The two broad classifications of analysts on Wall Street, are called fundamentalists and chartists.
Fundamentalists investigate the operations of companies; sales, earnings and future potential.
Chartists look at the technical market; pricing highs, lows, trading patterns and the volume that accompanies patterns. There are many types and interpretations of chartists.
When you hear someone saying a market for a stock is oversold or undersold or is ready to “break out,” chances are they are charting the market.
Fundamentalists are more long term in their outlook. And to complicate matters, some analysts use a combination of both approaches.
Also, there are quants who look to the math of securities more than they do management evaluation.
I have spent decades studying well over 1,500 individual investment strategies. I find it important that you overlook individual analyst recommendations if you have little understanding of what they are about.
Always remember: The analyst advice you get may vary greatly, depending on their type of analysis. ( See the Earl J Weinreb NewsHole® comments.)
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