What distinguishes technical analysis from fundamental analysis?

The distinction between technical analysis and fundamental analysis primarily lies in their focus. Technical analysis is centered on the examination of historical price movements and trading volumes to forecast future price movements. Analysts utilizing this method look at charts and various indicators to identify patterns and trends, which they believe can predict future performance based on past behavior.

In contrast, fundamental analysis involves evaluating a company's financial health through its financial statements, economic factors, and overall market conditions. It seeks to determine the intrinsic value of a stock by analyzing company fundamentals such as earnings, revenue, asset values, and market position.

The choice identifying the focus on historical stock price movements versus company fundamentals accurately captures this core difference. It emphasizes the contrasting methodologies employed in each analysis type, highlighting that technical analysts do not concern themselves with company metrics but rather with market sentiment reflected in price movements. Other options present different concepts that do not align with the key differentiating factors of these analysis techniques.