SUMMER TRAINING PROJECT REPORT UNDER SHAREKHAN LIMITED ON analysis on return on investment(ROI) in metals based on commodity market(MCX)

SUBMITTED IN PARTIAL FULLFILMENT OF THE REQUIRMENT FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION OF THE RAJASTHAN TECHNICAL UNIVERSITY, KOTA. SUBMITTED BY :FACITLITY SUPERVISOR:SUBMITTED TO :DEPARTMENT OF MANAGENENT STUDIES, SWAMI KESHVANAND INSTITUTE OF TECHNOLOGY, MANAGEMENT & GRAMOTHAN. JAIPUR 2008-2010

Certificate

Declaration Im Soyeb Jindani, a student of BHAGAWAN MAHAVIR COLLEGE OF MANAGEMENT, Which is affiliated to Veer Narmad South Gujarat University , Surat hereby declare that the project entitled TECHNICAL ANALYSIS OF COMMODITY MARKET TAKING GOLD AND CRUDE OIL at Jainam Share and Security pvt ltd. , is the original work done by me and the information provided in the study is authentic to the best of my knowledge. This study report has not been submitted to any other institution or university for the award or any other degree and will not be submitted in near future.

This report is based on my personal opinion hence cannot be referred to legal purpose.

(Soyeb Jindani) Date:

Acknowledgement The completion of any project depends upon the co-operation, coordination and combined efforts of several resources of knowledge, inspiration & energy. Words fall short acknowledging immense support lent to me yet I will try to give full credit to the deserver's. My sincere thanks goes to Mr. Vikas Shrotriya (HOD DMS) giving me an opportunity to discover more knowledge. I am also thankful to Mr. S. P. Kabra (Director,Prabhat financial services) for his support, guidance and cooperation throughout to accomplish this project also expressing deep sense of gratitude to my Project guide, Ms. Shilpi Kuntal (Lecturer) for her valuable guidance, continuous encouragement and tremendous patience in discussing my problems, have been of the greatest help in bringing out my task in present shape. I am equally grateful to all my other teachers for their complete support. It would be unfair on my part if I do not thank my colleagues for their continuous help without which this work could never have been accomplished. They made me realize the importance of teamwork and also the leadership skills. I am grateful to all of them standing with me and supporting me in this project.

Preface In the present situation where stock market is going up and down, it is necessary to invest consciously in the market whatever it is, this is the study about the last two year fluctuation in stock market which enables the investor in taking decision regarding investment. This study tells the factor which directly or indirectly affects the market and some basic information not only share market but also other market such as derivatives or commodity market for the new investors or the students who have some interest in stock market. The objective of selecting the topic is to know about the market trends of the stock market and the information related to the investment for the future investor. The study of fluctuations of stock market makes the investor aquatinted with the factor affecting the investment and Stock prices can be volatile and some analysts argue that this volatility is excessive. This is not easy to prove, since it is difficult to assess certainty about future earnings and dividends. Companies tend to smooth dividends, so they will be less volatile than stock prices. Volatile stock prices do not have a major impact on consumption and capital spending since there is a good chance that price movements in one direction may be reversed.

Contents

Executive summary

Not able to copy from jainam scribed

This research will able to understand empower traders and investors with a basic knowledge of charting, trading-skills, and decision-making abilities. Secondly, to set such a value, one must ask to what degree the source of analysis is reliable, accurate, and consistent with one's specific trading preferences, and tolerance for risk. Finally, one must know to what extent one can expect to consistently profit from such analysis. A market is an environment that allows buyers and sellers to trade or exchange goods, services, and information. These interactions define demand and supply characteristics and are therefore fundamental to economies. A market can be defined as a place where any type of trade takes place. Markets are dependent on two major participants buyers and sellers. Buyers and sellers typically trade goods, services and/ or information. Historically, markets were physical meeting places where buyers and sellers gathered together to trade. Although physical markets are still vital, virtual marketplaces supported by IT networks such as the internet have become the largest and most liquid. Some markets are very competitive, with a number of vendors selling the same kinds of products or services. Conversely, some markets have low or no competition, particularly if the industry is protected by government legislation. The number of buyers and sellers involved will have a direct bearing on the price of the good or service to be sold, and has become known as the law of supply and demand. Where there are more sellers than buyers, the availability of supply will push down prices. If there are more buyers than sellers, the increased demand will push up prices. Markets can appear spontaneously when there are goods or services to be exchanged, or they can be planned and regulated .Free markets operate under laissez-fare conditions, in that the government does not intervene in how the market operates. These markets may be distorted if a seller gains monopoly power by managing the majority of supply (or indeed if a buyer develops monophony power by managing demand). Governments or trade bodies often step in when such distortions undermine the smooth functioning of free markets. The currency markets are the largest continuously traded markets in the world. Twenty four hours a day, seven days a week,

governments, banks, investors and consumers are buying and selling every currency, leading to massive money flows constantly changing hands. Stock markets have become highly complex markets that allow investors to buy shares in companies or in funds that aggregate companies or industries together. Most stock markets today are primarily electronic networks, although they often maintain a physical location for buyers, sellers and market makers to interact directly. Markets originally started as marketplaces usually in the center of villages and towns, for the sale or barter of farm produce, clothing and tools. These kinds of street markets developed into a whole variety of consumer-oriented markets, such as specialist markets, shopping centers, supermarkets, or even virtual markets such as eBay. With the rising price of oil and food, commodity markets are once again under the spotlight. Commodities underpin economic activity. Commodity markets include: energy (oil, gas, coal and increasingly renewable energy sources such as biodiesel), soft commodities and grains (wheat, oat, corn, rice, soya beans, coffee, cocoa, sugar, cotton, frozen orange juice, etc), meat, and financial commodities such as bonds. Capital goods markets help businesses to buy durable goods to be used in industrial and manufacturing processes. A number of services can also be associated with these goods. Transactions tend to be wholesale with large quantities of goods being transacted at low prices. Everyone has seen it and everyone is wishing if he should have buy stocks before this rally. Albeit it could have been a gamble buying stocks before declaration of election results, it paid off for those who bought. Now that's history. Stock markets are going to be volatile for next few days. Today, i.e. on Tuesday, markets opened in red, went till 3oo points down, then recovered and went up to 500 points up and finally settled for flat closing. So what should a small investor do now? Should he buy stocks or should be selling stocks that he holds.This article is a COMPLETE guide to the basics of making money in the stock market! If you are considering investing in the stock market, you MUST read this article! We have explained all the concepts and talked about all the "myths" that people have about the stock market!

Core study Stock marketA stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008 . The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring.). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.) The stocks are listed and traded on stock exchanges which are entities a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The stock market in the United States includes the trading of all securities listed on the NYSE, the NASDAQ, the Amex, as well as on the many regional exchanges, e.g. OTCBB and Pink Sheets. European examples of stock exchanges include the London Stock Exchange, the Deutsche Brse and the Paris Bourse, now part of Euronext.

Function and purposeThe stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate. History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an up and coming economy. In fact, the stock market is often considered the primary indicator of a country's economic strength and development. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison d'tre of central banks. Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction. The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity. Relation of the stock market to the modern financial systemThe financial system in most western countries has undergone a remarkable transformation. One feature of this development is disintermediation. A portion of the funds involved in saving and financing flows directly to the financial markets instead of being routed via the traditional bank lending and deposit operations. The general public's heightened interest in investing in the stock market, either directly or through mutual funds, has been an important component of this process. Statistics show that in recent decades shares have made up an increasingly large proportion of households' financial assets in many countries. In the 1970s, in Sweden, deposit accounts and other very liquid assets with little risk made up almost 60 percent of households' financial wealth, compared to less than 20 percent in the 2000s. The major part of this adjustment in financial portfolios has gone directly to shares but a good deal now takes the form of various kinds of institutional investment for groups of individuals, e.g., pension funds, mutual funds, hedge funds, insurance investment of premiums, etc. The trend towards forms of various kinds of institutional investment for groups of individuals, e.g., pension funds, mutual funds, hedge funds, insurance

investment of premiums, etc. The trend towards forms of saving with a higher risk has been accentuated by new rules for most funds and insurance, permitting a higher proportion of shares to bonds. Similar tendencies are to be found in other industrialized countries. In all developed economic systems, such as the European Union, the United States, Japan and other developed nations, the trend has been the same: saving has moved away from traditional (government insured) bank deposits to more risky securities of one sort or another. The stock market, individual investors, and financial riskRiskier long-term saving requires that an individual possess the ability to manage the associated increased risks. Stock prices fluctuate widely, in marked contrast to the stability of (government insured) bank deposits or bonds. This is something that could affect not only the individual investor or household, but also the economy on a large scale. The following deals with some of the risks of the financial sector in general and the stock market in particular. This is certainly more important now that so many newcomers have entered the stock market, or have acquired other 'risky' investments (such as 'investment' property, i.e., real estate and collectables). With each passing year, the noise level in the stock market rises. Television commentators, financial writers, analysts, and market strategists are all overtaking each other to get investors' attention. At the same time, individual investors, immersed in chat rooms and message boards, are exchanging questionable and often misleading tips. Yet, despite all this available information, investors find it increasingly difficult to profit. Stock prices skyrocket with little reason, then plummet just as quickly, and people who have turned to investing for their children's education and their own retirement become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly. This is a quote from the preface to a published biography about the long-term valueoriented stock investor Warren Buffett.[4] Buffett began his career with $100, and $105,000 from seven limited partners consisting of Buffett's family and friends. Over the years he has built himself a multi-billion-dollar fortune. The quote illustrates some of what has been happening in the stock market during the end of the 20th century and the beginning of the 21st century.

1.1 Introduction to Training.

This project report is prepared as result of summer training of M.B.A. (Full time) which was of 8 weeks from 21 st May 2009 to 15 th July 2009. The researcher has taken training at JAINAM SHARES CONSULTANT PVT LTD which is simply related with stock market. Hence it is Stock broking firm which deals with different market like Equity, Commodity, and Derivatives etc.

1.2 Objective of Study:

To gain knowledge about different market such as capital market and its industry which is helpful in completing this report effectively. To gain the knowledge about stock market and it operation. To become familiarize with organization, which help in applying theoretical concepts into practical routine To understand the working system of different department. To get an experience of working environment. To become part of professionalism. To understand technical terms and its applications in study. To understand of working of different departments and its connectivity with whole organization. To gain the detailed knowledge of core functions like Marketing, Human Resources, Finance, Research. To know how the scripts are being traded in Equity market, Derivatives, Commodity market.

1.3 Benefit of Study:

The research has gained some of the following benefit due to this study. Got the knowledge about stock market and its operations.

Learnt about different scrip. Learnt about equity and derivatives and how the prices are being volatile. The working of sensex and nifty its rules and regulation. How to invest in different security and at what time investor should exit or enter in trading. How the top management is handling whole organization structure. Learnt some technical terms of stock market and its application in trading. As researcher has done detailed study on technical analysis of commodity market so researcher has gained knowledge about technical terms of it. And moreover the study of technical analysis helped to understand the price movements of commodities and how to predict price for near future. Even because of the study uses of charts how to make different kinds of charts and after analysis of charts what would be interpretation of it the all things can be answered after the detailed study.

Chapter 2Introduction of the industry

Financial System: The economy of each and every country in based on the sound financial system which helps in production, capital and economic growth by encouraging savings habits, mobilizing savings from house holds and other segments and allocating savings into productive usage such as trade, manufacture, commerce etc. Thus, financial system provides bridge for surplus of the savers to be utilized by the deficit spending units. The financial system includes three basic elements:

Diagramssssssssssssssss from summer project at jainam