Research firm InvestorsObserver has started a proprietary ranking system that combines both technical and fundamental data to rank stocks in the overall stock universe.
We have been keeping an eye on the ranking system because we see a lot of value in combining both technical and fundamental data, and so far the stocks that we have been featuring have done pretty well. In all fairness, the overall market has been incredibly strong, so a large majority of stocks have managed to post solid gains in recent months, but the new ranking system appears to be valuable for investors in both up and down markets.
Fundamental analysis studies everything from the overall market to the actual financial condition of a company. It evaluates things such as a companies financial statements and return on equity. Fundamental analysis attempts to determine a company’s fair value, which traders can use to determine whether or not the company’s underlying stock is fairly valued.
Technical analysis, on the other hand, looks at a stock’s recent and long term trends. Investors that focus on technical analysis believe that patterns repeat themselves, so if you can identify bullish trading patterns in a stock, there is a decent chance that shares will rise. Conversely, bearish trends suggest shares are moving lower for a reason, and could continue to lose ground versus the overall market.
Combing both technical and fundamental analysis when ranking stocks provides a greater assurance that stocks which have been strong in the past will continue to be strong moving forward.
Let’s look at five stocks that currently rank very high in InvestorsObserver’s Stock Score Report.