Fundamental and Technical Security Analysis

Chapter 13 opens Exam 2 by shifting from market description to market judgment. It compares fundamental and technical methods, then builds a top-down sequence from macroeconomic analysis to industry analysis and, finally, to technical interpretation of market behaviour.

The chapter is strongest when students understand how methods complement one another. The exam may contrast a chart-based trading signal with a fundamentals-based valuation view, or ask which layer of analysis is most relevant to a given decision.

Exam Focus

• Distinguish fundamental analysis from technical analysis by evidence used, time horizon, and decision purpose.
• Move from macroeconomic conditions to industry effects and then to security-level implications.
• Recognize what charts, trendlines, support, resistance, and momentum indicators can and cannot establish.

In this section

• Methods of Equity Analysis in Practice
  Comparison of fundamental and technical analysis, understand what each method measures, and see why investors often combine them.
• Fundamental Macroeconomic Analysis
  How growth, fiscal policy, rates, inflation, employment, and major events affect sectors, earnings, and valuation.
• Fundamental Industry Analysis
  Analyze industry classification, life cycle, cyclical sensitivity, and competitive forces to understand where a company sits inside its market.
• Technical Analysis Tools and Signals
  Read charts, trend, support and resistance, moving averages, momentum, sentiment, and cycle tools used in technical analysis.