Valuation Models

Explore the three core valuation approaches — Fundamental, Technical & Swing Trade models — to inform strategy and investment decisions.

Fundamental Valuation

Fundamental analysis focuses on the intrinsic value of a company: reviewing financial statements, cash flows, growth prospects and business model. The goal is to identify whether a stock is undervalued or overvalued relative to its true worth. For example, discounted cash-flow (DCF) models, Dividend Discount models and book value methods are commonly used.

  • Estimate future free cash flows and discount them to present value
  • Use multiples (P/E, P/B) to compare with peer groups
  • Assess competitive advantage, management quality and macro trends

Technical Valuation

Technical analysis uses price action, chart patterns and indicators to determine when to enter or exit positions. It asks “when” and “how” rather than “what” the value is.

  • Moving averages (50-day, 200-day), trend lines and support/resistance zones
  • Indicators such as RSI, MACD, Bollinger Bands that signal momentum or reversals
  • Chart patterns (head & shoulders, double bottom, flags) along with volume analysis

Swing Trade Strategies

Swing trading bridges the gap between technical and fundamental analysis: holding positions for days to weeks to capture actionable price movement. It focuses on both setups and timing. :contentReference[oaicite:4]{index=4}

  • Identify stocks with strong fundamentals then use technical indicators for entry/exit
  • Use setups based on momentum, trend exhaustion, pull-backs or breakouts
  • Define clear exit strategy and risk-management rules (stop loss, profit targets)

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