{"id":137,"date":"2018-09-19T14:16:40","date_gmt":"2018-09-19T14:16:40","guid":{"rendered":"https:\/\/www.technicalanalysisofstocks.in\/articles\/?p=137"},"modified":"2022-11-03T06:26:21","modified_gmt":"2022-11-03T06:26:21","slug":"combining-technical-and-fundamental-analysis","status":"publish","type":"post","link":"https:\/\/www.technicalanalysisofstocks.in\/articles\/combining-technical-and-fundamental-analysis\/","title":{"rendered":"Combining Technical and Fundamental Analysis"},"content":{"rendered":"<div class=\"f5e6b27933b27206dd1e7c8ffd0cf440\" data-index=\"4\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4887266588189027\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- TA Blog Below Image -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4887266588189027\"\r\n     data-ad-slot=\"2552137125\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p>It\u2019s possible to take rules from technical and fundamental analysis and put them together to produce highly effective stock market methods. Two of the best champions of this approach are William J. O\u2019Neil and Martin Zweig, whose methods have trounced the <a href=\"https:\/\/www.technicalanalysisofstocks.in\/articles\/market-sentiment-timing-and-trends\/\">market over significant time<\/a> frames. O\u2019Neil and Zweig\u2019s methods have some strong similarities, but are by no means identical. Both are very successful, hence they provide an excellent starting point for <a href=\"https:\/\/www.technicalanalysisofstocks.in\/articles\/trading-essentials-to-become-a-good-trader-in-stock-market\/\">stock market<\/a> newbies.<\/p>\n<p>O\u2019Neil explained his CANSLIM method in <em>How to Make Money in Stocks<\/em>.<\/p>\n<p>Zweig explained his market-beating method in <em>Winning on Wall Street<\/em>.<\/p>\n<h2>The O\u2019Neill Approach \u2013 CANSLIM<\/h2>\n<p>The Approach is based on:<\/p>\n<ul>\n<li><strong>C<\/strong>urrent Quarterly Earnings per share. This number is taken from the company\u2019s most recent financial results. The higher the most recent quarterly EPS, the better. Ideally it should be the highest in the company\u2019s history. (Fundamental.)<\/li>\n<li><strong>A<\/strong>nnual Earnings Increases: Significant growth is required from year to year. We\u2019re talking about increases over 20% a year for a few years. (Fundamental.)<\/li>\n<li><strong>N<\/strong>ew Products, New Management, New Highs: Buy at a time that enables you to take advantage of some positive news. New management might be getting positive media coverage or a new product like Apple\u2019s iPhone might have been launched. New highs could be appearing in the <a href=\"https:\/\/www.technicalanalysisofstocks.in\/articles\/how-pr-affects-stock-prices\/\">stock\u2019s price <\/a>chart. (Fundamental and\/or Technical.)<\/li>\n<li><strong>S<\/strong>upply and Demand: The shares should be in demand with a larger pool of potential buyers than potential sellers. (Technical.)<\/li>\n<li><strong>L<\/strong>eader or Laggard: Buy the leading stock in any sector (the one whose price is advancing fastest) and avoid the laggards. (Technical.)<\/li>\n<li><strong>I<\/strong>nstitutional Sponsorship: Are the big boys buying? (Technical.)<\/li>\n<li><strong>M<\/strong>arket Direction: Buy when the market is in an uptrend. (Technical.)<\/li>\n<\/ul>\n<h2>The Zweig Approach<\/h2>\n<p>Martin Zweig\u2019s <a href=\"https:\/\/www.technicalanalysisofstocks.in\/articles\/penny-stocks-investment-guide\/\">investing strategy is to buy and sell stocks<\/a> in line with monetary conditions (a fundamental approach), the direction of the stock market (a technical approach), and the performance (both fundamental and technical) of individual stocks.<\/p>\n<p>Zweig\u2019s method brings together several components:<\/p>\n<ul>\n<li><a href=\"https:\/\/www.technicalanalysisofstocks.in\/articles\/what-is-fundamental-analysis-of-stocks\/\">Fundamental analysis<\/a> of monetary conditions. The main indicators used are interest rates and debt levels.<\/li>\n<li><a href=\"https:\/\/www.technicalanalysisofstocks.in\/articles\/does-stock-market-technical-analysis-work\/\">Technical analysis of the stock market<\/a> as a whole, to measure market momentum. The three indicators used are the Advance\/Decline ratio, Up Volume, and The Four Percent Indicator.<\/li>\n<li>The Super Model, where the other indicators are added to yield a total score. The Super Model tells Zweigh whether the broad market is likely to be bullish or bearish.<\/li>\n<\/ul>\n<p>If the Super Model indicates bullish conditions, Zweig believes investors should allocate their maximum funds to buying stocks. Individual stocks are chosen as follows:<\/p>\n<ul>\n<li>Stocks are screened for superior fundamentals \u2013 in particular, above average earnings growth and a reasonable price\/earnings ratio.<\/li>\n<li>Stocks whose fundamentals look attractive are screened using basic <a href=\"https:\/\/www.technicalanalysisofstocks.in\/articles\/is-trading-with-technical-analysis-profitable\/\">technical analysis<\/a>. Only <a href=\"https:\/\/www.technicalanalysisofstocks.in\/articles\/how-large-shareholders-manipulate-the-stock-price\/\">stocks whose price<\/a> action shows strength are selected.<\/li>\n<\/ul>\n<h2>Fundamental or Technical Analysis<\/h2>\n<p>To judge the market as a whole, Zweig gives greater weight to <a href=\"https:\/\/www.technicalanalysisofstocks.in\/articles\/technical-analysis-and-charting\/\">technical analysis<\/a> than fundamental analysis. To judge individual stocks, he gives greater weight to fundamental analysis than technical analysis.<\/p>\n<h2>A Summary of Martin Zweig\u2019s Market Strategy<\/h2>\n<p>The basis of Martin Zweig\u2019s investment philosophy is to take a measure of whether the broader market is bearish or bullish and then stay in tune with it. If the market is bullish, buy attractive stocks and let your profits run. Lock in profits or cut your losses by selling according to pre-established criteria. If the market is bearish, stand on the sidelines with cash, waiting to enter the market when it turns bullish.<\/p>\n\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>It\u2019s possible to take rules from technical and fundamental analysis and put them together to produce highly effective stock market methods. Two of the best champions of this approach are William J. O\u2019Neil and Martin Zweig, whose methods have trounced the market over significant time frames. O\u2019Neil and Zweig\u2019s methods have some strong similarities, but are by no means identical. Both are very successful, hence they provide an excellent starting point for stock market newbies. O\u2019Neil explained his CANSLIM method in How to Make Money in Stocks. Zweig explained his market-beating method in Winning on Wall Street. The O\u2019Neill Approach <\/p>\n","protected":false},"author":1,"featured_media":139,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[6,2],"tags":[83,81,10],"class_list":["post-137","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fundamental-analysis","category-technical-analysis","tag-combining-technical-and-fundamental-analysis","tag-fundamental-analysis","tag-technical-analysis","has_thumb"],"_links":{"self":[{"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/posts\/137","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/comments?post=137"}],"version-history":[{"count":3,"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/posts\/137\/revisions"}],"predecessor-version":[{"id":681,"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/posts\/137\/revisions\/681"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/media\/139"}],"wp:attachment":[{"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/media?parent=137"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/categories?post=137"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.technicalanalysisofstocks.in\/articles\/wp-json\/wp\/v2\/tags?post=137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}