SUMMER INTERNSHIP PROJECT

SUBMITTED BY

ROHAN RAVINDRA WANI

ROLL NO – 2021242
MMS – II (SEM III)
YEAR 2021- 2023

1
 PROJECT REPORT ON

EQUITY RESEARCH ON IT SERVICES AND CONSULTING SECTOR

IN

HDFC LIFE

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF

MASTER OF MANAGEMENT STUDIES

BY

ROHAN RAVINDRA WANI

ROLL NO 2021242
MMS-II (SEM III)
YEAR 2021- 2023

LALA LAJPATRAI INSTITUTE OF MANAGEMENT

MAHALAXMI, MUMBAI - 400034

2
 Certificate

This is to certify that the project work titled “EQUITY RESEARCH ON IT

SERVICES AND CONSULTING SECTOR” is a summer internship work carried out
by Mr. / Ms. ROHAN RAVINDRA WANI.
The project was completed for “HDFC LIFE“, under the guidance of SHREYA
KARIA
I further certify that the said work has not been submitted in the part or in full, to any
other University.

Date: 5th December, 2022

_____________________ __________________________
Dr. Shilpa Shinde Dr . C. Satyanarayana
Project Mentor Director

3
 DECLARATION

I, Mr. / Ms. Rohan Ravindra Wani, student of Lala Lajpatrai Institute of Management
of MMS II (Semester III) hereby declare that I have completed the summer internship
project on “EQUITY RESEARCH ON IT SERVICES AND CONSULTING
SECTOR” with HDFC Life in the Academic year 2021 - 2023. The information
submitted is true & original to the best of my knowledge.

Rohan Ravindra Wani

4
 ACKNOWLEDGEMENT

At the outset of this project, I would like to express my profound thanks to a few
people without whose help, completion of this project would not have been possible.
First and foremost, I would like to express sincere thanks to HDFC LIFE for giving
me this opportunity to work with them.
The list is endless but to name a few special people, I would like to thank SHREYA
KARIA for being extremely supportive and guiding me throughout my internship and
giving me constant motivation and expert advice.
I would also like to thank the entire HDFC LIFE TEAM for providing me their
precious time and making this internship a successful learning experience.
I am very grateful to Dr. C. Satyanarayana, Director of Lala Lajpat Rai Institute of
Management, for giving me the opportunity to do this project in HDFC LIFE.

I would also like to thank Dr. Shilpa Shinde for being an excellent mentor and
helping me whenever I approached him/her.
Last but not the least; I take pride in thanking my parents (Mr. RAVINDRA WANI
& Mrs. NEHA WANI) siblings and friends for their much valued support.

5
Contents
Contents...........................................................................................................................................................6
EXECUTIVE SUMMARY...............................................................................................................................7
ABSTRACT......................................................................................................................................................8
PURPOSE OF INTERNSHIP................................................................................................................................9
ABOUT THE COMPANY..................................................................................................................................10
INTRODUCTION...........................................................................................................................................10
VISION AND VALUES.................................................................................................................................11
VISION.........................................................................................................................................................11
VALUES.......................................................................................................................................................11
SWOT ANALYSIS STRENGTHS:............................................................................................................11
WEAKNESS:................................................................................................................................................12
OPPORTUNITIES:.......................................................................................................................................12
THREATS:....................................................................................................................................................12
COMPETITORS OF HDFC LIFE:...............................................................................................................12
INTRODUCTION TO TECHNICAL ANALYSIS.........................................................................................13
OVERVIEW OF IT SERVICES AND CONSULTING SECTOR..................................................................27
PORTER’S FIVE FORCES.............................................................................................................................29
COMPANIES USED FOR ANALYSIS..........................................................................................................30
CANDLESTICKS...............................................................................................................................................31
TECHNICAL INDICATORS........................................................................................................................34
TECHNICAL STRATEGIES..............................................................................................................................42
TECHNICAL PATTERNS..................................................................................................................................44
BACKTESTING OF INDICATORS...............................................................................................................55
CONCLUSION...............................................................................................................................................56
REFERENCES................................................................................................................................................56

6
 EXECUTIVE SUMMARY

NAME: Rohan Ravindra Wani ROLL NO- 2021242

ORGANIZARION DESCRIPTION-
INDUSTRY TYPE- Financial Investment Sector
Name & Address- HDFC LIFE, 17/19, 3rd & 4th floor, Hira House, Mint Road, Opp. GPO,
CST, Fort, Mumbai, Maharashtra 400001
This internship report is based on a three-month internship program that I successfully
completed in HDFC Life from May 05, 2022 to July 05, 2022, as part of my MMS study at
Lala Lajpatrai Institute of Management, Mumbai.
OBJECTIVE OF INTERNSHIP-
- The primary goal of equity research is to investigate companies, examine financials, and
consider quantitative and qualitative factors in order to make investment decisions.
- To learn about different strategies, indicators to add credibility to portfolio.
- To learn about derivative market and technical behind the same.
The report is divided into different chapters. The first chapter deals with the Introduction
about the company, SWOT analysis of the company. To further understand about the study,
the second chapter deals with the Overview of the sector choses, i.e., IT SERVICES AND
CONSULTING SECTOR. The third chapter deals with Index calculations as started from
10th May to 05th July . The fourth chapter is about the Futures and Options analysis done in
the Bank Nifty and Nifty Derivatives.
METHODOLOGY-
Primary and secondary method being used.
FINDINGS AND CONCLUSIONS-
Making effective financial decisions requires both fundamental and technical analysis. After
determining your risk capacity and tolerance, as well as your time horizon and investing
purpose, an individual portfolio can generate systematic returns.

The technical approach to invest is

essentially a reflection of
the idea the price moves which is
determined by challenging
attitude of investors towards a variety of
economic, monetary
7
forces. Technical analysis works best
on current market,
intermediate on future market and
stock market. Chart
patterns work better on stock markets
than currency markets.
The study is concerned with features of
technical analysis and
about its indicators. Technical analysis
is widely accepted
worldwide and a very useful tool for
the analysis of share
price behaviour. The share market is
more challenging,
fulfilling and rewarding to resourceful
investors should able to
learn the study of technical analysis. It
is risky in trading in
volatile market because any point of
time the stock can be
8
drop down and can go up. Sometimes
there will be difficult to
decide when to entering and exiting the
share.
The technical approach to invest is
essentially a reflection of
the idea the price moves which is
determined by challenging
attitude of investors towards a variety of
economic, monetary
forces. Technical analysis works best
on current market,
intermediate on future market and
stock market. Chart
patterns work better on stock markets
than currency markets.
The study is concerned with features of
technical analysis and
about its indicators. Technical analysis
is widely accepted
9
worldwide and a very useful tool for
the analysis of share
price behaviour. The share market is
more challenging,
fulfilling and rewarding to resourceful
investors should able to
learn the study of technical analysis. It
is risky in trading in
volatile market because any point of
time the stock can be
drop down and can go up. Sometimes
there will be difficult to
decide when to entering and exiting the
share.
The technical approach to invest is
essentially a reflection of
the idea the price moves which is
determined by challenging
attitude of investors towards a variety of
economic, monetary
10
forces. Technical analysis works best
on current market,
intermediate on future market and
stock market. Chart
patterns work better on stock markets
than currency markets.
The study is concerned with features of
technical analysis and
about its indicators. Technical analysis
is widely accepted
worldwide and a very useful tool for
the analysis of share
price behaviour. The share market is
more challenging,
fulfilling and rewarding to resourceful
investors should able to
learn the study of technical analysis. It
is risky in trading in
volatile market because any point of
time the stock can be
11
drop down and can go up. Sometimes
there will be difficult to
decide when to entering and exiting the
share.
The technical approach to invest is
essentially a reflection of
the idea the price moves which is
determined by challenging
attitude of investors towards a variety of
economic, monetary
forces. Technical analysis works best
on current market,
intermediate on future market and
stock market. Chart
patterns work better on stock markets
than currency markets.
The study is concerned with features of
technical analysis and
about its indicators. Technical analysis
is widely accepted
12
worldwide and a very useful tool for
the analysis of share
price behaviour. The share market is
more challenging,
fulfilling and rewarding to resourceful
investors should able to
learn the study of technical analysis. It
is risky in trading in
volatile market because any point of
time the stock can be
drop down and can go up. Sometimes
there will be difficult to
decide when to entering and exiting the
share.
The technical approach to invest is
essentially a reflection of
the idea the price moves which is
determined by challenging
attitude of investors towards a variety of
economic, monetary
13
forces. Technical analysis works best
on current market,
intermediate on future market and
stock market. Chart
patterns work better on stock markets
than currency markets.
The study is concerned with features of
technical analysis and
about its indicators. Technical analysis
is widely accepted
worldwide and a very useful tool for
the analysis of share
price behaviour. The share market is
more challenging,
fulfilling and rewarding to resourceful
investors should able to
learn the study of technical analysis. It
is risky in trading in
volatile market because any point of
time the stock can be
14
drop down and can go up. Sometimes
there will be difficult to
decide when to entering and exiting the
share.
The technical approach to invest is essentially a reflection of the idea the price moves which is
determined by challenging attitude of investors towards a variety of economic, monetary forces.

Technical analysis works best on current market, intermediate on future market and stock market.
Chart patterns work better on stock markets than currency markets. The study is concerned with
features of technical analysis and about its indicators.

Technical analysis is widely accepted worldwide and a very useful tool for the analysis of share
price behavior. The share market is more challenging, fulfilling and rewarding to resourceful
investors should able to learn the study of technical analysis. It is risky in trading in volatile
market because any point of time the stock can be drop down and can go up. Sometimes there will
be difficult to decide when to entering and exiting the share.

15
 ABSTRACT

This report details the practical experience I gained while interning in the HDFC Life
Summer Internship Program. It takes an in-depth look into the IT services and consulting
industry.
During this timeframe, I was introduced to the stock market and learnt how to trade utilizing
a demat account using various methods and oscillators. I learned the foundations of intraday
trading by trading large-cap stocks.
The main goal of the project is to get an in-depth understanding of the "IT services and
consulting" sector in India, as this area is popular with investors, and it would be
advantageous to assess the trend and strong performing companies in order to provide
recommendations. Using different indications and strategies, various equity shares were
analyzed.
The research was to use fundamental and technical analysis to look at the equities. To
determine when to buy, hold, or sell a company's stock utilizing techniques in order to
determine the company's liquidity and profitability in chosen sector.

16
 PURPOSE OF INTERNSHIP
For the purposes of technical analysis, I have included all large-cap businesses in the “IT
SERVICES AND CONSULTING” Sector in my project.
The project covers a brief overview of the stock market, as well as fundamental and technical
analysis of how to invest in the stock market. Because investors are more concerned with
return and want to avoid risk, technical analysis is very useful in determining when to buy
and sell a particular stock.

17
 INTRODUCTION
ABOUT THE COMPANY

HDFC Life Insurance Company Limited is a joint venture between HDFC Ltd., India's
largest home finance company, and Standard Life Aberdeen, a global investment firm.
In 1999, the Insurance Regulatory and Development Authority (IRDA) was established as a
self-governing agency to oversee and grow the insurance business. The IRDA opened the
market in August 2000 by issuing a call for registration applications. In the year 2000, HDFC
Life became India's first private sector life insurance firm.
By 2001, the company had acquired its 100th customer, increased its workforce to 100, and
settled its first claim. In 2005, HDFC Life launched their first television commercial, "Sar
Utha Ke Jiyo." HDFC Life was ranked 29th among the most trusted Indian brands among the
Top 50 Service Brands of 2010 in a study performed by Brand Equity – Economic Times in
2006.
In 2009, the Insurance Regulatory and Development Authority (IRDA) granted HDFC Life
accreditation for 149 training centres located in its branches to meet the mandated training
requirements as well as other sales training needs.
It was the first private life insurance company to bring back pension plans under the new
regulatory regime in 2012, with the launch of two pension plans – HDFC Life Pension Super
Plus and HDFC Life Single Premium Pension Super. It is the second largest private pension
fund management company in India in terms of assets under management and subscribers in
Fiscal 2017. In fiscal 2012, the firm became profitable, with an annual profit of Rs 271 crore,
and in December 2013, it paid its first dividend to shareholders. In 2014, the company's
Assets Under Management (AUM) surpassed Rs 50000 crore.
Standard Life Mauritius increases its stake in HDFC Life from 26% to 35% in 2016, and the
latter establishes its first international subsidiary in the UAE, HDFC International, to operate
the reinsurance business, signing reinsurance treaties for two distinct lines of individual life
business and entering into arrangements to offer reinsurance services for group and credit life
schemes, and expects the pension and reinsurance bus to arrive in 2017.
It had 66,372 individual agents across India, accounting for 6.8% of total private agents in the
Indian life insurance industry, and entered into 125 banking tie-ups, including with HDFC
Bank, giving it access to a massive branch network.
The insurance firm has insured 21.6 million lives in both individual and group segments until
2019, and has one of the highest margins in the industry, with 24.3 percent in the first half of
the financial year 2019, and is regarded as one of the most consistent life insurance firms,
with efficient returns on operating Earning Value (EV) of 20% for the last three financial
years.
HDFC Life, a prominent long-term life insurance solutions provider in India, was founded in
2000 and offers a variety of individual and group insurance products to address a variety of
consumer needs, including Protection, Pension, Savings, Investment, Annuity, and Health.

18
With 421 locations and other distribution touchpoints through multiple partnerships, HDFC
Life continues to benefit from its presence across the country. 270 bancassurance partners,
including NBFCs (Non-Banking Financial Companies), MFIs (Micro Finance Institutions),
SFBs (Small Finance Banks), and more than 40 new ecosystem partners, are included in the
collaborations. A strong base of financial consultants also supports the company.
HDFC Ltd, HDFC Bank, HDFC International Life and Re Company Limited, HDFC
Pension, HDFC MF, HDFC Sales, HDFC Ergo, HDB Financial Services (HDBFS), HDFC
Securities, HDFC RED, HDFC Ventures Trustee Company, GRUH Finance, HDFC Trustee
Company, HDFC Developers, HDFC Property Ventures, HDFC Investments, HDFC
Developers, HDFC Property Ventures, HDFC Investments, HDFC Credit Information Bureau
(India).

VISION AND VALUES

VISION
'The most successful and admired life insurance company,' which implies we're the most
reliable, easy to work with, provide the best value for money, and establish industry
standards.

VALUES
 Excellence
 People Engagement
 Integrity
 Customer Centricity
 Collaboration

SWOT ANALYSIS STRENGTHS:

 The consumer is at the center of HDFC Life Insurance's strategy
 The organization offers low-cost products, excellent customer service, continuous
investment growth, and a quick claim settlement process.
 HDFC Life Insurance offers consumers bespoke insurance policies that are tailored to
their specific needs.
 Large distribution network that allows to deliver services to customers all over the
world.
 Promoting its products through advertisements, Facebook marketing, WhatsApp
marketing and other online marketing channels.
 Gives greatest and the most valuable products at the lowest possible costs to its
clients.
 The company's customer service is exceptional, which contributes to the brand's
image.
 HDFC Life Insurance has a decent claim settlement ratio.
 HDFC Life provides excellent customer service.

19
 WEAKNESS:
 As a private company, HDFC Life Insurance has not been able to establish a brand
image comparable to LIC.
 Insurance Advisors are uncontrollable. Before selling insurance plans, some advisors
do not provide accurate information.
 HDFC Life has substantial administrative and overhead expenditures. Due to the fact
that sales entail some spending, there is a steady flow of cash out to help businesses
expand.
 Network retention is low, despite the fact that the company has a well-established
network; nonetheless, the network has a high turnover rate, raising the cost of
operations even more.

OPPORTUNITIES:
 Due to the rising need for insurance, HDFC Life can devise methods to promote and
develop new plans in response to consumer demand.
 For the sale and marketing of its life insurance policies, HDFC Life might form
partnerships with new banks.
 India's population is rapidly increasing, and the insurable population is still too large
and inadequately protected, creating a huge opportunity for the sector in the Indian
market.
 Customers are attracted to Unit Linked Insurance Plans (ULIPs) because they provide
numerous benefits, such as investment and life insurance. This opportunity can be
seized by aggressively promoting HDFC Life's Unit Linked Plans.

THREATS:
 In India, there is some rivalry between insurance providers. Insurance companies are
offering premiums for insurance policies that are competitive. This could be a serious
problem.
 There is a great deal of economic insecurity, which has a direct impact on business.
 HDFC Life Insurance faces a major threat from new entrants.
 Because the business has a high turnover rate, good employees opt to go from one
company to another, putting a lot of pressure on recruiting and even applicants who
are driven to market and elevate the company in terms of new brand insurance.
 The Insurance Regulatory and Development Authority (IRDA) and the Insurance
Corporation of India (ICICI) are both responsible for insurance regulation. Prudential
must follow the IRDA's policies and regulations.

COMPETITORS OF HDFC LIFE:

 SBI Life
 Bajaj Allianz Life Insurance
 HDFC Life Insurance
 Religare Life Insurance
 Sahara Life Insurance
 Tata AIA Life Insurance

20
 INTRODUCTION TO TECHNICAL ANALYSIS

What is technical analysis?

Technical analysis is the study of financial market action. The technician looks at price changes that
occur on a day-to-day or week-to-week basis or over any other constant time period displayed in
graphic form, called charts. Hence the name chart analysis. A chartist analyzes price charts only, while
the technical analyst studies technical indicators derived from price changes in addition to the price
charts. Technical analysts examine the price action of the financial markets instead of the fundamental
factors that (seem to) effect market prices. Technicians believe that even if all relevant information of a
particular market or stock was available, you still could not predict a precise market "response" to that
information.

There are so many factors interacting at any one time that it is easy for important ones to be ignored in
favor of those that are considered as the "flavor of the day." The technical analyst believes that all the
relevant market information is reflected (or discounted) in the price with the exception of shocking
news such as natural disasters or acts of God. These factors, however, are discounted very quickly.
Watching financial markets, it becomes obvious that there are trends, momentum and patterns that
repeat over time, not exactly the same way but similar. Charts are self-similar as they show the same
fractal structure (a fractal is a tiny pattern; self-similar means the overall pattern is made up of smaller
versions of the same pattern) whether in stocks, commodities, currencies, bonds.

A chart is a mirror of the mood of the crowd and not of the fundamental factors. Thus, technical
analysis is the analysis of human mass psychology. Therefore, it is also called behavioral finance.

21
Technical analysis pre-empts fundamental data

Fundamentalists believe there is a cause and effect between fundamental factors and price changes. This
means, if the fundamental news is positive the price should rise, and if the news is negative the price
should fall. However, long-term analyses of price changes in financial markets around the world show
that such a correlation is present only in the short-term horizon and only to a limited extent. It is non-
existent on a medium- and long-term basis. In fact, the contrary is true.

The stock market itself is the best predictor of the future fundamental trend. Most often, prices start
rising in a new bull trend while the economy is still in recession (position B on chart shown above), i.e.
while there is no cause for such an uptrend. Vice versa, prices start falling in a new bear trend while the
economy is still growing (position A), and not providing fundamental reasons to sell. There is a time-
lag of several months by which the fundamental trend follows the stock market trend.

Moreover, this is not only true for the stock market and the economy, but also for the price trends of
individual equities and company earnings. Stock prices peak ahead of peak earnings while bottoming
ahead of peak losses. The purpose of technical analysis is to identify trend changes that precede the
fundamental trend and do not (yet) make sense if compared to the concurrent fundamental trend.

22
Mood governs ratio

Know yourself and knowledge of the stock market will soon follow. Ego and emotions determine far
more of investors´ stock market decisions than most would be willing to admit. For years, we have dealt
with professional money managers and committees and found they were as much subject to crowd
following and other irrational emotional mistakes as any novice investor. They were, for the most part,
better informed, but facts alone are not enough to make profitable decisions.

The human element, which encompasses a range of emotions from fear to greed, plays a much bigger
role in the decision-making process than most investors realize. In a practical sense, most investors act
exactly opposite to the rational wisdom of buying low and selling high based on very predictable
emotional responses to rising or falling prices. Falling prices that at first appear to be bargains generate
fear of loss at much lower prices when opportunities are the greatest.

Rising prices that at first appear to be good opportunities to sell ultimately lead to greed induced buying
at much higher levels. Reason is replaced by emotion and rationalization with such cyclical regularity,
that those who recognize the symptoms and the trend changes on the charts can profit very well from
this knowledge. Investors who manage to act opposite to the mood of the crowd and against their own
emotions are best positioned to earn money in the financial markets. Financial risk and emotional risk
correlate inversely.

23
Optimism, pessimism, greed and fear

Why aren´t more people making more money in the financial markets?

Because, as we have seen, people are motivated by greed (optimism) when buying and by fear
(pessimism) when selling. People are motivated to buy and sell by changes in emotion from optimism
to pessimism and vice versa. They formulate fundamental scenarios based on their emotional state (a
rationalization of the emotions), which prevents them from realizing that the main drive is emotion. The
chart above shows that if investors buy based on confidence or conviction (optimism) they BUY near or
at the TOP.

Likewise, if investors act on concern or capitulation (pessimism) they SELL near or at the BOTTOM.
Investors remain under the bullish impression of the recent uptrend beyond the forming price top and
during a large part of the bear trend. Vice versa, they remain pessimistic under the bearish impression
from the past downtrend through the market bottom and during a large part of the next bull trend. They
adjust their bullish fundamental scenarios to bearish AFTER having become pessimistic under the
pressure of the downtrend or AFTER having become optimistic under the pressure of the uptrend. Once
having turned bearish, investors formulate bearish scenarios, looking for more weakness just when it is
about time to buy again.

The same occurs in an uptrend when mood shifts from pessimism to optimism. Investors formulate
bullish scenarios AFTER having turned bullish, which is after a large part of the bull trend is already
over. Emotions are the drawback of fundamental analysis. Investors must learn to buy when they are
fearful (pessimistic) and sell when they feel euphoric (optimistic).

This may sound easy (simple contrary opinion), but without Technical Analysis it is hard to achieve.
The main purpose of technical analysis is to help investors identify turning points which they cannot see
because of individual and group psychological factors.

24
Bar charts

Four bar charts of the Swiss Market Index are shown above. They are the most widely used chart
types. The bar charts are: High-low charts or High-low-close charts or Open-high-low-close charts One
single bar shows the high and the low of the respective trading period. A vertical bar is used to
connect the high and the low. Horizontal lines are used to show the opening price (left) of that specific
trading period and the closing price (right) at the end of the period. For example, on the monthly chart,
a bar indicates the high and the low at which the SMI traded during that single month.

Line charts
Sometimes we use line charts, especially for Elliott wave analysis. A line chart is the simplest of all
methods. It is constructed by joining together the closing price of each period, for example daily
closings for the daily line chart, weekly closings for the weekly chart or monthly closings for the
monthly line chart.

25
Support and resistance
Resistance lines are horizontal lines that start at a recent extreme price peak with the line pointing
horizontally into the future. Support lines are horizontal lines that start at a recent extreme of a
correction low and also point toward the future on the time axis. An uptrend continues as long as the
most recent peak is surpassed and new peak levels are reached. A downtrend continues as long as past
lows are broken, sustaining a series of lower lows and lower highs. Notice that the previous support
often becomes resistance and resistance becomes support.

A resistance or a support line becomes more important and breaks above or below these lines gain more
credibility as the number of price extremes (peaks for resistance; or lows for support) that can be
connected by a single line increase.

Some examples for Microsoft are shown on the chart above. Microsoft reached a high of 19 in July
1997. The price started to correct from there and Microsoft remained below this level until February
1998. The 19 level became the resistance, meaning that only if 19 (the highest peak so far in the
uptrend) had been broken on the upside would the stock have confirmed its uptrend. The same is true
for the peak at 30 in July 1998. The uptrend was confirmed when the price rose above this resistance in
November 1998. Support levels are positioned for example at 11, 15, 20.5 or 22. As long as the price
pushes above past peaks (resistance levels) and holds above past support levels (does not break them)
the uptrend remains intact. The same is true for the bear trend.

The downtrend remains intact as long as the price falls below the recent lows (support levels) and fails
to rise above past resistance levels. A bearish trend reversal occurs when the price breaks through the
most recent support after failing to rise above the most recent resistance. A bullish trend reversal occurs
when the price penetrates the most recent resistance after holding above the most recent support

26
Trendlines
Resistance levels can either be drawn by horizontal lines (as discussed on the previous page) or can be
up trending or down trending lines. The trendline is nothing more than a straight line drawn between at
least three points. In an up move the low points are connected to form an uptrend line. For a downtrend
the peaks are connected. The important point is that it should not be drawn over the price action.
Trendlines must incorporate all of the price data, i.e. connect the highs in a downtrend and the lows in
an uptrend.

The trendline becomes more important and gains credibility as the number of price extremes that can be
connected by a single line increases. The validity and viability of a line that connects only two price
extremes (for example the starting point and one price low) is questionable. The trend is broken when
the price falls below the uptrend line or rises above the downtrend line. Some analysts use a 2-day rule,
meaning that the trend is only seen as broken if the price closes above/below the trendline for at least
two days. Others use a 1% stop (could be higher depending on market volatility), meaning the trend is
only seen as broken if the price closes over 1% above/below the trendline.

The chart below shows Intel´s rise from July 1996 to March 1997. Based on the uptrend line, investors
would have held onto the position from around 38/40 until 66 or even 74/76. Most often investors take
profits much too early. Stay with a trend until it breaks, avoiding the urge to sell too soon because the
profit could be higher than you originally thought.

27
The chart above shows three US dollar/Swiss franc trends.
 The uptrend from 1995 to 1997 is long term. It is also called the PRIMARY trend (the Hours). It
was broken by the 1998 decline. The long-term uptrend is not a straight line, but is interrupted
by corrections of a smaller degree.
 These corrections are the medium-term or intermediate-term trends (the Minutes). They are also
called SECONDARY trends. The medium-term correction is also not a straight line, but is made
up of smaller corrections.
 These smaller trends are the short-term trends. They are also called MINOR trends (the
Seconds). A minor downtrend can be part of an intermediate-term uptrend, which itself can be
part of a longer-term primary downtrend. Sometimes it is difficult to differentiate between a
short- and a medium-term or a long-term trend. Technical analysis helps you to differentiate
between the various trends in all financial markets and instruments.

28
Moving averages
Moving averages are popular and versatile for identifying price trends. They smooth out fluctuations in
market prices, thereby making it easier to determine underlying trends. Their other function is to signal
significant changes in direction as early as possible. The simple moving average is the most widely
used. Its calculation is shown above in mathematical form and displayed in the chart on the right. For a
5-day moving average, you simply add the closing prices of the last five closings and divide this sum by
5. You add each new closing and skip the oldest. Thus, the sum of closings always remains constant at 5
days. Whether you choose a 10-day average or a 40- week average, the calculation is the same; instead
of adding five days, you add 10 days or 40 weeks and divide the sum by 10 or 40, respectively. In most
of our research, we use the moving average length out of the Fibonacci series (see page 29).

To analyse the short-term trend, we use the 13-day and 21-day averages. For the medium-term trend,
we use the 34-day and 55-day averages. For the long-term trend, we use the 89-day and 144- day
averages. Moreover, we also analyze very long-term trends, the so-called secular trends with the 233-
day, 377-day, 610-day and 987-day moving averages.

29
The simple moving average (SMA)
The simple moving average yields the mean of a data set for a given period. For example: a 21- day
simple moving average (SMA) would include the last 21 days of data divided by 21, resulting in an
average (see chart above for the Dow Industrial Index). This can be calculated at any given time using
the last 21 days; hence, the average moves forward with each trading day.

The moving average is usually plotted on the same chart as price movements, so a change in direction
of trend can be indicated by the penetration/crossover of the SMA. Generally a buy signal is generated
when a price breaks above the moving average and a sell signal is generated by a price break below the
moving average. It is added confirmation when the moving average line turns in the direction of the
price trend. The moving average naturally lags behind price movement, and the extent by which it lags
(or its sensitivity) is a function of the time span.

Generally, the shorter the moving average, the more sensitive it is. A 5-day moving average will react
more quickly to a change in price than the 21-day moving average, for example. However, the 5-day
moving average is more likely to give false signals and "whipsaw" than the 21-day one, which gives
signals later and suffers from opportunity loss. Generally, if the market is trending (in an uptrend or
downtrend), a longer time period would be used.

If it is ranging (consolidating), the shorter time frame will catch the minor moves more easily. Moving
averages can act as support and resistance (as shown by the arrows on the chart above for the Dow
Jones Industrial Index), similar to the support and resistance discussed before.

30
Long-term, medium-term and short-term averages

We incorporate two basic moving averages to track the three investment horizons as discussed.
They are shown on the three charts on this page.
 On the monthly chart above, the 13-month and 21-month moving averages track the long-term
trend.
 On the weekly chart above, the 13-week and 21- week moving averages track the medium-term
trend.
 On the daily chart to the right, the 13-day and 21- day moving averages track the short-term
trend.
The direction of the moving averages indicates the direction of the three basic trends in force. Instead of
showing the moving averages on three separate charts to illustrate the three basic trends, we more often
display all moving averages on a single daily chart. This is shown on the next page. The long-term
moving average is not shown on the monthly chart, but on the daily chart. The medium-term moving
average is also shown on the daily chart instead of the weekly chart.

31
Moving average crossover

The short-term, medium-term and long-term moving averages are all shown here on the daily chart. The
21-day moving average is shown here for the short-term trend, the 55-day moving average for the
medium-term trend and the 144-day moving average for the long-term trend. Displaying the three
moving averages on one single chart provides important signals based on the moving average trends
and crossovers.

BUY and SELL signals are given - when the price crosses the moving average - when the moving
average itself changes direction and - when the moving averages cross each other A short-term (trading)
buy signal (B1) is given when the price rises above the 21-day moving average. The buy signal is
confirmed when the 21-day average itself starts rising.

A short-term (trading) sell signal (S1) is given in the opposite direction. A medium-term (tactical) buy
signal (B2) is given when the price breaks above the 55-day moving average. It is confirmed when the
21-day average crosses above the 55-day average and the 55-day average itself starts rising. A medium-
term (tactical) sell signal (S2) is given in the opposite direction. A long-term (strategic) buy signal (B3)
is given when the price rises above the 144-day moving average. It is confirmed when the 55-day
average crosses above the 144-day moving average and the 144-day average itself starts rising. A long-
term (strategic) sell signal (S3) is given in the opposite direction.

32
Momentum

In physics, momentum is measured by the rate of increase and decrease in the speed of an object. In
financial markets it is measured by the speed of the price trend, i.e. whether a trend is accelerating or
decelerating, rather than the actual price level itself. While moving averages are lagging indicators,
giving signals after the price trend has already turned, momentum indicators lead the price trend. They
give signals before the price trend turns. But once momentum provides a signal it has to be confirmed
by a moving average crossover. Instead of calculating the moving average of the sum of 5 days (see
page 12), here we calculate the difference over a constant 5-day period for a 5-day rate of change. This
is shown on the chart above together with the zero line. If today´s price is higher than five days ago, the
indicator is positive, i.e. above the zero line. If the price continues to rise compared to five days earlier,
the indicator rises. If the price today is lower than five days ago the indicator is negative, i.e. below the
zero line. The rate of change oscillator is rather volatile. Therefore, we have smoothed it out (see blue
line) so that it provides easy-to-read directional change signals as explained on the next page. The
moving averages are always displayed on the same chart and with the same scale as the price from
which they are calculated. The momentum indicators are calculated using the price difference rather
than adding the prices (as with the moving averages). This is why the momentum indicators are
displayed with a different scale than the price scale. On the chart above, it is shown by the scale to the
left.

33
Trend and momentum combination

We pictured the three moving averages on one single chart which was the daily chart. We do the same
analysis here with the momentum indicators. We show all three momentum indicators on the daily chart
together with the short-term, medium- and long-term moving averages. On the chart above for the US
dollar/Swiss franc, the long-term trend was rising from 1996 until August 1997. The US dollar was
trading above the rising 144-day average and the long-term momentum indicator was rising until it
topped in September. The momentum indicator´s top was soon confirmed by the dollar´s fall below the
144-day average in September and October. The long-term top was also indicated by the negative
divergence (dashed blue line) in the medium-term momentum indicator, which registered a lower high
in September compared to its high in March. Thus it did not confirm the new price high in the US dollar
at CHF 1.54 in August. The medium-term trend was bullish from September 1996 until March 1997
when the weekly indicator topped and the US dollar fell below the slowing 55-day average. The
medium-term top in March was also indicated by the negative divergence of the daily momentum
indicator, which did not confirm the new high in the US dollar in February 1997 at 1.49. The daily
indicator registered a top that was lower than the top in January. THE COMBINATION OF THESE
SIX INDICATORS reveals the most likely future path of the underlying market in all asset classes. The
21-day average is monitored in combination with the daily (short term) momentum indicator, the 55-
day average with the weekly (medium-term) indicator and the 144-day average with the monthly (long-
term) momentum indicator. The most positive technical constellation is present when the price is above
the short-term average, which in turn is rising above the medium-term average, which in turn is rising
above the 144-day moving average. AT THE SAME TIME, the daily, weekly and monthly momentum
indicators are rising. The same is true in the opposite direction for the most negative constellation.

34
OVERVIEW OF IT SERVICES AND CONSULTING SECTOR

Information technology services, consulting, and outsourcing are all part of India's huge
information technology industry. By 2020, the IT industry will account for 8% of India's
GDP. Revenue in the IT and BPM business is expected to reach US$194 billion in FY 2021,
up
2.3 percent year on year. In FY 2021, the IT industry is expected to generate US$45 billion in
domestic sales and US$150 billion in export income. As of March 2021, the IT sector
employs
4.5 million workers. Employee attrition is highest in the Indian IT business.
In comparison to the IT business, India's global sourcing market continues to grow at a faster
rate. India is the world's most popular sourcing destination, with a market share of around 55
percent of the US$ 200-250 billion global services sourcing industry in 2019-20.
In the 2021 edition of the Global Innovation Index, India climbed four places to 46th place
(GII).
In 2020, the IT industry will contribute for 8% of India's GDP. Software exports by IT
companies affiliated with STPI (Software Technology Park of India) totaled Rs. 1.20 lakh
crore (US$ 16.29 billion) in the first quarter of FY22, according to STPI.

Fig: Market Size of IT Industry in India

35
The Indian IT industry's revenue is predicted to reach US$ 227 billion in FY22, up from US$
196 billion in FY21, according to the National Association of Software and Service
Companies.

IT spending in India is likely to rise to US$ 101.8 billion in 2022, up from an estimated US$
81.89 billion in 2021, according to Gartner forecasts.
By 2025, the Indian software product sector is anticipated to be worth $100 billion. Indian
enterprises are concentrating their efforts on overseas investments in order to grow their
global presence and improve their global delivery centers.
In FY20, the Indian data annotation market was valued at US$ 250 million, with the US
market accounting for 60% of the total. Due to increased local demand for AI, the market is
estimated to reach US$ 7 billion by 2030.
In FY21, India's IT industry exported a total of US$ 149 billion. IT services exports have
been the most significant contributor, accounting for more than 51% of total IT exports
(including hardware). During FY21, BPM, Engineering and R&D (ER&D), and software
product exports each accounted for 20.78 percent of overall IT exports. By 2022, the ER&D
market is estimated to reach US$ 42 billion.
In FY22 (as of February), the IT industry added 4.5 lakh new personnel, the most in a single
year. Women made up 44% of the overall number of new hires.

36
 PORTER’S FIVE FORCES

Bargaining power of buyers: The bargaining power of buyers is high. This is largely
due to the fact that Indian IT services companies are capable of handling work of that scope
and magnitude. Despite the fact that there are just a few of them, clients have a large number
of options to pick from because each company brings something unique to the table.

Bargaining power of suppliers: Supplier bargaining power is extremely limited, and

because of the high level of standardization, suppliers have minimal leverage. IT
infrastructure providers (servers, computers, etc.), recruitment agencies, and office space
providers are among the vendors.

Threats of New Entrants: In the Indian IT service sector, the threat of new entrants is
rather minimal. One of the main reasons is that the deals that come in have a specific ticket
size requirement. And not every business will be able to handle a project of that magnitude.
Furthermore, about 4-5 players have developed the ability to cope with multi-million-dollar
transactions. Although there is a start-up culture, these businesses operate in a very specific
industry.

Threats from substitutes: Substitutes do not pose a significant threat to the IT industry,
primarily because there are no actual substitutes. We live in a digital age; thus, we rely on
technology to run our personal and professional lives. A scientific calculator is an example of
a substitute, however comparing the two is a stretch. Nothing will ever be able to fully
replace what computers have done for us as a society.

Rivalry Among existing players: The IT industry is well-known for its speed,
efficiency, and competitiveness. The strong competition amongst current players is one of the
key reasons why many new entrants fail. Economies of scale assist large enterprises in this
industry, which is valuable and something they work hard to maintain. This industry's
products are well-branded and have a large customer base. Existing firms' market share is
unevenly divided, and they are frequently engaged in legal and advertising conflicts with one
another.

37
 COMPANIES USED FOR ANALYSIS
The company chosen for the survey has a market capitalization of more than 7500 Cr. And
are known as Large Cap Companies.
 TCS
 INFOSYS
 HCL TECH
 WIPRO
 TECH MAHINDRA
 L&T INFOTECH
 MINDTREE
 MPHASIS
 PERSISTENT
 ORACLE FIN SERV
 CORFORGE LTD.
 AFFLE INDIA
 KPIT TECH
 HAPPIEST MINDS
 BIRLASOFT
 ROUTE
 CYIENT
 INTELLECT DESIGN
 MASTEK
 LATENT VIEW
 ZENSAR TECH
 SONATA

38
 CANDLESTICKS
A candlestick is a sort of technical analysis price chart that shows the high, low, open, and
closing prices of a securities over time.
The "true body," or wide part of the candlestick, indicates investors if the closing price was
greater or lower than the opening price.

The link between the day's high, low, opening, and closing prices determines the shape of a
candlestick.
Technical analysts use candlesticks to identify when to enter and exit trades since they
indicate the impact of investor mood on security prices.
Types of Candlesticks

1. Doji candle: Doji candles are crucial candlesticks that convey information on their
own and also appear in a variety of patterns. When the open and close of a security
are almost equal, a doji appears. The length of the top and lower shadows might
differ, giving the candlestick a cross, inverted cross, or plus sign appearance. Doji are
neutral designs when used alone. Any bullish or bearish bias is based on price
behaviour in the past and confirmation in the future.

39
 While a doji with an equal open and closure is considered more robust, capturing the
spirit of the candlestick is more crucial. Doji represent uncertainty or a tug-of-war
between buyers and sellers. During the session, prices fluctuate above and below the
opening level, but they close at or around the opening level. As a result, there is a
standoff. Neither the bulls nor the bears have been able to seize control, and a turning
moment is possible.

2. Hammer Candlestick: The hammer is a bullish reversal pattern. Hammers can

indicate a potential trend reversal as well as bottoms or support levels. Hammers
indicate a bullish rebound after a drop. The extended lower shadow's low indicates
that sellers pushed prices lower during the session. The robust finish, on the other
hand, suggests that buyers regained their footing and finished the session well. While
this may appear to be sufficient, hammers demand additional bullish confirmation.
The hammer's low point indicates that there are still plenty of buyers. Before acting,
further buying pressure is required, preferably on a larger volume. A gap up or a long
white candlestick could provide such assurance. Hammers are akin to climaxes and
high- volume sales.

3. Inverted Hammer Candlestick: Inverted hammers indicate the possibility of a trend

reversal or support levels.
The lengthy upper shadow after a decrease signal purchasing pressure during the
session. The bulls, however, were unable to maintain this buying pressure, and prices
closed considerably below their highs, resulting in the extended upper shadow.
Because of this failure, action must wait for bullish confirmation. Bullish
confirmation might be an inverted hammer followed by a gap up or a long white
candlestick with significant volume.

40
4. Hanging Man Candlestick: A bearish reversal pattern, the hanging man can also
indicate a top or resistance level. A hanging man forms following an advance and
indicates that selling pressure is increasing. The session's low of the long lower
shadow confirms that sellers pushed prices lower. The advent of selling pressure
raises the yellow flag, even if the bulls regained their footing and drove prices higher
by the finish. A dangling guy, like the hammer, seeks bearish confirmation before
acting. A gap down or a long black candlestick on high volume can provide as
confirmation.
5.

6. Shooting Star: The shooting star is a bearish reversal pattern that appears in the star
position following an advance. A shooting star can indicate a possible trend reversal
or level of resistance. The resulting candlestick has a little black or white body and a
long top shadow. The bears' ability to drive prices down after a significant surge
raises the yellow flag. The upper shadow should be relatively long and at least 2 times
the length of the body to indicate a significant reversal. After the shooting star,
bearish confirmation is necessary, which can take the shape of a gap down or a long
black candlestick on high volume.

41
TECHNICAL INDICATORS
Technical indicators are pattern-based signals generated by the price, volume, and / or open
interest of a security or contract used by a trader who follows a technical analysis. Technical
analysts use indicators to predict future price fluctuations by analyzing historical data.
Types of indicators used in this study are as follows:

1. Super trend: Super trend are trend-following indicators. It is plotted against the price
and the current trend can be easily determined by the placement against the price. This
is a very simple indicator, created using only two parameters, duration and multiplier.
Buy and sell signals are generated when the indicator goes above or below the closing
price.
A buy signal is generated when the "super trend" is above the price and a sell signal is
generated when the "super trend" is below the closing price.

2. Relative Strength Index: The Relative Strength Index (RSI) is a measure of

momentum used in technical analysis to measure the magnitude of recent price
fluctuations to determine the overbought or oversold state of the price of a stock or
other asset. Evaluate. The RSI is displayed as an oscillator (a line graph that moves
between two extrema) and can take values from 0 to 100.
In usage of the RSI, readings above 70 indicate that the security is overbought or
overvalued and may be prepared for a trend reversal or price decline. An RSI reading
of 30 or less indicates an oversold or undervalued condition.

42
3. Volume Weighted Average Price (VWAP): Volume Weighted Average Price
(VWAP) is a technical analysis indicator used in intraday charts and is reset at the
start of each new trading session. This is a trading benchmark that represents the
average price at which a security is traded throughout the day based on volume and
price. The VWAP is important because it gives traders insight into both trend and
value pricing of securities.
Stocks priced below VWAP may be considered undervalued and stocks priced above
VWAP may be considered overvalued. If the price falls below the VWAP above it,
the trader can increase the inventory. If the price above VWAP falls below it, they can
sell a position or open a short position.

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4. Moving Average Convergence Divergence (MACD): Moving Average
Convergence Divergence (MACD) is a trend-following momentum indicator of the
relationship between two moving averages of a security's price.
Traders can buy securities when the MACD crosses above the signal line and sell (or
short) the securities when the MACD crosses below the signal line. MACD helps
investors understand whether prices are rising or falling, either stronger or weaker.

5. Fibonacci: The Fibonacci retracement level (derived from the Fibonacci sequence) is
a horizontal line that indicates where support and resistance are likely to occur.
Indicators are useful because they can be drawn between two important price points
such as highs and lows. The indicator then creates a level between these two points.
For a Golden cross Fibonacci, the 21 MA should cut the 55 MA line from down to
up, in order to take the trade for BUY.
For a Death cross Fibonacci, the 21 MA should cut the 55 MA line from up to down, in
order to take the trade for SELL.

44
6. Stochastic RSI: Stochastic RSI is an indicator used in technical analysis, ranging
from 0 to 1 (or 0 to 100 on some charting platforms) and a set of Stochastic Oscillator
equations with a series of Relative Strength Index values. Using the RSI level within
the Stochastic formula allows traders to know if the current RSI level is overbought or
oversold. Stochastic RSI can be used not only to identify overbought / oversold conditions,
but also to identify short-term trends by displaying in the context of an oscillator with a
centreline of 0.50. If Stochastic RSI is above 0.50, security can be considered to tend to be
higher, and below 0.50, the opposite is true.

7. Awesome Oscillator: Awesome Oscillator is an indicator used to measure market

dynamics. AOs are typically used to identify trends and predict possible reversals.
Due to its nature as an oscillator, the Awesome Oscillator is designed to have values
that fluctuate above and below the zero line. The generated values are displayed as a
histogram of the red and green bars. If the value is higher than the previous bar, the
bar will be green. A red bar indicates that the bar is lower than the previous bar.
If the AO value is above the zero line, it indicates that the short term tends to be
higher than the long term.
If the AO value is below the zero line, the short term tends to be lower than the long
term. This information can be used for a variety of signals.

45
8. Ichimoku Cloud: The Ichimoku Cloud is a collection of technical indicators that show
the level of support and resistance, as well as the direction of momentum and trends.
To do this, some mean values are taken and displayed in the diagram. We also use
these numbers to calculate the "cloud" that attempts to predict where prices may find
support or resistance in the future.
The overall trend is up when the price is above the cloud, down when the price is
below the cloud, and trendless or transitioning when the price is in the cloud.
If the cloud moves in the same direction as the price, the above trend signals are
intensified. The top of the cloud, for example, moves up during an uptrend, whereas
the bottom of the cloud moves down during a downtrend.

9. Williams Alligator: The Williams Alligator indicator is a smoothed moving

averages- based technical analysis tool.
To begin, the indicator calculates a smoothed average using a simple moving average
(SMA).
It employs three moving averages with periods of five, eight, and thirteen periods. The
Jaw, Teeth, and Lips of the Alligator are made up of three moving averages.
A short sell opportunity is indicated by the Lips crossing down through the other
lines, whereas a buying opportunity is indicated by the Lips crossing upward. The
downward cross is referred to as the alligator "sleeping," while the upward cross is
referred to as the alligator "awakening."

46
10. Central Pivot Range: The Central Pivot Range is a technical analysis tool. Traders
utilize it as an effective trading indicator in intraday trading. The Central Pivot
Range (CPR) indicator is used to determine price levels' important points and trade
accordingly. The CPR indicator is a great tool for traders who want to combine
several trading approaches to create lucrative positions. Traders can employ this
strategy alone or in conjunction with other indicators.

In case the CPR lines form an increasing trend or a higher trend, it suggests a strong
bullish approach.

On the other hand, if the CPR lines form a downward trend, it indicates a bearish
approach.

11. Pivot Point Standard: Is a technical indicator that is used to assess where price
might find support or resistance. A pivot point (PP) level with multiple support (S)
and resistance (R) levels make up the Pivot Points indicator.

If the price falls below the pivot point, traders know they'll be shorting early in the
session. They will be buying if the price is higher than the pivot point. S1, S2, R1, and
R2 might be utilised as target prices and stop-loss levels for such trades.

47
12. Bollinger Band: Bollinger Bands are a trading technique that may be used to
calculate trade entry and exit locations.
Overbought and oversold circumstances are frequently identified using the bands.
When the price of an asset falls below the lower band of the Bollinger Bands, it is
likely that prices have fallen too far and will rebound again. When price breaks above
the upper range, however, the market is likely overbought and due for a pullback.

13. Aroon: The Aroon indicator is a technical indicator that may be used to detect price
trend changes as well as the strength of that trend. In essence, the indicator tracks the
time between highs and lows over a given period of time. The notion is that strong
uptrends will see new highs on a frequent basis, whereas strong downtrends will see
new lows on a regular basis.
It implies positive price behaviour when the Aroon Up is higher than the Aroon
Down. It indicates negative price behaviour when the Aroon Down is higher than the
Aroon Up.
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49
 TECHNICAL STRATEGIES

1. Bull 180: This strategy can be used when the share price of a particular stock has
fallen in series for a over of time, and a green candle engulfs the earlier red candle,
from where the trend takes a reversal to bullish side.

2. Bear 180: This strategy can be used when the share price of a particular stock has
been going up in series over of time, and a red candle engulfs the earlier green
candle, from where the trend takes a reversal to bearish side.

3. Squeeze momentum: Squeeze Momentum depicts periods of increased or decreased

volatility, or when the market shifts from a trend to a flat movement and vice versa.
The market consolidates 80% of the time and only moves in a specific direction 20%
of the time. It applies to all time periods. After a flat movement, there is always a
breakout or breakdown.
Firstly, we select some stocks from Top gainers or Top losers from that particular
day, and then watch the stock for some time till consolidation gives a breakout or
breakdown. For Top gainers stock, Consolidation gives breakout and for Top losers,
consolidation gives breakdown

50
4. ORB: The opening range breakout trading approach is known as ORB. Traders might
notice it if a range has been broken after a specific amount of time has passed since
the market opened.
Allow the markets or stocks to establish the range. Certain elements must be
considered initially in ORB trading strategy.
To begin, determine the time frame so that a range can be constructed. Traders
employ a variety of time frames, such as 5 minutes, 15 minutes, 30 minutes, and so
on. Second, you must determine the high and low points of the range for a specific
stock or index.

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 TECHNICAL PATTERNS
Long term patterns-
1. Bump and Run Reversal: The bump and run reversal chart pattern, also known as
BARR, is a reversal pattern that occurs when a stock experiences a rapid and big price
increase as a result of excessive market speculation.
When excessive speculation drives prices up too much, too fast, a bump and run
reversal chart pattern occurs. The reversal of an existing trend, whether short or long
term, is indicated when the pattern forms.
The stock price continues to move down towards the trend line after reaching its high,
and the chart begins to display the right side of the bump.

2. Double Top (Reversal): A double top is a negative technical reversal pattern that
arises when an asset reaches a high price two times in a row with a moderate decrease
in between. When the asset's price goes below a support level equal to the low
between the two previous highs, it's verified.
This is a strong indication that a reversal is imminent, as it indicates that the buying
pressure is nearly exhausted.
Because we are anticipating a reversal of the uptrend, we would put our entry order
below the neckline with the double top.

52
3. Double Bottom (Reversal): A double bottom pattern is a technical analysis charting
pattern that indicates a shift in trend and a reversal of momentum from prior leading
price movement. It represents a stock or index dropping, rebounding, dropping again
to the same or comparable level as the previous decline, and finally rebounding. The
double bottom resembles a letter "W." The twice-touched low is seen as a level of
support.

4. Head and Shoulder Top (Reversal): A head and shoulders pattern is a chart
formation that consists of a baseline with three peaks, the outside two of which are
similar in height and the centre peak being the highest.
After an uptrend, a head and shoulders reversal pattern appear, and its completion
signals a trend reversal. Three successive peaks make up the pattern, with the centre
peak (head) being the highest and the two outside peaks (shoulders) being low and
fairly equal. Each peak's response lows might be linked to construct support or a
neckline.

5. Head and Shoulder Bottom (Reversal): The bottom of the head and shoulders is
53
also known as an inverse head and shoulders. The pattern is similar to its counterpart
in many ways; however, it relies more on volume patterns for confirmation.
After a decline, the head and shoulders bottom forms, and its completion signals a
trend change. The pattern is made up of three troughs, with the centre trough (head)
being the deepest and the two outer troughs (shoulders) being the shallowest. The two
shoulders should be the same height and width. The middle of the pattern's response
highs can be linked to form resistance or a neckline.

54
6. Rounding Bottom: The rounding bottom is a long-term reversal pattern that works
well on weekly time frames. It's also known as a saucer bottom, and it denotes a
protracted period of consolidation before the market shifts from bearish to bullish.
A rounding bottom is a technical analysis chart pattern that is defined by a series of
price moves that form a "U" graphically. Rounding bottoms appear at the end of long
downward trends and signal a change in long-term price movements.

7. Cup with handle: The Cup with Handle is a bullish continuation pattern that
55
indicates a period of consolidation.
The pattern consists of two parts: the cup and the handle. After some time, the cup
takes shape and resembles a bowl or a rounded bottom. A trade range emerges on
the right-hand side as the cup is completed, and the handle is produced. A subsequent
breakthrough from the handle's trading range indicates that the preceding increase will
continue.

56
Mid-term patterns-
1. Flag Pennant: Flags and Pennants are short-term continuation patterns that signal a
brief pause before the preceding advance restarts. These patterns are frequently
preceded by a strong rise or decline with high volume, and they indicate the middle of
a trend.
Flags and pennants must be preceded by a significant rise or drop.

57
2. Symmetrical Triangle: A symmetrical triangle is a chart pattern made up of two
converging trend lines that connect a succession of peaks and troughs. The slope of
these trend lines should be about equal.
Symmetrical triangles form when the price of an asset consolidates in such a way that
two converging trend lines with comparable slopes emerge.
The distance between the initial high and low applied to the breakout or breakdown
point determines the breakout or breakdown objectives for a symmetrical triangle.

3. Ascending Triangle: An ascending triangle is a technical analysis chart pattern. It is

58
formed by price movements that permit the drawing of a horizontal line along the
swing highs and a rising trendline along the swing lows. A triangle is formed by the
two lines. Triangle breakouts are frequently watched by traders. A breakout can
happen on either the upside or the downside.
Ascending triangles are also known as continuation patterns because the price usually
breaks out in the same direction as the trend that existed shortly before the triangle
formed.

59
4. Descending Triangle: A descending triangle is a bearish chart pattern made by
drawing one horizontal trend line connecting a series of lower highs and a second
horizontal trend line connecting a series of lows in technical analysis. Traders often
look for a move below the lower support trend line since it indicates that downward
momentum is building and a breakdown is approaching. Traders establish short
positions and aggressively help push the asset's price farther lower if the collapse
happens.

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5. Price Channel: When the price of a security oscillates between two parallel lines,
whether horizontal, ascending, or descending, it is called a price channel.
Price channels can help you spot breakouts, which occur when a security's price breaks
through the upper or lower channel trendline.
Traders can sell when the price reaches the upper trendline of the price channel and buy
when the price approaches the lower trendline.

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6. Rectangle Pattern: During a trend halt, a rectangle forms as a trading range as a
continuation pattern. Two comparable highs and two comparable lows clearly identify
the pattern. The top and bottom of a rectangle can be formed by connecting the highs
and lows to form two parallel lines. Trading ranges, consolidation zones, and
congestion areas are all terms used to describe rectangles.

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 BACKTESTING OF INDICATORS

Back testing is a way for determining how well a strategy would have performed in the
absence of the strategy or model. Back testing determines the viability of a trading strategy
by examining how it might perform in the past. If back testing proves to be effective, traders
and analysts may be more willing to use it in the future.

Strategy Name Probability of Win Probability of Losses Rankings

% %
Super trend 53.62% 46.38% 2

RSI 49.68% 49.68% 7

MACD 47.11% 53.50% 10

VWAP 46.97% 52.24% 11

Stochastic RSI 55.00% 44% 1

Fibonacci 48.47% 50.26% 8

CPR 51.20% 47.84% 4

Bollinger band 52.99% 49.63% 3

Pivot point standard 49.75% 49.26% 6

Aroon 50.28% 48.32% 5

Awesome oscillator 47.57% 50.27% 9

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 CONCLUSION
In order to make informed investment decisions, equity research is quite important. After
determining your risk tolerance and capacity, as well as your time horizon and investing
goals, the individual portfolio can provide you with systematic returns.
One such method for value analysis is the relative valuation model. To determine a confirm
trade signal, one can utilize long and short-term technical analysis, as well as fundamental
analysis. By estimating long-term target prices, investors may maximize profits while also
determining how long they should keep the stock.

REFERENCES
 https://www.ibef.org/industry/insurance-sector-india
 https://in.tradingview.com/
 https://www.screener.in/
 https://www.moneycontrol.com/stocks/marketinfo/marketc
ap/bse/index.html

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