Technical analysis and fundamental analysis when combined, yields much accurate and better trade setups. There is simple line you need to follow “Know the fundamentals and trade the technicals”. So according to this statement traders need to know the fundamental of the current market, fundamentals like IIP data, inflation, GDP figures, Interest rate decision.
Finding Tops and Bottoms:
Next we will watch chart patterns carefully to watch for important technical levels. Then we will see how market reacts to these important levels, now look for options open interest data and find out which call option has highest open interest and then put option which has highest open interest. Now corresponding call and put option levels will be looked with technical’s levels and positional trade will be taken with outlook for 3 to 4 days. You can also look for Fibonacci retracement /extension level for profit booking (Top) and support/resistance. Most of the time, technicals and fundamentals are used together to improve trading analysis and get most profitable strategy. In my analysis articles I most of the time look fundamental first and then look for technical levels in same direction of fundamental analysis.