Technically strong market

A market is said to be strong in technical sense (from the TA perspective) when the market is rising with good trade value. Even if it is falling with low trade value it is considered as technically strong market.

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Technical Indicators

Technical indicators are derived from Technical Analysis (TA). Technical indicators such as Average prices, charts, average volumes, relative strength index (RSI), money flow index, various stochastic and bands etc helps traders/investors identify better buy/sell position for a stock.

Though short-term traders rely heavily on technical indicators, long term investors also use it for better entry position. But it helps in no way to judge stock merits based on company performance. It is wholly used to guess speculative price movements.

Technical indicators are derived from studying active trading of a security in exchanges not from the fundamental values of financial statements or annual reports.

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Fundamental Analysis

Fundamental Analysis (FA) deals with the company's income sources, cash flow, financial statements, company health, profitability, company management, its competitive advantage, industry trend and many more to forecast the future sustainability of the company as well as future growth.

In a word Fundamental Analysis tries to know the business performance of a specific company.

After analyzing all the business prospect and future performance the analyst identifies a true value (intrinsic value) of the company. Then he compares the true value with market value to decide if the stock is undervalued or over valued.

If he finds the stock undervalued he decides to buy, if find it over valued he recommends a sell.

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Technical Analysis

Technical Analysis deals with the trade information. It study historical price volume data to forecast the future.

Technical analysis gets the price-volume information as input, process it and produces meaningful statistics and charts. Traders and investors then interpret those in a predefined manner to get bus/sell signals.

Technical Analysis (TA) doesn't care about the company performance. It only reads the trade performance of the company in the exchanges.

For example Company A trades only around 10million shares a day. But suddenly the chart shown the trade volume has increased significantly. A technical analyst will take it positively even the company may not disclosed any price sensitive information.

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