THE ROLE OF FUNDAMENTAL AND TECHNICAL ANALYSIS IN STOCK TRADING

Abstract

Stock trading is the buying and selling shares in publicly traded companies. To know the buying, selling and not to lose money investors have to know how to do fundamental and technical analysis of a stock. The purpose of this research is to examine the tools used in the fundamental and technical analysis on stock trading in capital market. For finding out the purpose of the study, top five companies on the basis market capitalization listed in the NEPSE are taken for the study and their fundamental and technical analysis are carried out. NTC, Nabil, CIT, NRIC and GBIME are top five companies whose analysis are carried out. For fundamental analysis Return on equity (ROE), Dividend, Earning Per Share (EPS), Price Earnings Ratio (PE), Price-to-Book value Ratio (PB) and their book value are taken for the interpretation. In case of Technical analysis there are many tools explained the research but only three tools are used while analyzing the stocks. Moving Average, RSI and Bollinger bands are taken for as the technical indicators. Fundamental and technical analysis are independent variable whereas stock trading is dependent variable. Descriptive analysis, analytical surveys and comparative analysis are carried out for the research. Among the 5 companies dividend given by NTC is very high compared to others. Coming up with conclusion, in the context of trading, new investors have to know the fundamental and technical analysis in order to sustain in the capital market in any capital market of the world. This dissertation is based on secondary data collected from the NEPSE, Merolagani and other websites. As we know fundamental and technical analysis are carried out with all the past prices and data.