Technical Analysis of Securities

A REPORT ON
TECHNICAL ANALYSIS OF SELECTED EQUITIES
EXECUTIVE SUMMARY
Technical analysis is method of evaluating securities by analyzing the statistics generated by market activities, such as past prices and volume. Technical analyst do not attempts to measure a securitys intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activities. Just as there are many investment styles on the fundamental side, there are also many different types of technical traders. The study period was from December 2 ! to "ovember 2 #. The
monthly closing prices of $ companies %2 companies each from & sectors' of companies were taken for testing and moving average was taken to find the return to investor. (astly )elative strength inde* analysis was drawn to find the moment of security with inde*. +or the study purpose monthly closing prices of respective security and monthly closing value of ,ombay -tock .*change inde* %,-./ -ense*' were taken to compare by using the tools like monthly moving average and )elative strength analysis. 01. +inancials is one of the financial services providing company where the pro2ect has been undertaken. 3t offers its customers with a wide range of financial services and product from securities, derivative trading, mutual fund services, life insurance, non life insurance, loan product services etc.
GSSSIETW / GSSS-IMS / MBA
5ence, this study helps to guide customers and brokers to select the best performing stocks according to technical analysis in comparison with market inde*. *********
CHAPTER - 1
GENERAL INTRODUCTION
PART - A: ACE FINANCIALS - COMPANY PROFILE Ace Financial was set up on 2!th June 2 # by three partners with a vision to be the most respected company in the financial services arena. 0ce +inancials is a business associate for -61 7lobal -ecurities in 6ysore. 8e focus on customer/first/attitude, ethical and transparent business practices, respect for professionalism, research/based value investing and implementation of cutting/edge technology. 0ce +inancials is a one/stop financial services shop. 9ur offerings range from .:uities and derivatives trading, 1ommodities trading, ;ortfolio 6anagement -ervices, 6utual +unds, (ife 3nsurance, "on (ife 3nsurance, +i*ed deposits, 7old ,onds and other 0sset products to (iability products like 5ousing (oans, 0uto (oans, ;ersonal (oans, etc. The promoters of 0ce +inancials believe in being a leader in the market, not a follower, and constantly give the best possible products < services in a personalized fashion. 8e have utilized our e*perience and e*pertise to grow from strength to strength and go mile to mile=to better our services, to provide new ones, to innovate and to diversify. 8ith the e*perience of years of financial servicing behind us and years of complete e*pertise in the industry to look forward to, we wish to build a reputation as most sought integrated financial services provider, offering a wide spectrum of services and we have started this 2ourney by taking the route of :uality service. Di!ec" E#$i"ie : .:uities are one of the most rewarding but also one of the most challenging and risky types of investing. 3nvestment in e:uities promises higher rates of return over the long term. .:uity investments even give a high level of li:uidity. GSSSIETW / GSSS-IMS / MBA &
De!i%a"i%e : Derivatives are financial securities whose value is derived from another >underlying> financial security. Derivatives can be used as hedging, protecting against financial risk, or can be used to speculate on the movement of commodity or security prices, interest rates or the levels of financial indices. C&''&(i") T!a(in*: 1ommodities are physical assets such as precious metals, base metals, crude oil etc. and food including wheat, pepper, potatoes, etc. 1ommodity trading helps as a hedge against inflation. -peculators may see tremendous opportunity in commodity markets. The futures markets have been the traditional vehicles for participating in the commodities markets. De'a" Acc&$n" : Demat 0ccount is re:uired if one wants trade in shares. "owadays, practically all trades have to be settled in dematerialized form. 3n a Demat 0ccount the stocks of investors are held in electronic form. The Depositary ;articipant will provide you with periodic statements of holdings and transactions. M$"$al F$n(: 6utual funds are essentially medium to long/term investment option. 6utual funds allow investors to indirectly take position in the e:uity market or the debt market. These are comparatively less risky than investment indirect e:uities. Li+e In $!ance: (ife insurance forms an important part of your personal safety net, especially if you have financial dependents. 3nsurance is desired to safeguard oneself and one?s family against possible losses on account of risks and perils. 3nsurance companies collect premiums to provide for this protection.
N&n Li+e In $!ance: "on (ife 3nsurance is mainly concerned with protecting the policyholder from loss or damage caused by specific risks. .*amples include ;roperty A 1asualty 3nsurance, 5ealth A Disability 3nsurance ,usiness A 1ommercial 3nsurance. P&!"+&li& Mana*e'en" Se!%ice: 6anaging
investments are a serious business. 3t can be a time/ consuming task, because it re:uires intelligent planning, continuous monitoring and periodic ad2ustments. 0nd it can be challenging, because it re:uires e*pert knowledge and e*perience. 3f one doesnt have the time or e*pertise to select collective investments for his portfolio, he can use ;ortfolio 6anagement -ervice. L&an P!&($c" : Debt financing %loans' is the most common means of obtaining capital. +inancial institutions like banks and other funding sources provide a variety of loan products. .ach funding source has its own credit parameters and re:uirements. The various (oan ;roducts available are 5ousing (oans, Behicle (oans, personal (oans, etc.
PART - ,: The methods used to analyze securities and make investment decisions fall into two very broad categoriesC fundamental analysis and technical analysis. +undamental analysis involves analyzing the characteristics of a company in order to estimate its value. Technical analysis studies supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future. 3n other words, technical analysis attempts to understand the emotions in the market by studying the market itself, as opposed to its components. Technical analysis is method of evaluating securities by analyzing the statistics generated by market activities, such as past prices and volume. Technical analyst do not attempts to measure a securitys intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activities. Just as there are many investment styles on the fundamental side, there are also many different types of technical traders. The methodology of technical analysis rests upon the assumption that history tends to repeat itself in the stock e*change. 3f a certain pattern of activity has in the past produced certain results nine times out of ten, one can assume a strong likelihood of the same outcome whenever this pattern appears in the future. Thus technicians assert the study of the past patterns of variables such as prices and volumes will allow the investor to accurately identify times when certain specific stocks are either overpriced. 6ost technical analysts rely on charts of the stock prices and trading volumes. The technician usually attempts to predict short term price movements and thus makes recommendations concerning the timing of purchases and sales either specific task or groups of stocks or stocks in general. 3t is sometimes said that fundamental analysis is designed to answer the :uestion DwhatE and technical analysis is to answer the :uestion DwhenE. GSSSIETW / GSSS-IMS / MBA $
Technical analysis determines the worthiness of buying, selling or holding of securities. Technical analysis can be viewed as the activity of providing inputs to the portfolio management process. 3t estimates security future sensitivity to ma2or factor and uni:ue risk. Technical analysis believes the forces of supply and demand are reflected in patterns of price and volume trading. Technical analysis is done through identifying the trends, recognizing the price fluctuations that are determined by the changing attitudes of investors towards a variety of economic, monetary, political and psychological forces. 1-1 STATEMENT OF THE PRO,LEM -ecurity analysis is the first step undertaken in the process of investment decisions. The task involves determining prospective benefits from the investment in a security, the condition sub2ect to which they may be received and the likelihood of such condition. The basic idea behind this research is to make buy, hold and sell decisions of stocks. To make this decisions one should have sound information base. The increasing trend towards comple*ity in investment decision calls for security analysis. Technical analysis is one of tools used to analysis stocks to buy, hold and sell decisions but, Technical analysis alone cannot prove to be sole device. -o, it can be used as a supplement to fundamental analysis. 1-. O,/ECTIVES OF THE STUDY: 4. To conduct technical analysis. 2. &. To know how various tool of technical analysis is used in predicting future -tock prices. To analyze the recent pattern in the movement of share prices to determine the timing of investment.
@. To make buy, hold or sell decisions. !. $. To know how the charting techni:ues are useful to make buy or sell decisions. To evaluate the usefulness of technical analysis for an investor in predicting future. 1-0 SCOPE OF THE STUDY: The study mainly focuses on guiding the investors in making decisions %buy, hold or sell' by determining the value of stocks through technical analysis. The analysis has been done on si* stocks of different companies selected from different industries, and these si* stocks are part of ,-. shares inde*. 9ut of various tools of technical analysis only two such tools are used in this study. 1-1 RESEARCH DESIGN: The type of research design adopted here is both e*ploratory and descriptive. This pro2ect seeks to describe technical analysis and the procedure adopted in conducting it on one hand, and on the other, e*plores the potential avenues of investments through technical analysis. 0ny kind of investigation or research study re:uires a preliminary plan. The aim and scope of the study must be understood at the outset. 9ne has to present a clear idea of the research of the procedure used in the system since the value of any systematic research lies in its methodology. 0ny en:uiry would prove unsuccessfully, if it is not its methodology. The level of research depends on proper sampling, collection of data by personal interviews, classifications of interpretations of data and at the end, the formulation of generalization and conclusion.
Sa'2lin* (e i*n: The samples were chosen based on their past performance and future e*pected growth. The sample types is stratified and a convenient sample. 1-1-1 METHOD OF DATA COLLECTION AND ANALYSIS: S&$!ce &+ (a"a The report is prepared with the help of both primary as well as secondary data. The primary data were collected from the office taken up for the study that is 01. +inancials, 6ysore through personal en:uiries. 6oreover secondary data will be collected through website, te*t books, and news papers, 2ournals and magazines and other sources. 1-1-. SIGNIFICANCE OF THE STUDY: The study mainly focuses on guiding investor on making buy, hold and sell decisions by determining the value of the stock through technical analysis. The analysis is done on three different sectors. Biz. +617, 1ement and ;harmaceuticals industries listed in ,-. -."-.G 4. 3T1 2. 53"DH-T0" (.B.) (363T.D &. ,3)(0 @. 06,HJ0 !. )0",0"GI $. 13;(0 1-1-0 TECHNI3UES OF DATA ANALYSIS: Technical tools used for the study areC 4. 6oving average convergence and divergence %601D' 2. )elative strength inde*es.
1-4 LIMITATION OF THE STUDY: -ome of the limitations of the study areC 4. +irstly the sub2ect analysis is a vast sub2ect and so certain limitations in the study. 2. The study is purely for academic purpose. &. The ine*perience makes the study less precise than professionals. @. The study is based on time duration take from December 2 "ovember 2 # for the finding purpose. !. Tools for analysis are limited. $. The time given for accomplishment of the pro2ect is also very less. ********* ! to
CHAPTER - .
LITERATURE REVIE5
.-1 AN OVERVIE5 OF TECHNICAL ANALYSIS: Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a securitys intrinsic value, but instead use charts and other tools to identity patterns that can suggest future activity. Technical analysts believe that the historical performance of stock and markets are indications of future performance. 3n a shopping mall, a fundamental analyst would go to each store, study the product that was being sold, and then decide whether to buy it or not. ,y contrast, a technical analyst would sit on a bench in the mall and watch people go into the stores. Disregarding the intrinsic value of the products in the store, his or her decision would be based on the patterns or activity of people going into each store. Just as there are many investment styles on the fundamental side, there are also many different types of technical indicators and oscillators, and most use some combination of the two. 3n any case, technical analysts e*clusive use of historical price and volume data is what separates them from their fundamental counterparts. Hnlike fundamental analysts, technical analysts dont care whether a stock is undervalued K the only thing that matters is a securitys past trading data and what information this data can provide about where the security might move in the future. Despite all the fancy and e*otic tools it employs, technical analysis really 2ust studies supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future. 3n other words, technical analysis attempts to understand the emotions in the market by studying the market itself, as opposed to its components. 3f you understand the benefits and limitations of technical analysis, it can give you a new set of tools or skills that will enable you to be a better trader or investor.
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Technical analysis is fre:uently used as a supplement to fundamental analysis rather than as a substitute for it. Thus, technical analysis can, and fre:uently does, confirm findings based on fundamental analysis. Tec6nical anal) " 7a e "6ei! !e ea!c6 &n "6e +&ll&8in* "6!ee a9i&' : 4. The market discounts everything. 2. The market price moves in trend. &. 5istory tends to repeat itself. 1- THE MAR:ET DISCOUNTS EVERYTHING: 0 ma2or criticism of technical analysis is that it only considers price movement, ignoring the fundamentals factors of the company. 5owever, technical analysis assumes that, at any given time, a stocks price reflects everything that has or could affect the company / including fundamentals factors. Technical analysts believe that the companys fundamentals, along with border economic factors < market psychology, are all price into the stock, removing the need to actually consider these factor separately. This only leaves the analysis of price movement, which technical theory views as a product of the supply < demand for a particular stock in the market. .- THE MAR:ET PRICE MOVES IN TRENDS: 3n technical analysis, price movements are believed to follow trends. This means that after a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. 6ost technical trading strategies are based on this assumption. 0- HISTORY TENDS TO REPEAT ITSELF: 0nother important idea in technical analysis is that history tends to repeat itself, mainly in turns of price movements. The repetitive nature of price movement is attributed to market psychologyL 3n other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Technical analysis uses chart patterns to analyze market movements < understand trends. 0lthough many of these charts have been used for more
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than 4
years, they are still believed to be relevant because they illustrate
patterns in price movements that after repeat themselves. 56a" i c6a!"; 3n technical analysis, charts are similar to the charts that you see in any business settings. 0 chart is simply a graphical representation of a series of price over a set time frame. +or e.g. a chart may show a stocks price movement over a one year period, where each part on the graph represents the closing price for each day the stock is traded. CHART PROPERTIESC There are several things that you should be aware of when looking at a chart, as these factors can affect the information that is provided. They include the time scale, the price scale and the price point properties used. THE TIME SCALE: The time scale refers to the range of dates at the bottom of the chart, which can vary from decades to seconds. The most fre:uently used time scales are intraday, daily, weekly, monthly, :uarterly and annually. The shorter the time frame, the more detailed the chart. .ach data point can represent the closing price of the period or show the open, the high, the low and the close depending on the chart used. 3ntraday charts plot price movement within the period of one day. This means that the time scale could be as short as ! minutes or could cover the whole trading day from the opening bell to the closing bell. Daily charts are comprised of a series of price movements in which each price point on the chart is a full days trading condensed into one point. 0gain, each point on the graph simply the closing price or can entail the open, high, low < close for the stock over the day. These data points are spread out over weekly, monthly < even yearly 4 scales to monitor both short term and intermediate trends in price movements.
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8eekly, monthly, :uarterly < yearly charts are used to analyze longer term trends in the movement of a stocks price. .ach data points in these graphs will be a condensed version of what happened over the specified period. -o far a weekly chart, each data point will be representation of the price movement of the week. +or e.g. if you are looking at a chart of weekly data spread over a ! year period < each data point is the closing price for the week, the price that is plotted will be the closing price on the last trading day of the week, which usually a +riday. .-. TOOLS OF TECHNICAL ANALYSIS: 1- DO5 THEORY: The theory is so formulated by 1harles 5. Dow who was the editor of 8allstreet Journal in H-0. 3n fact, the theory was presented in a series of editorials in the 8allstreet Journal during 4J /4J 2.
0round the turn the century, 1harles 5. Dow formulated a hypothesis that the stock market does not perform on a random basis but is influenced by & distinct cyclical trends that guide its market direction. ,y following these trends, he said, the general market direction can be predicted. Dow classified these cycle as primary, secondary < minor trends. The primary trend is the long/range cycle that carries the entire market up or down. The secondary trend acts as a restraining force on the primary trend, tending to correct deviations from its general boundaries. -econdary trends usually last from several weeks to several months in length. The minor trends are the day to day fluctuations in the market. The basic proposition in the Dow Theory is relatively simple. 0 bull market is in process when successive highs are reached after secondary corrections < when secondary upswings advance behind previous secondary downs swings. The classical Dow Theory utilizes both the industrial average < the transportation average in determining the market position. 8hen both averages are moving in the same direction, valid indicators of continuing bull or bear market are implied.
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0mong the three movements in the market, the primary movement is considered to be the most important. The primary trend is said to have & phases in it, each of which would be interrupted by a counter move or secondary reactions which would retrace about &&/$$M of earlier rise or fall.
G!a26 < .-1 ,ULLISH TREND: During a bull market %upward moving market', in the first phase the prices would advance with the revival of confidence in the future of business. This will prompt investors to buy shares of companies. During phase, prices would advance due to the improvements in corporate earnings. 3n the third phase, prices advance due to inflation and speculation. 0ccording Dow Theory, the formation of higher bottoms and higher tops indicates a bullish trend. ,EARISH TREND: The bear market is also characterized by three phases. 3n the first phase, prices begin to fall due to abandonment of hopes. 3nvestors begin to sell their shares. 3n the second phase, companies start reporting lower profits and lower dividends. This causes further fall in prices due to increased selling pressure. 3n the final phase, prices fall still further due to distress selling. 0 bearish market would be indicated by the formation of lower tops and lower bottoms. GSSSIETW / GSSS-IMS / MBA 4!
.- VOLUME INDICATORS: Bolume changes are believed by most technicians to be prere:uisite to any change in price. Bolume is a function of the demand for and supply of stocks and can signal turning points for the market as well as for individual stocks. 0 Dow Theory tenet is that during bull markets, volume increases with price advances and decreases with price declines. 3n a ma2or downward price trend, the reverse will hold trueL volume will generally increases as prices decline and dwindle on price rallies. +urther, volume generally falls in advance of ma2or declines in the stock price averages and rises sharply during market bottoms. Thus, forecasting price changes re:uires e*amination of the trend of price changes as well as fluctuations in volume of transactions. ).. SHORT SELLING:
0s a technical indicator, short selling is called short interest. The theory is that short sellers must eventually cover their positions. This buying activity increases the potential demand for stock. 3n effect, short interest has significance for the market as a whole, as well as for individual stocks. 6onthly short interest for the market can be related to average daily volume for the preceding month. Thus, monthly short interest divided by average daily volume gives a ratio. The ratio indicates how many days of trading it would take to use up total short interest. 5istorically, the ratio has varied between one/third of a day and four days. Data are now being made public regarding short selling by stock specialists. -pecialists are permitted to use short selling as one of their tools to promote orderly markets in the stocks they specialize in. increasing and high levels of specialist short selling tend to signal market bottoms. R-ODD-LOT TRADING: shares of a
The small investor more often than not buys fewer than 4
given stock an odd lot and such buyers and sellers are called odd lotters. GSSSIETW / GSSS-IMS / MBA 4$
6any find reason to watch the buying and selling activities of the odd lotters very closely. 9dd lotters try to do the right thing most of the timeL that is, they tend to buy stocks as the market retreats and sell stocks as the market advances. 5owever, technicians feel that the odd lotter is inclined to do the wrong thing at critical turns in the market. 3f we relate odd lot purchases to odd lot sales, we get an odd lot inde*. 0n increase in the inde* suggests relatively more buyingL a decrease indicates relatively more selling. During most of the market cycle, odd lotters are selling the advances and buying the declines. During advances, the odd lot inde* is falling. 5owever, at or near the market peak, the inde* begins to rise as odd lotters sell proportionately less. The volume of odd lot purchases increases noticeably 2ust before a decline in the market. -imilarly, during declines, the inde* is rising. Just before a rise in the market, the volume of odd lot sales increase greatly and the inde* begins to fall. R-ODD-LOT SHORT SALES:
The presumed lack of sophistication on the part of odd lotters is often further verified by looking at their activities in short selling. 0 ratio can be calculated by dividing odd lot short sales. This short sales A sales ratio is gauging the speculative activities of the man on the street, which, as a speculator, is presumed to be more wrong than the average odd lotter. 9dd/ lot short sellers tend to increase their short sales sharply near the bottom of a declining market as soon as the market turns around, they tend to lose faith and reduce their short sales noticeably. 0n increasing ratio of short sales to sales suggests increasing bearishnessL a falling ratio indicates decreasing bearishness. "ormally, a short sale ratio of .! percent suggests high optimism a ratio in e*cess of & percent suggests high pessimism.
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=- ELLIOT 5AVE THEORY: ).". .lliot believed markets had well/ defined waves that could be used to predict market direction. 3n 4J&J, .lliot detailed the .lliot wave theory, which states that stock prices are governed by cycles founded the +ibonacci series %4/2/&/F/4&/24='. There are many theories which seek to e*plain the behavior of the stock market. 9ne such theory, in technical analysis, is the wave theory formulated by )alph .lliot, known as the Elli&" 8a%e "6e&!)- 0 wave is a movement of the market price from one change in the direction to the ne*t change in the same direction. The waves are the results of buying and selling impulses emerging from the demand and supply pressures on the market. 0ccording to the .lliott wave theory, stock prices tend to move in a predetermined number of waves consistent with the +ibonacci series. -pecifically, .lliott believed the market moved in five distinct waves on the upside and three distinct on the downside. The basic shape of the wave is shown below. 8aves one, three and five represent the Nimpulse, or minor up/ waves in a ma2or bull move. 8aves two and four represent the Ncorrective, or minor down/waves in the ma2or bull move. The waves lettered 0 and 1 represents the minor down/waves in a ma2or bear move, while , represents the one up/wave in a minor bear wave. .lliott proposed that the waves e*isted at many levels, meaning there could be waves within waves. To clarify, this means that the chart above not only represents the primary wave pattern, but it could also represent what occurs 2ust between points 2 and @. The diagram below shows how primary waves could be broken down into smaller waves.
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7raph K 2.2 .lliott wave theory ascribes names to the waves in order of descending size. 4. 7rand super cycle 2. -uper cycle &. 1ycle @. ;rimary !. 3ntermediate $. 6inor #. 6inute F. 6inuette J. -ub K 6inuette The ma2or waves determine the ma2or trend of the market, and minor waves determine minor trends. This is similar to the way Dow Theory postulates primary and secondary trends. .lliott provided numerous variations on the main wave, and placed particular importance on the golden mean, .$4F, as s significant percentage for retracement. Trading using .lliott wave patterns is :uite simple. The trader identifies the main wave or super cycle, enters long, and then sells or shorts, as the reversal is determined. This continues in progressively shorter cycles until the cycle completes and the main wave resurfaces. The caution to this is that much of the wave identification is taken in hindsight and disagreements arise between .lliott wave technicians as to which cycle the market is in.
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.-0 ,ASIC PRINCIPLES OF TECHNICAL ANALYSIS: 4. 2. &. @. !. $. The market value of a security is related to demand and supply factors operating in the market. These are both rational and irrational factors, which surrounds the supply and demand factors of security. -ecurity prices behave in a manner that their movement is continuous in a particular direction for some length of time. Trends in stock prices have been seen to change when there is a shift in the demand and supply factors. The shifts in the demand and supply can be detected through charts prepared specially to show market action. ;atterns which are pro2ected by charts record price movements and these recorded patterns are used by analysts to make forecasts about the movement of prices in future. PRICE ANALYSIS APPROACH: P!ice c6a!": 1harting represents a key activity in technical analysis, because graphical representation is the very basis of technical analysis. 3t is the security prices that are charted. 0 share may be traded in the market at different prices on the same day. 9f these different prices prevailing in the market on each trading day, four prices are important. These are the highest price of the day, the lowest price of the day, the opening price and the closing price. The price chart is the basic tool used by the technical analyst to study the share price movement. The prices are plotted on a *y graph where the * a*is represents the trading days and the a*is denotes the prices. The oldest charting procedure was known as the point and figure %p<f' charting. 3t is now out of vogue. Three types of price charts are currently used by technical analysts. These are the line chart or the closing price chart, the chart, and the Japanese candlestick chart.
Line c6a!": 3t is the simplest price chart. 3n this chart, the closing prices of a share are plotted on the *y graph on a day to day basis. The closing price of each day would be represented by a point on the *y graph. 0ll these points would be connected by a straight line which would indicate the trend of the market.
7raph K 2.& ,a! c6a!": 3t is perhaps the most popular chart used by technical analysts. 3n this chart, the highest price, the lowest price and the closing price of each day are plotted on a day to day basis. 0 bar is formed by 2oining the highest price and the lowest price of a particular day by a vertical line. The top of the bar represents the highest price of the day, the bottom of the bar represents the lowest price of the day and a small horizontal hash on the right of the bar is used to represent the closing price of the day. -ometimes, the opening price of the day is marked as a hash on the left side of the bar.
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G!a26 < .-1 /a2ane e can(le "ic> c6a!" : The Japanese candlestick chart shows the highest price, the lowest price, the opening price and the closing price of shares on day to day basis. The highest price and the lowest price of a day are 2oined by a vertical bar. The opening price and closing price of the day which would fall between the highest and lowest prices would be represented by a rectangle so that the price bar chart looks like candlesticks. Thus each days activity is represented by a candlestick. There are mainly three types of candlestick, viz., the white, the black and the do2i or neutral candlestick. 0 white candlestick is used to represent a situation where the closing price of the day is higher than the opening price. 0 black candlestick is used when the closing price of the day is lower than the opening price. 0 do2i candlestick is the where the opening price and the closing price of the day are the same. 3n order to create a candlestick chart, you must have a data set that contains open, high, low and close values for each time period you want to display. The hollow or filled portion of the candlestick is called Dthe bodyE %also referred to as Dthe real bodyE'. The long thin lines above and below the body
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represent the highAlow range and are called DshadowsE %also referred to as DwicksE and DtailsE'. The high is marked by the top of the upper shadow and the low by the bottom of the lower shadow. 3f the stock closes higher than its opening price, a hollow candlestick is drawn with the bottom of the body represents the opening price and the top of the body representing the closing price. 3f the stock closes lower than its opening price, a filled candlestick is drawn with the body representing the closing price.
G!a26 < .-4 TRENDS AND TREND REVERSALS: Trend is the direction of movement of share prices in the market the prices move upwardsL it is a rising or uptrend. 8hen the prices move downwards, we have a falling trend or downtrend. The change in the direction of the trend is referred to as trend reversal. 0 share that e*hibits a rising trend may start to move narrowly or fall after sometime. This change in the direction of movement represents a trend reversal. The technical analyst tries to identify the trend reversal at an early stage so as to trade profitably in the market. 8hen the trend reverses and begins to raise the technical analyst would recommend purchase of the share. 8hen the trend begins to fall, sale is indicated. During a flat trend the investor should stay away from the market.
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CHART PATTERNS: 8hen the price bar charts of several days are drawn close together, certain patterns emerge. These patterns are used by the technical analyst to identify trend reversal and predict the future movement of prices. The chart patterns may be classified as support and resistance patterns, reversal patterns and continuation pattern. S$22&!" an( Re i "ance: -upport and resistance represent key 2unctures where the forces of supply and demand meet. 3n the financial markets, prices are driven by e*cessive supply %down' and demand %up'. -upply is synonymous with bearish, bears and selling. Demand is synonymous with bullish, bulls and buying. These terms are used interchangeably throughout this and other articles. 0s demand increases, prices advance and as supply increases, prices decline. 8hen supply and demand are e:ual, prices move sideways as bulls and bears slug it out for control. 56a" i $22&!";
-upport is the price level at which demand is thought to be strong enough to prevent the price from declining further. The logic dictates that as the price declines further. The logic dictates that as the price declines towards support and gets cheaper, buyers become more inclined to buy and sellers become less inclined to sell. ,y the time the price reaches the support level, it is believed that demand will overcome supply and prevent the price from falling below support. -upport does not always hold and a break below support signals that the bears have won out over the bulls. 0 decline below support indicates a new willingness to sell and Aor a lack of incentive to buy. -upport breaks and new lows signal that sellers have reduced their e*pectations and are willing sell at even lower prices. 3n addition buyers could not be coerced into buying until prices declined below support or below the previous low. 9nce support is broken, another support level will have to be established at a lower level.
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-upport levels are usually below the current price, but it is not uncommon for a security to trade at or near support. Technical analysis is not an e*act science and it is sometimes to set e*act support levels. 3n addition, price movements can be volatile and dip below support briefly. -ometimes it does not seem logical to consider a support level broken if the price closes 4AFth below the established support level. +or this reason, some traders and investors establish support zones. 56a" i Re i "ance; )esistance is the price level at which selling is thought to be strong enough to prevent the price from pricing further. The logic dictates that as the price advances towards resistance, sellers become more inclined to sell and buyers become less inclined to buy. ,y the time the price reaches the resistance level, it is believed that supply will overcome demand and prevent the price from rising above resistance. )esistance does not always hold and a break above resistance signals that the bulls have won out over the bears. 0 break above resistance shows a new willingness to buy andAor a lack of incentive to sell. )esistance break and new highs indicate buyers have increased their e*pectations and are willing to buy at even higher prices. 3n addition, sellers could not be coerced into selling until prices rose above resistance or above the previous high. 9nce resistance is broken, another resistance level will have to be established at a higher level. 56e!e i !e i "ance e "a7li 6e(; )esistance levels are usually above the current price, but it is not uncommon for a security to trade at or near resistance. 3n addition, price movements can be volatile and rise above resistance briefly. -ometimes it does not seem logical to consider a resistance level broken if the price closes 4AFth above the established resistance level. +or this reason, some traders and investors establish resistance zones.
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Re%e! al 2a""e!n: ;rice movements e*hibit up/trends and downtrends the trends reverse direction after a period of time. These reversals can be identified with the help of certain chart formation that typically occur during these trend reversals. Thus reversal patterns are chart formations that tend to signal a change in direction of earlier trend. Hea( an( 6&$l(e! "&2 ?HST@ 2a""e!n: 0s the name suggests, the 5-T formation has a left shoulder, a head, and a right shoulder. The 5-T formation represents a bearish development. 3f the price falls below the neckline %the line drawn tangentially to the left and right shoulders', a price decline is e*pected. 5ence, it is a signal to sell.
Hea( an( 6&$l(e! +&!'a"i&n

J F # $ ! @ & 2 4 4 2 & @ ! $ 2e!i&( # F J 4 44
2!ice
-eries4
7raph K 2.$ The well known head and shoulders pattern is formed by three peaksL the center peak, or head, is slightly higher than two lower, and not necessarily symmetrical, shoulders. The line 2oining the bottoms of the two shoulders is called the neckline. Due to fluctuations, the neckline is rarely symmetrical or perfectly horizontal. The pattern isnt complete until the neckline is broken. 3t is often good to wait for confirmation K for e*ample, two successive closes below the neckline. )emember, markets often bounce back to the neckline after the breakout and this becomes a new level of resistance. GSSSIETW / GSSS-IMS / MBA 2$
Bolume should be assessed to confirm the validity of these patterns. Bolume is normally heaviest during the formation of the left shoulder and also tends to be :uite heavy as prices approach the peak. The real conformation of a developing 5ead and -houlders pattern comes with the formation of the right shoulder, which is invariably accompanied by distinctly lower volume. -ome traders use the distance between the neckline and the top of the head to pro2ect a Dprice ob2ectiveE. The price ob2ective is determined by measuring from is the top of the head to the neckline, and using this distance from the breakout point downwards. In%e! e 6ea( an( 6&$l(e! "&2 ?IHST@ 2a""e!n: 0s the name indicates, the 35-T formation is the inverse of the 35-T formation. 5ence, it reflects a bullish development. 3f the price rises above the neck line, a price rise is e*pected. 5ence, it is a signal to buy. 0n 3nverted head and -houlders pattern is a mirror image of the head < shoulder pattern %forming a market bottom'. D&$7le T&2
In%e! e 6ea( an( 6&$l(e! 2a""e!n

J F # $ ! @ & 2 4 4 2 & @ ! $ 2e!i&( # F J 4 44
2!ice
-eries4 -eries2
7raph K 2.#
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This pattern is the reverse of the head and shoulder formation described above and is really an inverted head and shoulder pattern. This occurs at the end of a bear phase and consists of three distinct bottoms. The first bottom is the left shoulder, and then comes a lower bottom, which forms the head, followed by the third bottom, which is termed the right shoulder. The neckline is drawn by 2oining the tops from, which the head and the right shoulder originate. 8hen the price rises above the neckline, the formation of a pattern is considered to be completed Double Tops are another reliable and fre:uently used reversal pattern. This pattern consists of tow tops of appro*imately e:ual height. 0 line is drawn below and parallel to the resistance line that connects the two tops. The neckline is a strong support for price level but eventually fails. 0s with a head and -houlders, after the two rallies and their respective reversals are completed the double tops is confirmed only when the neckline 3 broken. The support line then becomes a resistance line, which often holds a market rebound. 0 Double ,ottom pattern is a mirror image of a double top patternC the average height of the bottoms gives a good indication of the price ob2ective. C&n"in$a"i&n 2a""e!n : There are certain patterns which tend to provide a breathing space to the earlier sharp rise or fall and after the completion of these patterns, the price tends to move along the original trend. These patterns are formed during side way movements of share prices and called continuation patterns because they indicate a continuation of the trend prevailing before the formation of the pattern. The term Dcontinuation patternE may be unfamiliar to some, but perhaps triangles, both ascending and descending, flags, pennants, rectangles and wedges are recognizable to most. 0ll these constitute the study of continuation patterns, and in this four/part series we will break them down into GSSSIETW / GSSS-IMS / MBA 2F
bite/ size morsels, allowing you to see them clearly and act upon them in your decision/making process. T!ian*le an( c&il +&!'a"i&n: The triangle formation may occur during a bull phase or a bear phase. 3n either case it would indicate a continuation of a trend. 3t is generally seen that the volume diminishes during the movement within the triangular pattern. The breakout from the pattern is usually accompanied by increasing volume. 0 technical analysis pattern that suggests a trend is e*hibiting a temporary diversion in behavior and will eventually continue on its e*isting trend. The symmetrical triangle charts displayed below are both e*hibiting a continuation pattern. "otice how the chart e*tends above %below' its e*isting pattern.
7raph K 2.F Fla* an( Pennan" : These are considered to be very reliable continuation patterns. They represent a brief pause in a fast moving market. The flag formation looks like a parallelogram with the two trend lines forming two parallel lines. The volume of trading is e*pected to fall during the formation of the flag and again pick up on breaking out from the pattern.
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0 technical charting pattern is that which looks like a flag with a mask on either sides. +lags results from price fluctuations within a narrow range and mark a consolidation before the previous move resumes. (ikewise,E pennantE formation are usually treated like flag formation because they are very similar in appearance, tend to show up at the same place in an e*isting trend, and a same volume and measuring criteria.
7raph K 2.J The pennant formation looks like a symmetrical triangle. The upper trend line formed by connecting the tops stoops downwards. The pennant is formed midway between either a bullish trend or a bearish trend and signals the continuation of the same trend. The break out from the pattern is marked by increased volume of trading. 0 continuation pattern in technical analysis formed when there is a large movement in a stock the flag pole, followed by a consolidation period with converging trend lines, the pennant, followed by a break out movement in the same direction as the initial large movement, the second half of the flag pole. 0s can be seen in the above picture, there is a large rise in the stock, followed by a converging consolidation period that resembles a pennant and a resulting continuation of the initial trend.
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+lags and pennants are among the most reliable of continuation patterns and only rarely produce a trend reversal. The only differences between the two patterns is that a flag resembles a parallelogram %or rectangle' marked by two parallel trend lines that tend to slope against the prevailing trend. The pennant however, is identified by two converging trend lines and more horizontal which resembles a small symmetrical triangle. The important thing to remember is that they are both characterized by diminishing trend volume and though different the measuring implications are the same for both patterns as demonstrated in the above illustration. .-= TYPES OF INDICATORS: MOVING AVERAGE: 0n indicator fre:uently used in technical analysis showing the average value of a securitys price over a set period. 6oving averages are generally used to measure momentum and define areas of possible. 0n indicator fre:uently used in technical analysis showing the average value of a securitys price over a set period. 6oving averages are generally used to measure momentum and define areas of possible support and resistance. 6oving averages are used to emphasize the direction of a trend and to smooth out price and volume fluctuations, over DnoiseE that can confuse interpretation. Typically, upward momentum is conformed when a short term average %e.g.4!days' crosses above a longer term average %e.g. ! days'. Downward momentum is confirmed when a short term average crosses below a long term average. RELATIVE STRENGTH INDEX ?RSI@: There are a few different tools that can be used to interpret the strength of a stock. 9ne of these is the relative strength inde* %)-3', which is a comparison between the days that a stock finishes of and the days it finishes down. This indictor is a big tool in momentum trading.
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The )-3 is a reasonably simple model that anyone can use. 3t is calculated using the following formula. RSI A 1BB - C1BB D ?1ERS@ F 8hereC )- O %average of "/day up closes' A %average of " day down closes' " O days %most analysts use J/4! day )-3' 0s you can see from the chart below the )-3 ranges from /4 . 0n
asset is deemed to be over bought once the )-3 approaches the # level, meaning that it may be getting over valued and is a good candidate for a pull back. (ikewise, if the )-3 approaches & , it is an indication that the asset may be getting oversold and therefore likely to became undervalued. 0 trader using )-3 should be aware that large surges and drops the price of an asset will affect the )-3 by creating false buy or sell signals. The )-3 is best used as a valuable complement to other stock picking tools. RATE OF CHANGE: ?ROC@ )ate of change is centered oscillator that also fluctuates above and below zero. 0s its name implies, )91 measures the percentage price change over a given time period. +or e.g. 2 day )91 would measure the percentage price change over the last 2 days. The bigger the difference between the current price and the 2 days ago, the higher will be the value of the )91 oscillator. 8hen the indicator is above zero, the percentage price is positive %,ullish'. 8hen the indicator is below zero, the percentage price change is negative %,earish'. .-G THE GAP THEORY: The phenomenon of gaps is one of the most widely talked in stock markets. "ormally this occurs between the close of the market on one day and the ne*t days open. (ots of things can cause this, such as an earning report coming out after the stock market as closed for the day. 3f the earning GSSSIETW / GSSS-IMS / MBA &2
were significantly higher than e*pected, many investors might place buy order for the ne*t day. This could result in the price opening higher than the previous days close. 3f the trading that day continuous to trade above that point, a gap e*ist in the price chart. 7aps can offer evidence that something important as happened to the fundamentals or the psychology of the crowd that accompanies this market movement. ,efore we get into the different types of gaps, here is a chart showing the gap so you will know what we are talking about. 7aps appear more fre:uently on daily charts, where every day is an opportunity to create an opening gap. 7aps on weekly or monthly charts or fairly rareC the gap would have to occur between +ridays close and 6ondays open for weekly charts and between the last day of the months close and the first day of the ne*t month for the monthly charts. 7aps can be subdivided into @ basic categoriesC 4. 1ommon gap 2. ,reakaway gap &. )unaway gap @. .*haustion gap COMMON GAPS: -ometimes referred to as a trading gap or an area gap, the common gap is usually uneventful. 3n fact, they can be caused by a stock going e*/dividend when the trading volume is low. This gaps are common %get itP' and usually get filled fairly :uickly. D7etting filledE means that the price action at a later time %few days to a few weeks' usually retraces at the least to the last day before the gap. This is also known as closing the gap. ,REA:A5AY GAPS: ,reak away gaps are the e*citing ones. They occur when the price action is breaking out of their trading range or congestion area. To understand gaps, one has to understand the nature of congestion areas in the market. 0 congestion area is 2ust a price range in which the market has traded for some period of time, usually a few weeks or so. The area near the top of the GSSSIETW / GSSS-IMS / MBA &&
congestion area is usually resistance when approached from below. (ikewise, the area near the bottom of the congestion area is support when approached from above. To breakout of these areas re:uires market enthusiasm and, either many more buyers than sellers for upside breakouts or more sellers than buyers for downside breakouts. RUNA5AY GAPS: )unaway gaps are also called as measuring gaps and are best described as gaps that are caused by increased interest in the stock. +or runaway gaps to the upside, it usually represents traders who did not get in during the initial move of the uptrend and while waiting for a retracement in price, decided it was not going to happen. 3ncreased buying interest happens all of a sudden, and the price gaps above the previous days close. This type of runaway gaps represents an almost panic state in traders. 0lso, a good uptrend can have runway gaps caused by significance new events that caused new interest in the stock. 3n the chart below, note the significant increase in volume during the runaway gap. )unaway gaps can also happen in down trends. This usually represents increased li:uidation of that stock by traders and buyers who are standing on the side lines. These can become very serious as those who are holding on to the stock will eventually panic and sell K but sell to whomP The price has to continue to drop and gap down to find buyers is no a good situation. The term measuring gap is also used for runaway gaps. This is an interpretation that is hard to find e*ample for, but it is a way of helping one beside how much longer a trend will last. The theory is that the measuring gap will occur in the middle, or half way, through the move. -ometimes, the futures market will have runaway gaps that are caused by trading limits imposed by the e*changes. 7etting caught in the wrong side of the trend when you have these limits moves in futures can be horrifying. The good news is that you can also be on the right side of them. GSSSIETW / GSSS-IMS / MBA &@
These are not common occurrences in the futures market despite all the wrong information touted by those who do not understand it, and are only repeating something they read from an uninformed reporter. EXHAUSTION GAPS: .*haustion gaps are those that happened near the end of a good up or downtrends. They are many times the first signal of the end of that move. They are identified by high volume and large price difference between the previous days close and the new opening price. They can easily be mistaken for runaway gaps if one does not notice the e*ceptionally high volume. 3t is almost a state of panic if the gap appears during the long down move and pessimism has set in. selling all positions to li:uidate holdings in the market is not uncommon. .*haustion gaps are :uickly filled as prices reverse their trend. (ikewise, if they happen during a bull move, some bullish euphoria over come trades, and buyer can not get enough of that stock. The prices gap up with huge volumeL then there is a great profit taking and the demand for the stock totally dries up. ;rices drop, and a significant change in trend occurs. .*haustion gaps are probably the easiest to trade and profit form. 3n the chart, notice that there was one more day of trading to the upside before the stock plunged. The high volume was give away that this was going to be, either, an e*haustion gap or a runaway gap. ,ecause of the size of the gap and the near doubling of volume, an e*haustion gap was making here. ISLAND REVERSAL: 0fter a stock e*hibits e*haustion gap it trades at round the recent high it form for some days. There is a lackluster movement during this period. -uddenly it may reverse itself with a gap %breaking away gap'. During the process a sort of island is formed in price pattern. -uch type of reversal is termed as an island reversal. This should be regarded as a significant as it has enough potential to wipe out the entire gains that was recorded in the stock in the entire ,ull )un.
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S$22&!" an( !e i "ance le%el : 7aps usually provide e*cellent support and resistance points in a market. 3f the scrip is rising then one can e*pect it to encounter strong resistance at gaps made in the past. .-H MAR:ET INDICATORSC 0ll of the technical analysis tools discussed up to this point were calculated using a securitys price. There is another group of technical analysis tools designed to help you gauge changes in all securities with in a specific market. These indicators are usually referred to as a market indicator, because they gauge an entire market, not 2ust an individual security. 6arket indicators typically analyze the stock market, although they can be used for other markets. 8hile the data fields available for an individual security limited to its open, high, low, close, volume, and sparse financial reports, there are numerous data items available for the overall stock market. +or e*ample, the no. of stocks that made new highs for the day, the no. of stocks that increased in price, the volume associated with the stock that increased in price, etc. market indicators cannot be calculated for an individual security because the re:uired data is not available. 6arket indicators add significant depth to technical analysis, because they contain much more information that price and volume. Typical approach is to use market indicators to determine where the overall market is headed and then use priceAvolume indicators to determine when to buy or sell an individual security. Ca"e*&!ie &+ 'a!>e" in(ica"&! 6arket indicators typically fall into & categoriesC 6onetary -entiment 6omentum
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MONETARY INDICATORS: They concentrate on economic rate such as interest rates. They help you to determine the economic environment in which businesses operate. These e*ternal forces directly affect a businesss profitability and share price. .*amples of interest rates are the money supply, consumer and corporate debt, and inflation. SENTIMENT INDICATORS: They focus on investor e*pectation/often before those e*pectations are discernible in prices. 8ith an individual security, the price is often the only measure of investor sentiment available. 5owever, for a large market such as the "ew Iork stock e*change, many more sentiment indicators are available. These include the no. of odd lot sales, the putAcall )atio, the ratio of bullish versus bearish investment advisors, etc. MOMENTUM: 3t shows what prices are actually doing but does so by looking deeper than price. .*amples of momentum indicators include all of the priceA volume indicators applied to the various market indices, the no. of stocks that made new highs versus the no. of stocks making new lows, the relationship between the no. of stocks that advanced in price versus the no. that declines, the comparison of the volume associated with increased price with the volume associated with decreased price, etc. *********
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CHAPTER - 0
DATA ANALYSIS AND INTERPRETATION

The following are some of the mathematical indicators that are used to interpret the dataC 0-1 M&%in* A%e!a*e: 0n average is the sum of prices of a share for a specific number of days divided by the number of days. 3n a simple moving average, the set of averages are calculated for a specific number of days, each average being calculated by including a new price and e*cluding an old price. The formula used here to calculate moving average isC M&%in* a%e!a*e A S$' &+ 2!ice &+ 6a!e D N$'7e! &+ (a) 0-. Rela"i%e S"!en*"6 In(e9: This is a powerful indicator that signals buying and selling opportunities ahead of the market. )-3 for a share is calculated by using the following formulaC RSI A 1BB - C1BBD?1ERS@F 8here, Rela"i%e "!en*"6 ?RS@ O 0verage gain per day A 0verage loss per day
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TA,LE - 0-1 TA,LE SHO5ING MOVING AVERAGE OF ITC
DATE & /Dec/ ! &4/Jan/ $ 2F/+eb/ $ &4/6ar/ $ 2J/0pr/ $ &4/6ay/ $ & /Jun/ $ &4/Jul/ $ &4/0ug/ $ 2J/-ep/ $ &4/9ct/ $ & /"ov/ $ 2J/Dec/ $ &4/Jan/ # 2F/+eb/ # & /6ar/ # & /0pr/ # &4/may/ # 2J/Jun/ # &4/Jul/ # &4/0ug/ # 2F/-ep/ # &4/9ct/ # & /"ov/ #
ITC 4@2 4!@.F! 4#2.$ 4J@.J! 2 &.# 4$!.4 4F2.2! 4$#.! 4J4.2! 4F#.$! 4FJ.F! 4F@.$ 4#!.J! 4#&.# 4#4.F! 4! .@ 4$ 4$&.$ 4!@.# 4# .# 4# .!! 4FJ.# 4#J.4! 4F!.@
MOVING AVERAGE
4#&.$2 4#F.2@ 4F&.#2 4F2.# 4F4.J$ 4#F.#! 4F&.# 4F@.4# 4F!.F$ 4F2.&! 4#&.4J 4#4.& 4$$.&F 4$&.&4 4$ .44 4!J.F! 4$&.J4 4$J.F! 4#2.J$ 4#J.4
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CHART - 0-1
MOVING AVERAGE OF ITC

2! 2 PRICE 4! 4 ! 3T1 69B3"7 0B7
INTERPRETATION: The above diagram of moving average line of the 3T1 < the scrip line are almost moving together. The tendency of scrip price movement is constant over the months. 1urrently the scrip prices are at increasing tendency and the investor is advised to hold the security for another 2 months. 3t may increase the scrip price in the future.
D ec / 6 ar / Ju n/ -e p/ D ec / 6 ar / Ju n/ -e p/
DATE
TA,LE - 0-. TA,LE SHO5ING MOVING AVERAGE OF HLL
DATE & /Dec/ ! &4/Jan/ $ 2F/+eb/ $ &4/6ar/ $ 2J/0pr/ $ &4/6ay/ $ & /Jun/ $ &4/Jul/ $ &4/0ug/ $ 2J/-ep/ $ &4/9ct/ $ & /"ov/ $ 2J/Dec/ $ &4/Jan/ # 2F/+eb/ # & /6ar/ # & /0pr/ # &4/6ay/ # 2J/Jun/ # &4/Jul/ # &4/0ug/ # 2F/-ep/ # &4/9ct/ # & /"ov/ #
HLL 4J#.2! 4J@.F 2@4.J! 2#2.& 2F#.J! 2&&.# 22J.4 2&2.2! 2&@.$ 2!$.2 2&&.$ 2&!.F! 24$.!! 2 F.2 4#$.4! 2 !.2! 4JJ.@ 2 &.! 4FF.F! 2 $.&! 2 F.$ 24J.&! 2 #.$ 24 .2
MOVING AVERAGE
2&F.F! 2@$.4@ 2!& 2!4. $ 2@&.!2 2&#.4# 2&#.4! 2&F.! 2&!.&$ 2& . F 24@. # 2 F.@ 2 4.44 4JF.! 4J@.$& 2 .$# 2 4.&@ 2 !.&& 2 $.4! 24 .@2
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CHART - 0-.
MOVING AVERAGE OF HLL

&! & 2! 2 4! 4 ! 0pr/ $ Jun/ $ 0pr/ # Jun/ # Dec/ ! Dec/ $ 0ug/ # 0ug/ $ 9ct/ $ +eb/ # +eb/ $ 9ct/ # 5(( 69B3"7 0B7
PRICE
DATE
INTERPRETATION: 3n the above diagram it can be observed that the scrip line was bit upward at the beginning. (ater it stabilized along with the moving average line during the entire period i.e. from 0pril 2 $ to "ov 2 #.
1urrently the scrip is moving downward direction. Therefore it is better to sell the security at the current price.
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TA,LE - 0-0 TA,LE SHO5ING MOVING AVERAGE OF AM,U/A
DATE &4/Dec/ ! &4/Jan/ $ 2F/+eb/ $ &4/6ar/ $ & /0pr/ $ &4/6ay/ $ & /Jun/ $ &4/Jul/ $ &4/0ug/ $ & /-ep/ $ &4/9ct/ $ & /"ov/ $ &4/Dec/ $ &4 Jan # 2F/+eb/ # &4/6ar/ # & /0pr/ # &4/6ay/ # & /Jun/ # &4/Jul/ # &4/0ug/ # & /-ep/ # &4/9ct/ # & /"ov/ #
AM,U/A #J.$ FF.! FF.2 4 &.2! 42@. ! J2.J JJ.! 4 @.# 442.&! 44$.F! 44#.2! 4@@.4! 4@4.& 4&#.4! 44!.J! 4 $.# 44#.J! 44&.4! 42@.!! 4&4.! 4&&.@! 4@&.F 4@@.$! 4!
MOVING AVERAGE
J$.#2 JJ.&F 4 4.!F 4 @.FF 4 $.# 4 !.2$ 44 .4& 44J. $ 42$.&F 4&4.&@ 4&4.4$ 42J. ! 42&.F4 44F.4F 44!.$$ 44F.## 42@.42 42J.2J 4&!.!J 4@ .$F
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CHART - 0-0
MOVING AVERAGE OF AM,U/A

4$ 4@ 42 4 F $ @ 2
De &4 c/ /6 ! ar / & /J $ un & / /- $ e &4 p/ /D $ ec / &4 $ /6 & ar /J un & / /- # ep / #
PRICE
06,HJ0 69B3"7 0B7
&4 /
DATE
INTERPRETATION: 3n the above diagram the scrip price is fall below the moving average line in the month of 6arch. 3n the month of 6ay 2 $ < June 2 # the moving average line < the scrip line coincides. +rom then the scrip price is above the moving average line. 3n this case it is advised to hold the securities for another 2 months, further the scrip may increase in coming days.
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TA,LE - 0-1 TA,LE SHO5ING MOVING AVERAGE OF ,IRLA
DATE &4/Dec/ ! &4/Jan/ $ 2F/+eb/ $ &4/6ar/ $ & /0pr/ $ &4/6ay/ $ & /Jun/ $ &4/Jul/ $ &4/0ug/ $ & /-ep/ $ &4/9ct/ $ & /"ov/ $ &4/Dec/ $ &4/Jan/ # 2F/+eb/ # &4/6ar/ # & /0pr/ # &4/6ay/ # & /Jun/ # &4/Jul/ # &4/0ug/ # & /-ep/ # &4/9ct/ # & /"ov/ #
,IRLA 2!$.!! 2$@.@ 2!J.!! &4J.4 &JJ.&! 2@@.# 2&&.@! 2$ .2 2F .2! &&J.&! &4F.J &$$.# &&$.F & J. ! 2$$.F! 4J .& 2&#.!! 2@@.F! 2$$.F 2$J.4! 2J .$ &&$.#! &!2.2! &@&.!
MOVING AVERAGE
2JJ.#J 2J#.@2 2J4.2& 2J4.&$ 2F&.!J 2#4.!J 2F$.@& &4&. F &2F.@ &&@.4$ &4J.$$ 2J&.J@ 2$F.44 2@J.#2 2@4.2# 2@4.#& 2$4.#J 2F4.$& & &.44 &4F.@!
CHART - 0-1
@!
MOVING AVERAGE OF ,IRLA

@! @ &! & 2! 2 4! 4 !
ec / 6 ! ar / $ Ju n/ -e $ p/ D $ ec / 6 $ ar / # Ju n/ -e # p/ #
PRICE
birla 69B3" 7 0B7
DATE
INTERPRETATION: The above chart during the period from Dec 2 ! to "ov 2 # the scrip price fluctuates < do not moves with moving average line. 3n the middle the moving average line < the scrip line almost coincides. ,ut in the month of 0pril 2 # the scrip price crosses downwards below the moving average it indicates selling mode. 0t the end of the period the scrip line shows bullish market < it is in buying mode.
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TA,LE - 0-4 TA,LE SHO5ING MOVING AVERAGE OF CIPLA MOVING AVERAGE
CIPLA 4#2.J& 4#2.44 24!.2@ 2!F.4$ 2$ .F 22J.! 24!.F 2&$ 2@J.J! 2$2.2! 2$2. ! 2!&.F! 2! .# 2@!.F 2&&.& 2&!.# 24 .F! 24#.$! 2 F.@! 4J .# 4$#.&! 4F2.@ 4#F.#! 4F4.!
24!.F! 22#.4$ 2&!.J 2@ . ! 2&F.@4 &&F.# 2@!.24 2!2.F2 2!!.#$ 2!@.J2 2@J.4@ 2@&.F# 2&!.2# 22F.$$ 224.4J 242.$# 4JJ 4J2.&4 4F!.!& 4F .4@
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CHART - 0-4
MOVING AVERGE OF CIPLA @ &! & 2! 2 4! 4 !

ec / 6 ! ar / Ju $ n/ -e $ p/ D $ ec / 6 $ ar / Ju # n/ -e # p/ #
13;(0 69B3"7 0B7
PRICE
DATE
INTERPRETATION: 3n the above diagram it is observed that the scrip line increases in the beginning < shows a decreasing tendency over the years. ,oth the moving average line and scrip line are downwards. 1urrently the scrip price is showing a bearish trend so it is advisable to the investor to sell the securities.
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TA,LE - 0-= TA,LE SHO5ING MOVING AVERAGE OF RAN,AXY
RAN,AXY &$2.&! &JJ.4 @2J.@ @&4.$ @#2.## @44.@! &!$.@ &#&.F! @ $.F @&J.F! &JJ.# &#2.& &J4.F! @ F.$ &&#.$ &!2.$ &#4.&! &F#.# &!@.J! &FJ.J &J4.& &@&.@ @2#. ! &#F.J!
MOVING AVERAGE
@4J @2F.F2 @4J.$F @ F.!# @ &.$4 &J#. # &J@.42 &JF.! @ 2.4 @ 2.@$ &F2. 4 &#2.!J &#2.@ &#4.!# &$ .F@ &#4.& &#J. @ &J4.$! &JJ.!2 @ @.&2
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CHART - 0-=
MOVING AVERAGE OF RAN,AXY ! @ PRICE & 2 4

)0",0GI 69B3"7 0B7
INTERPRETATION: 3n the above diagram it is observed the scrip line has more volatility < fluctuates with moving average line. 3n the month of June2 shows the bearish trend < in the month of 0pril 2 ,ullish trend. 3n simple words it is advisable to the investors to sell the scrip or to watch the market for some time. $ the scrip $ the scrip price shows the
ec / 6 ! ar / Ju $ n/ -e $ p/ D $ ec / 6 $ ar / Ju # n/ -e # p/ #
DATE
TA,LE - 0-G TA,LE SHO5ING RELATIVE STRENGTH AND RELATIVE STRENGTH OF HLL
AVERAGE GAIN AVERAGE LOSS
HLL 4J#.2! 4J@.F 2@4.J! 2#2.& 2F#.J! 2&&.# 22J.4 2&2.2! 2&@.$ 2!$.2 2&&.$ 2&!.F! 24$.!! 2 F.2 4#$.4! 2 !.2! 4JJ.@ 2 &.! 4FF.F! 2 $.&! 2 F.$ 24J.&! 2 #.$ 24 .2
GAIN
LOSS
RS
RSI
2.@! @#.4! & .&! 4!.$# !@.2! @.$ &.4! 2.&! 24.$ 22.$ 2.2! 4J.& F.&! &2. ! 2J.4 !.F! @.4 4@.$! 4#.! 2.2! 4 .#! 44.#! & 4F.$& 4F.$& 4F.$& J.F& @.2& !.@2 !.@2 !.F# !.2@ @.## .@! $.2# !.F2 $.$@ $.$@ 4 .4@ @.## $.J2 $.4 $.# .@J 44.&@ 44.## 44.## 44.## 44.## !.@@ @.!2 F.&F 4 . ! 4$.@$ 44.J@ 4&.44 J.2! 4 .!4 @.4 @.4 2.J& !.2F 2.&! &F. 2 4.$@ 4.!F .F& .&$ .@$ .JJ 4.2J .$2 .@# . & .!2 .@@ .#2 .$& 2.@# 4.4$ 2.&$ 4.4! 2.F! J#.@@ $2.42 $4.2@ @!.&! 2$.@# &4.!4 @J.#! !$.&& &F.2# &4.J# 2.J4 &@.2J & .!! &4.F$ &F.$! #4.4F !&.# # .2@ !&.@J #@. 2
!4
CHART - 0-G
RSI OF HLL
42
RSI
RSI
6ay/ #
6ar/ $
6ay/ $
Dec/ !
+eb/ $
0ug/ $
-ep/ $
+eb/ #
6ar/ #
Jan/ $
0pr/ $
Jun/ $
Jan/ #
Jun/ #
-ep/ #
9ct/ #
DATE
INTERPRETATION: 3n the above chart, it can be observed that during the period of "ov 2 $ < "ov 2 #, the scrip is very sensitive which is showing fluctuating tendency. The peak price in the year was )s. 2F#.J!. 0t the end of the year it reduces by almost )s # . The performance of scrip price is almost depends on the performance of market. 8ith regard to 5(( it is advisable to the small investors to stay out of this scrip, < for heavy investor to hold < watch.
"ov/ #
9ct/ $
"ov/ $
Dec/ $
0pr/ #
0ug/ #
Jul/ $
Jul/ #
!2
TA,LE - 0-H TA,LE SHO5ING RELATIVE STRENGTH AND RELATIVE STRENGTH OF ITC
AVERAGE Da"e & /Dec/ ! &4/Jan/ $ 2F/+eb/ $ &4/6ar/ $ 2J/0pr/ $ &4/6ay/ $ & /Jun/ $ &4/Jul/ $ &4/0ug/ $ 2J/-ep/ $ &4/9ct/ $ & /"ov/ $ 2J/Dec/ $ &4/Jan/ # 2F/+eb/ # & /6ar/ # & /0pr/ # &4/6ay/ # 2J/Jun/ # &4/Jul/ # &4/0ug/ # 2F/-ep/ # &4/9ct/ # & /"ov/ # ITC 4@2 4!@.F! 4#2.$ 4J@.J! 2 &.# 4$!.4 4F2.2! 4$#.! 4J4.2! 4F#.$! 4FJ.F! 4F@.$ 4#!.J! 4#&.# 4#4.F! 4! .@ 4$ 4$&.$ 4!@.# 4# .# 4# .!! 4FJ.# 4#J.4! 4F!.@ $.42! 4J.4! 4 .!! 4$ .4! J.$ &.$ F.J 2.2 !.2! F.$! 2.2! 4.F! 24.@! 2&.#! &.$ 4#.4! 4@.#! 42.F! 4#.#! 22.&! F.#! &F.$ 22. @ 22. @ 4@.$J 4$. F 4F.2# 4$.$J 4$.$J 4$.$J 4#.44 4&.F# #.2$ 4 .2$ 4@. 4 4&.&# 4 . 2 4#. 4 4@.2J 4J.4$ 4!.FJ 4!.FJ 42.22 2&.2& 2&.2& 2&.2& 2&.2& 4J. @ 4&.!4 4&.!4 4&.!4 2#.#4 4J.$F 4@.2 @.2 2 .#! $.!! $.!! $.!! F. 2 44. J 4.F .$& .$J .#J .#2 .FF 4.2@ 4.2# 4. & .2$ .!2 .JJ .J2 .@F 2.$ 2.4F 2.J& 4.JF 4.@& $@.2J &F.$! @ .F& @@.4& @4.F$ @$.F4 !!.&F !!.J! ! .#@ 2 .$& &@.24 @J.#J @F.@! &2.@& #2.22 $F.!! #@.!! $$.@@ !F.F! GAINS LOSS GAIN AVERAGE LOSS RS RSI
!&
CHART - 0-H
RSI OF ITC
HB GB =B 4B
RSI
1B 0B .B 1B B
Dec/ ! Jan/ $ +eb/ $ 6ar/ $ 0pr/ $ 6ay/ $ Jun/ $ 0ug/ $ -ep/ $ Dec/ $ Jan/ # +eb/ # 6ar/ # 0pr/ # Jun/ # 0ug/ # -ep/ # 6ay/ # "ov/ $ 9ct/ # 9ct/ $ Jul/ $ Jul/ # "ov/ #
RSI
DATE
INTERPRETATION: +rom the above chart we can observe that the 3T1 scrip price is moving along with market inde* but in the month of 0pril 2 the ,-. indices the scrip price is not moving accordingly. 8hen it comes to investing in 3T1 it is advisable to the new investors to invest in the stock < to the e*isting investors to hold the stock. $ it touched highest price of )s. 2 &.# < again starts fluctuating. 3f we take into account
!@
TA,LE - 0-I TA,LE SHO5ING RELATIVE STRENGTH AND RELATIVE STRENGTH OF RAN,AXY
RAN,AXY &$2.&! &JJ.4 @2J.@ @&4.$ @#2.## @44.@! &!$.@ &#&.F! @ $.F @&J.F! &JJ.# &#2.& &J4.F! @ F.$ &&#.$ &!2.$ &#4.&! &F#.# &!@.J! &FJ.J &J4.& &@&.@ @2#. ! &#F.J!
GAIN
LOSS
RS
RSI
&$.#! & .& 2.2 @ J! $4.4 !!. ! 4#.@! &2.J! &&. ! @ .4! 2#.@ 4J.!! 4!.#! #4 4! 4F.#! 4$.&! &2.#! &@.J! 4.@ @&.4 #.&! @F.4 22. @ 22. @ 4@.$J 4$. F 4F.2# 4$.$J 4$.$J 4$.$J 4#.44 4&.F# #.2$ 4 .2$ 4@. 4 4&.&# 4 . 2 4#. 4 4@.2J 4J.4$ 4!.FJ 4!.FJ 42.22 2&.2& 2&.2& 2&.2& 2&.2& 4J. @ 4&.!4 4&.!4 4&.!4 2#.#4 4J.$F 4@.2 4@.2 2 .#! $.!! $.!! $.!! F. 2 44. J 4.F .$& .$J .#J .#2 .FF 4.2@ 4.2# 4. & .2$ .!2 .JJ .J@ .@F 2.$ 2.4F 2.J& 4.JF 4.@& $@.2J &F.$! @ .F& @@.4& @4.F$ @$.F4 !!.&F !!.J! ! .#@ 2 .$& &@.24 @J.#! @F.@! &2.@& #2.22 $F.!! #@.!! $$.@@ !F.F!
!!
CHART - 0-I
RSI OF RAN,AXY
F
RSI
)-3
&
Jan/ $
6ar/ $
6ay/ $
6ar/ #
6ay/ #
+eb/ $
0pr/ $
Jun/ $
-ep/ $
Dec/ $
Jan/ #
0pr/ #
Jun/ #
0ug/ #
9ct/ #
DATE
INTERPRETATION: +rom the above diagram < chart it is observed that the scrip price of )0",0GI shows decreasing tendency. 5ere the scrip falls below the market. 3n the month of 0pril 2 again reduces. 1urrently the scrip price decreasing hence it is advised to sell the stock < avoid the future losses or to hold it < watch for another 2 to & months. $ the scrip reaches the peak level to )s @#2 < once
"ov/ #
Dec/ !
Jul/ $
0ug/ $
9ct/ $
"ov/ $
+eb/ #
-ep/ #
Jul/ #
!$
TA,LE - 0-1B TA,LE SHO5ING RELATIVE STRENGTH AND RELATIVE STRENGTH INDEX OF CIPLA
CIPLA 4#2.J& 4#2.44 24!.2@ 2!F.4$ 2$ .F 22J.! 24!.F 2&$ 2@J.J! 2$2.2! 2$2. ! 2!&.F! 2! .# 2@!.F 2&&.& 2&!.# 24 .F! 24#.$! 2 F.@! 4J .# 4$#.&! 4F2.@ 4#F.#! 4F4.!
GAIN
LOSS
RS
RSI
.F2 @&.4& @2.J2 2.$@ &4.& 4&.# 2 .2 4&.J! 42.& .2 F.2 &.4! @.J 42.! 2.@ 2@.F! $.F J.2 4#.#! 2&.&! 4!. ! &.$! 2.#! .@F .@F 4.F@ 4.F@ 4.F@ 4.&$ @.&$ &. 4 &.!$ 4#.#@ 4#.#@ 4#.#@ 4&.4! #.&$ 2.2J J.2J J.2J !.2! 2.@$ .4$ $.@2 J J J J 2.#F 4.$F 2.&4 &.2J !.#J !.#! J. F F.@! J.&4 4 .&$ 4!. & 4 . $ 4 .#J 4 .J! . F . ! .22 .2 .4F . J .@& .2F .&& #.@4 @.#$ 4F. & 4$.$# 4!.2! F.2$ & . # 24.FF 2@.F4 44 .FF 2.#$ 4.J# 4.@$ .F2 4. & &.&@ !.!& 2.2# .#! JJ.44 #&.@ $$.&& !J.&! @!. ! ! .#@ #$.J$ F@.$J $J.@2 @2.F$
!#
CHART - 0-1B
RSI OF CIPLA
42
RSI
RSI
6ay/ #
6ar/ $
6ay/ $
Dec/ !
+eb/ $
0ug/ $
-ep/ $
+eb/ #
6ar/ #
Jan/ $
0pr/ $
Jun/ $
Jan/ #
Jun/ #
-ep/ #
9ct/ #
DATE
INTERPRETATION: 3n the above chart it can be observed that the scrip is not doing well when compared to market inde*. 3t reaches to )s 2$2.2! which is the highest price in the last 42 months. The investors are advised to sell the stock as soon as possible as it is showing the decreasing tendency. The large investors can wait for some time < watch the market.
"ov/ #
9ct/ $
"ov/ $
Dec/ $
0pr/ #
0ug/ #
Jul/ $
Jul/ #
!F
TA,LE - 0-11 TA,LE SHO5ING RELATIVE STRENGTH AND RELATIVE STRENGTH OF AM,U/A
AVERAGE DATE &4/Dec/ ! &4/Jan/ $ 2F/+eb/ $ &4/6ar/ $ & /0pr/ $ &4/6ay/ $ & /Jun/ $ &4/Jul/ $ &4/0ug/ $ & /-ep/ $ &4/9ct/ $ & /"ov/ $ &4/Dec/ $ &4 Jan # 2F/+eb/ # &4/6ar/ # & /0pr/ # &4/6ay/ # & /Jun/ # &4/Jul/ # &4/0ug/ # & /-ep/ # &4/9ct/ # & /"ov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
!J
CHART - 0-11
RSI OF AM,U/A
42
RSI
RSI
6ay/ #
6ar/ $
6ay/ $
Dec/ !
+eb/ $
0ug/ $
-ep/ $
+eb/ #
6ar/ #
Jan/ $
0pr/ $
Jun/ $
Jan/ #
Jun/ #
-ep/ #
9ct/ #
DATE
INTERPRETATION: The above chart shows increasing tendency in the scrip price of 06,HJ0. 3n the month of "ov 2 # it reaches to )s 4! which is the highest price. The scrip is moving with the market inde*. 3t is advisable to the investors to buy the stock < hold it for a longer time. The small investors can take a chance < invest in this scrip.
"ov/ #
9ct/ $
"ov/ $
Dec/ $
0pr/ #
0ug/ #
Jul/ $
Jul/ #
TA,LE - 0-1. TA,LE SHO5ING RELATIVE STRENGTH AND RELATIVE STRENGTH OF ,IRLA
DATE &4/Dec/ ! &4/Jan/ $ 2F/+eb/ $ &4/6ar/ $ & /0pr/ $ &4/6ay/ $ & /Jun/ $ &4/Jul/ $ &4/0ug/ $ & /-ep/ $ &4/9ct/ $ & /"ov/ $ &4/Dec/ $ &4/Jan/ # 2F/+eb/ # &4/6ar/ # & /0pr/ # &4/6ay/ # & /Jun/ # &4/Jul/ # &4/0ug/ # & /-ep/ # &4/9ct/ # & /"ov/ #
,IRLA 2!$.!! 2$@.@ 2!J.!! &4J.4 &JJ.&! 2@@.# 2&&.@! 2$ .2 2F .2! &&J.&! &4F.J &$$.# &&$.F & J. ! 2$$.F! 4J .& 2&#.!! 2@@.F! 2$$.F 2$J.4! 2J .$ &&$.#! &!2.2! &@&.!
GAIN
LOSS
RS
RSI
#.F! @.F! !J.!! F .2! 4!@.$! 44.2! 2$.#! 2 . ! !J.4 2 .@! @#.F 2J.J 2#.#! @2.2 #$.!! @#.2! #.& 24.J! 2.&! 24.@! @$.4! 4!.! F.#! 2J.!& 2J.!& 2#.J$ &&.&4 2!.@4 24.4F 24.4F & .#@ 2!.&J 24.&F J.!$ J.!$ J.@! 4 .J4 4!.& 4!.## 2 . $ 4J.F@ 24.@F 4#. J 4.#! J.## J .#4 .J# &4.J4 &@.4! &&.4F &&.4F &&.4F $.&@ @. J 4 . # 4!.$2 2@. $ &!.2F &!.2F 2J.& 2&.#! 4!.&4 & .@@ .J& .F2 4 .#$ .$@ &.&@ #.!2 2.!2 4.&# .&J .2# .2# .&# .$@ 4. & J$.F2 @F.4J @!. ! ! @2.!& @&.4F #$.J$ FF.2$ #4.!J !#.F4 2F.!# 24.2$ 24.2$ 2#. 4 &J. 2 ! .#@
$4
CHART - 0-1.
RSI OF ,IRLA
42
RSI
)-3
Ma)-B=
/$n-B=
A$*-B=
Ma)-BG
/$n-BG
A$*-BG
Ma!-B=
A2!-B=
N&%-B=
Dec-B4
Fe7-B=
Se2-B=
Ma!-BG
/an-B=
/$l-B=
/an-BG
A2!-BG
/$l-BG
DATE
INTERPRETATION: 3n the above chart it can be observe that the price of ,3)(0 is shows some fluctuating tendency at the beginning of the year < tend to increase at the end of the year. 3t is advisable to the investors to hold the stock < wait for another one or two months in anticipation of increase in the price of the scrip.
********
N&%-BG
Oc"-B=
Dec-B=
Fe7-BG
Se2-BG
Oc"-BG
$2
CHAPTER - 1
FINDINGS AND SUGGESTIONS

1-1 FINDINGS: Technical analysts consider the market to be F M psychological and 2 M logical. +undamental analysts consider the market to be 2 M psychological and F M logical. ;sychological or logical may be open for debate, but there is no :uestioning the current price of a security. 0fter all, it is available for all to see and nobody doubts its legitimacy. The price set by the market reflects the sum knowledge of all participants. These participants have considered %discounted' everything under the sun and settled on a price to buy or sell. These are the forces of supply and demand at work. ,y e*amining price action to determine which force is prevailing, technical analysis focuses directly on the bottom lineC what is the priceP 8here has it beenP 8here is it goingP Technical analysis is one of those fields in which everyone has a different theory regarding what works and what doesnt. 3t we can leave you with one last tip, it is to back test whatever strategy you decide to pursue. ,ack testing means to look back at the several years worth of charts to see how particular stock reacts. 5ere are some points to remember about technical analysisC Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, past prices and volume. The advantage of using a bar chart over a line graph is that it shows the high, low, open and close for each particular day. 9ne of the most basic and easy to use technical analysis indicators is the moving average, which shows the average value of a securitys price over a period of time. The most commonly used moving averages are 2 , & , and ! ,4 and 2 day.
$&
-upport and resistance levels are price levels at which movement should stop and reverse direction. Think of support A resistance as levels that act as a floor or a ceiling to future price movements.
There are literally hundreds of different price patterns and indicators out there.
Technical analysis is a terrific tool, but it is much more effective when combined with fundamental analysis. 5owever, during the period of December 2 ! to "ovember 2 # the
stock prices are moving in upward directionL by this we can understand this period the overall market condition was favorable. Technical indicators such as 4! day moving average chart and
relative strength chart advice the investors whether to hold, buy or to sell the securities of the si* companies to improve their portfolio position.
$@
1-. SUGGESTIONS: COMPANY 4 NAME )0",0GI
INFERENCE The scrip price shows decreasing tendency. 5ere the scrip falls below the market. 3n the present situation correction mode is not likely to end
SUGGESTIONS -.((
3T1
within couple of weeks. The scrip price is moving along with market inde*. 1urrently the scrip prices are at increasing tendency. The scrip is currently under pressure < it is moving downward direction. There is a chance for increase in stock price. The price of ,3)(0 is shows some fluctuating tendency at the beginning of the year < tend to increase at the end of the year. The scrip is e*pected remain under pressure and increase in selling price. The scrip is moving with the market inde*. The scrip price is above the moving average line. There is a chance for the scrip to increase its price after some minor corrections. The scrip is not doing well when compared to market inde*. ,oth the moving average line and scrip line are downwards. 1urrently the scrip price is showing a bearish trend pared to market inde*.
59(D
&
5((
-.((
,3)(0
59(D 0"D 80T15
06,HJ0
59(D
13;(0
-.((
0part from the above table, further suggestions are provided to the investors. They areC
$!
0n investor should be very careful in identifying the primary trend.
9nce he identifies the primary trend any pull back in the rally is an opportunity for a re/entry provided, the primary trend is intact.
0n investor should not hesitate in increasing his position on identifying the strength and hold onto his position until the trend gives a reverse signal.
0n investor is supposed to follow the principles laid down with total clarity and in good faith, which will help him in reducing the psychological strain, stretch and pressures. This will also help him in protecting from false roomers or wrong information and protecting from market manipulation.
*********
$$
CHAPTER - 4
CONCLUSIONS
CONCLUSIONS: -ince the overall market conditions is not favorable, the stock prices of all the si* companies %i.e., 3T1, 5((, ,irla, 0mbu2a, )anba*y, 1ipla' are not moving in single direction such as they are not moving either in upward direction nor in downward direction. 3n the stock prices of si* companies, the stock price of )anba*y is started moving in downward directionL but the other five companies stock prices %i.e., 3T1, 5((, ,irla, 0mbu2a and 1ipla' are moving in upward direction by making some minor fluctuations. +itting conclusion to technical analysis is a list of lessons founded and learned, both from others and the hard way. The investor should not compound their losses by averaging down %i.e., dont keep buying additional shares at lower prices'. 3t is tempting to think that a loss Ddoesnt countE until the position is closed. ,ut it doesQ The investor get distracted by others investment prowess. 6ost investors only discuss their success, threatening his focus and confidence. 0nytime an investor owns a security, as him self if he would buy it today. 3f he wouldnt buy it, he should consider selling it. 6aster the basics. 6ost investors spend there time for looking for easy money %which is not an easy search' instead of learning the key factors to security prices supply and demand.
*********
$#

Technical Analysis of Securities

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Technical Analysis of Securities

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A REPORT ON

TECHNICAL ANALYSIS OF SELECTED EQUITIES

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

years, they are still believed to be relevant because they illustrate

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

$22&!" e "a7li 6e(;

GSSSIETW / GSSS-IMS / MBA

Hea( an( 6&$l(e! +&!'a"i&n

In%e! e 6ea( an( 6&$l(e! 2a""e!n

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA

DATA ANALYSIS AND INTERPRETATION

GSSSIETW / GSSS-IMS / MBA

TA,LE - 0-1 TA,LE SHO5ING MOVING AVERAGE OF ITC

GSSSIETW / GSSS-IMS / MBA

MOVING AVERAGE OF ITC

GSSSIETW / GSSS-IMS / MBA

TA,LE - 0-. TA,LE SHO5ING MOVING AVERAGE OF HLL

GSSSIETW / GSSS-IMS / MBA

MOVING AVERAGE OF HLL

GSSSIETW / GSSS-IMS / MBA

TA,LE - 0-0 TA,LE SHO5ING MOVING AVERAGE OF AM,U/A

GSSSIETW / GSSS-IMS / MBA

MOVING AVERAGE OF AM,U/A

06,HJ0 69B3"7 0B7

GSSSIETW / GSSS-IMS / MBA

TA,LE - 0-1 TA,LE SHO5ING MOVING AVERAGE OF ,IRLA

GSSSIETW / GSSS-IMS / MBA

MOVING AVERAGE OF ,IRLA

birla 69B3" 7 0B7

GSSSIETW / GSSS-IMS / MBA

TA,LE - 0-4 TA,LE SHO5ING MOVING AVERAGE OF CIPLA MOVING AVERAGE

GSSSIETW / GSSS-IMS / MBA

MOVING AVERGE OF CIPLA @ &! & 2! 2 4! 4 !

GSSSIETW / GSSS-IMS / MBA

TA,LE - 0-= TA,LE SHO5ING MOVING AVERAGE OF RAN,AXY

GSSSIETW / GSSS-IMS / MBA

MOVING AVERAGE OF RAN,AXY ! @ PRICE & 2 4

GSSSIETW / GSSS-IMS / MBA

GSSSIETW / GSSS-IMS / MBA