TECHNICAL ANALYSIS

1.INTRODUCTION

TECHNICAL ANALYSIS

INTRODUCTION
TECHNICAL ANALYSIS
Technical analysis is a security analysis discipline for forecasting the future direction of prices through the study of past market data, primarily price and volume.

HISTORY
The principles of technical analysis derive from the observation of financial markets over hundreds of years The oldest known example of technical analysis was a method developed by Homma Munehisa during early 18th century which evolved into the use of candlestick techniques, and is today a main charting tool. Dow Theory is based on the collected writings of Dow Jones co-founder and editor Charles Dow, and inspired the use and development of modern technical analysis from the end of the 19th century. Other pioneers of analysis techniques include Ralph Nelson Elliott and William Delbert Gann who developed their respective techniques in the early 20th century.

Many more technical tools and theories have been developed and enhanced in recent decades, with an increasing emphasis on computer-assisted techniques.

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NEED AND IMPORTANCE OF STUDY

NEED OF THE STUDY

Investment decisions are influenced by various motives. Some people invest in a business to acquire control and enjoy the prestige associated with it. Some people invest in expensive yachts and famous villas to display their wealth. Most investors however are largely guided by the pecuniary motive of earning a return on their investment. Return is the primary motivating force that drives investment. It represents the reward for undertaking investment. Since the game of investing is about returns (after allowing for risk), measurement of realized (historical) returns is necessary to access how well the investment manager has done. In addition, historical returns are often used as an important input in estimating future (prospective) returns.

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Objectives
To study the price fluctuations of various stocks in Indian stock market. To identify the stocks which are best to be invested using Technical analysis. To study how best we can analyze the stocks using technical analysis tools. To know which stocks can be bought at what time using technical analysis. To know which stocks can be sold at what time using technical analysis.

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REASEARCH METHODOLOGY

Research Design
Around 10 companies are chosen, their average gain and average loss are calculated and Technical analysis is made.

Data collection
The present study is based on Secondary data. The various source of secondary data include Share prices of different BSE Sensex companies. Information provided by IndiaInfoline. Magazines Websites nseindia.com icicidirect.com

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Scope for the Study

Technical analysts seek to identify price patterns and trends in financial markets and attempt to exploit those patterns. While technicians use various methods and tools, the study of price charts is primary.

Technicians especially search for archetypal patterns, such as the well-known head and shoulders or double top reversal patterns, study indicators such as moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants or balance days.

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LIMITATIONS
The present project work has been undertaken to provide information regarding

Risk Return on equities. The following are the limitations of the study. The study is based on the secondary data which is available from various websites. The study is limited to only 5 securities. The time taken to undertake the project work is very short; hence only 5securities were chosen for the study.

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INDUSTRY PROFILE
Industry Overview
The securities market achieves one of the most important functions of channeling idle resources to productive resources or from less productive resources to more productive resources. Hence in the broader context the people who save and investors who invest focus more towards the economys abilities to invest and save respectively. This enhances savings and investments in the economy, the two pillars for economic growth. The Indian Capital Market has come a long way in this process and with a strong regulator it has been able to usher an era of a modern capital market regime. The past decade in many ways has been remarkable for securities market in India. It has grown exponentially as measured in terms of amount raised from the market, the number of listed stocks, market capitalization, trading volumes and turnover on stock exchanges, and investor population. The market has witnessed fundamental institutional changes resulting in drastic reduction in transaction costs and significant improvements in efficiency, transparency and safety.

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DEPENDENCE OF SECURITIES MARKET:

Three main sets of entities depend on securities market- the corporate, the government & households. While the corporate and governments raise resources from the securities market to meet their obligations, the households invest their savings in securities.

PRIMARY MARKET & SECONDARY MARKET:

The securities market comprises two segments- primary market (new issues, offer for sale) & secondary market (trading of stocks). There are two major types of issuers who issue securities. The corporate entities issue mainly debt and equity instruments (shares, debentures, etc.), while the governments (central and state governments) issue debt securities (dated Securities, treasury bills). The two major exchanges, namely the NSE and the BSE provide trading of securities.

LAWS GOVERNING CAPITAL MARKET:

The four main legislations governing the securities market are: (a) The SEBI Act, 1992 which establishes SEBI to protect investors and develop and regulate securities market. (b) The Companies Act, 1956, which sets out the code of conduct for the corporate sector in relation to issue, allotment and transfer of securities, and disclosures to be made in public issues.

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(c) The Securities Contracts (Regulation) Act, 1956, read with the Securities Contracts (Regulation) Rules, 1957 which provide for regulation of transactions in securities through control over stock exchanges; and (d) The Depositories Act, 1996 which provides for electronic maintenance And transfers of ownership of d-mat securities.

REGULATORS:
SEBI is the primary regulator of the Securities Market and the entities operating therein. The SEBI Act and the Depositories Act are mostly administered by SEBI. Government and regulations by SEBI frame the rules under the securities laws. All these are administered by SEBI. The powers under the Companies Act relating to issue and transfer of securities and non-payment of dividend are administered by SEBI in case of listed public companies and public companies proposing to get their securities listed.

STOCK MARKET:
When investors think of the stock market, they may imagine a specific place - such as a stock exchange. In fact, the stock market is the abstract idea of stock trading and stock exchange. All selling of stocks - at stock exchanges and in other ways - affects the market overall. Following stock market information in the news can help you make the right decisions about stock market investing.

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NEED OF STOCK MARKET:

The stock market is simply a term for the overall market or industry that is concerned with buying and selling company stock, both private and publicly traded securities. The stock market does many things. It helps to set prices of stocks. The more a stock is traded on the market and the more in demand the stock, the higher is its value. Having a stock market that is interconnected with stock markets around the world helps traders and investors to see how Specific stocks are doing. Of course, the stock market is mainly present to create money. Through the market, investors - both companies and individuals - can buy stocks, which effectively make them own a small part of a company. If the company prospers, investors are rewarded with dividends and profits. Companies, by becoming public and offering stocks to the public, can raise money and improve their profile through business expansions which can help them make great profit.

HOW TO INVEST IN STOCK MARKET:

Most financial experts recommend that investors must consult a full-service financial advisor initially. This type of advisor can provide advice and can help ensure that an investor's money gets a good return. More experienced investors may be interested in one of the online investing options. These allow almost anyone with a fast internet connection and a subscription to an investment site to buy and sell stocks when they wish.

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THE STOCK MARKET:

One of the most basic advices that people give when speaking about the stock market is to buy low, sell high. But this is a short-term view of the mechanics of how the stock market works (another example of this short-term view is short selling stocks). In reality, shares are more complex than that. Stock market is the term given to the act of trading company shares, stocks, and other securities and its derivatives. The stock market has a number of players, which could be range from an individual stockholder to a very large corporate trader. These players can be anybody coming from any part of the world. Trading in the stock market can be done privately with an attorney or with a professional stock exchange dealer who have the power to execute the order. For the most part, stock market is very volatile in nature and that's the reason why it is so hard to predict. But due to persistent studies, the changes in the stock market can now be calculated in a relatively acceptable precision. Here are the various efforts carried out by stock market experts to predict the market's movements.

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INTRODUCTION
BSE:
Bombay Stock Exchange Limited (the Exchange) is the oldest stock exchange in Asia with a rich heritage. Popularly known as "BSE", it was established as "The Native Share & Stock Brokers Association" in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a demutualised and corporative entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatizations and Demutualization) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). Bombay Stock Exchange Limited received its Certificate of Incorporation on 8th August, 2005 and Certificate of Commencement of Business on 12th August, 2005. The 'Due Date' for taking over the business and operations of the BSE, by the Exchange was fixed for 19th August, 2005, under the Scheme. The Exchange has succeeded the business and operations of BSE ongoing concern basis and its recognition as an Exchange has been continued by SEBI.With demutualization, the trading rights and ownership rights have been de-linked effectively addressing concerns regarding perceived and real conflicts of interest. The Exchange is professionally managed under the overall direction of the Board of Directors. The Board comprises eminent professionals, representatives of Trading Members and the Managing Director of the Exchange. The Board is inclusive and is designed to benefit from the participation of market intermediaries.
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In terms of organization structure, the Board formulates larger policy issues and exercises over-all control. The committees constituted by the Board are broad-based. The Managing Director & CEO and a management team of professionals manage the day-today operations of the Exchange. The Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The systems and processes of the Exchange are designed to safeguard market integrity and enhance transparency in operations. During the year 2004-2005, the trading volumes on the Exchange showed robust growth. The Exchange provides an efficient and transparent market for trading in equity, debt instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietary system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing & settlement functions of the Exchange are ISO 9001:2000 certified. Bombay Stock Exchange Limited (BSE), which was founded in 1875 with six brokers, has now grown into a giant institution with over 874 registered Broker-Members spread over 380 cities across the country. Today, BSEs Wide Area Network (WAN) connecting over 8000 BSE Online Trading (BOLT) System Trader workstations (TWS) is one of the largest of its kind in the country. With a view to provide efficient and integrated services to the investing public through the members and their associates in the operations pertaining to the Exchange, Bombay Stock Exchange Limited (BSE) has set up a unique Member Services and Development to attend to the problems of the Broker-Members. The journey of BSE is as eventful and interesting as the history of Indias securities markets. Indias biggest bourse, in terms of listed companies and market capitalization, BSE has played a pioneering role in the Indian Securities Market - one of the oldest in the
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world. Much before actual legislations were enacted, BSE had formulated comprehensive set of Rules and Regulations for the Indian Capital Markets. It also laid down best practices adopted by the Indian Capital Markets after India gained its Independence. Perhaps, there would not be any leading corporate in India, which has not sourced BSEs services in resource mobilization.

BSE as a brand is synonymous with capital markets in India. The BSE SENSEX is the benchmark equity index that reflects the robustness of the economy and finance. At par with international standards, BSE has been a pioneer in several areas. It has several firsts to its credit even in an intensely competitive environment.

First in India to introduce Equity Derivatives First in India to launch a Free Float Index First in India to launch US$ version of BSE Senses First in India to launch Exchange Enabled Internet Trading Platform First in India to obtain ISO certification for Surveillance, Clearing & Settlement 'BSE On-Line Trading System (BOLT) has been awarded the globally recognized the Information Security Management System standard

BS7799-2: 2002. First to have an exclusive facility for financial training

Moved from Open Outcry to Electronic Trading within just 50 days

An equally important accomplishment of BSE is the launch of a nationwide investor awareness campaign - Safe Investing in the Stock Market - under which nationwide awareness campaigns and dissemination of information through print and electronic
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medium was undertaken. BSE also actively promoted the securities market awareness campaign of the Securities and Exchange Board of India.

In 2002, the name The Stock Exchange, Mumbai, was changed to BSE. BSE, which had introduced securities trading in India, replaced its open outcry system of trading in 1995, when the totally automated trading through the BSE Online trading (BOLT) system was put into practice. The BOLT network was expanded, nationwide, in 1997. It was at the BSE's International Convention Hall that Indias 1st Bell ringing ceremony in the history Capital Markets was held on February 18th, 2002. It was the listing ceremony of Bharti Tele ventures Ltd.

BSE with its long history of capital market development is fully geared to continue its contributions to further the growth of the securities markets of the country, thus helping India increase its sphere of influence in international financial markets.

VISION
"Emerge as the premier Indian stock exchange by establishing global benchmarks" Listing means admission of the securities to dealings on a recognized stock exchange. The securities may be of any public limited company, Central or State Government, quasi governmental and other financial institutions/corporations, municipalities, etc. The objectives of listing are mainly to:

provide liquidity to securities; mobilize savings for economic development; Protect interest of investors by ensuring full disclosures.
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A company intending to have its securities listed on the Exchange has to comply with the listing requirements prescribed by the Exchange. Some of the requirements are as under:1. 2. 3. Minimum Listing Requirements for new companies Minimum Listing Requirements for companies listed on other stock exchanges Minimum Requirements for companies delisted by this Exchange seeking relisting to this exchange 4. 5. 6. 7. 8. 9. 10. 11. Permission to use the name of the Exchange in an Issuer Company's prospectus Submission of Letter of Application Allotment of Securities Trading Permission Requirement of 1% Security Payment of Listing Fees Compliance with Listing Agreement Cash Management Services (CMS) - Collection of Listing Fees.

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STOCK MARKET Definitions:

1.

A market for the buying and selling of stocks, such as the Bombay Stock exchange.

2. 3.

An institution that facilitates the buying and selling of stocks. Where stocks (shares) are bought and sold. A share is a portion of the total ownership of a corporation. The more shares you own in a corporation, the more ownership you have in that corporation.

4.

Stocks are bought or sold. The market refers to this activity. There are organized exchanges, such as The Bombay Stock exchange, that buyers and sellers go through to place the transactions (or trades).

5.

Stock exchange: an exchange where professional stockbrokers conduct security trading.

6.

A stock market is a market for the trading of company stock, and derivatives of it; both of these are securities listed on a stock exchange as well as those only traded privately.

7. The organized trading of stocks, bonds, or other securities, or the place where such trading occurs. 8. Where stocks (shares) are bought and sold. A share is a portion of the total ownership of a corporation. The more shares you own in a corporation, the more ownership you have in that corporation.

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9. The set of institutions that facilitate the exchange of stocks between buyers and sellers. A stock market can be an actual place, but with the growth of electronic transactions a large fraction of stock market transactions are not centrally located in a particular location. 10. Particulars market where stocks and bonds are traded. 11. Stock market may be a physical place, sometimes known as a stock exchange, where brokers gather to buy and sell stocks and other securities. The term is also used more broadly to include electronic trading that takes place over computer and telephone lines. 12. Is a market for the trading of publicly held company stocks or shares and associated financial instruments (including stock options, convertibles and stock index futures). Traditionally such markets were open-outcry where trading occurred on the flour of exchange. 13. in relation to a securities exchange or a stock exchange, includes, in the case of the Exchange, a stock market of a securities exchange or of a stock exchange, as the case may be, that is a subsidiary of the Exchange. 14. Stock exchange: an exchange where security trading is conducted by professional stockbrokers an organized marketplace where members gather to trade securities. Members may act either as agents for customers, or as principals for their own...

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15. An organized marketplace for securities featured by the centralization of supply and demand for the transaction of orders by member brokers for institutional and individual investors.

An organized market established to facilitate the buying and selling of stocks. An organized marketplace where securities are bought and sold.

The stock exchange is an organized marketplace where stocks are bought and sold. Stock exchanges operate under strict rules, regulations and guidelines.

An organized marketplace, in which securities are bought and sold, prices being controlled by supply and demand.

Is such Financial Assets trading environment where the Financial Assets that constitute the object of a Transaction are listed, as well as the clearinghouse servicing the stock exchange. Licensed market for the buying and selling of listed securities. An organized marketplace where specific types of securities, such as common stock and bonds, are bought and sold by members of the exchange.

STOCK EXCHANGE:
A place where stocks, bonds, or other securities are bought and sold. An association of stockbrokers who meet to buy and sell stocks and bonds according to fixed regulations. A place where stocks, bonds, or other securities are bought and sold.
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An association of stockbrokers who meet to buy and sell stocks and bonds according to fixed regulations.

DIFFERENCES BETWEEN THE INDICES:

The indices are different from each other to a certain extent. Some time the sensex May move up 100 point but NSE nifty may move up only 40 points. The main factors that differentiate one index from the other are give below. The number of the component stocks The composition of the stocks The weights Base year

1. The number of the component stocks: The number of stock in an index influences the behavior of index. If the number of component stocks is larger, it would be a representative sample capable of reflecting the market movement. The sensex has 30 scrips like the Dow Jones Industrial average in (338 stocks) and Nifty (50 stocks)

are also widely used. BSE National Index is considered to be more representative than sensex because it has 100 stocks. Out of 100 stocks. Out of 100, 22 are quoted on the rest are listed on the BSE and the rest are listed on the BSE and other exchanges. 2. The Composition of the stocks: The composition of the stocks in the index should reflect the market movement as well as the macroeconomic changes. The centre for monitoring Indian Economy maintains an index. It often changes the composition of the index so as to reflect the market movement in a better manner. Some of the scrips
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traded volume may fall down and at the same time some other stock may attract the market interest. In such a case the scrip that has lost the market interest should be dropped and other must be added. Only then, the index would representative. 3.The weight: The weight assigned to each companys scrip also influences the movement of the index. The indices may be weighted with the price or value. The Dow Jones industrial Average and Nikkei Stock Average of 225 scrips of Tokyo stock exchange are weighted with the price. A price weight index is computed by adding the current prices of the stocks exchange and dividing the sum by the total number of stocks. The stocks with high price influence the index more than the low priced stock in the sample. In the value weighted index the total market value of the share is the weight. In an unweighted index, all stocks carry equal carry equal weights. The price or market volume of the scrip does not affect the index. The movement of the price is based on the percentage change in the average price of the stocks in the particular index. 4.Base year: The choice of base year also leads to variations among the index. The base year differs from each other in the various indices. The base year should be free from any unnatural fluctuations in the market. If the base year is close to the current year, the index would be more effective in reflecting the changes in the market movement. At the same time if it is too close, the investor cannot make historical comparison. The sensex has the base year as 1978-79 and the next oldest one is the RBI index of ordinary shares with 1980-81 as base year. The following table gives the summary of major stock market indices.
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Composition of Stock Indian stock market indices Economic Time Index 85 Ordinary Share Prices BSE sensex 79 BSE National Index 84 BSE- 200 90 Dollex 90 S&P Nifty (NSE-50) S&P CNX Nifty Junior S&P CNX-500 CNX Midcap-200 CMIE Market Value Market Value Market Value Market Value Market Value Market Value Market Value Market Value Market Value 30 100 200 200 50 50 500 200 72 1978 1983 1989 1989 Nov 1995 1994 1994 1994 Wieghting Base Unweighted No. of Stock 72 Base Year 1984

Table-1.1

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THE BSE SENSITIVE INDEX

The BSE Sensitive Index has long been known as the barometer of the daily temperature Indian bourses. In 1978-79 stock market contained only private sector complies and they were mostly geared to commodity production. Hence, a sample 30 was draw from them. With the passage of time more and more companies private as well as public came in to the market. Even though the number of scrips in the sensex basket remained the same 30, representations were give to new industrial sectors such as services, telecom, consumer goods, 2 and 3 wheeler auto sector. The continuity and integrity of the index are kept intact, so that a comparison of the current market analysis is avoided. The criteria adopted in the selection of 30 scrips are listed. 1.Industry representation: The Index should be able to capture the macro- industrial situation through price movement of individual scrips. The companys scrip should reflect the present state of the industry and its future prospects. Companies chosen should be representative of the industry. Care is taken in selecting scrips across all the major industries major industries to make the index act as a real barometer to the economy

2. Market capitalization: The market capitalization of the stock indicates the true value of the stock, as the outstanding number of share is multiplied by the price. Price Indicate the demand and growth potential for the stock. The outstanding shares depend on the equity base. The selected scrip should have a wide equity base too

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3.Liquidity: The liquidity factor is based on the average number of deal of scrip. The average number of deal in the two previous years is taken in to account. The market fancy for the share can be found out by the trading volumes. The Financial Express Equity Index is weighted by trading volume and not by market capitalization. The market depth: the market depth factor is the average deal as a percentage of companys shares outstanding. The market depth depends upon the wide equity base. If the equity base is broad based then number of deals in the market would increase. For example Reliance Industries has a wide equity base and large number of outstanding shares. 1.Floating stock depth: The floating stock depth factor is the average of deals as a percentage of floating stock. Low floating stock is able to command high price. Its sound finance and internal generation of funds led growth may be the reason for the low flotation. Trading volumes are directly linked to the public holding in the company. Wide public holding is a pre-requisite for high trading volume. Reliance industries are a good example. The free float of company is 45 percent and it has its positive effect on the trading volume.

Revision of sensex scrips

In 1998, the Index committee of the BSE decided to give a wide representation to the four market favorites at its meeting. They need to have broad-based and liquid index futures on its way. The beverage sector a weight of 12.75 per cent with the market cap at Rs.21, 113 corer. Health care industry has been given a weight of 4.70 percent, consumer nondurable-21.74 percent and industry 7.92 percent. IT accounts for a weight of 4.33

percent, oil and gas -6.22 per cent, petrochemicals-6.70 percent, telecom-7.71 percent, power-1.98 percent and hotel -11.10 per cent.
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NSE
Logo of NSE

The logo of the NSE symbolizes a single nationwide securities trading facility ensuring equal and fair access to investors, trading members and issuers all over the country. The initials of the Exchange viz., N, S and E have been etched on the logo and are distinctly visible. The logo symbolizes use of state of the art information technology and satellite connectivity to bring about the change within the securities industry. The logo symbolizes vibrancy and unleashing of creative energy to constantly bring about change through innovation.

MISSION OF NSE:
NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the main objectives of:

Establishing a nation-wide trading facility for equities, debt instruments and hybrids,

Ensuring equal access to investors all over the country through an appropriate communication network,

Providing a fair, efficient and transparent securities market to investors using electronic trading systems,
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Enabling shorter settlement cycles and book entry settlements systems, and Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology has become industry benchmarks and is being emulated by other market participants. NSE is more than a mere market facilitator. It's that force which is guiding the industry towards new horizons and greater opportunities.

PROMOTORS OF NSE
NSE has been promoted by leading financial institutions, banks, insurance companies and other financial intermediaries:

Industrial Development Bank of India Limited Industrial Finance Corporation of India Limited Life Insurance Corporation of India State Bank of India ICICI Bank Limited IL & FS Trust Company Limited Stock Holding Corporation of India Limited SBI Capital Markets Limited Bank of Baroda Canara Bank General Insurance Corporation of India National Insurance Company Limited
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The New India Assurance Company Limited The Oriental Insurance Company Limited United India Insurance Company Limited Punjab National Bank Oriental Bank of Commerce Indian Bank Union Bank of India Infrastructure Development Finance Company Ltd.

Corporate Structure

NSE is one of the first de-mutualised stock exchanges in the country, where the ownership and management of the Exchange is completely divorced from the right to trade on it. Though the impetus for its establishment came from policy makers in the country, it has been set up as a public limited company, owned by the leading institutional investors in the country.

From day one, NSE has adopted the form of a demutualised exchange - the ownership, management and trading is in the hands of three different sets of people. NSE is owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries and is managed by professionals, who do not directly or indirectly trade on the Exchange. This has completely eliminated any conflict of interest and helped NSE in aggressively pursuing policies and practices within a public interest framework.

The NSE model however, does not preclude, but in fact accommodates involvement, support and contribution of trading members in a variety of ways. Its Board comprises of senior executives from promoter institutions, eminent
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professionals in the fields of law, economics, accountancy, finance, taxation, and etc, public representatives, nominees of SEBI and one full time executive.

While the Board deals with broad policy issues, decisions relating to market operations are delegated by the Board to various committees constituted by it.

Such committee includes representatives from trading members, professionals, the public and the management. The day-to-day management of the Exchange is delegated to the Managing Director who is supported by a team of professional staff.

COMMITTEES
The Exchange has constituted various committees to advise it on areas such as good market practices, settlement procedures, risk containment systems etc. These committees are manned by industry professionals, trading members, Exchange staff as also representatives from the market regulator.

Executive Committee Committee On Trade Related Issues (COTI) Advisory Committee - Listing of Securities

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GROUP OF NSE:

NSCCL

NCCL

NSETECH

IISL

NSE

NSE.IT

DotEx Intl. Ltd.

NSDL

The National Stock Exchange (NSE) is India's leading stock exchange covering various cities and towns across the country. NSE was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of systems, practices and procedures. NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several
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innovations in products & services viz. demutualization of stock exchange governance, screen based trading, compression of settlement cycles, dematerialization and electronic transfer of securities, securities lending and borrowing, professionalization of trading members, fine-tuned risk management systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of information technology.

NSE MILESTONES
November 1992 April 1993 May 1993 June 1994 November 1994 March 1995 April 1995 June 1995 Incorporation Recognition as a stock exchange Formulation of business plan Wholesale Debt Market segment goes live Capital Market (Equities) segment goes live Establishment of Investor Grievance Cell Establishment of NSCCL, the first Clearing Corporation Introduction of centralized insurance covers for all trading members Establishment of Investor Protection Fund became largest stock exchange in the country Commencement of clearing and settlement by NSCCL Launch of S&P CNX Nifty

July 1995 October 1995 April 1996 April 1996

June 1996 November 1996

Establishment of Settlement Guarantee Fund Setting up of National Securities Depository Limited, first depository in India, co-promoted by NSE

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November 1996 December 1996

Best IT Usage award by Computer Society of India Commencement of trading/settlement in dematerialized securities

December 1996 December 1996 February 1997 November 1997 May 1998 July 1998

Dataquest award for Top IT User Launch of CNX Nifty Junior Regional clearing facility goes live Best IT Usage award by Computer Society of India Launch of NSE's Web-site: www.nse.co.in Launch of NSE's Certification Programmed in Financial Market

August 1998 February 1999 April 1999 October 1999 January 2000 February 2000 June 2000 September 2000 November 2000 venture December 2000

CYBER CORPORATE OF THE YEAR 1998 award Launch of Automated Lending and Borrowing Mechanism CHIP Web Award by CHIP magazine Setting up of NSE.IT Launch of NSE Research Initiative Commencement of Internet Trading Commencement of Derivatives Trading (Index Futures) Launch of 'Zero Coupon Yield Curve' Launch of Broker Plaza by Dotex International, a joint between NSE.IT Ltd. and i-flex Solutions Ltd. Commencement of WAP trading

June 2001

Commencement of trading in Index Options

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July 2001 Securities

Commencement of trading in Options on Individual

November 2001 Securities

Commencement of trading in Futures on Individual

December 2001

Launch of NSE VaR for Government Securities

January 2002

Launch of Exchange Traded Funds (ETFs)

May 2002

NSE wins the Wharton-Infosys Business Transformation Award in category the Organization-wide Transformation

October 2002

Launch of NSE Government Securities Index

January 2003 June 2003

Commencement of trading in Retail Debt Market Launch of Interest Rate Futures

August 2003 June 2004

Launch of Futures & options in CNXIT Index Launch of STP Interoperability

August 2004

Launch of NSEs electronic interface for listed companies

March 2005

India Innovation Award by EMPI Business School, New Delhi

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June 2005

Launch of Futures & options in BANK Nifty Index

December 2006

'Derivative Exchange of the Year', by Asia Risk magazine

January 2007

Launch of NSE CNBC TV 18 media centre

March 2007 June 2007

NSE, CRISIL announce launch of IndiaBondWatch.com NSE launches derivatives on Nifty Junior & CNX 100

STOCK MARKET CRASH:

Many would-be investors simply refuse to enter the stock market, because of the risks involved. When asked what they fear most, most respond by saying that they fear a stock market crash.

WHAT HAPPENS WHEN THE STOCK MARKET CRASHES:

A stock market, strangely, really begins to crash years before the actual market downturn. When the market is peaking and investors are buying and making profits, the market is commonly known as a bull market. However, as many economists point out, strong economic times are often followed by bad times. Whenever the stock market surges and profits are good, economic downturn eventually happens. Sometimes, stock markets crash because of a specific economic or political situation. For example, in 2002, the famous Enron scandal shook investor confidence and caused a downturn in the market. More often, however, crashes are caused by nothing more than panic.
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What we say that a market crashes, what we mean is that the value of stocks drops dramatically across the board. Rather than just one corporation being affected, the stocks of many or all corporations fall dramatically. This, in turn, causes investor panic and many people rush to sell their stocks. The more people try to sell their stocks lower stock value falls, making the problem worse.

WHO IS INVOLVED IN A STOCK MARKET CRASH

Many people are involved in a stock market downturn. At the base level, it is shareholders or those who own stocks who are most involved. In many cases, it is investors themselves can contribute to a crash. Investors may borrow money to buy stocks or may invest in stocks without thoroughly understanding the stock market. Investors who are not disciplined and who do not understand the market may be among the first panic and try to sell their stock, pushing a temporary downturn into an actual crash. More significantly, however, investors are often part of speculation. This means that they buy stock in the hopes that it will increase in profit. When some sort of economic news seems to suggest that they will lose money, again, they often rush to sell their stock, driving stock prices down. Companies selling stock are also involved in the stock market crash. As their stock values drop, many companies will tighten their belts and reduce spending. Often, this can lead to job cuts and other types of cutbacks which can affect the economy overall and can reduce customer and investor confidence.Investments and finance professionals also involved in a crash. They're the ones that not only report the incidents to the media and explain it to reporters, but they are also the ones that people often turn to when their stocks fall.
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WHO IS AFFECTED BY A CRASH:

In short, everyone is affected by a crash. When the stock market takes a downturn, job loss, slow GDP growth, slow economic growth, and devastated consumer confidence are often the results. Investors and companies are making less money, companies are closing, and therefore people are buying less. This affects virtually every aspect of the economy and causes overall economic depression. Since the crash often follows a bull market, many people are panicked by the sudden economic downturn and may become even more cautious with their money, which can further hinder financial growth.

The descriptions of major American indices

Indices of The NASDAQ Stock Market:

The following common type securities are eligible for index inclusions. There is no distinction between either the NASDAQ National Market vs. The NASDAQ Capital Market, or domestic US vs. Non-US securities.

NASDAQ -100 INDEX

The NASDAQ-100 Index includes 100 of the largest domestic and international nonfinancial securities listed on The NASDAQ Stock Market based on market capitalization. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain securities of financial companies including investment companies. The NASDAQ-100 methodology. Index is calculated under a modified capitalization-weighted

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NASDAQ-100EQUALWEIGHTEDINDEX
The NASDAQ-100 Equal Weighted Index is the equal weighted version of the NASDAQ-100 Index which includes 100 of the largest non-financial securities listed on The NASDAQ Stock Market based on market capitalization. The Index contains the same securities as the NASDAQ-100 Index, but each of the securities is initially set at a weight of 1.00% of the Index which is rebalanced quarterly.

On June 20, 2005, the NASDAQ-100 Equal Weighted Index began with a base value of 1000.00.

NASDAQ-100TechnologySectorIndex
The NASDAQ-100 Technology Sector Index is an equal weighted index based on the securities of the NASDAQ-100 Index that are classified as Technology according to the Industry Classification Benchmark (ICB) classification system. This index is calculated on a price return basis. On February 22, 2006, the NASDAQ-100 Technology Sector Index began with a base value of 1000.00.

NASDAQ Financial-100 Index

The NASDAQ Financial-100 Index includes 100 of the largest domestic and international financial securities listed on The NASDAQ Stock Market based on market capitalization. They include companies classified according to the Industry Classification Benchmark as Financials, which are included within the NASDAQ Bank, Insurance, and Other Finance Indexes. On January 31, 1985, the NASDAQ Financial-100 Index began with a base of 250.00.

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NASDAQ Biotechnology Index

The NASDAQ Biotechnology Index contains securities of NASDAQ-listed companies classified according to the Industry Classification Benchmark as either Biotechnology or Pharmaceuticals, which also meet other eligibility criteria. The NASDAQ Biotechnology Index is calculated under a modified capitalization-weighted methodology.

On November 1, 1993, the NASDAQ Biotechnology Index began with a base of 200.00.

NASDAQ BANK INDEX

The NASDAQ Bank Index contains securities of NASDAQ-listed companies classified according to the Industry Classification Benchmark as Banks. They include banks providing a broad range of financial services, including retail banking, loans and money transmissions.

On February 5, 1971, the NASDAQ Bank Index began with a base of 100.00.

NASDAQ COMPUTER INDEX

The NASDAQ Computer Index contains securities of NASDAQ-listed companies classified according to the Industry Classification Benchmark as Technology excluding Telecommunications Equipment. They include computer services, internet, software, computer hardware, electronic office equipment, and semiconductors.

On November 1, 1993, the NASDAQ Computer Index began with a base of 200.00.

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NASDAQ INDUSTRIAL INDEX

The NASDAQ Industrial Index contains securities of NASDAQ-listed companies not classified in one of the NASDAQ sector Indexes. These include firms that are involved in oil and gas productions, oil equipment, services & distribution, chemicals, forestry and paper, industrial metals, mining, construction and materials, aerospace and defense, general industrials, electronic and electrical equipment, industrial engineering, support services, automobiles and parts, beverages, food producers, household goods, leisure goods, personal goods, tobacco, food and drug retailers, general retailers, media, gambling, hotels, recreational services, restaurants and bars, travel & tourism, electricity, gas distribution, water, and multi utilities.

On February 5, 1971, the NASDAQ Industrial Index began with a base of 100.00.

NASDAQ Telecommunications Index

The NASDAQ Telecommunications Index contains securities of NASDAQ-listed companies classified according to the Industry Classification Benchmark as Telecommunications and Telecommunications Equipment. They include providers of fixed-line and mobile telephone services, and makers and distributors of high-technology communication products. On November 1, 1993, the NASDAQ Utility Index was renamed the NASDAQ Telecommunications Index. The former NASDAQ Utility Index was reset to a base of 200.00, using a factor of 5.74805.

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NASDAQ Index Calculation Description

The formula used for determining the Index values is as follows:

Current Index Market Value Index Level = ----------------------------------------------------Adjusted Base Period Market value * Base value

The level of an index will only change as a result of price changes occurring between the openings and closing of the market. Adjustments for securities being added to or deleted from an index or capitalization changes are adjustments which take place during the system maintenance process which occurs after the market has closed. These adjustments will result in value changes to the Current Index Market Value and Adjusted Base Period Market Value, but will not in and of them alter the level of an index.

Stock splits and stock dividends are likewise adjusted for during the system maintenance process. However, the system makes a price adjustment to account for the increased number of shares with the result being that the Current Index Market Value does not change. As an example, assume that ABC Corp. has 1,000,000 shares outstanding with a NOCP of $20 (market value - $20,000,000) the company has declared a 2 for 1 stock split. During system maintenance on the day prior to the effective date of the split, the system will adjust the shares outstanding to 2,000,000 and will correspondingly adjust the price to $10. The result is the same Current Index Market Value of $20,000,000.

In the case of cash dividends, no system adjustment is made unless an index is a total return index. Neither the Current Index Market Value nor the Adjusted Base Period
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Market Value is adjusted to reflect cash dividends. The Index formula relies on market forces to determine the level of an index.

MAJOR AMERICAN STOCK MARKETS: By the turn-of-the-millennium about

half of the world's stock market capitalization was trading in the United States -- up from about 30% a decade earlier. During the same period Japan's share shrank from 40% in 1990 to 11%. In the American market the technology sector had doubled from 10% in 1990 to 20%. Most American common stock trades either on the New York Stock Exchange (NYSE) or The NASDAQ Stock Market. The American Stock Exchange (AMEX) was rapidly diminishing in importance until the emergence of Exchange-Traded Funds (ETF s), index-tracking funds known as Unit Investment Trusts (UIT s) that trade like stocks. So-called "Cubes" (QQQ s) which tracked the Nasdaq-100 Index were by far the most heavily traded stocks on the AMEX.

THE DOW JONES INDUSTRIAL AVERAGE (DJIA, "The DOW") :

In 1882 Charles Henry Dow founded Dow Jones & Company with his partner Edward Jones. On July 3, 1884 he published his first stock market average composed of 11 stocks: 2 manufacturing & 9 railroad companies (railroads were among the largest & sturdiest companies and industrials were considered more speculative). Dow's purpose in creating an index was to identify trends that could be used to guide investment. He used only closing prices to eliminate the effects of day-trading. (For details concerning Dow Theory an On May 26, 1896 Dow created a 12-stock industrial index separate from his 20-stock railroad index. The first DOW industrial price average was 40.94. At first the average was published irregularly, but when THE WALL STREET JOURNAL began being published daily on October 7, 1986, the DOW began being published daily as well. The DOW indexes allowed investors to gauge the over-all movement of the market -- as opposed to individual stocks -- and created the opportunity to compare the movements of individual stocks with the broader market. By choosing only the most heavily-traded stocks it became possible to quote the index intra-day, because all of the stocks would have had recent trade prices.
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2. LITERATURE REVIEW

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Technical analysis is a security analysis discipline for forecasting the future direction of prices through the study of past market data, primarily price and volume.

History
The principles of technical analysis derive from the observation of financial markets over hundreds of years. The oldest known example of technical analysis was a method developed by Homma Munehisa during early 18th century which evolved into the use of candlestick techniques, and is today a main charting tool. Dow Theory is based on the collected writings of Dow Jones co-founder and editor Charles Dow, and inspired the use and development of modern technical analysis from the end of the 19th century. Other pioneers of analysis techniques include Ralph Nelson Elliott and William Delbert Gann who developed their respective techniques in the early 20th century.

Many more technical tools and theories have been developed and enhanced in recent decades, with an increasing emphasis on computer-assisted techniques.

General description
Technical analysts seek to identify price patterns and trends in financial markets and attempt to exploit those patterns. While technicians use various methods and tools, the study of price charts is primary.

Technicians especially search for archetypal patterns, such as the well-known head and shoulders or double top reversal patterns, study indicators such as moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants or balance days.
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Technical analysts also extensively use indicators, which are typically mathematical transformations of price or volume. These indicators are used to help determine whether an asset is trending, and if it is, its price direction. Technicians also look for relationships between price, volume and, in the case of futures, open interest. Examples include the relative strength index, and MACD. Other avenues of study include correlations between changes in options (implied volatility) and put/call ratios with price. Other technicians include sentiment indicators, such as Put/Call ratios and Implied Volatility in their analysis.

Technicians seek to forecast price movements such that large gains from successful trades exceed more numerous but smaller losing trades, producing positive returns in the long run through proper risk control and money management.

There are several schools of technical analysis. Adherents of different schools (for example, candlestick charting, Dow Theory, and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one school. Technical analysts use judgment gained from experience to decide which pattern a particular instrument reflects at a given time, and what the interpretation of that pattern should be.

Technical analysis is frequently contrasted with

fundamental analysis, the study of

economic factors that influence prices in financial markets. Technical analysis holds that prices already reflect all such influences before investors are aware of them, hence the study of price action alone. Some traders use technical or fundamental analysis exclusively, while others use both types to make trading decisions.

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Users of technical analysis are most often called technicians or market technicians. Some prefer the term technical market analyst or simply market analyst. An older term, chartist, is sometimes used, but as the discipline has expanded and modernized the use of the term chartist has become rare.

Characteristics
Technical analysis employs models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, intermarket and intra-market price correlations, cycles or, classically, through recognition of chart patterns.

Technical analysis stands in contrast to the fundamental analysis approach to security and stock analysis. Technical analysis "ignores" the actual nature of the company, market, currency or commodity and is based solely on "the charts," that is to say price and volume information, whereas fundamental analysis does look at the actual facts of the company, market, currency or commodity. For example, any large brokerage, trading group, or financial institution will typically have both a technical analysis and fundamental analysis team.

Technical analysis is widely used among traders and financial professionals, and is very often used by active day traders, market makers, and pit traders. In the 1960s and 1970s it was widely dismissed by academics. In a recent review, Irwin and Park reported that 56 of 95 modern studies found it produces positive results, but noted that many of the positive results were rendered dubious by issues such as data snooping so that the evidence in support of technical analysis was inconclusive; it is still considered by many
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academics to be pseudoscience. Academics such as Eugene Fama say the evidence for technical analysis is sparse and is inconsistent with the weak form of the efficient market hypothesis. Users hold that even if technical analysis cannot predict the future, it helps to identify trading opportunities.

In the foreign exchange markets, its use may be more widespread than fundamental analysis. While some isolated studies have indicated that technical trading rules might lead to consistent returns in the period prior to 1987, most academic work has focused on the nature of the anomalous position of the foreign exchange market. It is speculated that this anomaly is due to central bank intervention. Recent research suggests that combining various trading signals into a Combined Signal Approach may be able to increase profitability and reduce dependence on any single rule.

PRINCIPLES
Technicians say that a market's price reflects all relevant information, so their analysis looks more at "internals" than at "externals" such as news events. Price action also tends to repeat itself because investors collectively tend toward patterned behavior hence technicians' focus on identifiable trends and conditions.

Market action discounts everything

Based on the premise that all relevant information is already reflected by prices, pure technical analysts believe it is redundant to do fundamental analysis they say news and news events do not significantly influence price, and cite supporting research.

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On most of the sizable return days [large market moves]...the information that the press cites as the cause of the market move is not particularly important. Press reports on adjacent days also fail to reveal any convincing accounts of why future profits or discount rates might have changed. Our inability to identify the fundamental shocks that accounted for these significant market moves is difficult to reconcile with the view that such shocks account for most of the variation in stock returns.[19]

Prices move in trends Market trends

Technical analysts believe that prices trend directionally. Technicians say that markets trend up, down, or sideways. This basic definition of price trends is the one put forward by Dow Theory.

An example of a security that had an apparent trend is AOL from November 2001 through August 2002. A technical analyst or trend follower recognizing this trend would look for opportunities to sell this security. AOL consistently moves downward in price. Each time the stock rose, sellers would enter the market and sell the stock; hence the "zigzag" movement in the price. The series of "lower highs" and "lower lows" is a tell tale sign of a stock in a down trend. In other words, each time the stock moved lower, it fell below its previous relative low price. Each time the stock moved higher, it could not reach the level of its previous relative high price.

Note that the sequence of lower lows and lower highs did not begin until August. Then AOL makes a low price that doesn't pierce the relative low set earlier in the month. Later in the same month, the stock makes a relative high equal to the most recent relative high.
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In this a technician sees strong indications that the down trend is at least pausing and possibly ending, and would likely stop actively selling the stock at that point.

History tends to repeat itself

Technical analysts believe that investors collectively repeat the behavior of the investors that preceded them. "Everyone wants in on the next Microsoft," "If this stock ever gets to $50 again, I will buy it," "This company's technology will revolutionize its industry, therefore this stock will skyrocket" these are all examples of investor sentiment repeating itself. To a technician, the emotions in the market may be irrational, but they exist. Because investor behavior repeats itself so often, technicians believe that recognizable (and predictable) price patterns will develop on a chart.

Technical analysis is not limited to charting, but it always considers price trends. For example, many technicians monitor surveys of investor sentiment. These surveys gauge the attitude of market participants, specifically whether they are bearish or bullish. Technicians use these surveys to help determine whether a trend will continue or if a reversal could develop; they are most likely to anticipate a change when the surveys report extreme investor sentiment. Surveys that show overwhelming bullishness, for example, are evidence that an uptrend may reverse the premise being that if most investors are bullish they have already bought the market (anticipating higher prices). And because most investors are bullish and invested, one assumes that few buyers remain. This leaves more potential sellers than buyers, despite the bullish sentiment. This suggests that prices will trend down, and is an example of contrarian trading.

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Industry
Globally, the industry is represented by the International Federation of Technical Analysts (IFTA). In the United States, there are two national organizations: the Market Technicians Association (MTA), and the American Association of Professional Technical Analysts (AAPTA). The United States is also represented by the Technical Security Analysts Association of San Francisco (TSAASF). In the United Kingdom, the industry is represented by the Society of Technical Analysts (STA). In Canada the industry is represented by the Canadian Society of Technical Analysts. Additional major professional technical analysis organizations are noted in the External Links section below.

Professional technical analysis societies have worked on creating a body of knowledge that describes the field of Technical Analysis. A body of knowledge is central to the field as a way of defining how and why technical analysis may work. It can then be used by academia, as well as regulatory bodies, in developing proper research and standards for the field. The Market Technicians Association (MTA) has published a body of knowledge and the International Federation of Technical Analysts and the Nippon Technical Analysis Association are reported to be working on knowledge base projects.

Use
Traders generally share the view that trading in the direction of the trend is the most effective means to be profitable in financial or commodities markets. John W. Henry, Larry Hite, Ed Seykota, Richard Dennis, William Eckhardt, Victor Sperandeo, Michael Marcus and Paul Tudor Jones (some of the so-called Market Wizards in the popular book
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of the same name by Jack D. Schwager) have each amassed massive fortunes via the use of technical analysis and its concepts. George Lane, a technical analyst, coined one of the most popular phrases on Wall Street, "The trend is your friend!"

Many non-arbitrage algorithmic trading systems rely on the idea of trend-following, as do many hedge funds. A relatively recent trend, both in research and industrial practice, has been the development of increasingly sophisticated automated trading strategies. These often rely on underlying technical analysis principles (see algorithmic trading article for an overview).

Systematic trading
Neural networks
Since the early 1990s when the first practically usable types emerged, artificial neural networks (ANNs) have rapidly grown in popularity. They are artificial intelligence adaptive software systems that have been inspired by how biological neural networks work. They are used because they can learn to detect complex patterns in data. In mathematical terms, they are universal function approximators, meaning that given the right data and configured correctly, they can capture and model any input-output relationships. This not only removes the need for human interpretation of charts or the series of rules for generating entry/exit signals, but also provides a bridge to fundamental analysis, as the variables used in fundamental analysis can be used as input.

As ANNs are essentially non-linear statistical models, their accuracy and prediction capabilities can be both mathematically and empirically tested. In various studies, authors
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have claimed that neural networks used for generating trading signals given various technical and fundamental inputs have significantly outperformed buy-hold strategies as well as traditional linear technical analysis methods when combined with rule-based expert systems.

While the advanced mathematical nature of such adaptive systems has kept neural networks for financial analysis mostly within academic research circles, in recent years more user friendly neural network software has made the technology more accessible to traders. However, large-scale application is problematic because of the problem of matching the correct neural topology to the market being studied.

Rule-based trading
Rule-based trading is an approach intended to create trading plans using strict and clearcut rules. Unlike some other technical methods and the approach of fundamental analysis, it defines a set of rules that determine all trades, leaving minimal discretion. The theory behind this approach is that by following a distinct set of trading rules you will reduce the number of poor decisions, which are often emotion based.

For instance, a trader might make a set of rules stating that he will take a long position whenever the price of a particular instrument closes above its 50-day moving average, and shorting it whenever it drops below.

Combination with other market forecast methods

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John Murphy says that the principal sources of information available to technicians are price, volume and open interest. Other data, such as indicators and sentiment analysis, are considered secondary.

However, many technical analysts reach outside pure technical analysis, combining other market forecast methods with their technical work. One advocate for this approach is John Bollinger, who coined the term rational analysis in the middle 1980s for the intersection of technical analysis and fundamental analysis. Another such approach, fusion analysis, overlays fundamental analysis with technical, in an attempt to improve portfolio manager performance.

Technical analysis is also often combined with quantitative analysis and economics. For example, neural networks may be used to help identify intermarket relationships. A few market forecasters combine financial astrology with technical analysis. Chris Carolan's article "Autumn Panics and Calendar Phenomenon", which won the Market Technicians Association Dow Award for best technical analysis paper in 1998, demonstrates how technical analysis and lunar cycles can be combined. It is worth noting, however, that some of the calendar related phenomena, such as the January effect in the stock market, have been associated with tax and accounting related reasons.

Investor and newsletter polls, and magazine cover sentiment indicators, are also used by technical analysts.

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Charting terms and indicators Types of charts

OHLC - Open High Low Close charts plot the high and low of the price movement vertically and the open and close horizontally. Used to graph range and outliers.

Candlestick chart - Similar to OHLC, but open and close are filled. Often Black or Red candles represent a close lower than the open. While White, Green or Blue candles represent a close higher than the open.

Line chart - Connects each closing interval together on a line

Concepts

Average true range - averaged daily trading range, adjusted for price gaps Chart pattern - distinctive pattern created by the movement of security prices on a chart

Dead cat bounce - the phenomenon whereby a spectacular decline in the price of a stock is immediately followed by a moderate and temporary rise before resuming its downward movement

Elliott wave principle and the golden ratio to calculate successive price movements and retracements

Momentum - the rate of price change Point and figure charts - charts based on price without time

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Overlays are generally superimposed over the main price chart.

Resistance - an area that brings on increased selling

Support and resistance is a concept in technical analysis that the movement of the price of a security will tend to stop and reverse at certain predetermined price levels.

Support
A support level is a price level where the price tends to find support as it is going down. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely to continue dropping until it finds another support level.

Resistance
A resistance level is the opposite of a support level. It is where the price tends to find resistance as it is going up. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely that it will continue rising until it finds another resistance level.

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Identifying support and resistance levels

Support and resistance levels can be identified by trend lines. Some traders believe in using pivot point calculations.The more often a support/resistance level is "tested" (touched and bounced off by price), the more significance given to that specific level.

If a price breaks past a support level, that support level often becomes a new resistance level. The opposite is true as well, if price breaks a resistance level, it will often find support at that level in the future.

Support - an area that brings on increased buying Breakout - when a price passes through and stays above an area of support or resistance

A trend line is formed when you can draw a diagonal line between two or more price pivot points. They are commonly used to judge entry and exit investment timing when trading securities.

A trend line is a bounding line for the price movement of a security. A support trend line is formed when a securities price decreases and then rebounds at a pivot point that aligns with at least two previous support pivot points. Similarly a resistance trend line is formed when a securities price increases and then rebounds at a pivot point that aligns with at least two previous resistance pivot points. The following chart provides an example of support and resistance trend lines:

Trend lines are a simple and widely used technical analysis approach to judging entry and exit investment timing. To establish a trend line historical data, typically presented in the format of a chart such as the above price chart, is required. Historically, trend lines have
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been drawn by hand on paper charts, but it is now more common to use charting software that enables trend lines to be drawn on computer based charts. There are some charting software that will automatically generate trend lines, however most traders prefer to draw their own trendlines.

However, time periods can also be viewed in terms of years. For example, below is a chart of the S&P 500 since the earliest data point until April 2008. Please note that while the Oracle example above uses a linear scale of price changes, long term data is more often viewed as logarithmic: e.g. the changes are really an attempt to approxiamate percentage changes than pure numerical value. If we were to view this same chart linearly, we would not be able to see any detail from 1950 to about 1990 simply because all the data would be compressed to the bottom.

Figure-1.2

Trend lines are typically used with price charts, however they can also be used with a range of technical analysis charts such as MACD and RSI. Trend lines can be used to identify positive and negative trending charts, whereby a positive trending chart forms an upsloping line when the support and the resistance pivots points are aligned, and a negative trending chart froms a downsloping line when the support and resistance pivot points are aligned.
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Trend lines are used in many ways by traders. If a stock price is moving between support and resistance trendlines, then a basic investment strategy commonly used by traders, is to buy a stock at support and sell at resistance, then short at resistance and cover the short at support. The logic behind this, is that when the price returns to an existing principal trendline it may be an opportunity to open new positions in the direction of the trend, in the belief that the trendline will hold and the trend will continue further. A second way is that when price action breaks through the principal trendline of an existing trend, it is evidence that the trend may be going to fail, and a trader may consider trading in the opposite direction to the existing trend, or exiting positions in the direction of the trend.

Trend line - a sloping line of support or resistance Channel - a pair of parallel trend lines Moving average - lags behind the price action but filters out short term movements Bollinger bands - a range of price volatility Pivot point - derived by calculating the numerical average of a particular currency's or stock's high, low and closing prices

Price-based indicators
These indicators are generally shown below or above the main price chart.

Accumulation/distribution indexbased on the close within the day's range Advance decline line a popular indicator of market breadth Average Directional Index a widely used indicator of trend strength Commodity Channel Index - identifies cyclical trends 57

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MACD - moving average convergence/divergence Parabolic SAR - Wilder's trailing stop based on prices tending to stay within a parabolic curve during a strong trend

Relative Strength Index (RSI) - oscillator showing price strength Stochastic oscillator, close position within recent trading range Trix - an oscillator showing the slope of a triple-smoothed exponential moving average, developed in the 1980s by Jack Hutson

Volume based indicators

Money Flow - the amount of stock traded on days the price went up On-balance volume - the momentum of buying and selling stocks PAC charts - two-dimensional method for charting volume by price level

Empirical evidence
Whether technical analysis actually works is a matter of controversy. Methods vary greatly, and different technical analysts can sometimes make contradictory predictions from the same data. Many investors claim that they experience positive returns, but academic appraisals often find that it has little predictive power. Modern studies may be more positive: of 95 modern studies, 56 concluded that technical analysis had positive results, although data-snooping bias and other problems make the analysis difficult. Nonlinear prediction using neural networks occasionally produces statistically significant prediction results. A Federal Reserve working paper regarding support and resistance levels in short-term foreign exchange rates "offers strong evidence that the levels help to predict intraday trend interruptions," although the "predictive power" of those levels was "found to vary across the exchange rates and firms examined".
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Technical trading strategies were found to be effective in the Chinese marketplace by a recent study that states, "Finally, we find significant positive returns on buy trades generated by the contrarian version of the moving average crossover rule, the channel breakout rule, and the Bollinger band trading rule, after accounting for transaction costs of 0.50 percent." Nauzer J. Balsara, Gary Chen and Lin Zheng The Chinese Stock Market: An Examination of the Random Walk Model and Technical Trading Rules.

Critics of technical analysis include well-known fundamental analysts. For example, Peter Lynch once commented, "Charts are great for predicting the past." Warren Buffett has said, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians.

An influential 1992 study by Brock et al. which appeared to find support for technical trading rules was tested for data snooping and other problems in 1999; the sample covered by Brock et al. was robust to data snooping.

Subsequently, a comprehensive study of the question by Amsterdam economist Gerwin Griffioen concludes that: "for the U.S., Japanese and most Western European stock market indices the recursive out-of-sample forecasting procedure does not show to be profitable, after implementing little transaction costs. Moreover, for sufficiently high transaction costs it is found, by estimating CAPMs, that technical trading shows no statistically significant risk-corrected out-of-sample forecasting power for almost all of the stock market indices."[8] Transaction costs are particularly applicable to "momentum strategies"; a comprehensive 1996 review of the data and studies concluded that even

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small transaction costs would lead to an inability to capture any excess from such strategies.[31]

In a paper published in the Journal of Finance Dr. Andrew W. Lo, director MIT Laboratory for Financial Engineering, working with Harry Mamaysky and Jiang Wang found that "Technical analysis, also known as "charting," has been a part of financial practice for many decades, but this discipline has not received the same level of academic scrutiny and acceptance as more traditional approaches such as fundamental analysis. One of the main obstacles is the highly subjective nature of technical analysis---the presence of geometric shapes in historical price charts is often in the eyes of the beholder. In this paper, we propose a systematic and automatic approach to technical pattern recognition using nonparametric kernel regression, and apply this method to a large number of U.S. stocks from 1962 to 1996 to evaluate the effectiveness of technical analysis. By comparing the unconditional empirical distribution of daily stock returns to the conditional distribution---conditioned on specific technical indicators such as head-andshoulders or double-bottoms---we find that over the 31-year sample period, several technical indicators do provide incremental information and may have some practical value."
[32]

In that same paper Dr. Lo wrote that "several academic studies suggest

that...technical analysis may well be an effective means for extracting useful information from market prices."[33] Some techniques such as Drummond Geometry attempt to overcome the past data bias by projecting support and resistance levels from differing time frames into the near-term future and combining that with reversion to the mean techniques.

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Efficient market hypothesis

The efficient market hypothesis (EMH) contradicts the basic tenets of technical analysis by stating that past prices cannot be used to profitably predict future prices. Thus it holds that technical analysis cannot be effective. Economist Eugene Fama published the seminal paper on the EMH in the Journal of Finance in 1970, and said "In short, the evidence in support of the efficient markets model is extensive, and (somewhat uniquely in economics) contradictory evidence is sparse. EMH advocates say that if prices quickly reflect all relevant information, no method (including technical analysis) can "beat the market." Developments which influence prices occur randomly and are unknowable in advance. The vast majority of academic papers find that technical trading rules, after consideration for trading costs, are not profitable.

Technicians say that EMH ignores the way markets work, in that many investors base their expectations on past earnings or track record, for example. Because future stock prices can be strongly influenced by investor expectations, technicians claim it only follows that past prices influence future prices. They also point to research in the field of behavioral finance, specifically that people are not the rational participants EMH makes them out to be. Technicians have long said that irrational human behavior influences stock prices, and that this behavior leads to predictable outcomes. Author David Aronson says that the theory of behavioral finance blends with the practice of technical analysis:

By considering the impact of emotions, cognitive errors, irrational preferences, and the dynamics of group behavior, behavioral finance offers succinct explanations of excess market volatility as well as the excess returns earned by stale information strategies.... cognitive errors may also explain the existence of market inefficiencies that spawn the systematic price movements that 61

TECHNICAL ANALYSIS

allow objective TA [technical analysis] methods to work. EMH advocates reply that while

individual market participants do not always act rationally (or have complete information), their aggregate decisions balance each other, resulting in a rational outcome (optimists who buy stock and bid the price higher are countered by pessimists who sell their stock, which keeps the price in equilibrium).[38] Likewise, complete information is reflected in the price because all market participants bring their own individual, but incomplete, knowledge together in the market.

Relative Strength Index

The Relative Strength Index (RSI) is a trading indicator in the technical analysis of financial markets. It is intended to indicate the current and historical strength or weakness of a market based on the closing prices of completed trading periods. It assumes that prices close higher in strong market periods, and lower in weaker periods and computes this as a ratio of the number of incrementally higher closes to the incrementally lower closes. The Relative Strength Index was developed by J. Welles Wilderand published in a 1978 book, New Concepts in Technical Trading Systems, and in Commodities magazine (now Futures magazine) in the June 1978 issue. The RSI method may be classified as a momentum oscillator measuring the velocity and magnitude of directional price movements. Momentum is the rate of the rise or fall in price.

62

TECHNICAL ANALYSIS

Calculation
For each trading period an upward change (U) or downward change (D) is calculated. Up periods are characterized by the close being higher than the previous close,

U = closenow closeprevious D=0

Conversely, a down period is characterized by the close being lower than the previous period's (note that D is nonetheless a positive number),

U=0 D = closeprevious closenow

If the last close is the same as the previous, both U and D are zero. An average for U is calculated with an exponential moving average using a given N-period smoothing factor, and likewise for D. The ratio of those averages is the Relative Strength,

This is converted to a Relative Strength Index between 0 and 100,

This can be rewritten as follows to emphasize the way RSI expresses the up as a proportion of the total up and down (averages in each case),

63

TECHNICAL ANALYSIS

The EMA, in theory, uses an infinite amount of past data. It is necessary either to go back far enough, or alternately at the start of data begin with a simple average of N periods instead,

and then continue from there with the usual EMA formula,

The calculation of D is similar.

Interpretation

Figure-2.2

The RSI is presented in a graph below the price chart of a market. It is usually plotted as lines along with two moving averages connecting the relevant values for each period.
64

TECHNICAL ANALYSIS

Wilder recommended a smoothing period of 14. This is by his reckoning of EMA smoothing, i.e. =1/14 or N=27. Wilder posited that when price moves up very rapidly, at some point it is considered overbought. Likewise, when price falls very rapidly, at some point it is considered oversold. In either case, Wilder felt a reaction or reversal is imminent. The slope of the RSI is directly proportional to the velocity of the move. The distance traveled by the RSI is proportional to the magnitude of the move. As a result, Wilder believed that tops and bottoms are indicated when RSI goes above 70 or drops below 30. Traditionally, RSI readings greater than the 70 level are considered to be in overbought territory, and RSI readings lower than the 30 level are considered to be in oversold territory. In between the 30 and 70 level is considered neutral. Wilder further believed that divergence between RSI and price action is a very strong indication that a market turning point is imminent. Bearish divergence occurs when price makes a new high but the RSI makes a lower high, thus failing to confirm. Bullish divergence occurs when price makes a new low but RSI makes a higher low. Wilder thought that "failure swings" above 70 and below 30 on the RSI are strong indications of market reversals. For example, assume the RSI hits 76, pulls back to 72, then rises to 77. If it falls below 72, Wilder would consider this a "failure swing" above 70. Finally, Wilder wrote that chart formations and areas of support and resistance could sometimes be more easily seen on the RSI chart as opposed to the price chart. The center line for the relative strength index is 50, which is often seen as both the support and resistance line for the indicator. If the relative strength index is below 50, it generally means that the stock's losses are greater than the gains. When the relative strength index is above 50, it generally means that the gains are greater than the losses.

65

TECHNICAL ANALYSIS

In addition to Wilder's original theories of RSI interpretation, Andrew Cardwell has developed several new interpretations of RSI to help determine and confirm trend. First, Cardwell noticed that uptrends generally traded between RSI 40 and 80, while downtrends usually traded between RSI 60 and 20. Cardwell observed when securities change from uptrend to downtrend and vice versa, the RSI will undergo a "range shift.
Example of RSI Indicator Divergence

Next, Cardwell noted that bearish divergence: 1) only occurs in uptrends, and 2) mostly only leads to a brief correction instead of a reversal in trend. Therefore bearish divergence is a sign confirming an uptrend. Similarly, bullish divergence is a sign confirming a downtrend. Finally, Cardwell discovered the existence of positive and negative reversals in the RSI. Reversals are the opposite of divergence. For example, a positive reversal occurs when an uptrend price correction results in a higher low compared to the last price correction, while RSI results in a lower low compared to the prior correction. A negative reversal happens when a downtrend rally results in a lower high compared to the last downtrend rally, but RSI makes a higher high compared to the prior rally. In other words, despite stronger momentum as seen by the higher high or lower low in the RSI, price could not make a higher high or lower low. This is evidence the main trend is about to resume. Cardwell noted that positive reversals only happen in uptrends while negative reversals only occur in downtrends, and therefore their existence confirms the trend.

66

TECHNICAL ANALYSIS

COMPANY PROFILE

67

TECHNICAL ANALYSIS

COMPANY PROFILE
Bonanza Portfolio Limited calls itself as financial powerhouse for the customers. It is established in the year 1994. Bonanza developed into one of the largest financial

services and broking house in India within a short span of time. Today, Bonanza is the fastest growing financial service with 5 mega group companies under it. With diligent effort, acknowledged industry leadership and experience, Bonanza has spread its trustworthy tentacles all over the country with pan-India presence across more than 1150 outlets spread across 375 cities.

With a smorgasbord of services across all verticals in finance Bonanza offers to the customers the perfect blend of financial services right from Equity Broking, Advisory Services that cover Portfolio Management Services, Mutual Fund Investments, and Insurance to exceptional Depository Services.

Bonanza believes in being technologically advanced so that they can offer us their techsavvy customers - an integrated and innovative platform to trade online as well as offline. Besides, they also have one of the finest and most dedicated research teams with experts who have in-depth, unsurpassed knowledge of the market place. All this and more makes Bonanza the perfect place for customers to take their first step in the direction of financial success.

68

TECHNICAL ANALYSIS

Bonanza is affiliated with the best in the industry right from the NSE, BSE MCX, MCX-SX to CDSL, NSDL, etc. These affiliations prove their worth in the market and make Bonanza a name to reckon with. With various titles and achievements under their belt, Bonanza looks forward to tougher challenges and newer milestones to conquer, so that we their customer can get nothing less than the BEST! Vision: To be one of the most trusted and globally reputed financial distribution companies. Values: Customer-centric approach:

At Bonanza, customers come first and their satisfaction is not just top priority but also the driving force for the company, every single day.

Transparency: Honesty is forte of the company. They believe in dealing on thoroughly ethical grounds, being fair and transparent with their customers.

Meritocracy: The company recognizes and appreciates efforts put in by their employees and as a matter of fact, reward and distinguish each one of them, ceaselessly. Solidarity:

69

TECHNICAL ANALYSIS

The company believes in sharing a forthright and respectful relationship with their business partners and employees. They consider them both as their team associates, who work together. Succeed together. Milestones:

5th largest in terms of no. of offices for 2008-2009.

Top Equity Broking House in terms of branch expansion for 2008.

6th in terms of trading terminals in for two consecutive years 2007- 2008.

9th in terms of Sub Brokers for 2007.

Nominated among the Top 3 for the "Best Financial Advisor Awards '08" in the category of National Distributors Retail instituted by CNBC-TV18 and OptiMix.

Nominated among the Top 3 for the "Best Financial Advisor Awards '09" in the category of National Distributors Retail instituted by CNBC-TV18 and OptiMix.

Awarded by BSE 'Major Volume Driver 04-05,06-07,07-08' .

Ranked 2nd by UTI MF & CNBC TV 18 Financial Awards 2009 in the category Best Financial Advisor- Retail.
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TECHNICAL ANALYSIS

Services offered by Bonanza:

1. Equity and Derivative: Derivatives are vital for the financial system as they help to hedge against the risk and also provide the customer with an opportunity to profit from the anomalies in the market.

Various derivative contracts constitute a significant share of all the capital market transactions in the domestic as well as global markets. In India, derivative contracts are traded on National Stock Exchange (NSE) on a huge scale and their trade is becoming increasingly prevalent even on Bombay Stock Exchange (BSE).

Bonanzas membership of the Derivative Segment on both the above mentioned exchanges provides the customers with an opportunity to avail of numerous benefits of trading in derivatives. This includes, researched trading ideas, hedging and arbitrage strategies, strong risk management of leveraged positions and countless others. 2. Commodity:

Commodities are more than what the customer think they are. Almost everything we see around is made of what market considers commodity. It could be any kind of movable property, except actionable claims, money and securities. Commodity trade forms the backbone of world economy.

71

TECHNICAL ANALYSIS

Bonanza provides us with the perfect platform to trade in these highly valuable commodities so that we can benefit and make the most of the thriving markets.

With a perfect blend of philosophy, knowledge and highly skilled and dedicated professionals Bonanza strives to offer its client the best investment solutions across the country. Its our belief and tryst that each client is unique and therefore the company provide customized solutions to suit their every unique need.

3. Currency Derivatives:

Bonanza Portfolio Ltd. has always been the forerunner in initiating any new financial product and have launched trading facilities on the Currency Derivatives Segment for their clients at all three Exchanges namely NSE, BSE & MCX-SX. Thus, they bring to us a new trading segment which brings Foreign Currency & Interest Rate Futures Trading. These asset classes, where the participation was earlier limited to Banks, Currency brokers, Licensed Money Changers, Corporates and Multinational Companies, are now available at your convenience at your finger tips.

4. E-Broking:

Compared to nations overseas, Online Trading or E-broking is still in its early life in India. Yet these days trading online has evolved into a convenient and widely used feature for traders and investors.

72

TECHNICAL ANALYSIS

Bonanza believes in being up-to-date with the latest in markets and technology. Keeping that in mind, they bring to their customers the Online Trading feature so that the customers can trade from anywhere, anytime, anyplace at their own convenience. Clients can now keep track of their trading accounts, receive advice during trading hours and keep an eye on the market all through online broking. Its tremendously fast, gives us the freedom from paperwork and the necessary statements are available to us all the time.

5. Distributions:

a. Mutual Fund: Mutual Funds are the same and not everything about them is that simple. Customers still wonder about the nature of Mutual Funds if they are like shares in a company or bonds or fixed deposits. Bonanza makes it simple for the customers to understand the cycle and psychology of Mutual Funds and their markets so that the customer can make a diminutive amount multiply in value.

b. Insurance: Bonanza not only provides customized solutions to individual clients but also to some of the leading corporate houses and institutions across the country. Highly qualified and experienced Insurance Advisory team helps make informed decisions right from analyzing the needs, recommending an optimum insurance cover to assisting claim settlements.

73

TECHNICAL ANALYSIS

c. IPO: When it comes to IPOs, no one understands the markets and the client needs better than Bonanza. With top-notch assistance and up-to-the-minute information within reach, client can rest assure, client are in safe hands.

6. Depository Services:

Bonanza offering a multitude of services under one roof also includes unparalleled Depository Services. Bonanza Portfolio Ltd. is a registered member / Depository Participant of both CDSL (Central Depository Services Ltd.) and NSDL (National Securities Depository Ltd.), thus giving the client the option to not only choose depository services but also the opportunity of trading at one place.

7. Institutional Broking:

At Bonanza, they also cater to the investment needs of leading corporate houses and institutions. Their specialized services consist of the most experienced market professionals and Institutional Broking Services are backed by an insightful research team who provide the most in-depth reports on the markets. They live to serve their clients every exclusive need through extensive knowledge repository and perfect blend of counseling, guidance and management. At Bonanza, they blend caution with aggression in the desired proportion for the benefit of their clients.

74

TECHNICAL ANALYSIS

8. Investment Banking:

Bonanza Corporate Solutions Pvt. Ltd. (BCS) is a member of Bonanza Group focused on providing financial & strategic business advisory services for Indian Small and Medium Enterprises (SMEs) & middle market Corporates with the primary objective of enhancing their clients competitiveness & value.

Customer centric & research based approach enables Bonanza to design services to meet clients specific needs with high level of customization at every stage of the transaction, making the clients who are their valued partners for growth. Bonanza understands the problems faced by clients by working closely with them & help them deliver integrated solutions to complex financial & business problems. BCS specializes in providing advisory services towards strategic Business Advisory, Venture Capital / Private Equity Fund Raising, Debt Syndication, Strategic Investments, and Mergers & Acquisitions

BCS is also engaged in advisory for domestic as well as foreign private equity / venture capital investors for deal flow generation, pre-investment due diligence, valuation, postinvestment monitoring and exit strategy.

75

TECHNICAL ANALYSIS

4. DATA ANALYSIS & INTERPRETATION

DATA ANALASYS & INTERPRETATION

76

TECHNICAL ANALYSIS

TABLE SHOWING THE CALCULATION OF RELATIVE STRENGTH INDEX

1.) CIPLA
Symbol CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA CIPLA Date 13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11 Prev Close 315.5 314.65 313.15 314.95 311.2 312.35 317.65 316.6 313.35 312.9 319.4 317 320.35 319 324 324.75 323.9 325.1 322.05 324.05 324.4 335.45 337.6 340.3 338 333.4 334.65 338.1 340 336.35 339.1 341.3 347.1 348.4 340.6 Close Price 314.65 313.15 314.95 311.2 312.35 317.65 316.6 313.35 312.9 319.4 317 320.35 319 324 324.75 323.9 325.1 322.05 324.05 324.4 335.45 337.6 340.3 338 333.4 334.65 338.1 340 336.35 339.1 341.3 347.1 348.4 340.6 338.5 1.25 3.45 1.9 3.65 2.75 2.2 5.8 1.3 7.8 2.1 1.2 3.05 2 0.35 11.05 2.15 2.7 2.3 4.6 6.5 2.4 3.35 1.35 5 0.75 0.85 1.15 5.3 1.05 3.25 0.45 Gain Loss 0.85 1.5 1.8 3.75 Avg Gain 1.78 1.74 1.87 1.87 1.73 1.81 1.83 2.12 2.06 1.91 1.47 1.45 1.34 1.39 1.58 1.47 1.45 1.34 1.39 1.32 2.01 2.02 2.07 1.92 1.78 1.74 1.87 1.87 1.73 1.81 1.83 2.12 2.06 1.91 1.77 Avg Loss 1.1 1.02 0.95 0.88 1.07 1 0.93 0.86 0.8 1.3 0.95 0.88 1.04 0.96 0.96 0.95 0.88 1.04 0.96 0.89 0.83 0.77 0.72 0.83 1.1 1.02 0.95 0.88 1.07 1 0.93 0.86 0.8 1.3 1.35 RS 1.62 1.71 1.97 2.13 1.62 1.81 1.97 2.47 2.58 1.47 1.55 1.65 1.29 1.45 1.65 1.55 1.65 1.29 1.45 1.48 2.42 2.62 2.88 2.31 1.62 1.71 1.97 2.13 1.62 1.81 1.97 2.47 2.58 1.47 1.31 RSI 61.81 63.04 66.31 68.00 61.79 64.41 66.30 71.14 72.03 59.50 60.74 62.23 56.30 59.15 62.20 60.74 62.23 56.30 59.15 59.73 70.77 72.40 74.19 69.82 61.81 63.04 66.31 68.00 61.79 64.41 66.30 71.14 72.03 59.50 56.73

Table-4.1

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TECHNICAL ANALYSIS

RSI
80 70 60 50 40 30 20 10 0

Price

Date
Figure-4.2

Interpretation: The above table shows the Relative strength Index of Cipla company
for a period of 30 days. The RSI ranged from 56 to 75. The highest RSI is 74.19 and the lowest is 56.30

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TECHNICAL ANALYSIS

2.) TATA MOTORS LTD

Symbol TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS Date
13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11

Prev Close 802.65 830.85 816.25 789.2 772.35 714.9 711.9 709.85 706.95 673.45 709.5 741.75 749.5 755 724.95 746.15 767.25 771.6 737.1 735.8 728.05 759.1 764.9 760.25 759.7 780.35 802.2 801.8 807.3 797.65 791.05 785.2 768.9 789.25 770.95

Close Price Gain 830.85 28.2 816.25 789.2 772.35 714.9 711.9 709.85 706.95 673.45 709.5 36.05 741.75 32.25 749.5 7.75 755 5.5 724.95 746.15 21.2 767.25 21.1 771.6 4.35 737.1 735.8 728.05 759.1 31.05 764.9 5.8 760.25 759.7 780.35 20.65 802.2 21.85 801.8 807.3 5.5 797.65 791.05 785.2 768.9 789.25 20.35 770.95 778.5 7.55 Table-4.3

Loss 14.6 27.05 16.85 57.45 3 2.05 2.9 33.5

30.05

34.5 1.3 7.75

4.65 0.55

0.4 9.65 6.6 5.85 16.3 18.3

Avg gain 8.78 9.66 9.28 8.61 8.00 7.43 9.11 8.88 8.24 7.65 8.58 9.53 8.85 8.21 7.62 7.07 6.57 6.10 8.00 7.43 9.11 8.88 8.24 7.65 8.58 9.53 8.85 8.21 7.62 7.07 6.57 6.10 7.11 6.60 6.66

Avg loss 12.42 11.53 10.71 12.41 11.61 11.34 10.53 9.77 9.41 8.77 8.15 7.57 7.05 6.55 6.77 6.76 6.69 7.38 11.61 11.34 10.53 9.77 9.41 8.77 8.15 7.57 7.05 6.55 6.77 6.76 6.69 7.38 6.85 7.67 7.12

RS 0.71 0.84 0.87 0.69 0.69 0.66 0.87 0.91 0.88 0.87 1.05 1.26 1.26 1.25 1.13 1.05 0.98 0.83 0.69 0.66 0.87 0.91 0.88 0.87 1.05 1.26 1.26 1.25 1.13 1.05 0.98 0.83 1.04 0.86 0.94

RSI 41.42 45.59 46.42 40.96 40.80 39.58 46.38 47.61 46.69 46.59 51.29 55.73 55.66 55.62 52.95 51.12 49.55 45.25 40.80 39.58 46.38 47.61 46.69 46.59 51.29 55.73 55.66 55.62 52.95 51.12 49.55 45.25 50.93 46.25 48.33

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TECHNICAL ANALYSIS

RSI of TataMotors
60 50 40 30 20 10 0 RSI

Price

Date
Figure -4.4

Interpretation: The above table and chart shows the Relative strenght Index of Tatamotors
Ltd for a period of 30 days. The RSI ranged from 36 to 57. The heighest RSI is 55.73 and the lowest is 36.92

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TECHNICAL ANALYSIS

3.) UNITECH LTD

Symbol UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH Date
13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11

Prev Close 77.6 79.6 76.45 76.85 76.25 71.35 70.2 69 67.55 66.05 68.75 71.45 73.5 72.6 69 70.95 71.65 71.25 69.4 67.45 69.05 70.7 68.25 68.7 70.6 70.35 70.2 70.6 73.45 74.25 76 74.35 73.45 74.8 73.05

Close Price Gain 79.6 2 76.45 76.85 0.4 76.25 71.35 70.2 69 67.55 66.05 68.75 2.7 71.45 2.7 73.5 2.05 72.6 69 70.95 1.95 71.65 0.7 71.25 69.4 67.45 69.05 1.6 70.7 1.65 68.25 68.7 0.45 70.6 1.9 70.35 70.2 70.6 0.4 73.45 2.85 74.25 0.8 76 1.75 74.35 73.45 74.8 1.35 73.05 74.35 1.3 Table-4.5

Loss 3.15 0.6 4.9 1.15 1.2 1.45 1.5

0.9 3.6

0.4 1.85 1.95

2.45

0.25 0.15

1.65 0.9 1.75

Avg Gain 0.69 0.76 0.7 0.69 0.77 0.72 0.67 0.65 0.8 0.8 0.87 0.81 0.75 0.79 0.78 0.78 0.72 0.67 0.62 0.69 0.76 0.7 0.69 0.77 0.72 0.67 0.65 0.8 0.8 0.87 0.81 0.75 0.79 0.74 0.78

Avg Loss 1.1 1.02 1.12 1.04 0.96 0.91 0.86 0.8 0.74 0.68 0.64 0.71 0.72 0.67 1.21 1.12 1.07 1.13 1.19 1.1 1.02 1.12 1.04 0.96 0.91 0.86 0.8 0.74 0.68 0.64 0.71 0.72 0.67 0.75 0.69

RS 0.63 0.75 0.63 0.66 0.80 0.79 0.78 0.81 1.08 1.18 1.36 1.14 1.04 1.18 0.64 0.70 0.67 0.59 0.52 0.63 0.75 0.63 0.66 0.80 0.79 0.78 0.81 1.08 1.18 1.36 1.14 1.04 1.18 0.99 1.13

RSI 38.55 42.70 38.46 39.88 44.51 44.17 43.79 44.83 51.95 54.05 57.62 53.29 51.02 54.11 39.20 41.05 40.22 37.22 34.25 38.55 42.70 38.46 39.88 44.51 44.17 43.79 44.83 51.95 54.05 57.62 53.29 51.02 54.11 49.66 53.06

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TECHNICAL ANALYSIS

RSI of Unitech
60 50 40 30 20 10 0 RSI

Price

Date
Figure -4.6

Interpretation: The above table and chart shows the Relative Strength Index of Unitech Ltd
for a period of 30 days. The RSI ranged from 34 to 58. The highest RSI is 57.62 and the lowest is 34.25

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TECHNICAL ANALYSIS

4.)

JINDAL STEEL LTD

Date
13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11

Symbol JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL JINDALSTEL

Prev Close 668.3 668.7 650.85 657.6 637.3 618.35 627.65 634.55 648.25 617.45 622 622.25 654.5 654.1 632.05 624.45 635 629.65 614.55 612.8 615.3 629.35 641.95 649.1 656.1 652.45 665.5 671.8 685.9 671.05 661.5 657.25 641.6 637.85 621.2

Close Price Gain 668.7 0.4 650.85 657.6 6.75 637.3 618.35 627.65 9.3 634.55 6.9 648.25 13.7 617.45 622 4.55 622.25 0.25 654.5 32.25 654.1 632.05 624.45 635 10.55 629.65 614.55 612.8 615.3 2.5 629.35 14.05 641.95 12.6 649.1 7.15 656.1 7 652.45 665.5 13.05 671.8 6.3 685.9 14.1 671.05 661.5 657.25 641.6 637.85 621.2 624.5 3.3 Table-4.7

Loss 17.85 20.3 18.95

30.8

0.4 22.05 7.6 5.35 15.1 1.75

3.65

14.85 9.55 4.25 15.65 3.75 16.65

Avg Gain 4.83 5.39 5.51 5.62 5.22 5.78 5.81 6.41 5.95 5.52 5.13 4.76 4.42 5.29 4.91 5.31 4.93 4.58 4.25 4.12 4.83 5.39 5.51 5.62 5.22 5.78 5.81 6.41 5.95 5.52 5.13 4.76 4.42 4.1 4.05

Avg Loss 6.29 5.84 5.42 5.03 4.94 4.58 4.25 3.95 4.73 5.07 5.01 5.77 5.63 7.88 7.86 7.29 7.15 7.72 7.29 6.77 6.29 5.84 5.42 5.03 4.94 4.58 4.25 3.95 4.73 5.07 5.01 5.77 5.63 6.41 5.96

RS 0.77 0.92 1.02 1.12 1.06 1.26 1.37 1.62 1.26 1.09 1.02 0.82 0.79 0.67 0.62 0.73 0.69 0.59 0.58 0.61 0.77 0.92 1.02 1.12 1.06 1.26 1.37 1.62 1.26 1.09 1.02 0.82 0.79 0.64 0.68

RSI 43.44 48.00 50.41 52.77 51.38 55.79 57.75 61.87 55.71 52.12 50.59 45.20 43.98 40.17 38.45 42.14 40.81 37.24 36.83 37.83 43.44 48.00 50.41 52.77 51.38 55.79 57.75 61.87 55.71 52.12 50.59 45.20 43.98 39.01 40.46

83

TECHNICAL ANALYSIS

RSI of JindalSteel
60 50 40 30 20 10 0 RSI

Price

Date
Figure -4.8

Interpretation: The above table and chart shows the Relative Strenght Index of Jindal Steel
Ltd for a period of 30 days. It has ranged from 36 to 62. The highest RSI is 61.87 and the lowest one is 36.83

5.) HDFC BANK LTD 84

TECHNICAL ANALYSIS

Symbol HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC

Date
13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11

Prev Close 2779.05 2808.75 2776.8 2759.45 2740 2673.7 2710.5 2710.2 2664.1 2610.1 2695.05 2763.8 2790.15 2789.75 2706.8 2710.6 2735.2 2748.9 2671 2702.2 2705.15 2749.9 2808.9 2837.4 2859.05 2912.9 2932.75 2930.45 2985.45 2979.25 2993.65 3022.3 2935.4 2958.75 2902.65

Close Price 2808.75 2776.8 2759.45 2740 2673.7 2710.5 2710.2 2664.1 2610.1 2695.05 2763.8 2790.15 2789.75 2706.8 2710.6 2735.2 2748.9 2671 2702.2 2705.15 2749.9 2808.9 2837.4 2859.05 2912.9 2932.75 2930.45 2985.45 2979.25 2993.65 3022.3 2935.4 2958.75 2902.65 2944.2

Gain 29.7

Loss 31.95 17.35 19.45 66.3

36.8 0.3 46.1 54 84.95 68.75 26.35 0.4 82.95 3.8 24.6 13.7 77.9 31.2 2.95 44.75 59 28.5 21.65 53.85 19.85 2.3 55 6.2 14.4 28.65 86.9 23.35 56.1 41.55

Avg Gain 15.73 16.83 15.84 17.91 20.84 21.39 21.41 23.72 23.45 21.77 24.14 22.42 21.85 22.33 20.74 17.19 16.94 15.73 16.83 15.84 17.91 20.84 21.39 21.41 23.72 23.45 21.77 24.14 22.42 21.85 22.33 20.74 20.92 19.42 21

Avg Loss 22.49 20.88 19.39 18 16.71 15.52 14.41 13.38 12.42 11.7 10.86 10.53 9.78 9.08 14.64 19.63 18.23 22.49 20.88 19.39 18 16.71 15.52 14.41 13.38 12.42 11.7 10.86 10.53 9.78 9.08 14.64 13.59 16.63 15.44

RS 0.70 0.81 0.82 1.00 1.25 1.38 1.49 1.77 1.89 1.86 2.22 2.13 2.23 2.46 1.42 0.88 0.93 0.70 0.81 0.82 1.00 1.25 1.38 1.49 1.77 1.89 1.86 2.22 2.13 2.23 2.46 1.42 1.54 1.17 1.36

RSI 41.16 44.63 44.96 49.87 55.50 57.95 59.77 63.94 65.37 65.04 68.97 68.04 69.08 71.09 58.62 46.69 48.17 41.16 44.63 44.96 49.87 55.50 57.95 59.77 63.94 65.37 65.04 68.97 68.04 69.08 71.09 58.62 60.62 53.87 57.63

Table-4.9

85

TECHNICAL ANALYSIS

RSI of HDFC
60 50 40 30 20 10 0 RSI

Price

Date

Figure -4.10

Interpretation: The above table and chart shows the Relative Strenght Index of HDFC
Bank Ltd for a period of 30days. It has ranged from 41 to 72. The highest RSI is 71.09 where the lowest one is 41.16

86

TECHNICAL ANALYSIS

6.) HINDUSTAN UNILEVER LTD

Symbol HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR Date
13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11

Prev Close 238.5 238.2 233.9 240.05 240.05 233.35 236.95 230.7 231.7 230.55 231.55 233 236.35 237.2 233.8 237.75 247.05 251.7 251.05 251.4 249.55 252 252.75 255.45 260.15 255.9 253 257.75 258.75 261.75 266.2 270.9 266.25 266.75 262.65

Close Price 238.2 233.9 240.05 240.05 233.35 236.95 230.7 231.7 230.55 231.55 233 236.35 237.2 233.8 237.75 247.05 251.7 251.05 251.4 249.55 252 252.75 255.45 260.15 255.9 253 257.75 258.75 261.75 266.2 270.9 266.25 266.75 262.65 267.55

Gain Loss 0.3 4.3 6.15 0 6.7 3.6 6.25 1 1.15 1 1.45 3.35 0.85 3.4 3.95 9.3 4.65 0.65 0.35 1.85 2.45 0.75 2.7 4.7 4.25 2.9 4.75 1 3 4.45 4.7 4.65 0.5 4.1 4.9

Avg Gain 2.02 1.9 1.77 1.82 1.74 1.81 2.01 1.87 1.74 1.95 1.88 1.96 2.14 1.24 1.43 1.99 2.18 2.02 1.9 1.77 1.82 1.74 1.81 2.01 1.87 1.74 1.95 1.88 1.96 2.14 2.32 2.16 2.04 1.89 2.11

Avg Loss 1.21 1.12 1.17 1.09 1.01 0.94 0.92 1.16 1.28 1.19 1.11 1.03 0.95 1.57 1.45 1.35 1.25 1.21 1.12 1.17 1.09 1.01 0.94 0.92 1.16 1.28 1.19 1.11 1.03 0.95 0.89 1.15 1.07 1.29 1.19

RS 1.67 1.70 1.51 1.67 1.72 1.93 2.18 1.61 1.36 1.64 1.69 1.90 2.25 0.79 0.99 1.47 1.74 1.67 1.70 1.51 1.67 1.72 1.93 2.18 1.61 1.36 1.64 1.69 1.90 2.25 2.61 1.88 1.91 1.47 1.77

RSI 62.54 62.91 60.20 62.54 63.27 65.82 68.60 61.72 57.62 62.10 62.88 65.55 69.26 44.13 49.65 59.58 63.56 62.54 62.91 60.20 62.54 63.27 65.82 68.60 61.72 57.62 62.10 62.88 65.55 69.26 72.27 65.26 65.59 59.43 63.94

Table-4.11

87

TECHNICAL ANALYSIS

RSI of HINDUNILVR
60 50 40 30 20 10 0 RSI

Price

Date

Figure -4.12

Interpretation: The above table and chart shows the Relative Strenght Index of Hindustan UniLever Ltd for a period of 30 days. It has ranged from 44 to 73. The highest one is 72.27 where the lowest one is 44.13

88

TECHNICAL ANALYSIS

7.) HEROHONDA LTD

Symbol HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA HEROHONDA Date 13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11 Prev Close 1899.25 1876.8 1849.2 1837.05 1858.6 1862.65 1855 1893.15 1868.5 1898.75 1898.8 1919.65 1937.45 1924.45 1986.45 1979.45 1996.25 1977.85 1930.65 1920.6 2005.75 2013.35 2008.55 2027.95 2017.1 1983.75 2020.9 2026.4 2020 2038.9 2058.4 2056.1 2053.45 2047.3 Close Price 1876.8 1849.2 1837.05 1858.6 1862.65 1855 1893.15 1868.5 1898.75 1898.8 1919.65 1937.45 1924.45 1986.45 1979.45 1996.25 1977.85 1930.65 1920.6 2005.75 2013.35 2008.55 2027.95 2017.1 1983.75 2020.9 2026.4 2020 2038.9 2058.4 2056.1 2053.45 2047.3 2048.55 1.25 18.9 19.5 2.3 2.65 6.15 37.15 5.5 6.4 19.4 10.85 33.35 85.15 7.6 4.8 16.8 18.4 47.2 10.05 62 7 30.25 0.05 20.85 17.8 13 38.15 24.65 21.55 4.05 7.65 Gain Loss 22.45 27.6 12.15 AVG Gain 12.6 11.7 10.86 10.08 15.45 14.88 13.82 14.22 13.2 12.26 14.04 13.43 12.47 12.93 13.4 12.44 11.7 10.86 10.08 15.45 14.88 13.82 14.22 13.2 12.26 14.04 13.43 12.47 12.93 13.4 12.44 11.55 10.72 10.05 AVG Loss 6.95 7.72 10.58 10.55 9.79 9.09 8.78 8.16 8.35 10.13 9.41 8.74 8.57 7.96 7.39 7.03 7.72 10.58 10.55 9.79 9.09 8.78 8.16 8.35 10.13 9.41 8.74 8.57 7.96 7.39 7.03 6.71 6.67 6.19 RS 1.81 1.52 1.03 0.96 1.58 1.64 1.57 1.74 1.58 1.21 1.49 1.54 1.46 1.62 1.81 1.77 1.52 1.03 0.96 1.58 1.64 1.57 1.74 1.58 1.21 1.49 1.54 1.46 1.62 1.81 1.77 1.72 1.61 1.62 RSI 64.45 60.25 50.65 48.86 61.21 62.08 61.15 63.54 61.25 54.76 59.87 60.58 59.27 61.9 64.45 63.89 60.25 50.65 48.86 61.21 62.08 61.15 63.54 61.25 54.76 59.87 60.58 59.27 61.9 64.45 63.89 63.25 61.64 61.88

Table-4.13
89

TECHNICAL ANALYSIS

RSI of HeroHonda
60 50 40 30 20 10 0 RSI

Price

Date

Figure -4.14

Interpretation: The above table and chart shows the Relative Strength Index of
Herohonda Ltd for a period of 30 days. It has ranged from 48 to 65. The highest one is 65 where the lowest one is 48.86.

90

TECHNICAL ANALYSIS

8.) SUN PHARMACEUTICALS LTD

Symbol SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA SUNPHARMA Date
13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11

Prev Close 1564.95 1577 1591.95 1580.55 1560.2 1555.8 1563.9 1545.95 1548.2 1587.4 1569.3 1635.15 1631.65 1664.15 1680.9 1682.5 1702.9 1704.8 1694.35 1687.2 1686.85 1702.45 1682.45 1702 1701.5 1702.8 1698.75 1713.35 1754.5 1761.65 1799.25 1809.8 1790.65 1790.75 1756.85

Close Price 1577 1591.95 1580.55 1560.2 1555.8 1563.9 1545.95 1548.2 1587.4 1569.3 1635.15 1631.65 1664.15 1680.9 1682.5 1702.9 1704.8 1694.35 1687.2 1686.85 1702.45 1682.45 1702 1701.5 1702.8 1698.75 1713.35 1754.5 1761.65 1799.25 1809.8 1790.65 1790.75 1756.85 1785.1

Gain 12.05 14.95

Loss

11.4 20.35 4.4 8.1 17.95 2.25 39.2 18.1 65.85 3.5 32.5 16.75 1.6 20.4 1.9 10.45 7.15 0.35 15.6 20 19.55 0.5 1.3 4.05 14.6 41.15 7.15 37.6 10.55 19.15 0.1 33.9 28.25

Avg Gain 9.05 11.72 10.89 9.05 10.04 12.54 11.64 10.81 9.69 10.39 9.65 9.05 12.54 13.68 12.81 13.35 12.54 11.64 10.81 10.04 10.43 9.69 10.39 9.65 9.05 8.4 8.85 11.15 10.87 12.78 12.62 11.72 10.89 10.11 11.4

Avg Loss 4.35 4.16 3.84 4.35 4.6 4.32 4.76 4.93 5.39 5.01 4.69 4.35 4.32 5.4 5.01 4.65 4.32 4.76 4.93 4.6 4.27 5.39 5.01 4.69 4.35 4.33 4.02 3.73 3.46 3.22 2.99 4.16 3.84 5.99 5.56

RS 2.08 2.82 2.84 2.08 2.18 2.90 2.45 2.19 1.80 2.07 2.06 2.08 2.90 2.53 2.56 2.87 2.90 2.45 2.19 2.18 2.44 1.80 2.07 2.06 2.08 1.94 2.20 2.99 3.14 3.97 4.22 2.82 2.84 1.69 2.05

RSI 67.54 73.80 73.93 67.54 68.58 74.38 70.98 68.68 64.26 67.47 67.29 67.54 74.38 71.70 71.89 74.17 74.38 70.98 68.68 68.58 70.95 64.26 67.47 67.29 67.54 65.99 68.76 74.93 75.85 79.88 80.85 73.80 73.93 62.80 67.22

Table-4.15

91

TECHNICAL ANALYSIS

RSI of SunPharma
60 50 40 30 20 10 0 RSI

Price

Date

Figure -4.16

Interpretation: The above table and chart shows the Relative Strength Index of
SunPharmaceuticals Ltd for a period of 30 days. It has ranged from 62 to 81. The highest one is 80.85 where the lowest one is 62.80

92

TECHNICAL ANALYSIS

9.) SUZLON ENERGY LTD

Symbol SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON SUZLON Date 13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11 Prev Close 66.9 66.8 65.6 64.6 63.95 59.9 59.25 58.7 58.8 58 58.75 58.1 61.05 56.25 55.6 54.2 55.3 55.8 54.6 53.6 53.5 53.9 53.85 54.7 57.3 57.3 57.45 56.5 57.4 56.45 57.6 57.65 57.8 58.05 57.3 Close Price 66.8 65.6 64.6 63.95 59.9 59.25 58.7 58.8 58 58.75 58.1 61.05 56.25 55.6 54.2 55.3 55.8 54.6 53.6 53.5 53.9 53.85 54.7 57.3 57.3 57.45 56.5 57.4 56.45 57.6 57.65 57.8 58.05 57.3 57.9 0.6 1.15 0.05 0.15 0.25 0.75 0.9 0.95 0.85 2.6 0 0.15 0.95 0.4 0.05 1.1 0.5 1.2 1 0.1 2.95 4.8 0.65 1.4 0.75 0.65 0.1 0.8 Gain Loss 0.1 1.2 1 0.65 4.05 0.65 0.55 Avg Gain 0.32 0.3 0.28 0.26 0.29 0.45 0.42 0.4 0.37 0.41 0.38 0.43 0.45 0.27 0.25 0.31 0.32 0.3 0.28 0.26 0.27 0.25 0.29 0.45 0.42 0.4 0.37 0.41 0.38 0.43 0.41 0.39 0.38 0.35 0.37 Avg Loss 0.94 0.96 0.96 0.9 0.72 0.67 0.62 0.58 0.6 0.56 0.59 0.54 0.67 1.07 1.09 1.01 0.94 0.96 0.96 0.9 0.83 0.78 0.72 0.67 0.62 0.58 0.6 0.56 0.59 0.54 0.51 0.47 0.43 0.45 0.37 RS 0.34 0.31 0.29 0.29 0.40 0.67 0.68 0.69 0.62 0.73 0.64 0.80 0.67 0.25 0.23 0.31 0.34 0.31 0.29 0.29 0.33 0.32 0.40 0.67 0.68 0.69 0.62 0.73 0.64 0.80 0.80 0.83 0.88 0.78 1.00 RSI 25.40 23.81 22.58 22.41 28.71 40.18 40.38 40.82 38.14 42.27 39.18 44.33 40.18 20.15 18.66 23.48 25.40 23.81 22.58 22.41 24.55 24.27 28.71 40.18 40.38 40.82 38.14 42.27 39.18 44.33 44.57 45.35 46.91 43.75 50.00

Table-4.17

93

TECHNICAL ANALYSIS

RSI of Suzlon
60 50 40 30 20 10 0 RSI

Price

Date

Figure -4.18

Interpretation: The above table and chart shows the Relative Strength Index of
Suzlon Energy Ltd for a period of 30days. It has ranged from 18 to 50. The highest one is 50 where the lowest one is 18.66

94

TECHNICAL ANALYSIS

10) HCL TECHNOLOGIES LTD

Symbol HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH HCLTECH Date
13-May-11 14-May-11 17-May-11 18-May-11 19-May-11 20-May-11 21-May-11 24-May-11 25-May-11 26-May-11 27-May-11 28-May-11 31-May-11 1-Jun-11 2-Jun-11 3-Jun-11 4-Jun-11 7-Jun-11 8-Jun-11 9-Jun-11 10-Jun-11 11-Jun-11 14-Jun-11 15-Jun-11 16-Jun-11 17-Jun-11 18-Jun-11 21-Jun-11 22-Jun-11 23-Jun-11 24-Jun-11 25-Jun-11 28-Jun-11 29-Jun-11 30-Jun-11

Prev Close 392.8 398.65 405.4 394.35 396.2 371.85 361.4 367.45 371 355 366.5 370.15 377.1 382.35 364.95 369.9 378.6 386.9 373.7 365.05 363.85 366.9 369.6 380.55 384.55 382.45 385.65 389.25 388.25 380.05 372.75 364.15 358.5 362.05 360.6

Close Price 398.65 405.4 394.35 396.2 371.85 361.4 367.45 371 355 366.5 370.15 377.1 382.35 364.95 369.9 378.6 386.9 373.7 365.05 363.85 366.9 369.6 380.55 384.55 382.45 385.65 389.25 388.25 380.05 372.75 364.15 358.5 362.05 360.6 364.15

Gain 5.85 6.75 1.85

Loss

11.05 24.35 10.45 6.05 3.55 16 11.5 3.65 6.95 5.25 17.4 4.95 8.7 8.3 13.2 8.65 1.2 3.05 2.7 10.95 4 2.1 3.2 3.6 1 8.2 7.3 8.6 5.65 3.55 1.45 3.55

Avg Gain 2.58 3.42 3.95 3.96 3.67 3.64 3.64 3.38 3.14 2.91 2.7 3.64 3.64 3.67 3.76 4.11 4.4 4.08 3.78 3.51 3.47 3.42 3.95 3.96 3.67 3.64 3.64 3.38 3.14 2.91 2.7 2.51 2.58 2.4 2.48

Avg loss 3.83 4.39 4.08 3.79 3.67 3.4 3.16 3.01 3.38 3.66 4.01 3.4 3.16 5.66 5.25 4.88 4.53 5.15 5.4 5.1 4.73 4.39 4.08 3.79 3.67 3.4 3.16 3.01 3.38 3.66 4.01 4.13 3.83 3.66 3.4

RS 0.67 0.78 0.97 1.04 1.00 1.07 1.15 1.12 0.93 0.80 0.67 1.07 1.15 0.65 0.72 0.84 0.97 0.79 0.70 0.69 0.73 0.78 0.97 1.04 1.00 1.07 1.15 1.12 0.93 0.80 0.67 0.61 0.67 0.66 0.73

RSI 40.25 43.79 49.19 51.10 50.00 51.70 53.53 52.90 48.16 44.29 40.24 51.70 53.53 39.34 41.73 45.72 49.27 44.20 41.18 40.77 42.32 43.79 49.19 51.10 50.00 51.70 53.53 52.90 48.16 44.29 40.24 37.80 40.25 39.60 42.18

Table-4.19
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RSI of HCL Technology

60 50 40 30 20 10 0 RSI

Price

Date
Figure -4.20

Interpretation: The above table and chart shows the Relative Strength Index of HCL
Technologies for a period of 30 days. It has ranged from 37 to 54. The highest one is 53.53 where the lowest one is 37.80

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4. SUMMARY AND CONCLUSIONS

FINDINGS

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The present project work is done to analyze the stock market in terms of Return and Risk. The investors show interest to identify the opportunities available to them in view of time of investment, weight of investment etc. During this project the following facts have been identified. Cipla company showed a sharp increase in RSI on 10th June due to high positive change RS.11.05 between the close price of Rs.324.4 and previous close price of Rs.335.45. Tata motors showed a sharp increase in RSI on 17th June due to high positive change Rs21.85 between the close price Rs802.2 and Previous close price Rs780.35 Unintech showed a sharp increase in RSI on 21st June due to high positive change Rs2.85 between the close price Rs73.45 and previous close price Rs70.6 Jindalsteel showed a sharp increase in RSI on 10th june due to high positive change Rs14.05 between the close price Rs629.35 and previous close price Rs615.3 HDFC Bank showed a sharp decline in RSI on 7th June due to high negative change Rs77.9 between the close price Rs2671 and previous close price Rs2748.9 Hindustan UniLever Ltd showed a sharp increase in RSI on 3rd june due to high positive change Rs9.3 between the close price Rs247.05 and previous close price Rs237.75

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Herohonda Ltd showed a sharp increase in RSI on 10th june due to high positive change Rs85.15 between the close price Rs2005.75 and previous close price Rs1920.6

Sunpharma Ltd showed a sharp increase in RSI on 21st June due to high positive change Rs44.15 between the close price Rs1754.5 and previous close price Rs1713.35

Suzlon Energy Ltd showed a sharp increase in RSI on 15th june due to high positive change Rs2.6 between the close price Rs57.3 and previous close price Rs54.7

HCL showed a sharp increase in RSI on 14th June due to high positive change Rs10.95 between the close price RS380.5 and previous close price Rs369.6.

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SUGGESTIONS
The present project work has been undertaken to analyze the stock market and suggest the investors when to invest, how much to invest and in which company to invest using some key tools like technical analysis especially Relative strength index. After such analysis and interpretations the following suggestions can be made. The RSI of Cipla on 10th June was 70.77 which breached the 70 mark upside. It means the security was overbought at this time. Its better for the investor to sell his holding at this time and take holding when the RSI is below 30 The RSI of Tatamotors on 1st June is 36.92 which is nearer to the oversold mark i.e, 30. so its better for the investors to take positions in tatamotors at this point of time ie., at Rs724.95

The RSI of Unitech on 1st June is 34.83 which is nearer to the oversold mark i.e, 30. So its better for the investors to take positions in Unitech at this point of time i.e, at Rs69.

The RSI of Jindal steel for this period neither breached 70 mark upside nor 30 downside. So its advisable for the investors to stay away from the stock by not doing any transaction for that period of time.

The RSI of HDFC Bank on 24th June was 71.09 which has breached 70 mark implies the security is overbought. So the investors should sell the stock at that point of time i.e, at Rs3022.3.

The RSI curve of Hindustan Unilever Ltd crossed the overbought mark 7 on 24th june. So its better for the investors to sell the stock at Rs270.9 where RSI is 72.72 and purchase it only when the RSI curve falls down below 30 mark.
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The RSI curve of HeroHonda is between the 70 and 30 which is not breaching the extrems of over bought or over sold limits.. So its better not to transact in this stock for this particular period of time.

The RSI curve of Sunpharmaceuticals noticed a failure swing on 21st June by not declining even though it crossed overbought mark. So the investors can invest in this stock for short term.

The RSI curve of SUZLON Energy Ltd is below the over sold mark from 1st june to 14th june. So it is advisable for the investor to invest in this stock in that period of time.

The RSI curve of HCL Technologies for the given period between 37 and 54 by not crossing oversold or overbought mark. So it is better for the investors to transact in this stock when the curve crosses either one mark.

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CONCLUSION
One of the most basic advices that people give when speaking about the stock market is to buy low, sell high. But this is a short-term view of the mechanics of how the stock market works (another example of this short-term view is short selling stocks). In reality, shares are more complex than that. Stock market is the term given to the act of trading company shares, stocks, and other securities and its derivatives. The stock market has a number of players, which could be range from an individual stockholder to a very large corporate trader. These players can be anybody coming from any part of the world. Trading in the stock market can be done privately with an attorney or with a professional stock exchange dealer who have the power to execute the order. For the most part, stock market is very volatile in nature and that's the reason why it is so hard to predict. But due to persistent studies, the changes in the stock market can now be calculated in a relatively acceptable precision. Here are the various efforts carried out by stock market experts to predict the market's movements. Such a tool is Technical analysis which helps the investors to identify the right stocks at right time with right amounts. This project work has shown a overall view of technical analysis and given good results and the overall project is found to be satisfactory.

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BIBLIOGRAPHY

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Reference Books
Title Author Name Edition Year Publication INVESTMENT MANAGEMENT SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT V.K. BHALLA PUNEETHA VATHI PANDYAN i ii 2008 2011 S.Chandh Vikas Publications of PublishER

INVESTMENT ANALYSIS

PRASANNA CHANDRA

iii

2008

Pata M McGrawHill Education

WEBSITES
http://www.nseindia.com/securities3.PDJ/html http://ww.bseindia.com/98.stocks.at-54/html http://ww.sebi.gov.in/dsgn/funds..n.;345securities/html http://www.bonanza.com/Share-securities52446.addffg/?:html

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