NISM-Series-XV: Research Analyst · Introduction to Research Analyst Profession

Types of Research: Fundamental, Technical and Quantitative Analysis

Updated 11 October 2026 · Fact-checked

Fundamental research estimates a security's intrinsic value from the economy, industry and company data. Technical research studies price and volume history to read trends and timing. Quantitative research uses mathematical and statistical models on large datasets to find rules-based signals. To answer questions, match the inputs and purpose to the approach.

Understand Types of Research: Fundamental, Technical, Quantitative

Every research approach tries to answer one question: what should an investor do with a security? The three approaches differ in what they look at and what they claim to find.

Fundamental analysis asks what a security is worth. It studies the economy, the industry and the company: sales, margins, debt, cash flows, management and governance. The output is an estimate of intrinsic value. If the market price is well below it, the security may be undervalued. It is mostly used for medium to long-term decisions.

Technical analysis asks what price is doing and when to act. It uses charts of past price and volume. The core belief is that price reflects all available information, prices move in trends, and history tends to repeat. It does not try to value the business. It is widely used for timing entries and exits.

Quantitative analysis uses mathematical and statistical models, often run by computers, on large datasets. Inputs can be prices, financial ratios, or other data. The analyst tests a rule on historical data and applies it systematically, which reduces personal judgement. Quant models can use fundamental data, technical data, or both, so quant is defined by method, not by input type.

Within fundamental analysis there are two ways to organise the work. In the top-down approach you start with the economy, move to industries, then pick companies. In the bottom-up approach you start with the company and look at its strengths first, giving less weight to the wider picture. Both end at the same place: a view on a company.

Key formulas to remember

Fundamental analysis: Inputs: economy, industry, company data → Output: intrinsic value; Compare intrinsic value with market price. Usually longer horizon.
Technical analysis: Inputs: price and volume history → Output: trend and timing signals; Does not estimate intrinsic value of the business.
Quantitative analysis: Inputs: large datasets → statistical or mathematical model → rules-based signal; Defined by method. Data may be fundamental, technical or other.
Top-down approach: Economy → Industry → Company; Starts broad and narrows down.
Bottom-up approach: Company → (then industry and economy as context); Starts with company-specific strengths.

How to solve Types of Research: Fundamental, Technical, Quantitative questions

Use this method for any question that asks you to identify, compare or apply a type of research.

1Read the question and underline the input mentioned: financial statements, charts, or models and data.
2Identify the purpose: valuing a business, timing a trade, or building a rules-based strategy.
3Match the input and purpose to fundamental, technical or quantitative.
4If the question mentions order of analysis, check the starting point: economy first means top-down, company first means bottom-up.
5Check for absolute words such as always, only or guarantees. These are usually wrong.
6Eliminate options that swap the approaches, such as assigning charts to fundamental analysis.
7Choose the option that fits both the input and the purpose.

Quickest way: Input-purpose match

When to use it: For definition and identification MCQs when time is short.

Spot the keyword: balance sheet or intrinsic value means fundamental.
Chart, trend, support or volume means technical.
Model, statistical, backtest or algorithm means quantitative.
Economy first means top-down. Company first means bottom-up.
Reject options with always or guaranteed.

Common mistakes in Types of Research: Fundamental, Technical, Quantitative

Saying technical analysis estimates intrinsic value.
Students think every analysis ends in a value.
Fix: Technical analysis reads price and volume for trends and timing. Intrinsic value belongs to fundamental analysis.
Treating quantitative analysis as the same as technical analysis.
Both use numbers and can be computer driven.
Fix: Quant is a method using models on datasets. It can use fundamental data too. Technical is defined by price and volume charts.
Mixing up top-down and bottom-up.
The direction words feel interchangeable.
Fix: Top-down starts at the economy. Bottom-up starts at the company.
Believing any one approach is always correct or guarantees returns.
Textbook descriptions sound confident.
Fix: Each approach has limits. Options claiming guaranteed results are traps.
Assuming fundamental analysis is only about financial statements.
Ratios get most study time.
Fix: It also covers the economy, the industry, management quality and governance.

Worked examples

Example 1

An analyst studies a company's revenue growth, debt levels and cash flows, and estimates what each share is worth. She then compares this with the current market price. Which type of research is this?
A. Technical analysis
B. Fundamental analysis
C. Candlestick analysis
D. Momentum analysis

Show the solution

Inputs: revenue, debt and cash flows. These are company financial data.
Purpose: estimating what the share is worth, which is intrinsic value.
Comparing value with market price is the fundamental approach.
Technical, candlestick and momentum approaches use price and volume patterns, not business value.

Answer: B. Fundamental analysis

Example 2

An analyst first reviews the outlook for the economy, then selects the banking sector as attractive, and finally picks one bank within that sector. Which approach is this?
A. Bottom-up approach
B. Top-down approach
C. Chart-based approach
D. Random sampling approach

Show the solution

Note the order: economy, then sector, then company.
Starting broad and narrowing to a company is the top-down approach.
Bottom-up would begin with the bank's own strengths.
Chart-based and random sampling do not describe this sequence.

Answer: B. Top-down approach

Exam tips

Questions are often one-line identifications. Find the input word and match it.
Watch for options that swap the approaches. This is the most common trap.
Remember that quant is defined by method, so an option saying it can use fundamental data may be correct.
With negative marking of 25% of the marks assigned to a question, skip only if you cannot eliminate any option.
Treat always and guarantees as red flags.

Practice questions from Introduction to Research Analyst Profession

Types of Research: Fundamental, Technical, Quantitative in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CA FinalTechnical Analysis and Charts

Types of Research: Fundamental, Technical, Quantitative: frequently asked questions

What is the difference between fundamental and technical analysis?

Fundamental analysis studies the economy, industry and company to estimate intrinsic value. Technical analysis studies past price and volume to judge trends and timing. The first asks what a security is worth, the second asks what price is doing.

What is quantitative research in equity markets?

It uses mathematical and statistical models on large datasets to produce rules-based signals. The rules are usually tested on historical data first. It can use fundamental, technical or other data.

What is the difference between top-down and bottom-up approach?

Top-down starts with the economy, moves to industries and then selects companies. Bottom-up starts with the company and its strengths. Both are ways of doing fundamental research.

Does the NISM Research Analyst exam test these types of research?

Yes, the topic sits in the introductory chapter and is tested through simple identification and comparison questions. Learn the inputs, purpose and typical horizon of each approach.