Fundamental Analysis: This is an analysis of the financial performance of the company based on certain financial parameters such as growth in sales, operating and net profits, gross and net margins, return on equity capital employed (ROCE) and return on net worth (RoNW), leverage ratio (DER), earnings per share (EPS), prospects of the industry in which the company is operating and its market share in the overall industry, track record of the management, dividend history, and so on. These parameters provide an overview of the financial health and the growth prospects of the company.
Technical Analysis: This is an analysis of the movement of share price of the company over a period of time. The technical parameters provide an indication to the trader about when and at what price level to enter a share (take a long/short position) and when to exit or close the position. There are many technical indicators which a trader uses to determine his entry or exit from the stock. Some of the technical indicators include support and resistance levels, overbought or oversold zones, simple moving average (SMA), exponential moving average (EMA), relative strength index (RSI), breakout levels, and many more.
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