Market Primers

One of the most common sources of confusion for new market participants are the seeming contradictions between COL Financial’s Technical and Fundamental recommendations. Quite often, an issue rated as “Sell” on Technicals will be rated as “Buy” on Fundamentals. Bakit ganun?

Well, you have to understand that Fundamental Analysis (FA) and Technical Analysis (TA) are two very different ways of looking at the same company. Simply put: FA looks at the business while TA looks at the movement of the company’s stock price.
buy sell blog
Hence, if a stock’s price starts going down, it becomes less attractive from a TA standpoint while POTENTIALLY becoming more attractive from a FA view — nagiging mas mura kasi kompanya. Conversely, when stock prices start rising, they become less attractive sa FA while becoming more attractive sa TA.

Confusing? Yes. Lalo na kung pa-lipat-lipat ka.

So, kung beginner ka sa market, dadali buhay mo if you stick with one school muna. NEITHER school is perfect — they both have strengths and weaknesses and unless you pick a side, you will quite often end up confused and unable to act properly.

Put another way: Pag pa-akyat, ayaw bumili kasi mahal. (FA kuno) Pag nalaglag, ayaw pa din kasi “downtrend” na (TA naman). Kung ganun, kelan ka papasok?

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Aya Laraya

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  1. Jolt Acebedo says

    Think of Warren Buffet as a classic example of a fundamental investor and then there is George Soros as the ultimate Technical Investor. Neither invests exclusively on their key strategy. However, never follow other investor’s plan unless you have your own plan of investing. It’s like following Tom Cruise to Hollywood because he is successful, but you’re not even travelling the same way.

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