Fundamental Analysis VS Technical analysis: The Comparison of Two Analysis in Malaysia Stock Market

Abstract

This study is conducted to analyse the credibility of the fundamental analysis and technical analysis on predicting the stock return and compare both models to determine which model is more credible to be used as a good trading strategy by investors. The study is based on 80 companies selected from Bursa Malaysia in the food manufacturing industry in the main market from the year of 2012 to 2016. The stock return is used to measure whether both analyses are able to forecast and generate the positive return. Net profit margin, price earnings ratio and total asset turnover are used as fundamental indicators while moving average convergence divergence is used as technical analysis indicators. In order to test the significance of both model on stock return, panel regression models are applied in this study. The result shows that although both model can be used to generate positive return, technical analysis did not outperform fundamental analysis in the food manufacturing industry in Bursa Malaysia.

Trasmisión de volatilidad del covid-19 a los precios de acciones del sector bancario e industrial de Sudamérica, México y Estados Unidos

“…Las diferentes maneras de representar esta variable surgen como respuesta a la relación existente entre la volatilidad y las variables del conjunto de información. Generalmente, son las novedades sobre su valor fundamental y las alteraciones en el entorno macroeconómico las principales fuentes de cambios en los precios de los activos (Kim y Wu, 1987;Cooper, Chuin, y Atkin, 2004;Bilson, Brailsford, y Hooper, 2005;Cauchie, Hoesli, y Isakov, 2005;Flannery y Protopapadakis, 2005;Baresa, Bogdan, y Ivanovic, 2013;Ato Forson y Janrattanagul, 2014;Barnor, 2014;Fama, 2014;Jakpar, Tinggi, Tak, y Chong, 2018;Demir, 2019;Rehman, Kashif, y Saleem, 2019).…”

The Role of Technical Analysis Indicators over Equity Market (NOMU) with R Programing Language

“…On the other side when the value of the indicator is less than 30 the mode of the market is in oversold mode. RSI indicator is calculated by applying the equation (6).…”

“…There are two common tools that can be implemented in order to support investors decision in the stock market [2], [6], [3], and [4]. Firstly, fundamental analysis where the focus is on the evaluation process of the intrinsic value of a security [3].…”

“…Fundamental analysis is performed based on three main phases known as economy, industry, and company (EIC) and each of which has his own factors and indicators to be analyzed and studied well by investors [4]. Interest rate, inflation rate, and unemployment rate play crucial roles in the development of any national economy [6]. Industries" competitive analysis and life cycle analysis of industry are two factors related to industry analysis [4].…”

“…Industries" competitive analysis and life cycle analysis of industry are two factors related to industry analysis [4]. Investors deal with the different factors that have affect for the company performance such as company business concept and financial statement for company [6].…”