Chart analysis versus fundamental analysis – which method provides better price forecasts?

Dusseldorf Whenever it comes to predicting share prices or market trends, investors stumble across the terms “chart analysis” and “fundamental analysis”. Chart analysis (also known as technical analysis) uses historical price and volume data to identify patterns and trends in price movements and to make predictions about future price developments. True to the motto: All important information is already included in the courses.

In contrast, fundamental analysis is based on examining balance sheets, income statements, company strategies and industry developments. Fundamental analysis tries to determine the fair value of a share and to make forecasts about the future profit prospects of the respective company.

Chart analysis is not without controversy and is often accused of being “not a real science”. On the other hand, it is very popular with many investors and small investors and has already produced amazingly accurate forecasts, as Handelsblatt stock market expert Ulf Sommer emphasizes in the new episode of Today Extended: “I can’t see that the chart technicians forecast worse than the many fundamental analysts.”

The forecast of the chart technicians for 2022 was that it would not be the year of the share. “That was true, and they said so long before the Russian invasion of Ukraine began,” says Sommer in an interview with host Anis Micijevic. And two years ago, the key message from the chart technicians was that all traffic lights on the stock market were green. “The forecast for the Dax was for 16,500 points, and two years ago it actually came within one and a half percent of this mark,” recalls Sommer.

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In this episode of Today Extended, the Handelsblatt stock analyst explains what the forecasts of the chart technicians and fundamental analysts for the Dax and Dow Jones look like this year.

More: Hope for a quieter stock market year

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