Question

What is the difference between technical analysis and fundamental analysis? What if the merit of each if markets are truly efficient?

Answer 1

Technical analysis is based on identifying patterns based on historical stock prices to predict future stock prices. Fundamental analysis is based on analyzing company's financial performance, its competitive position, product development, industry research, etc.

If markets are weak-form efficient, technical analysis does not consistently result in abnormal profits. If markets are semi-strong form efficient, fundamental analysis does not consistently result in abnormal profits.