundamentalists then have to look at specific companies within the
industry groups to determine their actual investments [7].
Fundamental analysis is very time-consuming. Fundamentalists conduct
thorough and extensive research for each aspect of an investment.