LONG-TERM INVESTMENT

OPPORTUNITY IN FIVE
MAJOR FINANCIAL SERVICE
COMPANIES USING
TECHNICAL ANALYSIS
By
P. R. PREETHI
(312318631072)
Under the Guidance of
Prof. Dr. JAYASREE KRISHNAN
 INTRODUCTION
"An investment in knowledge pays the best interest."
- Benjamin Franklin
The following project is a study of the Indian Stock Market & investment opportunity
in five major Financial Services companies listed in NSE using technical analysis. The
companies taken for this project are
 Shriram City Union Finance (Shriram City)
 Bajaj Finserv Ltd
 Indiabulls Housing Finance Ltd
 IndusInd Bank Ltd
 Kotak Mahindra Bank Ltd
 COMPANY PROFILE
 VNPA Enterprises is a growing organization, which is an ideal place for
individuals with high ambitions.
 VNPA financial services & wealth management is engaged in the businesses of
equities broking and portfolio management services.
 The research team of VNPA holds more than 15+ years of experience in stock
market research.
 The team consists of economists, researchers and private office fund
managers.
 VNPA enterprises also conduct exclusive training sessions for traders and
investors to learn the art of stock picking.
 NEED

 To study technical analysis which is applicable to make proper investment

decision based on technical analysis.
 To gain knowledge about the current market trend and various technical
analysis tools used for predicting the investment decision.
 To suggest profitable stocks to the long term investors in Financial Services
Sector.
 SCOPE OF THE STUDY

 The study is conducted based on the selected Financial Services companies

listed in NSE. The companies are selected with respect to the movement in
the share market.
 The scope of this project is limited to only one sector i.e. the Financial
Services Sector.
 OBJECTIVES OF THE STUDY
PRIMARY OBJECTIVES
 To analyse the financial market & the share movements in order to study the prospects of investing in
a particular stock or sector.

SECONDARY OBJECTIVES
 To employ various technical tools to analyze the price movements.
 To analyze the performance of selected scripts in Financial Service companies and to forecast the future
trends in the share prices through technical analysis.
 To suggest the investors on buy hold or sell strategies based on technical indicators.
 LITERATURE REVIEW
 Renu Isidore. R and P.Christie (2018) in their Research Journal titled
“Fundamental Analysis Versus Technical Analysis-A Comparative Review”,
discusses the history of each of the tools used in technical and fundamental
analysis and also the main components involved in each decision-making tool.
The merits and demerits of each of the tools were also discussed.
 Pushpa BV, Sumithra C.G and Madhuri Hegde (2017) in their Research Journal
titled “Investment Decision Making Using Technical Analysis: A Study On Select
Stocks In Indian Stock Market”, explains technical analysis of select
companies under Nifty 50 based on different sectors for a period from
January 2011 to December 2016.
 Valarmathi A, Kowsalya P (2016) in their Research Journal titled, “A Study On
The Technical Analysis Of NSE Towards It Stocks With Reference To Indian
Stock Market”, discusses the analysis done using the historical prices of IT
stocks with the help of technical tools like Exponential Moving Average and
Relative Strength Index and also suggestion is given based on the chart
patterns formed.
 RESEARCH METHODOLOGY
 The source of information for this project is only secondary data. Data are
collected from sources such as the internet, websites of selected companies
and chart patterns of companies and also from various journals.
 Analysis of data is done with the help of Technical tools for selected five
companies. The tools used for the study are Parabolic SAR, MACD, RSI, ATR
and Fibonacci Retrenchment.
 Financial Service Sector companies are selected for the study to understand
this sector.
 The reason for selecting Financial Services Sector is because of the Financial
Services Sector is the base for the growth of other sectors and with that the
growth of the economy in general and also there are huge investment
opportunities in the sector.
 TECHNICAL ANALYSIS

 Parabolic SAR
 Moving Average Convergence Divergence (MACD)
 Relative Strength Index (RSI)
 Average True Range (ATR)
 Fibonacci retracement
 SHRIRAM CITY UNION FINANCE LIMITED
PARABOLIC SAR

(Source: in.investing.com; Monthly chart Date: 2/7/19)

 Interpretation
• As per data collected on 2 July 2019, the Parabolic SAR dots above each
candle stick are in downward trend.
• It is inferred that Shriram City Union Finance Limited is showing bearish
confirmation in the Parabolic SAR chart.
• The stock goes in a downward trend for the past 4 months. This shows that
the stock will further decrease in next month.
• So it is not suitable for the long term investors to buy the stock.
 BAJAJ FINSERV LIMITED
MACD

(Source: in.investing.com; Monthly chart Date: 2/7/19)

 Interpretation
• According to the graph in MACD Blue line is increasing
• The blue line has cut the Redline. This gives a green signal to buy the stocks
• The investors will get good return if they invest in Bajaj Finserv stocks this
month.
 INDIABULLS HOUSING FINANCE LTD
RSI

(Source: in.investing.com; Monthly chart Date: 2/7/19)

 Interpretation
• RSI line is below the resistance line for the past one year.
• The RSI line is at very low level below the resistance line.
• It’ll take further long time period for the RSI line to cut the resistance line.
• So buying stocks at this time will be a bad idea.
• It’s better to sell the stocks and wait till a positive signal comes.
 INDUSIND BANK LIMITED
ATR

(Source: in.investing.com; Monthly chart Date: 2/7/19)

 Interpretation
• From ATR chart we can conclude that IndusInd Bank Stocks are highly
volatile
• Because there is large margin difference in the price of the shares and the
volume.
• Since there is a large difference in price of the shares the risk is very high thus
it makes the stock highly volatile in nature.
• Also the chart is in downward trend it is not advisable for the stocks to buy.
 KOTAK MAHINDRA BANK LTD
FIBONACCI RETRENCHMENT

(Source: in.investing.com; Monthly chart Date: 2/7/19)

 Interpretation
• When Fibonacci Retrenchment is drawn the 0.5 Fibonacci number is at 1246
so the stop loss is advised to fix there.
• Similarly Fibonacci number ends at 1595 so it can be fixed as Target.
• Thus from Fibonacci Retrenchment we can conclude that stop loss can be
set at 1246 and target can be fixed at 1595.
• Kotak Mahindra shares are in upward trend so it is a good opportunity for the
long term investors to gain profit from this stock
 ANALYSIS SUMMARY
Parabolic SAR MACD RSI ATR Decision
SHRIRAM CITY UNION Bearish Blue line lags Below Less Volatile Sell
FINANCE LIMITED red line Resistance
line
BAJAJ FINSERV LIMITED Bullish Blue line Above Less Volatile Buy
leads red line Resistance
line
INDIABULLS HOUSING Bearish Blue line lags Below High Volatile Sell
FINANCE LTD red line Resistance
line
INDUSIND BANK Bearish Blue line lags Below High Volatile Sell
LIMITED red line Resistance
line
KOTAK MAHINDRA Bullish Blue line Above Less Volatile Buy
BANK LTD leads red line Resistance
line
FINDINGS

 Using different pattern of stock prices and future trend of the selected five
companies could be analyzed with the right technical analysis tools.
 Technical analysis is of utmost importance to predict trend of short and
medium-term price movement and help the investors to select the right plan
and decisions to invest in the remunerative stocks.
 From Technical Analysis it’s found that Shriram City Union Finance Limited,
Indiabulls Housing Finance Ltd and IndusInd Bank Limited stocks are declining
in the mere future.
 Stocks of Bajaj Finserv Limited and Kotak Mahindra Bank Ltd are found to be
increasing in future time period.
 SUGGESTION
 For Shriram City Union Finance Limited it is suggested to sell the stocks.
 For Bajaj Finserv Limited it is the right time for the long term investors to buy
the stocks
 Indiabulls Housing Finance Ltd stocks is not safe for the investors to do their
investments as loss is expected to occur.
 IndusInd Bank Limited gives a bearish signal. From the interpretation
gathered from technical analysis tools it's suggested for the long term
investors to sell their stocks this month.
 Kotak Mahindra Bank Ltd gives green signal for long term investors to buy the
stocks this month as technical analysis shows an increasing upward trend
 CONCLUSION
• Technical analysis does not result in absolute predictions about the future
pricing. Instead, technical analysis can help investors to anticipate what is
"possible" to happen to stock prices over a period of time. Based on the
technical analysis tools used on selected five Financial Service Sectors
following are the conclusion which give details to the investors when to enter
and exit the market.
COMPANIES INVESTMENT DECISION

Shriram City Union Finance Limited Strong Sell

Bajaj Finserv Limited Strong Buy

Indiabulls Housing Finance Ltd Strong Sell

IndusInd Bank Limited Strong Sell

Kotak Mahindra Bank Ltd Strong Buy