Do fundamentals meet technical in the stock market?

[i4value]

In the stock market, when you invest based on fundamentals, you are looking at the prospects of the underlying company. You are comparing the value of the business with the market price.

When you invest based on technical you are trying to follow the crowd. You are using the technical indicators to gauge market sentiments. There is no attempt at valuation. Rather the investment decision is based mostly on price action.

Unless you have the situation where price = business value, technical and fundamental don’t meet.

And in the situation where price = business value, the fundamental investor would sell whereas the technical investor most likely will buy as prices are trending up.

So fundamental and technical are different investing approach.

I happen to be a fundamental investor as I think it is easier to read business prospects than market sentiments.

[specuvestor]

I use A-B-S framework when doing bottom up stock picking

I use over a cycle fundamentals to screen out alpha stocks in a particular sector

I use technicals to determine buying or selling catalysts after PRE-determining the price range using fundamentals. That's where for me the 2 meets. I see no fundamental difference between 0.5X and 0.6X Book or 30XPE and 50XPE. Caveat is to have a predetermined price range else there is no fundamental anchor and your price target sways with the greed/ fear. I don't aim to buy bottom sell top with technicals; that's just for cocktail talk. Roughly right rather than precisely wrong.

I think Technicals actually falls within behavioral finance though some say it is based on perfect market theorem

[i4value]

I think technical analysis is about reading crowd behaviour. A technical trader is one that is buying the stocks that the crowd is chasing. Fundamental analysis is about understanding the business performance. A fundamental investor is one that looks for discrepancy between the business performance and the crowd perception of the business performance.