CHAPTER – 1

INTRODUCTION

1.1INTRODUCTION

Technical Analysis is the forecasting of future financial price movements based on

an examination of past price movements. Like weather forecasting, technical analysis does
not result in absolute predictions about the future. Instead, technical analysis can help
investors anticipate what is “likely” to happen to prices over time. Technical analysis uses a
wide variety of charts that show price over time.

Technical analysis is applicable to stocks, indices, commodities, futures or any

tradable instrument where the price is influenced by the forces of supply and demand. Price
refers to any combination of the open, high, low, or close for a given security over a specific
time frame. The time frame can be based on intraday (1-minute, 5-minutes, 10-minutes, 15-
minutes, 30-minutes or hourly), daily, weekly or monthly price data and last a few hours or
many years. In addition, some technical analysts include volume or open interest figures
with their study of price action.

A method of evaluating securities by analysing statistics generated by market

activity, such as past prices and volume. Technical analysts do not attempt to measure a
security's intrinsic value, but instead use charts and other tools to identify patterns that can
suggest future activity. Technical analysts believe that the historical performance of stocks
and markets are indications of future performance.

In a shopping mall, a fundamental analyst would go to each store, study the product
that was being sold, and then decide whether to buy it or not. By contrast, a technical analyst
would sit on a bench in the mall and watch people go into the stores. Disregarding the
intrinsic value of the products in the store, the technical analyst's decision would be based on
the patterns or activity of people going into each store.

1
Stock market:

A stock market is a private or public market for the trading of company stock and
derivatives of company stock at an agreed price; both of these are securities listed on a stock
exchange as well as those only traded privately.

The expression 'stock market' refers to the market that enables the trading of
company stocks (collective shares), other securities, and derivatives. Bonds are still
traditionally traded in an informal, over-the-counter market known as the bond market.
Commodities are traded in commodities markets, and derivatives are traded in a variety of
markets (but, like bonds, mostly 'over-the-counter').

Market participants:

Many years ago, worldwide, buyers and sellers were individual investors, such as
wealthy businessmen, with long family histories to particular corporations. Over time,
markets have become more "institutionalized"; buyers and sellers are largely institutions
(e.g., pension funds, insurance companies, mutual funds, hedge funds, investor groups, and
banks).

The rise of the institutional investor has brought with it some improvements in
market operations. Thus, the government was responsible for "fixed" fees being markedly
reduced for the 'small' investor, but only after the large institutions had managed to break the
brokers' solid front on fees (they then went to 'negotiated' fees, but only for large
institutions).

Stock market index:

The movements of the prices in a market or section of a market are captured in price
indices called stock market indices, of which there are many, e.g., the S&P, the FTSE and

2
the Euronext indices. Such indices are usually market capitalization (the total market value
of floating capital of the company) weighted, with the weights reflecting the contribution of
the stock to the index. The constituents of the index are reviewed frequently to
include/exclude stocks in order to reflect the changing business environment.

Derivative instruments:

Financial innovation has brought many new financial instruments whose pay-offs or
values depend on the prices of stocks. Some examples are exchange-traded funds (ETFs),
stock index and stock options, equity swaps, single-stock futures, and stock index futures.
These last two may be traded on futures exchanges (which are distinct from stock exchanges
—their history traces back to commodities futures exchanges), or traded over-the-counter.
As all of these products are only derived from stocks, they are sometimes considered to be
traded in a (hypothetical) derivatives market, rather than the (hypothetical) stock market.

3
1.2INDUSTARY PROFILE

The National Stock Exchange is India's largest financial market. Established in 1992,
the NSE has developed into a sophisticated, electronic market, which ranks third in the
world for transacted volume. The NSE conducts transactions in the wholesale debt, equity
and derivative markets. Based in Mumbai, India, the National Stock Exchange is a leader in
market technology. The exchange's supports more than 3,000 VSAT terminals, making the
NSE the largest private wide-area network in the country. The National Stock Exchange has
been a pioneer for Indian financial markets, being the first electronic limit order book to
trade derivatives and ETFs.

The National Stock Exchange (NSE) is India's leading stock exchange covering
various cities and towns across the country. NSE was set up by leading institutions to
provide a modern, fully automated screen-based trading system with national reach. The
Exchange has brought about unparalleled transparency, speed & efficiency, safety and
market integrity. It has set up facilities that serve as a model for the securities industry in
terms of systems, practices and procedures.

NSE has played a catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today uses state-of-art
information technology to provide an efficient and transparent trading, clearing and
settlement mechanism, and has witnessed several innovations in products & services viz.

Demutualisation of stock exchange governance, screen based trading, compression of

settlement cycles, dematerialisation and electronic transfer of securities, securities lending
and borrowing, professionalisation of trading members, fine-tuned risk management

4
systems, emergence of clearing corporations to assume counterparty risks, market of debt
and derivative instruments and intensive use of information technology.

NSE is committed to operate a market ecosystem which is transparent and at the

same time offers high levels of safety, integrity and corporate governance, providing ever
growing trading & investment opportunities for investors.

The National Stock Exchange of India Limited has genesis in the report of the High
Powered Study Group on Establishment of New Stock Exchanges. It recommended
promotion of a National Stock Exchange by financial institutions (FIs) to provide access to
investors from all across the country on an equal footing. Based on the recommendations,
NSE was promoted by leading Financial Institutions at the behest of the Government of
India and was incorporated in November 1992 as a tax-paying company unlike other stock
exchanges in the country.

5
 The National Stock Exchange (NSE) operates a nation-wide, electronic market,
offering trading in Capital Market, Derivatives Market and Currency Derivatives segments
including equities, equities based derivatives, Currency futures and options, equity based
ETFs, Gold ETF and Retail Government Securities. Today NSE network stretches to more
than 1,500 locations in the country and supports more than 2, 30,000 terminals.

With more than 10 asset classes in offering, NSE has taken many initiatives to
strengthen the securities industry and provides several new products like Mini Nifty, Long
Dated Options and Mutual Fund Service System. Responding to market needs, NSE has
introduced services like DMA, FIX capabilities, co-location facility and mobile trading to
cater to the evolving need of the market and various categories of market participants.

NSE has made its global presence felt with cross-listing arrangements, including
license agreements covering benchmark indexes for U.S. and Indian equities with CME
Group and has also signed a Memorandum of Understanding (MOU) with Singapore
Exchange (SGX) to cooperate in the development of a market for India-linked products and
services to be listed on SGX. The two exchanges also will look into a bilateral securities
trading link to enable investors in one country to seamlessly trade on the other country's
exchange.

NSE is one of the first de-mutualised stock exchanges in the country, where the
ownership and management of the Exchange is completely divorced from the right to trade
on it. Though the impetus for its establishment came from policy makers in the country, it
has been set up as a public limited company, owned by the leading institutional investors in
the country.
From day one, NSE has adopted the form of a demutualised exchange - the
ownership, management and trading is in the hands of three different sets of people. NSE is
owned by a set of leading financial institutions, banks, insurance companies and other
financial interme diaries and is managed by professionals, who do not directly or
indirectly trade on theExchange. This has completely eliminated any conflict of interest and

6
helped NSE in aggressively pursuing policies and practices within a public interest
framework.
The NSE model however, does not preclude, but in fact accommodates involvement,
support and contribution of trading members in a variety of ways. Its Board comprises of
senior executives from promoter institutions, eminent professionals in the fields of law,
economics, accountancy, finance, taxation, etc, public representatives, nominees of SEBI
and one full time executive of the Exchange.

While the Board deals with broad policy issues, decisions relating to market
operations are delegated by the Board to various committees constituted by it. Such
committees includes representatives from trading members, professionals, the public and the
management. The day-to-day management of the Exchange is delegated to the Managing
Director who is supported by a team of professional staff.

NSE is one of the first de-mutualised stock exchanges in the country, where the
ownership and management of the Exchange is completely divorced from the right to trade
on it. Though the impetus for its establishment came from policy makers in the country, it
has been set up as a public limited company, owned by the leading institutional investors in
the country .
From day one, NSE has adopted the form of a demutualised exchange - the
ownership, management and trading is in the hands of three different sets of people. NSE is
owned by a set of leading financial institutions, banks, insurance companies and other
financial intermediaries and is managed by professionals, who do not directly or indirectly
trade on the Exchange. This has completely eliminated any conflict of interest and helped
NSE in aggressively pursuing policies and practices within a public interest framework.
The NSE model however, does not preclude, but in fact accommodates involvement,
support and contribution of trading members in a variety of ways. Its Board comprises of
senior executives from promoter institutions, eminent professionals in the fields of law,
economics, accountancy, finance, taxation, etc, public representatives, nominees of SEBI
and one full time executive of the Exchange.

7
 While the Board deals with broad policy issues, decisions relating to market
operations are delegated by the Board to various committees constituted by it. Such
committees includes representatives from trading members, professionals, the public and the
management. The day-to-day management of the Exchange is delegated to the Managing
Director who is supported by a team of professional staff.

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

NSE Trading Technology

National Stock Exchange of India is one of the leading exchanges in the world on
several key parameters. NSE ranks* in top 3 globally for Stock Futures and Index Futures
and Options. Technology at the exchange remains backstage to fulfil the demand for
capacity, reliabilityand performance ensuring the competitive edge of NSE as India’s
number one exchange platform.

Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange Ltd.), is
Asia’s first Stock Exchange and one of India’s leading exchange groups. Over the past 137
years, BSE has facilitated the growth of the Indian corporate sector by providing it an

8
efficient capital- raising platform. Popularly known as BSE, the bourse was established
as "The Native Share & Stock Brokers' Association" in 1875. BSE is a corporatized and
demutualised entity, with a broad shareholder-base which includes two leading global
exchanges, Deutsche Bourse and Singapore Exchange as strategic partners. BSE provides an
efficient and transparent market for trading in equity, debt instruments, derivatives, mutual
fundsMore than 5000 companies are listed on BSE making it world's No. 1 exchange in
terms of listed members. The companies listed on BSE Ltd command a total market
capitalization of USD 1.32 Trillion as of January 2013.

BSE also provides a host of other services to capital market participants including
risk management, clearing, settlement, market data services and education. It has a global
reach with customers around the world and a nation-wide presence. BSE systems and
processes are designed to safeguard market integrity, drive the growth of the Indian capital
market and stimulate innovation and competition across all market segments. BSE is the first
exchange in India and second in the world to obtain an ISO 9001:2000 certification. 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 On-Line trading System
(BOLT). It operates one of the most respected capital market educational institutes in the
country (the BSE Institute Ltd.

BSE’s popular equity index - the S&P BSE SENSEX - is India's most widely tracked
stock market benchmark index. It is traded internationally on the EUREX as well as leading
exchanges of the BRCS nations (Brazil, Russia, China and South Africa).
BSE has won several awards and recognitions that acknowledge the work done and progress
made like The Golden Peacock Global CSR Award for its initiatives in Corporate Social
Responsibility, NASSCOM - CNBC-TV18’s IT User Awards, 2010 in Financial Services
category, Skoch Virtual Corporation 2010 Award in the BSE star MF category and
Responsibility Award (CSR) by the World Council of Corporate Governance. Its recent
milestones include the launching of BRICSMART indices derivatives, BSE-SME Exchange
platform, S&P BSE GREENEX to promote investments in Green India.

9
 Bombay Stock Exchange has now adopted only its initials as the new name (BSE),
positioning itself better position as a national multi-asset financial infrastructure institution.
With renewed zeal and focus on new business opportunities, product and service innovation,
upgrades in technology, increased investor and member focus, BSE is always pushing the
envelope on all fronts. The ambition is to continually improve and adopt new and better
ways of conducting our business.

As the first stock exchange in Asia and the pioneer of securities transaction business,
BSE prides itself on being at the forefront of bringing innovations to the Indian capital
markets while creating diverse investment opportunities for the investor community in India
throughout its long history. BSE continues to undertake several initiatives to build on its
strong brand, legacy and market position to create value for its stakeholders and the financial
system.
Achievements:

 Host the popular opening-bell ceremony in Indian capital markets

 Launch mobile-based trading in India in Sept 2010
 Become securities market infrastructure member of SWIFT in India and provide
corporate actions to custodians in ISO 15022 format.
 Launched S&P BSE SENSEX Realized S&P BSE Volatility (REALVOL) Index in
Nov 201Besides the above, BSE has taken large strides in product and service
innovation for the benefit of its members and investors, notable ones being .
 Launch of a reporting platform for corporate bonds.
 Launch of the S&P BSE IPO index and S&P BSE PSU website.
 Revamp of its website with wide range of new investor-friendly features.
 Launch of trading in S&P BSE SENSEX futures on EUREX and leading exchanges
of the BRICS nation bloc.
 Launched Smart Order Routing for members and investors.
 Introduced SACT (SMS alert & Complaint Tracking system).
 Launched co-location facility at BSE premises in November 2010.

10
  Reduction in membership fees to Rs. 10 lakh for new memberships to promote
financial access and inclusion.
 Launch of web-based mutual fund trading platform for investors.

Awards & Recognitions

 Best Managed Financial Derivatives Exchange in the Asia Pacific by the The Asian
Banker.
 The Golden Peacock Global CSR Award for its initiatives in Corporate Social
Responsibility.
 BSE has won NASSCOM - CNBC-TV18’s IT User Awards, 2010 in Financial
Services category.
 BSE has won Skoch Virtual Corporation 2010 Award in the BSE Star MF category.
 Responsibility Award (CSR), by the World Council of Corporate Governance.
 Annual Reports and Accounts of BSE have been awarded the ICAI awards for
excellence in financial reporting for four consecutive years from 2006 onwards.

11
1.3COMPANY PROFILE

Sharekhan is India’s leading online retail broking house. Launched on February 8,

2000 as an online trading portal, Sharekhan has today a pan-India presence with over 1,529
outlets serving 950,000 customers across 450 cities. It also has international presence
through its branches in the UAE and Oman. Sharekhan offers services like portfolio
management, trade execution in equities, futures & options, commodities, and distribution of
mutual funds, insurance and structured products. These services are backed by quality
investment advice from an experienced research team which offers investment and trading
ideas based on fundamental and technical research respectively, market related news,
statistical information on equities, commodities, mutual funds, IPOs and much more.
Sharekhan is a member of the Bombay Stock Exchange, the National Stock Exchange and
the country’s two leading commodity exchanges, the NCDEX and MCX. Sharekhan is also
registered as a depository participant with National Securities Depository and Central
Depository Services. Sharekhan has set category leadership through pioneering initiatives
like Trade Tiger, an Internet-based executable application that emulates a broker terminal
besides providing information and tools relevant to day traders. Its second initiative, First
Step, is targeted at empowering the first-time investors. Sharekhan has also set its global
footprint through the “India First” initiative, a series of seminars conducted by Sharekhan to
help the non-resident Indians participate and benefit from the huge investment opportunities
in India.

Sharekhan's management team is one of the strongest in the sector and has positioned
Sharekhan to take advantage of the growing consumer demand for financial services
products in India through investments in research, pan-Indian branch network and an
outstanding technology platform. Further, Sharekhan's lineage and relationship with SSKI

12
Group provide it a unique position to understand and leverage the growth of the financial
services sector. We look forward to providing strategic counsel to Sharekhan's management
as they continue their expansion for the benefit of all shareholders.

SSKI Corporate Finance Private Limited (SSKI) is a leading India-based investment bank
with strong research-driven focus. Their team members are widely respected for their
commitment to transactions and their specialized knowledge in their areas of strength. The
team has completed over US$5 billion worth of deals in the last 5 years - making it among
the most significant players raising equity in the Indian market. SSKI, a veteran equities
solutions company has over 8 decades of experience in the Indian stock markets.

If we experience their language, presentation style, content or for that matter the
online trading facility, we'll find a common thread; one that helps us make informed
decisions and simplifies investing in stocks. The common thread of empowerment is what
Sharekhan's all about.

"Sharekhan has always believed in collaborating with like-minded Corporate into

forming strategic associations for mutual benefit relationships" says JaideepArora, Director -
Sharekhan Limited.

Sharekhan is also about focus. Sharekhan does not claim expertise in too many
things. Sharekhan's expertise lies in stocks and that's what he talks about with authority. So
when he says that investing in stocks should not be confused with trading in stocks or a
portfolio-based strategy is better than betting on a single horse, it is something that is spoken
with years of focused learning and experience in the’ stock markets. And these beliefs are
reflected in everything Sharekhan does for us! Sharekhan is a part of the SSKI group, an
Indian financial services power house, with strong presence in Retail equities Institutional
equities Investment banking.

13
 In Ahmedabad, It is having the branch at Dynamic house, opp. Child care hospital,
Navrangpura road and over 40 franchisees in Ahmedabad. We have been given the centre at
Navrangpura road, Ahmedabad.

Sharekhan ltd. Provide different Product as follows:

 Share online & offline

 Derivatives
 Mutual fund online
 Commodities online
 IPO online
 Portfolio Management Services
 Insurance
 Fixed deposits
 Advisory products
 Currency trading

14
SHAREKHAN PROVIDE ONLINE FACILITIES.

BENEFIT:

 Freedom from paperwork:-Integrated trading, bank and de-mat account with

digital contracts removers all paperwork.
 Instant credit and transfer:-instant transfer of funds from bank account of the
choice to Sharekhan trading account.
 Trade anywhere:-enjoy the ease of trading from any part of the world in a
completely secure environment.
 Dial n Trade:-call toll free number (1-800-22-7050) to place orders through
telebrokers.
 Timey advice:-make informed decisions with expert advice, investment calls and
live market commentary.
 Real-time portfolio tracking:-benefit from real-time information for investment and
current portfolio value.
 After-hour orders:-place order after market hours, which get executed as soon as
the markets opens.

Sharekhan provide two different accounts:

1) Classic account
2) Trade Tiger

CLASSIC ACCOUNT:

The Classic Account enables customers to trade online on the NSE and the BSE, invest in
IPO and Mutual Funds and access all the research and transaction reports through
Sharekhan’s website. This account is suitable for the retail investors.

In this account Shown the maximum script are 25 in the terminal and the technical chart are
not shown in this account. The life time registration charge for this account is 750 rupees.

15
Features:

 Online trading account for investing in Equities and Derivatives

 Free trading through Phone (Dial-n-Trade)
 Two dedicated numbers for placing your orders with your cell phone or landline.
 Automatic funds transfer with phone banking (for Citibank and HDFC bank
customers)
 Simple and Secure Interactive Voice Response based system for authentication
 Get the trusted, professional advice of our telebrokers.
 After hours order placement facility between 8.00 am and 9.30 am
 Integration of: Online trading + Bank + Demat account
 Instant cash transfer facility against purchase & sale of shares
 IPO investments
 Instant order and trade confirmations by e-mail
 Single screen interface for cash and derivatives

FAST TRADE:

Features

 Streaming quotes.
 Personalized market watch.
 Single screen interface for cash, derivatives and Commodities.
 New FastTrade is platform independent will support by all Operating System.
 New FastTrade will support all browsers in the market.
 New FastTrade is independent of existing website and can work even if content
website is down.
 Fast trade is web base product and it’s a shown fluctuation rate.

16
1.4.RESEARCH PROBLEM
To an individual investors major problem to faced in capital market is hidden
company information on and non transparency of the company facts and figures share
market or stock market normally volatile in nature that is share price of the particular
company may met with frequency oscillation over the year. To avoid the struggle for an
individual investors in my study and going to analysis technical factor of company that is
share price variance changes in share value of company sector.

Capital market is a vital market in this multinational competitive scenario. In my study

to frame work of my research will be on analyzing the market Trend.

1.5.NEED FOR THE STUDY

In those days Buy and Hold policy used to be the best one. Contrary to that now a
day’s volatility is the most dreaded buzzword in stock market. If you stick to the same old
policy of buy and hold, you will not even be in a position to beat inflation. If you are a
diehard fundamentalist then please check the return of your portfolio since 2008. It should
not surprise you if you are sitting on loss by following the buy and hold mantra. If you are
little bit convinced now then it’s the right time to change the investment strategy and add a
pinch of technical analysis to it so as to generate superior returns. In this article we will try to
figure out how following basic steps of technical analysis can help you in taking prudent
decisions.

17
1.6.OBJECTIVES OF STUDY:

PRIMARY OBJECTIVE:

To study on technical Analysis about companies in stock market.

SECONDARY OBJECTIVES:

 To identify and analysis the share price variances over the year.

 To analyse the market trend for selected sector.

 To analyse the share values of companies on various sectors.

 To analyse the major constraint and issues of stock market.

18
1.7.SCOPE OF STUDY:

This study was undertaken on sectoral basis, on each sector five companies was
chosen as the sampling unit.In this study for the technicalanalysis of the firm the stock price
movements and volume of trade by the company is taken for analysis. To meet out my
objective I have chosen 3sector from the NSE market based on the performance. In that
sectorial part 5 companies from each sector was chosen for analysis based on the
profitability. In this study have adopt technical and for each and every company which is fall
under sampling unit. My study helps investor to predict the price movements of stock
market.

1.8 LIMITATIONSOF THE STUDY:

 Limited companies are only covered in the study.

 The data collection was strictly confined to secondary source no primary data is
associated with the project.
 From BSE and NSE listing a very scripts are selected and analysed.
 Period of study is short

19
 CHAPTER - 2

REVIEW OF LITERATURE

2.1.CONCEPTUAL REVIEW:

Technical analysis method of predicting price movements and future market trend by
studying charts of past market action which take into account price of instruments, volume
of trading and , where applicable, open interest in the instruments.

Bull / Bear Trends

A bull trend is identify by a series of rallies where each rally exceeds the higher point
of the previous rally. The decline, between rallies, end above the lowest point of the
previous decline. In short it forms higher highs and higher lows. The start of an up trend is
signaled when price makes a higher low (trough), followed by rally above the previous high
(peak):

In short the Technical Analysis can be summed up

 A bull tend 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).

As the activities on a stock market tend to be specialized and not understood by

common people, this chapter will give some basic definitions and review stock market
history, participants, operations and important, so as to serve as a basis for understanding
how stock market can help promote investment and trade in a monetary zone. Besides,
review of other studies will be done in this chapter to give various dimensions of stock
market in an economy.

20
2.2.EMPIRICALSTUDY :

1.Testing Random Walk Hypothesis for Indian Stock Market Indices

Bhanu Pant

Research Scholar

Nirma Institute of Management, Ahmedabad

Abstract:

In this paper we have analyzed the behavior of daily and weekly returns of five
Indian stock market indices for random walk during April-1996 to June-2001. We have
tested the indices for normality, autocorrelation using Q-statistc& Dickey-Fuller test and
analyzed variance ratio using homoscedastic and heteroscedastic test estimates. The results
support that Indian stock market indices do not follow random walk. Heteroscedasticity is
not a cause of non-random behavior while autocorrelation is a minor source of no random
walk indicating thereby that mean reverting behavior of stock indices is the major cause of
random walk. While results of variance ratio test and autocorrelation test are similar and
reject random walk in Indian stock market indices, the results from Dickey-Fuller test fail to
reject the null hypothesis of random walk. Since variance ratio test is more powerful then the
other tests performed in the study, we go by the results of variance ratio test.

2. The journal of Finance (march 1959)

STOCK-MARKET “PATTERNS” AND FINANCIAL ANALYSIS:

Abstract:

A common and convenient name for analysis of stock-market patterns is “Technical

analysis. ” Perhaps no one in the financial world completely ignores technical analysis –
indeed, its terminology is in grained in market reporting-and some rely intensively on it.

21
Technical analysis includes many different approaches, most requiring a good deal of
subjective judgement in application. In part these approches are purely empirical; in part
they are based on analogy with physical processes, such as tides and waves.

3.Random Walks in stock Market PricesAuthor:EugeneF.Fama

Abstract

This article describes briefly and simply the theory of random walks and some of the
important issues it raises concerning the work of market analysts. A discussion of two
common approaches to predicting stock prices—the chartist (or technical) theories and the
theory of fundamental (or intrinsic) value—allows the reader to put the theory of random
walks into perspective. The theory of the market as efficient (at least semistrong efficient)
and ch aracterized as a random walk states that successive price changes in individual
securities are independent and a series of stock price changes has no memory; thus, the past
history of the series cannot be used to predict the future history. Empirical evidence indicates
that, although price changes may not be strictly independent, the dependence is so slight that
a simple buy-and-hold strategy beats any strategy based on mechanical trading rules. The
implications of the market being a random walk are devastating for chartism. For
fundamental value analysis, the implications are more complex. If the market is efficient,
stock prices at any point in time represent good estimates of intrinsic value, so additional
analysis is useless unless the analyst has new (private) information or insights. The challenge
for each type of analysis is to show that their methods produce more return than a random
sample of securities.

4. Handbook of Industrial Organization

Volume 2, 1989, Pages 1059–1107

Wesley M. Cohen

This chapter discusses the perceptible movement of empirical scholars from a narrow
concern with the role of firm size and market concentration toward a broader consideration

22
of the fundamental determinants of technical change in industry. Although tastes,
technological opportunity, and appropriability conditions themselves are subject to change
over time, particularly in response to radical innovations that alter the technological regime,
these conditions are reasonably assumed to determine inter-industry differences in
innovative activity over relatively long periods. Although a substantial body of descriptive
evidence has begun to accumulate on the way the nature and effects of demand, opportunity,
and appropriability differ across industries, the absence of suitable data constrains progress
in many areas. It has been observed that much of the empirical understanding of innovation
derives not from the estimation of econometric models but from the use of other empirical
methods. Many of the most credible empirical regularities have been established not by
estimating and testingelaborate optimization models with published data but by the
painstaking collection of original data, usually in the form of responses to relatively simple
questions.

5. A Study of Investment Performance and Impact of Stock Analysts’

Recommendations- KapilChoudhary andSushil Bajaj

November 9, 2011

Abstract:

Information available in the market is an important source for making investment in

the stock market. The objective of this study is to examine the value of analysts’ services for
investors and explore the presence of announcement effects of their recommendations on the
stock market return behavior. This study considers 222 buying recommendations and covers
the time period from July 4, 2005 to December 31, 2007. The present study uses the Sharpe
Performance Measure to capture the impact of analysts’ recommendations over the
investment performance. This study shows the absence of association between abnormal
return and the recommendations provided by the equity analysts. However, some interesting
results in case of holding period suggest that one week holding period following the

23
recommendations provides inferior investment performance while one year holding period
yields highest inferior investment performance.

6. A Study on the Relevance of Portfolio Management and Its Different

Dimensions - Sujoy Kumar DharSr - Icfai Business School (IBS) May 17,
2013
Abstract:
It is a universal phenomenon that the growth of the nation is not possible without the
rapid industrialization. The necessary condition for sustained rise in per capita income is a
sound and developed capital market. SEBI has realized that Indian capital market can not be
developed unless and until retail participation is enhanced. In the absence of retail
participation, the Indian capital market has to depend to a significant extent on FII inflows.
Index of Mumbai Stock Exchange might have reached 21000 points twice, not because of
strong fundamental of Indian companies, but due to the reflected glory of foreign funds. To
enhance the retail participation in Indian capital market, SEBI has already implemented
several stringent Corporate Governance rules. To win the confidence of retail investors,
SEBI is simultaneously conducting several awareness programs. Due to privatization,
liberalization and globalization, purchasing power of the common mass has gone up. Retail
households which have huge amount of idle cash and are willing to earn a higher return from
it but they are unable to do as they don’t have the adequate technical knowledge about the
different capital market instruments. They have hardly any idea about where to invest, how
much to invest, what is the ideal time for entrance into the market and when should they exit
from the market. If they park their surplus fund into bank deposits, insurance schemes, post
office deposits, derived return from investment will be abysmally low which is much lesser
than inflation rate. Therefore it is high time for them to participate in the capital market
provided they are ready to block their idle funds for the long term and they should invest in
the stocks of different blue chip large cap companies of diversified nature. Thus investing in

24
capital market is a win- win game for both the nation as well as the individual household
investors.

7.Journal of Accounting and Economics

Volume 21, Issue 1, February 1996, Pages 107–138

The capitalization, amortization, and value-relevance of R&D

Baruch Lev, a, Theodore Sougiannisb

Abstract

GAAP mandates the full expensing of R&D in financial statements, presumably

because of concerns with the reliability, objectivity, and value-relevance of R&D
capitalization. To address these concerns, we estimate the R&D capital of a large sample of
public companies and find these estimates to be statistically reliable and economically
meaningful. We then adjust the reported earnings and book values of sample firms for the
R&D capitalization and find that such adjustments are value-relevant to investors. Finally,
we document a significant intertemporal association between firms' R&D capital and
subsequent stock returns, suggesting either a systematic mispricing of the shares of R&D-
intensive companies, or a compensation for an extra-market risk factor associated with
R&D.

8. International Journal of Theoretical and Applied Finance

JINGTAO YAO

School of Computing, National University of Singapore, Lower Kent Ridge Road 119260,
Singapore

CHEW LIM TAN

25
School of Computing, National University of Singapore, Lower Kent Ridge Road 119260,
Singapore

This paper presents a study of artificial neural nets for use in stock index forecasting.
The data from a major emerging market, Kuala Lumpur Stock Exchange, are applied as a
case study. Based on the rescaled range analysis, a backpropagation neural network is used
to capture the relationship between the technical indicators and the levels of the index in the
market under study over time. Using different trading strategies, a significant paper profit
can be achieved by purchasing the indexed stocks in the respective proportions. The results
show that the neural network model can get better returns compared with conventional
ARIMA models. The experiment also shows that useful predictions can be made without the
use of extensive market data or knowledge. The paper, however, also discusses the problems
associated with technical forecasting using neural networks, such as the choice of "time
frames" and the "recency" problems.

9. Venture capitalists' appraisal of investment projects: an empirical European study

Sophie ManigartUGent, Mike Wright, Ken Robbie, Philippe Desbrières and Koen De
Waele

(1997) ENTREPRENEURSHIP-THEORY AND PRACTICE.21(4).p.29-44 Mark

Abstract

The investment appraisal and valuation process of venture capitalists includes

information gathering, the assessment of risk and required return, and the choice of a
valuation method. This process is empirically studied in the United Kingdom, the
Netherlands, Belgium, and France. The importance of different information sources is equal
in the four countries, except that the French venture capitalists place more emphasis on
personal references and the track record of the entrepreneur. The required return is lowest in
the Netherlands and Belgium for every development stage of a company, and highest in the
UK. The most widely used valuation method in the UK is the multiplication of past or future

26
earnings with some price-earnings ratio. In the Netherlands and Belgium it is the discounting
of future cash flows, and in France it is the book value of the net worth. Venture capitalists
perform an extensive due diligence process before investing in a company. In this way, they
want to minimize their investment risk by getting to know the entrepreneur or the
management team, the product, and the market potential presented in the investment
proposal. Due to possible agency problems, caused by information asymmetry and moral
hazard issues, the screening of deals is extremely important.

10.Technical analysis and the London stock exchange: testing the MACD
and RSI rules using the FT30

Terence Tai-Leung Chonga* & Wing-KamNga

Abstract

This article examines two oscillators – the Moving Average Convergence–

Divergence (MACD) and the Relative Strength Index (RSI) – to see if these rules are
profitable. Using 60-year data of the London Stock Exchange FT30 Index, it is found that
the RSI as well as the MACD rules can generate returns higher than the buy-and-hold
strategy in most cases.

11.Corporate governance and market valuation in China

Chong-En Baia, b, , , QiaoLiua, Joe Lua, Frank M. Songa, JunxiZhanga

Received 15 April 2003, Available online 30 Nov ember 2004

Abstract

In this paper, we investigate empirically the relationship between governance

mechanisms and the market valuation of publicly listed firms in China. We construct
measures of corporate governance and market valuation for all publicly listed firms on the
two stock markets in China from the firm's annual reports between 1999 and 2001. Using
this three-year panel, we examine the effect of corporate governance variables on market
valuation after controlling for factors commonly considered in market-valuation analysis.

27
Our empirical results support several theoretical predictions; for example, we find that both
high concentration of non-controlling shareholding and issuing shares to foreign investors
have positive effects on market valuation, while a large holding by the largest shareholder,
the CEO being the chairman or vice chairman of the board of directors, and the largest
shareholder being the government have negative effects. Journal of Comparative
Economics32 (4) (2004) 599–616.

12. Decision Support Systems

Volume 32, Issue 2, December 2001, Pages 201–214

Decision Support Issues in Customer Relationship Management and Interactive Marketing

for E-Commerce

Cover image

An empirical analysis of the antecedents of electronic commerce service continuance

Abstract

This paper examines key drivers of consumers' intention to continue using business-
to-consumer e-commerce services. Multiple theoretical perspectives are synthesized to
hypothesize a model of continuance behavior, which is then empirically tested using a field
survey of online brokerage (OLB) users. Salient results include: (1) consumers' continuance
intention is determined by their satisfaction with initial service use, their perceived
usefulness of service use, and the interaction between perceived usefulness and loyalty
incentives for service use, and (2) satisfaction and perceived usefulness are both predicted by
consumers' confirmation of expectations from initial service use. Implications of these
findings for e-commerce firms contemplating customer relationship management (CRM)
initiatives are discussed.

13.The Social Construction of Market Value: Institutionalization and Learning Perspectives on

Stock Market Reactions

Edward J. Zajac,James D. Westphal

28
Abstract

This study advances a social constructionist view of financial market behavior. The paper
suggests that the market's reaction to particular corporate practices, such as stock repurchase
plans, are not, as financial economists contend, simply a function of the inherent efficiency
of such practices. Rather, stock market reactions are also influenced by the prevailing
institutional logic and the degree of institutionalization of the practice. The theory first
predicts that the emergence of the agency perspective on corporate governance in the mid-
1980s represented a powerful new institutional logic that would lead the market to reverse its
prior aggregate reaction to stock repurchase plans in the United States. The paper then
considers the potential for institutional decoupling of repurchase plans and develops
competing hypotheses about how the market value of these policies might have changed as
more firms formally adopted, but did not implement, the plans over time. In contrast to a
financial economic perspective on market valuation, which suggests that markets should
discount the value of a policy as evidence of non-implementation accumulates, this study
posits that institutionalization processes might increase the market value of a policy as more
firms adopt it, despite growing evidence of decoupling. Implications for institutional theory
and theoretical perspectives on capital markets are discussed.

29
 CHAPTER- 3

RESEARCH METHODOLOGY

3.1.RESEARCH DESIGN.

Research design is a systematic planning,organizing and executing a research project

within specified time and resource allocation.In My research I have adopted Cross
Sectional Research. Research design tells the type of data to be collected, the sources of
data and the procedures to be followed in data collection. Research design provides suitable
framework that collection and analysis of data.

CROSS SECTIONAL STUDY:

A study can be undertaken in which data are gathered just once, perhaps over a period of
days or weeks or months, in order to answer a research question. Such studies are called one-
shot or cross-sectional studies

3.2. SAMPLI NG DESIGN

The sample of the stocks chosen for the study is based on non probability sampling
methods. The sectors are chosen in an unbiased manner and each stock is chosen based on
their profitability ranking i.e., top five companies in each sector.

SAMPLE SIZE

The sample size for the number of stocks is taken as 10 for technical analysis and 4
for fundamental analysis of stocks as fundamental analysis is very exhaustive and requires
detailed study.

3.3.FINANCIAL TOOLS USED:

 Relative strength index

 Trend analysis

30
 Risk analysis

BANKING SECTOR

CALCULATION OF RSI ( INDIAN BANK )


YEAR CLOSING PRICE GAIN LOSS

Feb 13 288.00 Nil Nil

Feb 14 286.00 6.0 Nil

Feb 15 278.25 Nil 7.75

Feb 16 289.45 11.2 Nil

Feb 17 291.00 1.55 Nil

Feb 20 290.25 Nil 0.75

TOTAL 18.75 8.5

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

=3.75 / 1.7

= 2.205

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

= 100 - [ 100 / ( 1+ 2.205)]

= 100 - [ 100 / 3.205]

= 100 - 31.20

= 68.8

31
RETURN ( INDIAN BANK )

RETURN = CLOSING STOCK - OPENING STOCK / OPENING STOCK * 100

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 168.80 199.30 18.06

2013 203.00 116.15 -42.78

2014 116.30 217.95 87.40

2015 218.80 115.50 -47.21

2016 116.25 220.85 89.91

32
100

80

60

40 S
e
20 ri
e
s
0 1

-20

-40

-60
RETURN

33
RISK ( INDIAN BANK )

YEAR RETURN (x) Dx= ( x-x ) Dx2

2012 18.06 -3.01 9.06

2013 -42.78 -63.85 4076.82

2014 87.40 66.33 4399.6

2015 -47.21 -68.28 4662.15

2016 89.91 68.84 4738.94

TOTAL 105.37 17886.57,

=√∑ d x 2
/ n-1

=√ 17886.57 / 4

=√ 4471.6

=66.87

34
 BANKING SECTOR

CALCULATION OF RSI ( UNION BANK OF INDIA )

YEAR CLOSING PRICE GAIN LOSS

Feb 13 146.05 Nil Nil

Feb 14 145.15 Nil 0.9

Feb 15 141.45 Nil 3.7

Feb 16 141.65 0.2 Nil

Feb 17 141.65 0 Nil

Feb 20 141.60 Nil 0.05

TOTAL 0.2 4.65

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 0.04 / 0.93

= 0.0430

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

= 100 - [ 100 / ( 1+0.0430)]

= 100 - [ 100 /1.0430]

35
 = 100 - 95.87

= 4.13

RETURN ( UNION BANK OF INDIA )

RETURN = CLOSING STOCK - OPENING STOCK / OPENING STOCK * 100

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 170.50 274.35 60.9

2013 275.95 130.40 -52.7

2014 131.10 239.40 82.6

2015 239.40 148.65 -37.9

2016 148.25 123.10 16.9

36
100

80

60

40 S
e
ri
20 e
s
1
0

-20

-40

-60
RETURN

37
 RISK ( UNION BANK OF INDIA )

YEAR RETURN (x) Dx= ( x-x ) Dx2

2012 60.9 46.94 2203.33

2013 -52.7 -66.6 4435.5

2014 82.6 68.64 4711.44

2015 -37.9 -51.86 2689.45

2016 16.9 2.94 8.64

TOTAL 69.8 14048.36

2
¿ √ ∑ d x / n-1

= √ 14048.36/ 4

= √ 3512.09

= 59.26

38
 BANKING SECTOR

CALCULATION OF RSI ( SATE BANK OF INDIA )

YEAR CLOSING PRICE GAIN LOSS

Feb 13 271.65 Nil Nil

Feb 14 270.20 Nil -1.45

Feb 15 268.95 Nil -1.25

Feb 16 270.50 1.55 Nil

Feb 17 269.35 Nil -1.15

Feb 20 269.65 0.3 Nil

TOTAL 1.85 -3.85

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 0.37 / -0.77

= -0.4805

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

= 100 - [ 100 / ( 1+ -0.4805)]

= 100 - [ 100 / 0.52]

= 100 - 192.3

= -92.3

39
RETURN ( STATE BANK OF INDIA )

RETURN = CLOSING STOCK - OPENING STOCK / OPENING STOCK * 100

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 1629.00 2385.50 46.43

2013 2404.90 1766.50 -26.54

2014 1772.00 311.85 -82.40

2015 312.45 224.45 -28.16

2016 225.00 250.20 11.2

40
 60
40
20
0 Se
ri
-20 es
-40 1
-60
-80
-100
RETURN

41
RISK ( STATE BANK OF INDIA)

YEAR RETURN (x) Dx= ( x-x ) Dx2

2012 46.43 62.32 3883.78

2013 -26.54 -10.65 -113.42

2014 -82.40 -66.51 -4423.58

2015 -28.16 -12.27 -150.55

2016 11.2 27.09 733.86

TOTAL -69.91

=√∑ d x 2
/ n-1

= √ −69.91 / 4

=√ 17.47

= 3.80

42
 BANKING SECTOR

CALCULATION OF RSI ( PUNJAB NATIONAL BANK )

YEAR CLOSING PRICE GAIN LOSS

Feb 13 142.35 Nil Nil

Feb 14 144.05 1.7 Nil

Feb 15 140.90 NIL 3.15

Feb 16 140.95 0.05 NIL

Feb 17 140.25 Nil 0.7

Feb 20 143.05 2.8 Nil

TOTAL 4.55 3.85

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 0.91 /0.77

= 1.181

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

= 100 - [ 100 / ( 1+ 1.181)]

= 100 - [ 100 / 2.181]

= 100 - 45.85

= 54.15

43
RETURN ( PUNJAB NATIONAL BANK )

RETURN = CLOSING STOCK - OPENING STOCK / OPENING STOCK * 100

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 784.90 871.30 11.00

2013 879.70 626.45 -28.78

2014 627.55 219.10 -65.08

2015 218.25 115.70 -46.98

2016 116.00 115.45 -47.41

44
 20
10
0
-10 S
-20 er
ie
-30 s
-40 1
-50
-60
-70
RETURN

45
RISK ( PUNJAB NATIONAL BANK )

YEAR RETURN (x) Dx= ( x-x ) Dx2

2012 11.00 36.87 1359.39

2013 -28.78 -2.97 8.80

2014 -65.08 -39.27 1542.1

2015 -46.98 -21.17 448.16

2016 -47.41 26.28 690.6

TOTAL 129.36 4049.05

= √∑ d x 2
/ n-1

=√ 4049.05 / 4

=√ 1012.26

=31.81

46
 BANKING SECTOR

CALCULATION OF RSI ( HDFC )

YEAR CLOSING PRICE GAIN LOSS

Feb 13 1310.20 Nil Nil

Feb 14 1311.10 0.9 Nil

Feb 15 1322.20 11.1 Nil

Feb 16 1327.90 5.7 Nil

Feb 17 1377.05 49.15 Nil

Feb 20 1409.10 32.05 Nil

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 19.78

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

= 100 - [ 100 / 19.78]

= 100 – 5.05

= 94.95

47
RETURN ( HDFC )

RETURN = CLOSING STOCK - OPENING STOCK / OPENING STOCK * 100

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 428.90 678.60 58.21

2013 682.10 665.85 -2.38

2014 668.00 951.60 42.45

2015 951.00 1082.15 13.79

2016 1088.75 1206.20 10.78

48
60

50

Se-
40 ries1

Se-
30 ries2

Se-
ries3
20

Se-
ries4
10

Se-
ries5
0

-10
RETURN

49
 RISK ( HDFC )

YEAR RETURN (x) Dx= ( x-x ) Dx2

2012 58.21 33.64 1131.64

2013 -2.38 -26.95 726.30

2014 42.45 17.88 319.69

2015 13.79 - 10.78 116.20

2016 10.78 - 13.79 190.16

TOTAL 122.85 2483.86

=√∑ d x 2
/ n-1

= √ 2483.86/ 4

=√ 620.96

=24.91

50
 PHARAMA SECTOR

CALCULATION OF RSI ( cadila healthcare LTD )

YEAR CLOSING PRICE GAIN LOSS

Feb 13 373.15 Nil Nil

Feb 14 365.25 Nil 7.9

Feb 15 358.40 Nil 6.85

Feb 16 429.50 71.1 Nil

Feb 17 450.05 20.5 Nil

Feb 20 443.65 Nil 6.4

TOTAL 91.6 21.15

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 18.32 / 4.23

= 4.330

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

= 100 - [ 100 / ( 1+4.330 )]

= 100 - [ 100 / 5.330 ]

51
= 100 - 18.76

= 81.24

RETURN ( CADILA HEALTHCARE LTD )

RETURN = CLOSING STOCK - OPENING STOCK / OPENING STOCK * 100

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 699.85 901.95 28.87

2013 890.05 810.10 -8.98

2014 817.50 1599.70 95.68

2015 1615.25 327.55 -79.72

2016 325.00 356.65 9.73

52
100
80
60
40 S
20 er
ie
0 s
-20 1
-40
-60
-80
RETURN

53
RISK ( CADILA HEALTHCARE LTD )

YEAR RETURN (x) Dx= ( x-x ) Dx2

2012 28.87 19.75 390.0

2013 -8.98 -18.09 327.2

2014 95.68 86.51 7483.9

2015 -79.72 -88.83 7890.7

2016 9.73 0.62 0.384

TOTAL 45.58 343.61

= √∑ d x 2
/ n-1

= √ −343.61 / 4

= √ −85.9

= 9.26

54
 PHARAMA SECTOR

CALCULATION OF RSI ( CIPLA LTD )

YEAR CLOSING PRICE GAIN LOSS

Feb 13 582.65 Nil Nil

Feb 14 572.05 Nil 10.6

Feb 15 574.25 2.2 Nil

Feb 16 584.60 10.35 Nil

Feb 17 593.25 8.65 Nil

Feb 20 592.75 Nil 0.50

TOTAL 21.2 11.1

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 4.24 / 2.22

= 1.909

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

= 100 - [ 100 / ( 1+1.909 )]

= 100 - [ 100/ 2.909 ]

= 100 - 34.37

= 65.63

55
RETURN ( CIPLA LTD )

RETURN = CLOSING STOCK - OPENING STOCK / OPENING STOCK * 100

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 320.90 414.25 29.0

2013 416.00 400.80 -3.65

2014 402.50 626.40 55.62

2015 626.50 649.75 3.71

2016 653.20 568.80 12.92

56
60

50

Series1
40

Series2
30

Series3
20

Series4
10
Series5
0

-10
RETURN

57
RISK ( CAPLA LTD )

YEAR RETURN (x) Dx= ( x-x ) Dx2

2012 29.0 9.42 89.8

2013 -3.65 -23.17 -536.84

2014 55.62 36.1 130.21

2015 3.71 15.81 249.95

2016 12.92 6.6 43.56

TOTAL 97.6 -23.32

=√∑ dx 2/¿ n−1 ¿

=√ 2223.5 / 4

= √ 138.95

= 11.78

58
 PHARAMA SECTOR

CALCULATION OF RSI ( SUN PHARMACEATILE INDUSTRY LTD )

YEAR CLOSING PRICE GAIN LOSS

Feb 13 654.70 Nil Nil

Feb 14 649.30 Nil 5.4

Feb 15 623.05 Nil 26.25

Feb 16 649.30 26.25 Nil

Feb 17 675.50 26.2 Nil

Feb 20 679.65 4.15 Nil

TOTAL 56.6 31.65

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 11.32 / 6.33

= 1.788

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

= 100 - [ 100 / ( 1+1.78 )]

= 100 - [ 100 /2.78 ]

= 100 - 35.97
= 64.03

59
 RETURN ( SUN PHARMACEATICAL LTD )

RETURN = CLOSING STOCK - OPENING STOCK / OPENING STOCK * 100

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 500.00 736.25 47.25

2013 739.10 567.45 -23.2

2014 568.25 826.55 45.45

2015 826.50 820.15 -0.76

2016 810.05 630.00 -22.22

60
50

40
Series1

30
Series2
20
Series3
10
Series4
0
Series5
-10

-20

-30
RETURN

61
 RISK ( SUN PHARMACEALITICAL LTD )

YEAR RETURN (x) Dx= ( x-x ) Dx2

2012 47.25 37.9 1436.4

2013 -23.2 -32.5 -1056.25

2014 45.45 36.15 1306.82

2015 −0.76 -10.06 - 101.20

2016 −22.22 -31.52 -992.25

TOTAL 592.95

=√∑ dx /n-1
2

=√ 4892.85 /4

=√ 1223.21

=34.97

62
 PHARAMA SECTOR

CALCULATION OF RSI ( LUPIN LTD )

YEAR CLOSING PRICE GAIN LOSS

Feb 13 1447.60 Nil Nil

Feb 14 1431.45 Nil 16.15

Feb 15 1432.90 1.45 Nil

Feb 16 1440.95 8.05 Nil

Feb 17 1458.70 17.75 Nil

Feb 20 1464.55 5.85 Nil

TOTAL 33.1 16.15

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 6.62 /3.23

= 2.049

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

= 100 - [ 100 / ( 1+2.049 )]

= 100 - [ 100 /3.049 ]

= 100 - 32.79

= 67.21

63
RETURN ( LUPIN LTD )

RETURN = CLOSING STOCK - OPENING STOCK / OPENING STOCK * 100

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 451.55 615.00 36.19

2013 615.15 908.00 47.60

2014 916.50 1427.95 55.80

2015 1428.40 1837.00 28.60

2016 1836.10 1470.00 -19.9

64
60

50

40
S
er
30 ie
s
20 1
S
10 er
ie
s
0 2

-10

-20
RETURN

65
 RISK ( LUPIN LTD )

YEAR RETURN (x) Dx= ( x-x ) Dx2

2012 36.19 6.54 42.7

2013 47.60 17.95 320.4

2014 55.80 26.15 681.2

2015 28.60 -1.05 1.10

2016 -19.9 9.75 95.06

TOTAL 1140.46

√∑ dx 2/n−1
=

=√ 1140.46/4

=√ 285.1

=16.88

66
 INFORMATION TECHNOLOGY SECTOR

CALCULATION OF RSI ( TCS)

DATE CLOSING STOCK GAIN LOSS

JAN 23 2305.70 Nil Nil

JAN 30 2334.20 28.5 Nil

FEB 6 2240.55 Nil 93.65

FEB 13 2410.30 169.75 Nil

FEB 20 2506.50 96.2 Nil

FEB 27 2488.90 Nil 17.6

TOTAL 294.45 111.25

CALCULATION Of RS= AVERAGE GAIN / AVERAGE LOSS

= 58.99 / 22.25

= 2.646

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

= 100 - [ 100 / ( 1 + 2.646)]

= 100 - [ 100 / ( 3.646)]

= 100 - 27.42

RSI = 72.58

67
 CALCULATION OF RETURN ( TCS )

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 1155.15 1130.50 -2.134

2013 1268.00 1342.75 5.89

2014 2180.00 2236.20 2.57

2015 2554.35 2481.00 -2.87

2016 2432.10 2391.20 - 1.68

68
6

3
S
2 e
ri
e
1 s
1
0

-1

-2

-3
RETURN

69
RISK ( TCS )

YEAR RETURN( x ) DX ( X-X ) Dx

2012 -2.13 -2.48 6.15

2013 5.89 5.54 30.69

2014 2.57 2.22 4.92

2015 -2.87 -3.22 10.36

2016 -1.68 -2.03 4.12

TOTAL 1.78 56.24

= √∑ d x 2
/ n-1

=√ 56.24 /¿ ¿ 4

=√ 14.06

=3.7

70
3 . CALCULATION OF RSI ( COGNIZANT )

DATE CLOSING STOCK GAIN LOSS

JAN 23 56.17 Nil Nil

JAN 30 53.66 Nil 2.51

FEB 06 52.76 Nil 0.9

FEB 13 57.64 4.88 Nil

FEB 20 58.62 0.98 Nil

FEB 27 59.58 0.96 Nil

TOTAL 6.82 3.41

CALCULATION OF RS = AVERAGE GAIN / AVETAGE LOSS

= 1.36 / 0.682

= 2

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

= 100 - [ 100 /( 1+ 2)]

= 100 - [ 100 / 3 ]

= 100 - 33.33

= 66.77

71
2. CALCULATION OF RETURN ( COGNIZANT)

YEAR OPENING PRICE CLOSING PRICE RETURN

2012 66.64 71.75 7.66

2013 75.46 78. 18 3.60

2014 100. 25 96.91 -3.33

2015 52.89 54.13 2.34

2016 58.81 63.31 7.65

72
8
6
4 S
e
2 r
i.
0 ..
-2
-4
RETURN

73
 RISK ( CTS )

YEAR RETURN( x ) DX ( X-X ) Dx

2012 7.6 4.029 16.23

2013 3.60 0.03 0.09

2014 -3.331 -6.9 47.61

2015 2.34 -1.23 1.51

2016 7.65 4.08 16.64

TOTAL 17.86 82.08

=√∑ d x 2
/ n-1

=√ 82.08/ 4

=√ 20.52

=4.5

74
 CALCULATION OF RSI ( INFOSIS )

WEEKS CLOSING PRICE GAIN LOSS

JAN 23 942.15 NIL NIL

JAN 30 934.95 NIL 7.2

FEB 6 968.05 33.1 NIL

FEB 13 963.10 NIL 4.95

FEB 20 1009.05 45.95 NIL

FEB 27 1012.75 3.7 NIL

TOTAL 82.75 12.15

AVERAGE GAIN = 82.75

AVERAGE LOSS =12.15.

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 16.55 / 2.43

= 6.810

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

= 100 - [ 100 / ( 1 + 6.810)]

= 100 - [ 100 / 7.810]

= 100 - 12.80

RSI = 87.19

75
2 CALCULATION OF RETURN ( INFOSIS )

RETURN = CLOSING STOCK - OPENING STOCK / CLOSING STOCK * 100

OPENI CLOSI
Series 3 NG NG
PRICE PRICE

Series 3

Category 1 Category 2 Category 3 Category 4

YEAR

2012 2763.9 2743. -

0 35 0.7
4

2013 2325.1 2 1
0 788.7 9.9
5 4

2014 3491.0 3699. 5.9

0 45 7

2015 1 2 8.8

76
 967.80 142.7 9
6

2016 1100.0 1164. 5

0 85 .89

20

15

10
S
er
ie
s
5 1

-5
RETURN

RISK ANALYSIS

77
YEAR RETURN DX ( X-X) DX2

2012 -0.74 -8.73 76.21

2013 19.94 11.95 142.80

2014 5.97 -2.02 4.08

2015 8.89 0.9 0.81

2016 5.89 -3.1 9.61

39.95 233.51

= √∑ d x 2
/n-1

=√ 233.51/¿ ¿ 4

=√ 58.37

=7.6

4 CALCULATION OF RSI ( TECH MAHINDRA )

DATE CLOSING PRICE GAIN LOSS

Jan 23 467.10 Nil Nil

Jan 30 480.44 13.35 Nil

Feb 6 499.90 19.45 Nil

Feb 13 503.50 3.6 Nil

78
 Feb 20 503.65 0.15 Nil

Feb 27 499.40 Nil 4.25

TOTAL 36.55 4.25

CALCULATION OF RS = AVERAGE GAIN / AVERAGE LOSS

= 7.31 / 0.85

= 8.6

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

= 100 - [ 100 / ( 1+ 8.6)]

= 100 - [ 100 /( 9.6)]

= 100 -10.41

= 89.59

CALCULATION OF RETURN ( TECH MAHINDRA)

79
 YEAR OPENING PRICE CLOSING PRICE RETURN

2012 289.00 326.00 12.80

2013 469.33 499.48 6.42

2014 922.56 893.47 -3.15

2015 1294.50 1434.25 10.79

2016 524.90 501.40 -4.47

14
12
10
8 S
6 e
4 r
2 i.
0 ..
-2
-4
-6
RETURN

80
 RISK ( TECH MAHAINDRA )

YEAR RETURN( x ) DX ( X-X ) Dx

2012 12.80 8.33 69.38

2013 6.42 1.95 3.80

2014 -3.15 -7.62 58.06

2015 10.79 6.32 39.94

2016 -4.47 -8.94 79.92

TOTAL 22.39 251.1

=√∑ d x 2
/n-1

=√ 251.1/4

=√ 62.7

=7.91

81
82