Types of Screeners: Fundamental vs Technical

A stock screener works like a search engine for stocks.

But how you use it depends on your goal.

Some investors use it to study a company’s business strength. Others use it to track price charts and trading signals.

That’s the key difference between fundamental screeners and technical screeners

Fundamental Screeners

Fundamental screeners filter stocks based on the company’s financial and business data. These are used mostly by long-term investors who want to know if the business is healthy and worth holding for years.

What they focus on:

• Profit and loss statements
• Balance sheet data
• Valuation ratios (P/E, P/B, EV/EBITDA)
• Return ratios (ROE, ROA)
• Debt levels and interest coverage
• Dividend history

Example:
Suppose you want to find Indian FMCG companies with:

• Market cap above ₹20,000 crore
• Debt-to-equity below 0.5
• Profit growth of at least 10% for 3 years

A fundamental screener will give you that shortlist. This way, you’re not just looking at the share price—you’re checking if the company behind the stock is strong.

Technical Screeners

Technical screeners filter stocks based on price and volume patterns. Traders use them for short-term opportunities, where timing matters more than long-term fundamentals.

What they focus on:

• Moving averages (50-day, 200-day)
• Indicators like RSI, MACD, Bollinger Bands
• Breakouts, support, and resistance levels
• Price volume spikes

Example:
You may want to find stocks in the Nifty 500 that are:

• Trading above their 200-day moving average
• Showing RSI below 30 (oversold zone)
• With daily volume higher than the last 10-day average

A technical screener will highlight these stocks, helping you spot momentum or reversal opportunities.

Key Differences at a Glance

How to Try This Yourself

1. Go to any free stock screener.

2. For fundamental screening:

   Set filters like:

• Market Cap > ₹20,000 Cr
• Debt-to-Equity < 0.5
• ROE > 15% Notice how the list narrows to financially stronger companies.

3. For technical screening:

Set filters like:

• Price above 200-DMA
• RSI < 30
• Daily Volume > 10-day average Now the output shows stocks with technical signals.

4. Compare both lists. You’ll see that fundamentals give you good companies, while technicals give you good timing.

Can You Combine Both?

Yes—and this is where screeners become powerful. Many investors first use a fundamental screener to ensure the company is strong, and then apply technical filters to decide the right entry point.

Example:

• Step 1: Use fundamentals to find IT companies with steady profit growth and low debt.
• Step 2: Use technicals to buy when the stock breaks above resistance with strong volume.

This mix helps you avoid weak companies and also time your trades better.

Final Takeaway

Fundamental screeners help you understand the business. Technical screeners help you understand the price behaviour. One looks at the company, the other at the chart. Smart investors often use both—first to select strong companies, then to pick the right entry or exit.

In short: Fundamentals tell you what to buy, technicals help you decide when to buy.