A method based on ellipse fitting for analysis of VISAR (Velocity Interferometer System for Any Reflector) signals has been described. The errors introduced on the free surface velocity history due to common measurement imperfections in the amplitude and phase angle of the VISAR signal has been investigated and a remedy to mitigate this using a proper ellipse fitting technique has been presented. Performance comparison among various ellipse fitting techniques based on empirical evidence is carried out, and the geometric fitting technique of the Gauss Newton algorithm with initial conditions from the Bookstein algebraic fitting method is proposed. The new method provides better result in terms of accuracy than existing techniques. The method is especially useful when a fractional fringe signal is present which is quite common in VISAR based measurements. The applicability of the ellipse fitting technique is first theoretically justified, and then numerical simulation of ellipse fitting is carried out. Finally, the proposed method is validated by applying it for the analysis of VISAR signals recorded in the shock wave experiment conducted on the Al-2024T4 target material. The results of present analysis display a good agreement with the data available from other sources.