Type of analysis in stock market - Fundamental analysis, technical analysis

     Stock analysis is a technique to measure the pulse of the stock and determine the right price to enter and exit stock with handsome return. There are two major yet very contrasting approach to do same. They are :

1. Fundamental analysis :-  Fundamental analysis is a study base on company financial past results including sales, profit, operation, general economic forecast, expected demand, profit margin, sales forecast, debs, competition, management and many other parameters. Based on these studies, analyst tries to find right value (intrinsic value) of the stock. A buy or investment decision is taken and when stock is trading below right value and a sell decision is taken when the stock is much above it's far value.
2. Technical analysis :-  Technical analysis on the other hand do not believe in the finding intrinsic value of the stock. They rather study equity's price and volume movement to predict the future direction of the stock price. Technical analysis in a very simple definition is, study of chars to determine patterns and use them to trade when such patterns has very high probability of a stock movement in a certain direction.

Both these analysis uses very different ways to analyze stocks and have been quite effective in producing good results. Both these approach may not always give buy/sell signal at the same time and may even give strong and opposite signal on same stock. One study may indicate strong buy where as other may give strong sell. Beginners may get confused and are strongly advice to study both but follow one, as mixing then could produce undesired results.