A STUDY ON TECHNICAL ANALYSIS ON SELECTED

STOCKS AT DESTIMONEY SECURITIES PVT LTD

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 CHAPTER 1: INTRODUCTION

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PART A: INDUSTRY PROFILE
INDIAN FINANCIAL SYSTEM:

The budgetary market in India at present is more cutting-edge than numerous

different areas as it got to be sorted out as ahead of schedule as the nineteenth
century with the securities trades in Mumbai, Ahmadabad and Kolkata. In the Mid
1960s, the quantity of securities trades in India turned into eight - including
Mumbai, Ahmadabad and Kolkata.

Aside from these three trades, there was the Madras, Kanpur, Delhi, Bangalore and
Pune trades also. Today there are 23 local securities trades in India. The Indian
stock exchanges till date have stayed stagnant because of the unbending monetary
controls. It was just in 1991, after the liberalization prepare that the India securities
business sector saw a whirlwind of IPO's serially.

The dispatch of the NSE (National Stock Exchange) and the OTCEI (Over the
Counter Exchange of India) in the Mid 1990s aided in controlling a smooth and
straightforward manifestation of securities exchanging. The administrative body
for the Indian capital markets was the SEBI (Securities and Exchange Board of
India). The capital markets in India experienced turbulence after which the SEBI
became somewhat renowned. The business sector escape clauses must be
connected by taking uncommon measures.

Structure of Indian Financial System

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INDUSTRY STRUCTURE:

Indian Financial Industry Structure.

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 Financial services

Capital markets Insurance NBFCs

Asset Asset
Management Life
finance
Insurance
Company
Broking
Non-life Investment
Insurance Company
Wealth
Management
Loan
Investment Company
Banking

About Industry:

Stock is an offer in the responsibility for organization. Stock speaks to a case on

the organization's benefits and income. As one gets more stock, their
proprietorship stake in the organization gets to be more noteworthy. Whether one
say imparts, value or stock, and it all methods the same thing.

Holding an organization's stock implies that individuals are one of the numerous
holders (shareholders) of an organization, and, all things considered, an individual
have a case to everything the organization claims. As a holder, shareholders are

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qualified for their offer of the organization's profit and additionally any voting
rights connected to the stock.

A stock is spoken to by a stock endorsement. This is a bit of paper that is

verification of shareholders possession. In today's PC age, stock records are kept
electronically, which is otherwise called holding shares. This is carried out to make
the shares less demanding to exchange. In the past when a man needed to offer his
or her imparts, that individual physically brought the authentications down to
financier. Presently, exchanging happens with a click of the mouse or a telephone
call. The value development of a stock demonstrates what speculators feel an
organization is worth. The estimation of an organization is its market underwriting,
which is the stock cost reproduced by the quantity of shares remarkable.

The most imperative variable that influences the estimation of an organization is its
profit. Income are the benefit an organization makes, and over the long haul no
organization can make due without them. It bodes well when one consider it. In the
event that an organization never profits, it isn't going to stay in business. Open
organizations are obliged to report their income four times each year (once every
quarter). Stock Exchange watches with frenzied consideration at these times,
which are alluded to as income seasons. The purpose for this is that experts base
their future estimation of an organization on their profit projection. On the off
chance that an organization's outcomes astonishment (are superior to expected), the
value bounced up. On the off chance that an organization's outcomes frustrate (are
more terrible than anticipated), then the cost will fall.

Some accept that it isn't conceivable to anticipate how stocks will change in value
while others surmise that by drawing graphs and taking a gander at past value
developments, one can focus when to purchase and offer. The main thing we do
know, as an assurance is that stocks are unstable and can change in cost to a great
degree quickly.

The essential things to consider about stocks are the accompanying:

At the most principal level, supply and request in the business sector decides stock
cost. Cost times the quantity of shares exceptional (business sector underwriting) is

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the estimation of an organization. Hypothetically, profit are what influence
speculators' valuation of an organization, however there are different pointers that
financial specialists utilization to anticipate stock cost. Recollect that, it is financial
specialists' estimations, disposition and desires that at last influence stock costs.
There are numerous hypotheses that attempt to clarify the way stock costs move
the way they do. Lamentably, there is nobody hypothesis that can clarify
everything.

Securities exchanges allude to a commercial center where financial specialists can

purchase and offer stocks. The cost at which every purchasing and offering
exchange takes is controlled by the business powers (i.e. Request and supply for a
specific stock).A stock exchange is an open business for the exchanging of
organization stock and subordinates at a concurred value; these are securities
recorded on a stock trade and additionally those just exchanged secretly. The span
of the world securities exchange

was assessed at about $36.6 trillion USD toward the start of October 2008.The
stock exchange is a standout amongst the most essential hotspots for organizations
to raise cash. This permits organizations to be traded on an open market, or raise
extra capital for development by offering shares of responsibility for organization
in an open business. Actually, stocks is frequently viewed as the essential pointer
of a nation's monetary quality and advancement. Climbing offer costs, for
occasion, have a tendency to be connected with expanded business venture and the
other way around.

Along these lines, putting resources into stock exchange, the stock trades
additionally assume significance part. Trades additionally go about as the
clearinghouse for every exchange, implying that they gather and convey the shares,
and assurance installment to the merchant of a security. This wipes out the danger
to an individual purchaser or vender that the counterparty could default on the
exchange. In this way, one likewise sees about Stock Exchanges as takes after.

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Stock exchange:

A stock trade is an element which gives "exchanging" offices for stock dealers and
brokers, to exchange stocks and different securities. Stock Exchanges are a
composed commercial center, either enterprise or shared association, where
individuals from the association assemble to exchange organization stocks or
different securities. Stock trades additionally give offices to the issue and recovery
of securities and in addition other budgetary instruments and capital occasions
including the installment of pay and profits.

The securities exchanged on a stock trade include: shares issued by organizations,

unit trusts, subordinates, pooled venture items and bonds. To have the capacity to
exchange a security on a certain stock trade, it must be recorded there. Typically
there is a focal area in any event for record keeping, yet exchange is less and less
connected to such a physical spot, as current markets are electronic systems, which
provides for them favorable circumstances of rate and expense of exchanges.
Exchange on a trade is by individuals just. The beginning offering of stocks and
securities to financial specialists is by definition done in the essential business
sector and consequent exchanging is carried out in the optional business.

A stock trade is regularly the most vital segment of a securities exchange. Supply
and request in stock exchanges is determined by different components which, as in
all free markets, influence the cost of stocks. There is typically no impulse to issue
stock through the stock trade itself, nor must stock be accordingly exchanged on
the trade. Such exchanging is said to be off trade or over-the-counter. This is the
typical way that subordinates and bonds are exchanged. Progressively, stock trades
are a piece of a worldwide business for securities.

List of Stock Exchanges in India

1. Bombay Stock Exchange(BSE)

2. National Stock Exchange(NSE)

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Bombay Stock Exchange (BSE):

The Bombay Stock Exchange Limited is the oldest stock exchange not only in the
country, but also in Asia with a rich heritage of over 133 years of existence. In the
early days, BSE was established as "The Native Share & Stock Brokers
Association." It was established in the year 1875 and became the first stock
exchange in the country to be recognized by the government. In 1956, BSE
obtained a permanent recognition from the Government of India under the
Securities Contracts (Regulation) Act, 1956.

BSE provides an efficient and transparent market for trading in equity, debt
instruments and derivatives. BSE is the first exchange in India and the second in
the world to obtain an ISO 9001:2000 certifications. It is also the first exchange in
the country and second in the world to receive Information Security Management
System Standard BS 7799-2-2002 certification for its BSE On-line Trading System
(BOLT).BSE continues to innovate.

The BSE On-line trading (BOLT):

BSE On-line Trading (BOLT) facilitates on-line screen based trading in securities.
BOLT is currently operating in 25,000 Trader Workstations located across
over 359 cities in India.

National Stock Exchange (NSE):

The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock

exchange. It is the largest stock exchange in India in terms of daily turnover and
number of trades, for both equities and derivative trading. NSE has a market
capitalization of around Rs.47,01,923crores and is expected to become the biggest
stock exchange in India in terms of market capitalization. Though a number of
other exchanges exist, NSE and the Bombay Stock Exchange are the two most
significant stock exchanges in India and between them are responsible for the vast
majority of share transactions. NSE is mutually-owned by a set of leading financial
institutions, banks, insurance companies and other financial intermediaries in India
but its ownership and management operate as separate entities.

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PART B: ABOUT SUBJECT

SECURITY ANALYSIS

An examination and evaluation of the various factors affecting the value of a

security is known as Security analysis. Security analysis refers to the analysis of
tradable financial instruments. Financial instruments can be classified into debt
securities, equities, or some hybrid of the two, futures contracts and tradable credit
derivatives are sometimes included. Security analysis is typically divided into
fundamental analysis, which relies upon the examination of fundamental business
factors such as financial statements, and technical analysis, which focuses upon
price trends and momentum.

Two analytical models When the objective of the analysis is to determine what
stock to buy and at what price, there are two basic methodologies:

• Fundamental analysis maintains that markets may misprice a security in

the short run but that the "correct" price will eventually be reached. Profits
can be made by trading the mispriced security and then waiting for the
market to recognize its "mistake" and re-price the security.
• Technical analysis maintains that all information is reflected already in the
stock price, so fundamental analysis is a waste of time. Trends 'are your
friend' and sentiment changes predate and predict trend changes. Investors'
emotional responses to price movements lead to recognizable price chart
patterns. Technical analysis does not care what the 'value' of a stock is.
Their price predictions are only extrapolations from historical price
patterns.

Investors can use both these different but somewhat complementary methods for
stock picking. Many fundamental investors use techniques for deciding entry and
exit points. Many technical investors use fundamentals to limit their universe of
possible stock to 'good' companies

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FUNDAMENTAL ANALYSIS

Fundamental analysis of a business involves analyzing its financial statements and

health, its management and competitive advantages, and its competitors and
markets. When applied to futures and forex, it focuses on the overall state of the
economy, interest rates, production, earnings, and management. When analyzing a
stock, futures contract, or currency using fundamental analysis there are two basic
approaches one can use; bottom up analysis and top down analysis. The term is
used to distinguish such analysis from other types of investment analysis, such as
quantitative analysis and technical analysis. A method of security valuation which
involves examining the company's financials and operations, especially sales,
earnings, growth potential, assets, debt, management, products, and competition.
Fundamental analysis takes into consideration only those variables that are directly
related to the company itself, rather than the overall state of the market or technical
analysis data. The end goal of performing fundamental analysis is to produce a
value that an investor can compare with the security's current price in hopes of
figuring out what sort of position to take with that security

Fundamental analysis is performed on historical and present data, but with the goal
of making financial forecasts. There are several possible

Objectives:

• To conduct a company stock valuation and predict its probable price

evolution.
• To make a projection on its business performance.
• To evaluate its management and make internal business decisions.
• To calculate its credit risk.

TECHNICAL ANALYSIS

Technical analysis is the use of past prices and trading volume of financial
instruments to forecast future prices; economic and fundamental analysis is outside
of its purview. A technical analyst believes that all relevant information has

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already been accounted for in the current market. Technical analysis can be used
for most kinds of financial markets that use public exchanges and where there is
sufficient volume of trading, such as the exchanges for stocks, futures and
currencies. However, it is not very useful for commodity markets, which are much
more strongly driven by fundamentals.

So why does technical analysis discount fundamental analysis? Because the

technical analyst believes that the main movers of the market are the greed and fear
of uninformed investors. Thus, these investors are affected by what the market is
doing, and their reactions seem to follow patterns that tend to repeat themselves
over time. These patterns can be studied best through the use of charts, which
graphs prices and volume over time.

Technical analysis is premised on the following:

• Market value is determined by the equilibrium of supply and demand.

• Both rational and irrational factors determine supply and demand.
• Although there are fluctuations, market prices trend up or down for a
variable, but usually, extended time.
• Changes in the trend result from changes in supply and demand.The
converse is not necessarily true, since changes in supply and demand are
also necessary to continue a trend; otherwise the market price would remain
the same.
• Regardless of their cause, trend changes can be detected in charts of prices
and volume plotted over time.
• Some chart patterns recur frequently; hence, they are useful in trading
decisions based on a probability that a pattern will repeat itself.

Trends and Indicators

The primary pattern followed by technical analysts is the trend, which is the
direction that market prices or individual security prices are moving. The primary
trend is the main direction of the market over time—in many cases, for months.
However, within the primary trend are many secondary and tertiary trends, which

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reflects the imbalance between supply and demand over shorter time frames. These
minor trends also form patterns within the primary trend. In fact, many of the
patterns have a fractal nature where the smaller patterns and the larger patterns
have the same general shape but extend over different time periods, such as over
the day, week, month, or even years.

Another major tool of the technical analyst is the use of market ratios, or market
indicators, and other statistics, such as odd-lot trading, short-sale ratios, and
volume of trading that indicate market sentiment, which is the optimism or
pessimism felt by most of the uninformed traders.

Technical analysts also use rules, which have accumulated over the years as traders
noticed the juxtaposition of events that seem to have a strong correlation, and, thus,
predictive power. These rules have been codified in an attempt to capture
relationships that seem to be persistent, and sometimes, there's even an attempt to
"explain" the relationship. Thus, there is a rule that "As January goes, so goes the
year." Another old rule was that the market went up or down along with the
hemlines of women's dresses, and that if a team, either a current member or former
member, of the National Football Conference wins the Super Bowl, then it will be
a good year for the stock market. The latter rule has been correct 82% of the time
— there is no statistical corroboration of the predictive value of women's hemlines,
however. It probably wouldn't be wise to bet one's fortune on these rules!

Some rules do have a strong statistical correlation. One such rule is the presidential
third-year rule, which states that the stock market is always up on the 3rd year of a
president's term. Since 1945, these years have averaged returns of 17.4%—twice as
high as the other years of the presidential terms. In fact, the S&P 500 has never
posted a loss during a term's 3rd year, and was up 23% in 2003, the 3rd year of
George W. Bush's 3rd year. However, the market did not do as well in the 3rd year
of Barack Obama's 1st term, with the stock market up only a little from the
beginning of the year to year-end.

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Short History of Technical Analysis

Technical analysis began in the late 1800's when there was little else to guide one's
trading decisions other than market data. There was little information on individual
companies or even the economy, and so, some traders tried to predict stock prices
by observing the overall stock market, since most of the time, the price movements
of individual stocks are determined by the movement of the market as a whole.

The Dow theory was one of the earliest attempts at technical analysis of the
markets. Charles H. Dow, one of the founders of Dow Jones observed that the
market basically follows a primary trend that is superposed on the many smaller
movements of the market until a reversal occurs. Charles Dow developed 2 indexes
that helped his analysis of the market: the Industrial Average, which would later be
called the Dow Jones Industrial Average (DJIA) and the Railroad Average, which
was based on 10 railroads and 2 industrial stocks. Railroads were far more
important in Dow's day than they are today, which is why railroads constituted
most of what would eventually become the Dow Jones Transportation Average.

The Dow theory used both the DJIA and the Railroad Average to confirm a
reversal. If both averages change direction, then this is treated as a confirmation of
the reversal. The major drawback to the Dow theory is that it has no predictive
value—there is no guidance as to how long the trend will last or when the reversal
will occur. That there are primary trends in major market indexes is easily
observable in the charts.

DOW THEORY:

The thoughts of Charles Dow, the first supervisor of the Wall Street Journal,
structure the premise of specialized investigation today. Charles Dow made the
Industrial Average, of top blue chip stocks, and a second normal of top railroad
stocks (now the Transport Average). He accepted that the conduct of the

Midpoints mirrored the trusts and apprehensions of the whole market. The conduct
designs that he watched apply to business sectors all through the world.

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Markets fluctuate in more than one time frame at the same time:

 The first is the everyday variety because of neighborhood reasons and the
equalization of purchasing and offering at that specific time (Ripple).

 The optional development covers a period extending from days to weeks,

averaging most likely between six to eight weeks (Wave).

 The third move is the immense swing covering anything from months to years,
averaging between 6 to 48 months. (Tide).

 Bull markets are wide upward developments of the business that may most
recent quite a long while, hindered by optional responses. Bear markets are
long decays hindered by auxiliary encourages. These developments are alluded
to as the essential.

Primary Phases of Movements

Auxiliary developments ordinarily follow from 33% to 66% of the essential pattern
subsequent to the past optional development.

Every day vacillations are imperative for transient exchanging, however are
immaterial in examination of wide market developments.

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Primary Movements have Three Phases

1. Bull markets
o Bull markets begin with resuscitating certainty as business conditions move
forward.
o Prices climb as the business reacts to enhanced income wild theory
overwhelms the business sector and value advances are taking into account
trusts and desires as opposed to real result.

2. Bear markets
o Bear markets begin with deserting of the trusts and desires that managed
expanded costs.
o Prices decrease because of baffling profit.
o Distress offering takes after as examiners endeavor to close out their
positions and securities are sold without respect to their actual quality.

3. Ranging Markets
o A optional response may take the type of a 'line', which may persevere for a
few weeks.
o Price changes inside a slender scope of around five percent.
o Breakouts from a reach can happen in either course.
o Advances over the maximum furthest reaches of the line signal gathering
and higher costs;
o Declines underneath as far as possible demonstrate dissemination and lower
costs;

o Volume is utilized to affirm value breakouts.

BULL TRENDS

A bull trend is identified by a series of rallies where each rally exceeds the highest
point of the previous rally. The decline, between rallies, ends above the lowest
point of the previous decline.

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Successive higher highs and higher lows

The start of an uptrend is signaled when price makes a higher low (trough),
followed by a rally above the previous high (peak):

Start = higher Low + break above previous High.

The end is signaled by a lower high (peak), followed by a decline below the
previous low (trough):

End = lower High + break below previous Low.

BEAR TRENDS:

A bear pattern begins toward the end of a bull pattern: when a rally closes with a
lower top and afterward withdraws beneath the past low. The end of a bear pattern
is indistinguishable to the begin of a bull pattern. Every progressive rally neglects

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to enter the high purpose of the past rally. Every decrease ends at a lower point
than the previous decay.

Successive lower highs and lower lows

Large Corrections: A large correction occurs when price falls below the previous
low (during a bull trend) or where price rises above the previous high (in a bear
trend).

A bull trend starts when price rallies above the previous high,

A bull trend ends when price declines below the previous low,

A bear trend starts at the end of a bull trend (and vice versa).

The Objectives of Technical Analysis

The main objectives of technical analysis are to be able to profit from trading by
observing market patterns and statistics, to know when to enter and exit a market,

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especially when it starts to shift, and to not let emotions influence trading
decisions.

Because technical analysis is based on the emotional trading of the uninformed

masses, it is only effective in auction markets, where many buyers and sellers
converge to 1 point—be it the floor of an exchange or a website—where the public
price is determined by the highest bid price and the lowest ask price.

Although technical analysis takes some of the emotion out of trading by relying on
specific signals, it does require intuition and interpretation, since technical
information is rarely unambiguous. Patterns will rarely be the exact shape that the
trader is looking for and the value of ratios will often border on blurry edges.
Furthermore, even if the pattern or ratio is unambiguous, it doesn't mean that the
trader will profit, even if the trades are executed flawlessly, because almost all of
the predictive value of technical analysis is based on probabilities. Furthermore,
these probabilities cannot be determined precisely, because there is a great deal of
interpretation in technical analysis, so differing probabilities may be due to
different interpretations. Oftentimes, rules have to be changed, because what
worked before no longer works. Hence, there will be times—maybe many times—
when the expected doesn't happen. The primary hope of the technical analyst is
that being right will happen more often than being wrong.

Does Technical Analysis Work?

There are many websites that offer extensive information on technical analysis,
and websites that publish market data also offer many tools used in technical
analysis.

The weak form of the efficient market hypothesis hypothecates that since past
market information provides no clues about the future market, and that trades
exhibit a random walk, making market prices unpredictable, technical analysis
can't work. While there are many arguments for and against technical analysis,
stock market bubbles and their aftermath do seem to support the idea that market

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sentiment moves the market at least significantly, if not more than fundamental
data.

So, does technical analysis work? It seems to work for some people, but the
question you have to ask yourself is, is it worth the amount of time that you will
spend analyzing prices, volumes, and other market data? Will you enjoy such
detailed analysis? Will the market consume your consciousness? Will your profits
exceed your losses? While I have read about people, such as Warren Buffett,
becoming rich by their fundamental analysis of individual companies and their
prospects, I have never read about anybody becoming rich through technical
analysis. This is not to say that it doesn't work, but it may not work as well as other
methods.

Furthermore, many technical analysis proponents seem to make more money

selling their system than actually trading the market. One of the most famous
examples is Ralph Nelson Elliott who made bundles of money giving talks and
selling newsletters, touting his Elliott Wave Theory. But there is little evidence that
he made a lot of money actually using his system to trade stocks!

How Technical Analysis is done

Technical analysis is done by identifying the trend from past movements and then
using it as a tool to predict the future price movements of the stock with the use of
the tools of technical analysis.

Main tools used in Technical analysis

The main tools used by technical analysis are:

• The Dow Jones theory which asserts that stock prices demonstrate a pattern
over four to five years and these patterns are mirrored by indices of stock
prices. The theory employs two Dow Jones Averages – the industrial

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 average and the transportation average. If industrial average is rising, then
transport average should also rise. Simultaneous price movement is the
maid prediction which may show bullish as well as bearish results.
• Chart Patterns are used along with Dow Jones Theory to predict the market
movements. Various types of charts are used for this purpose.

Assumptions of Technical Analysis

1. The Market Discounts Everything

A noteworthy feedback of specialized examination is that it just considers value

development, overlooking the key variables of the organization. On the other hand,
specialized investigation expect that at any given time a stock's value reflects
everything that has or could influence the organization - including basic elements.
Specialized investigators accept that the organization's basics, alongside more
extensive financial variables and business brain research, are all valued into the
stock, uprooting the need to really consider these components independently. This
just leaves the investigation of value development, which specialized hypothesis
sees as a result of the supply and interest for a specific stock in the business.

2. Price Moves in Trends

In specialized investigation, value developments are accepted to take after patterns.

This implies that after a pattern has been made, the future value development is
more inclined to be in the same course as the pattern than to be against it. Most
specialized exchanging methods are taking into account this presumption.

3. History Tends To Repeat Itself

An alternate vital thought in specialized examination is that history has a tendency

to rehash itself, essentially regarding value development. The redundant way of
value developments is credited to market brain research; as such, market members
have a tendency to give a reliable response to comparative business boosts over the
long haul. Specialized examination uses outline examples to examine market
developments and comprehend patterns. Albeit a considerable lot of these outlines
have been utilized for over 100 years, they are still accepted to be applicable on the

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grounds that they outline designs in value developments that frequently rehash
themselves.

Technical Indicators

A) MOVING AVERAGE:
A simple, or arithmetic, moving average that is calculated by adding the closing
price of the security for a number of time periods and then dividing this total by the
number of time periods. Short-term averages respond quickly to changes in the
price of the underlying, while long-term averages are slow to react.

In other words, this is the average stock price over a certain period of time. Keep in
mind that equal weighting is given to each daily price. As shown in the chart
above, many traders watch for short-term averages to cross above longer-term
averages to signal the beginning of an uptrend. As shown by the blue arrows,
short-term averages (e.g. 15-period SMA) act as levels of support when the price
experiences a pullback. Support levels become stronger and more significant as the
number of time periods used in the calculations increases.

B) RELATIVE STRENGTH INDEX (RSI):

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There are a couple of diverse apparatuses that can be utilized to translate the
quality of a stock. One of these is the Relative Strength Index (RSI), which is a
correlation between the days that a stock completes up and the days it completes
down. This pointer is a major apparatus in energy exchanging.

The RSI is a reasonably simple model that anyone can use. It is calculated using
the following formula.

RSI = 100 - [100/ (1 + RS)]

RS = (Avg. of n-day up closes)/ (Avg. of n-day down closes)

n = days (most analysts use 9 - 14 day RSI)

The RSI ranges from 0 to 100. At around the 70 levels, a stock is considered
overbought and you ought to consider offering. In a positively trending market
some accept that 80 is a superior level to demonstrate an overbought stock since
stocks frequently exchange at higher valuations amid buyer markets. In like
manner, if the RSI approaches 30, a stock is considered oversold and you ought to
consider purchasing. Once more, make the change in accordance with 20 in a bear
market.

The littler the quantity of days utilized, the more unstable the RSI is and the all the
more frequently it will hit extremes. A more drawn out term RSI is additionally
moving, fluctuating a considerable measure less. Distinctive divisions and
businesses have fluctuating edge levels regarding the RSI. Stocks in a few
businesses will go as high as 75-80 preceding dropping back, while others have an
intense time breaking past 70. A decent manage is to watch the RSI over the long
haul (one year or more) to focus at what level the verifiable RSI has exchanged and
how the stock responded when it arrived at those levels.

The RSI is an incredible pointer that can help you profit. Be mindful that enormous
surges and drops in stocks will drastically influence the RSI, bringing about false
purchase or offer signs. Most speculators concur that the RSI is best in
"maneuvering up" or expanding certainty before settling on a venture choice - don't

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contribute basically taking into account the RSI numbers.

Figure: Relative Strength Index (RSI)

Above, we have a RSI graph for AT&T. The RSI is the green line, and its scale is
the numbers on the right hand side that go from 0 to 100. Notice the RSI was
approaching the 60-70 level in December and January, and afterward the stock
(blue line) sold off. Additionally, recognize that when the RSI dropped to 25
around October the stock moved up almost 30% in only a few weeks.

Utilizing the moving midpoints, pattern lines disparity, backing and resistance
lines alongside the RSI outline can be extremely helpful. Climbing bottoms on the
RSI diagram can deliver the same positive pattern comes about as they would on
the stock outline. Should the general pattern of the stock value digression from the
RSI, it may start a cautioning that the stock is either over- or under purchased.

Momentum

The momentum is certainly the easiest one to compute. The momentum is the
difference between today's price and the one of n days before.

With: Pttoday's price. Pt-n the price at the date t-n

The momentum is: Mt = Pt- Pt-n.

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CHAPTER 2: RESEARCH DESIGN

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2.1 TITLE OF THE STUDY:

“A Study on Technical analysis on selected stocks”

2.2 STATEMENT OF PROBLEM:

Analysing the trading activity on selected stock, Which has been undertaken to
compare the selected technical analysis tools available for forecasting the future
trends or patterns in the market.

2.3 NEED FOR THE STUDY:

Every investor wants to know how the company is going to perform in the near
future which they are intrested to invest in. This study helpsout those investors in
buying and selling of the stocks, it is done by using technical tools like MA, RSI.
This is to make the investor understand when to buy & when to sell.

2.4 OBJECTIVES OF THE STUDY:

• The study's key target is to execute a through particular examination on a
select course of action of worth stocks by deciphering their quality graph
samples and pointers to find the key entry and way out centers for trade to
make extraordinary return.
• To discover the backing and resistance levels of individual stocks with the
assistance of past value conduct and aide people to make entrance and way
out.
• To learn the fluctuation of stock price movement in security market.
• To help the investor in making decisions, based on report.

2.5 METHODOLOGY:

For the study reason both essential and optional information are utilized. By and
large the essential information gathered from the organization's worker, stock
merchants and financial specialists managing in the supply of the specific recorded

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organization & the auxiliary information gathered from records of the organization,
speculators and dealers. The information of past exhibitions additionally have been
gathered. The essential and optional information have been gathered to cover each
part of the study and to fills our need of the examination study.
These are clarified underneath:

PRIMARY SOURCES:
Crude information is a term for information gathered from a source. Crude
information has not been subjected to handling or some other control, and are
additionally alluded to as essential information. Additionally they are the
information, which are gathered initially shockingly. For study reason essential
information source were:

• Discussions with the supervisor.

• Other individuals from the office & accessible sources.

SECONDARY SOURCES:

This is efficient study in perspective of helper data, infers data that are starting now
available in the hands of the all inclusive community which are assembled by the
lawmaking body, associations, regulatory force to ensure the straightforwardness
in the trading development. The helper data may either be circulated or
unpublished.

Distributed information will be accessible

• Websites:destimoney.com, nseindia.com, moneycontrol.com, investopedia.com

• Business Journals, books
• Reports by administration, researchers, specialists, representatives and so on…

2.6 SCOPE OF THE STUDY:

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For the study, 10 companies were selected from BSE. There are following steps in
methodology:

• Use of technical tools i.e. Moving Average, Relative Strength Index.

• Preparation of stock chart is Line chart showing the price and volume of the
stocks over the period of time and Interpret charts.

• Identification of patterns and trends in the stock price movements.

THE STOCKS SELECTED ARE AS FOLLOWS.

 HUL

 COLGATE PALMOLIVE

 GODREJ

 NESTLE

 GILLETTE INDIA

 KWALITY

 BRITANIA

 ITC

 DABUR INDIA

 ASIAN PAINTS

TECHNICAL TOOLS USED FOR DATA ANALYSIS:

Chart patterns

 Line charts: It is a type of chart where it represents the series of

data through points called ‘marker’ and joining the points with the
straight line. Here it shows only the closing price over the period of
time as closing price is most important in the stock price it will be

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 used to draw line chart . It doesn’t show opening price, high price,
low price information when we point the curser on the points which
is there in line chart because it includes only the closing price as
the value indicator.

 MS-Excel has been used for calculations part.

Indicators of the study:

 Moving Averages
 Relative strength index (RSI)

2.7 LITERATURE REVIEW:

 Hartono, Jogiyanto, Sulistiawan, Delhi, 2015 “Performance of technical

analysis in declining global market” they found technical analysis performs
better in the stock market with high volatility and a downward trend than stable
and uptrend markets. This article says that technical analysis helps to get higher
profits by suggesting the investor whether to buy, hold, or sell the securities.

 Sulistiwan, Dedhy, Hartono, Jagiyanto, 2014 “Can technical analysis signals

detect price reactions around earning announcement?” they have found that
technical analysis can detect price reaction before and after the earning
announcement. But technical analysis is more profitable for before earning
announcement than after earning announcement.

 Abbad, Jumah, Fardousi, Bashar, Muneer 2014 “Advantage of using the

technical analysis to predict the future price on Amman stock exchange”
they have founded that technical analysis is used in every market and they had
tried to know the capacity of the technical analysis to predict or estimate the
future. Their research shows that the technical analysis has vital power to predict
the future stock price and also it gives profitable suggestion whether to buy, hold,
or to sell the securities at the particular time.

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  Jacinta chanphooi, Zaindhun, Rozaimah, 2014 “Future trading signal using
an adaptive algorithm technical analysis indicator, adjustable moving
average: empirical study on Malasian future market” they have come to
known technical analysis algorithms, adjustable moving average are more useful
in providing the most appropriate signal to buy or hold the stock. It is useful in
future price and trend prediction.

 Arora, Nitin, 2013 “Testing of technical efficiency catching-up in Indian

sugar industry” for the study purpose the data of Indian sugar industry has
taken to undertake to test the hypothesis of convergence. It shows that technical
inefficiency occurs when there is managerial inefficiency. They have observed
that technical analysis has found valid during pre-reforms periods than post
reforms periods.

 Abbey, Boris s, Doukas, John A, 2012 “Is technical analysis is profitable for
individual currency traders” they have found that the technical analysis
associated with performance is negative. If the individual currency traders use
technical analysis will suffer from the poor performance.

 Abbondante, Paul, 2010 “Trading volume and stock indices: a test of

technical analysis” the researchers had analysed the movement of the individual
stock price technical analysis and its importance on trading volume has been
used. Attention has been paid to investigate the relationship between trading
volume and various stock indices, even though stock indices can track overall
market trend, trading volume could be used to forecast future stock market
trends.

 Holter James, 2008 “Technical analysis is the best practice” he had found that
the technical analysis deals with price, price changing and future forecasting,
every investor use technical analysis to determine the performance and future of
the security, it is an indicator for a trader before trading. It contains various tools
and methods which help to get nearer to real situation.
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  Palmeri, Jason, 2006 “Disability studies, cultural analysis, and the critical
practice of technical communication pedagogy” in their research they have
revealed that the technical analysis which can experience, knowledge, and
material needs of the investor with disability. If data collected by people are
inappropriate then technical analysis provide disabled answer.

 Ravindra, Wang, 2006 “The Relationship of Trading Volume to Stock

Indices in Asian Markets” Stock market indices from six developing markets in
Asia are analyzed over the 34 month period ending in October 2005. In the South
Korean market, the causality extends from the stock indices to trading volume
while the causality is the opposite in the Taiwanese market.

 Twibell, David A 2005 “Technical analysis has never received much respect
in the investment community but the study shows it may valuable tool” they
researched and revealed that technical analysis is not much effective as it uses
chart patterns of the past to predict the future which is not appropriate but now a
days everybody wants to consult technical analyst to know about the future
trends before investing in any stocks. It is not suitable for all the clients except
who want to sort through the missing information which is not sustaining in
today’s market.

 Schaff, William, 2004 “Pay attention to technical analysis” they have

revealed that technical analysis is a method which evaluates securities by
analysing past price and volume pattern in the charts indicates future. Intrinsic
value doesn’t matter nor do generic categories of valuation such as value or
growth equities. RSI, Moving average, commonly used methods of technical
analysis.

 Gupta, 2003“Fundamental Sources of His Worries Concerning the Stock

Market”A sample comprise of middle-class household’s spread over 21

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 sates/union territories. The study reveals that the foremost cause of worry for
household investors is fraudulent company management and in the second place
is too much volatility and in the third place is too much price manipulation in
market.

 Rattiner, Jeffery H, 2002 “Bird’s-eye investing: technical analysis is great

double check to fundamental analysis when planning or rebalancing client
portfolios” the researched founded that technical analysis is not only use to
determine the future trend by using past data but it suggests before investing in
the securities and also gives the signal whether to buy, hold, or sell it is related to
Dow theory, it helps in fundamental analysis for planning and rebalancing clients
portfolio.

 Sehgal, Sanjay garhyan, Anurag, 2002 “Abnormal returns using technical

analysis:- Indian experience” here the researchers put the technical analysis
into data comprised daily for 2years. They had found that the technical analysis
is the powerful tool which helps in formulating extra-normal return strategies.

2.8 LIMITATIONS OF THE STUDY:

 The study is based on TEN companies of same sector.

 The analysis is restricted to a sample size because of lack of time and
resources.
 The analysis is based on chart pattern.

 The recommendations made may not be a perfect prediction of the future as

technical analysis is not an absolutely accurate practice

2.9 CHAPTER SCHEME:

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CHAPTER 1: Introduction

This chapter gives the brief introduction about Indian Financial System and the
concept of Technical Analysis.

CHAPTER 2: Research Design

This chapter deals with the concept of research design such as Title of the study,
Statement of the problem, Objective, Need, Scope, Review of literature, Research
design, Methodology, Limitation.

CHAPTER 3: Company Profile

This chapter gives a brief insight about Destimoney securities pvt ltd.

CHAPTER 4: Data Analysis & Interpretation

This chapter includes analysis and inferences of the data collected.

CHAPTER 5: Summary of Findings & Conclusion

It comprises the findings and conclusion based on the data collected.

CHAPTER 6: Recommendations & Suggestion

Drawn with direct reference to objectives of the study & This chapter concludes
the project report.

Bibilography

Beside various chapter, the study provides Bibliography and Annexure.

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 CHAPTER 3: COMPANY PROFILE

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3.1 Introduction:

It was established in the year 2005, Destimoney it is listed as one of the most
leading full financial service origination in a country today. Destimoney mainly
believes in creating the trust towards their client and customers as every business
relation is based onelation of trust, The satisfaction which expressed by our
customers gives testimony to this fact, The company offers a garland of financial
services in equities, mutual funds, insurance, and wealth management services.
Destimoney offers services like commodity broking to its customers through its
associate company Destimoney Commodities Private Ltd. Apart from rapidly
growing retail broking and distribution business , the company is also focusing on
advisory services (transaction, M&A, fund raising etc.) and institutional broking.
As on Sep 30, 2011, the company with a manpower strength of over 750 dedicated
employees present in 20 states, we are large enough to deliver the value but
flexible enough to provide you with a highly valuable service. The main services
carried are Trading & NCDEX member of BSE, NSE& MCX. The major services
provided by DESTIMONEY are Equity & Derivatives, Currency Derivatives,
Commodities, Demat services, Wealth Management Services.

3.2 Key people:

• Dishant Sagwaria
(President & CEO of Destimoney securities.)
• Prashant Bansal
(National Sales Head - Broking & Wealth Management)
• Sanjay Nayak
(Head-Operation)
• Michael D’Souza
(Head - Risk Management)

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3.3 Promoter:

New Silk Route is a leading Asia-focused growth capital firm founded in 2006
with $1.5 billion under management, focused on the Indian subcontinent, as well
as other rapidly growing economies in Asia and the Middle East. NSR has
investments in Consumer Services, Telecom, Manufacturing, Financial Services
and Infrastructure amongst others.

3.4 Vision, mission & future plans:

Vision:

• To provide a world class customer centric financial services entity which

satisfy the financial needs and requirements of 'Middle Class India' with
global processes.
• To focus on profitable growth.

• To unlock and explore potential across four dimensions:

-Individual

-Team

-Customer

-Marketplace

Mission:

• To build strong relationships with our clients by creating value for them.
• To get deep through insight into client's financial needs and goals
&offer customized solutions.

• To hold & implement clients trust in our products & services.

• To protect & increase client's capital.

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 • To provide or show transparent and knowledge based investment
process & system.

Future plans:

• Destimoney is planning to start their services in two more additional field

those are, first “life insurance policy” & second “real estates.

3.5 SWOT analysis of company:

Strength:

• Destimoney brand: The biggest strength is the brand itself, as Destimoney

is one of the most leading company and has a good goodwill the brand
name itself will attract the customer towards the organisation

• Low prising: The brokerage charges rate of Destimoney is lower as what it

is in other organisation and banks.

• Co-operative & experienced managers:The staff and manager are well

qualified and having good experience in their work .they well co-operate
with the clients as well among themselves.

Weakness:

• Low awareness due to lake of advertisement: Destimoneyhave very poor

advertising strategy and marketing strategy and which in turn is not
known by many of the customers of market. Hence proper advertisement is
to be carried out to make the company more competitive in market

• In experience staff: This is the problem in most of the organisation as to

non-experience staff, sometime it might be possible that certain activities
are given to the employee who doesn’t know about the particular job

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Opportunities:

• Increasing spending powers: The best opportunities to grow is by making

their client to spend more in the securities market to earn higher profit and
these can be only done by assuring them about getting good return on their
investments.

• Siking of new customers through marketing: The opportunity to grow is

by getting new customer and getting those through the medium of
marketing the company services. Marketing is the only media which helps
to attract more customers towards the organisation.

• Changing mind-set of customers: Many people in India have the mind-set

that the investment in securities is a loss making thing, therefore it is the
duty of the organisation to change this mind-set of customers by showing
good performance in their services.

Threats:

• Competition from existing players in market:

Every business is having threats from other similar organisation and it is the duty
of organisation to know how to deal with the existing competing firm and to be
the unique in the market.

• Conflict in stock market:

Conflicts are everywere and it is the duty of organisation to avoid the conflict. One
has to understand the market and to analyse the market to avoid conflict as here are
many tools to analyse the stock market.

3.6 PRODUCTS:

• Option Strategy:

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Choice Strategy is a novel product provided by Destimoney. It has three items
under this heading. Through this component customers can exchange subsidiaries
fragment in a business sector.
• Equisip:
DestimoneyEquisip is a simple approach to put resources into the value markets,
which helps in collecting riches by checking little, standard speculations Equisip
permits you to put resources into the value markets with pre-altered sums or
amounts at characterized interims in NIFTY EFT's and Gold ETF's.
• Intra-day:
Intra-Day item empowers customers to take influence in intraday position in real
money and prospects. Customers can purchase and offer particular stocks amid the
day. Customers need to square off their open positions before 3.20 pm or will these
will be squared-off by us before business sector closes.
• NiveshDhan :
NiveshDhan is Destimoney's one of a kind uncommon membership plan. Unlike
whatever other accessible item in the business sector, under Niveshdhan the
customer can select to subscribe to an uncommon membership plan from an
extensive variety of sums structure Rs.2500 to Rs.100000.
• After market order (AMO):
AT Destimoney, we comprehend that our customers work in a quick pace
environment. With our After Market Order alternative you can now put orders
post-retail hours. Orders set reseller's exchange hours are sent to the trade at
whatever point the trade next opens for Exchanging
• Delivery:
Conveyance item permits us to buy stock against our credit adjust and offer stock
just from our holding. On buy exchanges, there will be 100% edge hindering for
the exchanging day. Offer exchanges will be permitted in view of possessions
accessible and deal continues would be discharged for the exchanging day. This
item is perfect for customers with venture viewpoint.
• Buy today and sell tomorrow (BT & ST):
Under this item customers can Buy shares today and Sell same tomorrow. This is
an office that permits you to offer shares even one day after the purchase request
dare, without you waiting for the receipt of shares into Demat account.

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3.7 Major competitors:

There are many other stock broking companies in India which are said to be the
competitors of Destimoney. Some of them are as follows,

• Share Khan Ltd.

• ICICI Securities Ltd.
• Lotak Securities Ltd.
• Indiabulls Financial Services Ltd.
• India Infoline
• Motilal Oswal Securities
• Karvy Securities
• HDFC Securities

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 CHAPTER 4: DATA ANALYSIS AND
INTERPRETATION

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HUL

20 DAYS MOVING AVERAGE

HUL
1200

1000

800

600

400 Series 1

200

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of June 2016 & end of August 2016 indicating the
security over bought implying the sell signal. It touches the lower price in the
month of January 2016, April 2016 & October 2016 indicating the security over
selling implying the buy signal.

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RSI

80

70

60

50
RS
40
RSI
30
OS
20 OB

10

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the Month of June, July as the
securities are over bought.

In the Month of May & October the investor can go for Buy as the securities are
oversold.

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COLGATE PALMOLIVE

20 DAYS MOVING AVERAGE

COLGATE-PALMOLIVE(INDIA)LTD
1200

1000

800

600
Series 1
400

200

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of August 2016, November 2016 to December 2016
indicating the security over bought implying the sell signal. It touches the lower
price in the month of March 2016 to April 2016 indicating the security over selling
implying the buy signal.

RSI
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 90

80

70

60

50 RS
40 RSI
30 OS

20 OB

10

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the month of July as the
securities are overbought.

In the Month of February, May, October, December the investor can go for Buy as
the securities are oversold.

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GODREJ

20 DAYS MOVING AVERAGE

GODREJ INDUSTRIES LTD

10000
9000
8000
7000
6000
5000
4000 Series 1
3000
2000
1000
0

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of August 2016, October 2016 & December 2016
indicating the security over bought implying the sell signal. It touches the lower
price in the month of February 2016, March 2016 & April 2016 indicating the
security over selling implying the buy signal.

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RSI

100
90
80
70
60
RS
50
RSI
40
OS
30
OB
20
10
0

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the month of March, April,
June, July, September as the securities are overbought.

In the Month of February, November the investor can go for Buy as the securities
are oversold.

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NESTLE

20 DAYS MOVING AVERAGE

NESTLE INDIA LTD

8000
7000
6000
5000
4000
3000 Series 1

2000
1000
0

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of June 2016 & August 2016 indicating the security over
bought implying the sell signal. It touches the lower price in the month of January
2016 to April 2016 indicating the security over selling implying the buy signal.

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RSI

90

80

70

60

50 RS
40 RSI
30 OS

20 OB

10

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the month of March, April,
July, October as the securities are overbought.

In the Month of February, September, November, December the investor can go

for Buy as the securities are oversold.

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GILLETTE INDIA

20 DAYS MOVING AVERAGE

GILLETTE INDIA LTD

6000

5000

4000

3000
Series 1
2000

1000

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of May 2016 to August 2016 indicating the security over
bought implying the sell signal. It touches the lower price in the month of April
2016 & October 2016 indicating the security over selling implying the buy signal.

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RSI

90

80

70

60

50 RS
40 RSI
30 OS

20 OB

10

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the month of March, May as
the securities are overbought.

In the Month of February, June, September, October the investor can go for Buy as
the securities are oversold.

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KWALITY

20 DAYS MOVING AVERAGE

KWALITY LTD
160
140
120
100
80
60 Series 1

40
20
0

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of October 2016 to December 2016 indicating the
security over bought implying the sell signal. It touches the lower price in the
month of February 2016 to April 2016 & July 2016 indicating the security over
selling implying the buy signal.

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RSI

100
90
80
70
60
RS
50
RSI
40
OS
30
OB
20
10
0

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the month of March, August,
December as the securities are overbought.

In the Month of February, May, November the investor can go for Buy as the
securities are oversold.

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BRITANIA

20 DAYS MOVING AVERAGE

BRITANIA INDUSTRY LTD

4000
3500
3000
2500
2000
1500 Series 1

1000
500
0

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of August 2016 to December 2016 indicating the security
over bought implying the sell signal. It touches the lower price in the month of
January 2016 to April 2016 & July 2016 indicating the security over selling
implying the buy signal.

RSI

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 90

80

70

60

50 RS
40 RSI
30 OS

20 OB

10

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the month of May, August as
the securities are overbought.

In the Month of January, November the investor can go for Buy as the securities
are oversold.

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ITC

20 DAYS MOVING AVERAGE

ITC
450
400
350
300
Axis Title

250
200
Series 1
150
100
50
0

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of April 2016 to June 2016 indicating the security over
bought implying the sell signal. It touches the lower price in the month of July
2016 to December 2016 indicating the security over selling implying the buy
signal.

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RSI
80

70

60

50
RS
40
RSI
30
0S
20 0B
10

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the month of May, June as the
securities are overbought.

In the Month of July, October the investor can go for Buy as the securities are
oversold.

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DABUR INDIA

20 DAYS MOVING AVERAGE

DABUR INDIA LTD

400
350
300
250
200
150 Series 1

100
50
0

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of May 2016 to June 2016 and August 2016 indicating
the security over bought implying the sell signal. It touches the lower price in the
month of January 2016 to April 2016 indicating the security over selling implying
the buy signal.

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RSI

90

80

70

60

50 RS
40 RSI
30 OS

20 OB

10

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the month of April, May, June
as the securities are overbought.

In the Month of January, August, September the investor can go for Buy as the
securities are oversold.

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ASIAN PAINTS

20 DAYS MOVING AVERAGE

asian apint
1400

1200

1000

800

600
mv
400

200

As shown in the above line chart which indicates the buying and selling signals
which is got by using 20 day simple moving average. Here the line touches the
higher price in the month of July 2016 to September 2016 indicating the security
over bought implying the sell signal. It touches the lower price in the month of
January 2016 to April 2016 indicating the security over selling implying the buy
signal.

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RSI

90
80
70
60
50 RS
40 RSI
30 OS
20 OB
10
0

From the above graph it’s understood that the RSI line is changing more frequently
which means the investor should sell the security in the month of May, June, July,
August as the securities are overbought.

In the Month of November, December the investor can go for Buy as the securities
are oversold.

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 CHAPTER 5: SUMMARY OF FINDINGS AND
CONCLUSION

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FINDINGS:

The study focuses on ten companies that operate in same sector industries. Even
though there are many different charting techniques are available, one method is
not necessarily better than the other. The data may be the same, but each method
will provide its own unique interpretation, with its own benefits and drawbacks.
The choice of charting methods, to use will depend on the user’s personal
preferences and trading or investing styles.

Once you have chosen a particular charting methodology, it is probably best to

stick with it and learn how best to read the signals. Switching back and forth must
be avoided as it causes confusion and undermine the focus of your analysis.

HUL:

TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
January, April,
20DAYS MA June, August
October
RSI May, October June, July

COLGATE PALMOLIVE:

TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
August,
20DAYS MA March, April November,
December
February, May,
RSI July
October, December

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GODREJ:

TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
February, March, August, October,
20DAYS MA
April December
April, June, July,
RSI February, November
September

NESTLE:

TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
January, February,
20DAYS MA June, August
March, April
February, September, March, April, July,
RSI
November, December October

GILLETTE INDIA:

TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
May, June, July,
20DAYS MA April, October
August
February, June,
RSI March, May
September, October

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KWALITY:

TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
October,
February, March,
20DAYS MA November,
April, July
December
February, May, March, August,
RSI
November December

BRITANIA:

TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
August,
January, September,
20DAYS MA February, March, October,
April, July November,
December
RSI January, November May, August

ITC:

TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
20DAYS MA July to December April, May, June
RSI July, October May, June,

DABUR INDIA:

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 TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
January, February,
20DAYS MA May, June, August
March, April
January, August,
RSI April, May, June
September

ASIAN PAINTS:

TECHNICAL SELLING
BUY SIGNAL
INDICATOR SIGNAL
July, August,
20DAYS MA January to April
September
May, June, July,
RSI November, December
August

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CONCLUSION

Technical analysis is a useful technique in guiding investment decisions. In light of

our study on five companies, we have seen how technical analysis can be used to
predict the possible futures swings of stock prices. After analyzing the companies,
the following conclusion was drawn.

According to RSI as the Gain increases, there is increase in the RSI value, which
indicates that there is increase in the share price. This states to the investor that it is
a strong sell signal. Whenever there is decrease in the share price value, RSI value
decreases which indicates the investor that it is a strong buy signal. In general, we
can conclude from the result that technical indicators can play useful role in the
timing stock market entry and exit. By applying technical indicators brokers or
investors enjoy substantial profit. Technical analysis cannot be answer for the
questions faced by analyst. It has to be in combination with fundamental analysis
to have maximum effect.

It can be said that some tools of technical analysis are more useful than others.
However, none of them can be termed an analysts panacea. The stock price
movements are influenced by various fundamental factors and the economy as a
whole. Even though there are some universal principles and rules that can be
applied, it must be remembered that technical analysis is more an art form than a
science. As an art form, it is subject to interpretation. However, it is also flexible in
its approach and each investor should use only that which suits his or her style.
Developing a style takes time, effort and dedication, but the rewards can be
significant.

Analysis can offer great insight but if used improperly, they can also produce false
signals. While trend lines have become a very popular aspect of technical analysis,
they are merely one tool for establishing, analyzing, and confirming a trend. Trend
lines should not be the final arbiter, but should serve merely as a warning that a
change in trend may be very useful. In some situation, this principle is violated. By
studying four sectors, it can be stated that technical analysis does not provide
100% accuracy to the investor. As the stock prices are dynamic in nature,
combination of Fundamental analysis and technical analysis will increases the

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percentage of accuracy and thus giving an idea to the investor to invest in that
stock which will yield him good returns.

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 CHAPTER 6: RECOMMENDATIONS AND
SUGGESTIONS

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RECOMMENDATIONS / SUGGESTIONS:

• Technical analysis will improve the investment decision.

• Technical analysis is simple and more reliable then fundamental analysis
because the information required for technical analysis is free available as
compared to fundamental analysis.
• Investor should have knowledge regarding the market terms so that they
can take maximum return from maximum investment.
• In case a trader entering in a new industries first he has to select stock to
buy in new industries after making careful study prospects and charts of the
stock.
• Even though technical analysis is enough for making decision In stock
market, simultaneous usage of both fundamental and technical analysis will
reduce errors in forecasting future prices.

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BIBLIOGRAPHY
BOOKS:

• Prasanna Chandra, Investment Analysis & Portfolio Management. 3rd

edition, 2008
• Bodie & Kane, Securities Analysis & Portfolio Management. 6th edition,
2004
• Donald E Fischer, Securities Analysis & Portfolio Management, 6th edition,
2001

JOURNALS, MAGAZINES AND NEWSPAPERS:

A. Economics Times

B. Business line

WEBSITES

 www.moneycontrol.com
 www.destimoney.com
 www.nseindia.com
 www.bseindia.com
 www.Stockcharts.com
 www.thismatter.com
 www.investopedia.com

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