Synopsis Trend and Time Cycle of Equity Market Introduction:

Trend: Trend is known as pattern of something that is prevailing in the market. These principles apply to all markets, stocks, and time patterns etc. trend offers a more detailed explanation of the various indicators and indexes. It also shows how they can be combined to build framework for determining the quality of internal structure of market. Reversal of price trends in the major averages is almost always preceded by latent strength or weaknesses in the market structure. Trends of investor confidence are responsible for price movements, and this emotional aspect is examined from dimensions they are price, time, volume and breadth. Primary trend: The primary trend generally lass between 1 and 2 yrs and is a reflection of investors attitudes towards unfolding fundamentals in the business cycle. Building up takes longer time than tearing down, bull markets generally last longer than bear markets. In an idealized situation the primary uptrend that is bull market is the same size as the downtrend i.e. bears market. But in reality of course their magnitude are different. Because it is very important to position investment in the direction of the main trend, a significant part of this is concerned with identifying reversals in the primary trend. Intermediate trend: Anyone who has looked at a price chart will notice that price do not move in a straight line. A primary upswing is interrupted by several reactions along the way. These counter cycle trends within the confines of a primary bull market are known as intermediate price movements. They last anywhere from 3 weeks to as long as 6 months or more. Short term trend: Short term trend, which lasts from 1 to 3 or 4 weeks, interpret the course of the intermediate cycle, just as the intermediate trend interrupts

primary price movements. They are usually influenced by random events and are far more difficult to identify than their intermediate counterparts. Secular trend: The primary trend consists of several intermediate cycles, but the secular, or very long term, trend is constructed from a no. of primary trends. This super cycle extends over a substantially greater period, usually lasting well over 10 years and often as long as 25 years. This is generally for the long term investors who have beliefs regarding the fundamentals of a concerned scrips or market.

What is cycle?
Cycle as an interval or space of time in which one round or one event is completed that occur regularly and in the same sequence. Market cycle is related to the market in which it is consider the time phase in which one revolution of a particular event is completed. Crux of the cycle concept is that there will be tendency for the price to make a low or high about the period of the cycle some-time a little earlier, some-time a little later. The basic idea, however is that there is enough regularity in market price cycles for this information to provide a useful inputs in making trading decision. Kondratieff Cycle: Kondratieff cycle used whole price index as focal point of his observations. This cycle reflects the balance between long term inflationary and deflationary forces. An up wave lasting about 20 years. A transition or plateau period of 7 to 10 years, and down wave of about 20 years. We observed that each up wave was associated with rising prices, the plateau with stable prices, and the down wave with declining prices, a war was associated with both the beginning and trend of each up wave. Kitchen cycle: This cycle based on observation that there is three separate cycles in a decade, each one lasting for approximately forty months. That is why this is called 4-year cycle of stock prices. More precisely, the 4year cycle is a 40.68 month cycle.

RESEARCH METHODOLOGY Objective

To find out the trend of particular scrip. To found out the nature of a particular scrips by using exponential M.A. To found out the presence of Fibonacci series in related scrips. To do the application of Kitchen cycle and Kondratieff cycle on the scrips. To know the effect of time series and their R-square regression with M.A.Averages using the time magnitude and see the various result.

Methods
Moving average Moving average attempts to tone down the fluctuations of stock prices into a smoothed trend, so that distortions are reduced to a minimum. A change from a rising to a declining market is signaled when the price moves below its moving average. A bullish signal is triggered when the price rallies above the average. Since the use of moving average gives the clear cut buy and sells signals, it helps to eliminate some of the subjectivity associated with the construction and interpretation of trend lines. Fibonacci series The series which carries his name is derived by taking the no. 2 and adding to it the previous no. in the series. That series is known as the Fibonacci series. For simplicity lets take Fibonacci series up to 987, It include 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, and 987. The

application of the Fibonacci series in the scrips is to find out whether the psychology is prevailing in the Indian equity market or not. If price magnitude or any time series having value which is follow the Fibonacci series than it indicate the presence of human psychology. Regression Analysis Regression analysis is a statistical tool with the help of which we are in a position to estimate the unknown values of one variable from known values of another variable. In our study the third goal of regression is important because from that we came to know about the relationship between the two variables. It may be between the closing price and averages (simple and exponential) and relationship between the closing price and time magnitude. Time Series In time series we take the price magnitude (T2-T1) of both weekly and monthly and same as ratio (T2/T1) of time series. This is done to get the relationship between the average and closing price of each scrips and also to find out the Fibonacci series pattern. Research Design Descriptive study is applied because the Row data are used in my study. SAMPLE PERIOD The study has included data from 1989 to 2007 JAN. in almost all the cases except for SBI which went public in 1994.

Source Secondary Data- Data is collected from the BSE index of four companies (Cipla, reliance, SBI, infosys). Limitations: A time constraint is the major limitation of the project. BSE is pool of securities taken all is not feasible as a result only few (5) companies are taken for the project. Assumptions of statistical tool are considered as limitation.

PAST TREND OF A SCRIPS

Weekly trend shows that BSE indicates that from 1989 to 2000 it shows horizontal trend. But after 2000 it shows upward trend with temporary downward trend. In simple language upward trend started. As a result it reaches the 14000 mark in 2006. Cipla remain flat till 1994, but after that it shows fluctuations and it still fluctuating in same pace as earlier which reveal in 2006. It means this stock is very volatile. So as such there is no relationship in the movement of the weekly graph in comparison to the stock. In 1999 Infosys gets momentum and reaches to 1400 in mid 1999. After that from 2003 it gets upward movement which is as similar as index. We can say that this stock is with the nature of stock and giving fair picture of stock market. Reliance is gaining with consistent trend that is upward trend throughout the period of 8 years. From the year 2003 it is in vertical upward direction and it is still continuous in same direction. Reliance is moving in tandem with the market since the last four years. SBI is having a fluctuating mood in the initial years because before 1994 it is privately held and its public issue came in same year. After the year 2002 it get it upward trend, this also shows that downward trend of the SBI is for very less period. In 2006 nit reaches to its 1200 mark which is very similar to the stock market if we consider the movement of the SBI. Monthly trend also give some indications about the related scrips like BSE reveals that stock is in upward trend after the year 2002, in the year 2003 it is in correction mode where it shows downward trend. But long term trend remain in upward mode. Infosys shows that it gains its momentum after 1988 and in the year 2001 was in down ward trend. It remains horizontal till 2003, after that it was in upward direction similar to the index and remain in touch with the stock market as far as direction is concern.

Reliance indicate that it remain flat mood till 2003. Afterward it is in upward trend with temporary down ward trend. After the year 2003 this stock is with the stock market and giving fair judgment regarding the index. It shows the exponential growth throughout the given years. It shows better growth as compare to BSE index. Because it gain 1700 mark in quick succession. SBI is having a fluctuating mood in the initial years because before 1994 it is privately held and its public issue came in same year.

A comparison between the exponential and simple moving average and it shows various results. If I talk about the weekly comparison M.A both exponential and simple average of 200 weeks shows more reliable picture of scrip. An exponential M.A. is more smoothened out the raw data as compare to simple M.A. From above we come to know that the longer the period of a M.A. more reliable conclusion can be drawn. Like wise the closing price of scrip in a 12 and 48 week average touches more number of times the M.A line. It means in long run the M.A especially exponential is more flat and continuous in an upward trend. If we take 50 years of exponential M.A. than it will be flat in nature, because it smoothened out the existing fluctuations. Monthly comparison shows that exponential and simple average of 100 weeks shows more reliable picture of scrip. An exponential M.A. is more smoothened out the raw data as compare to simple M.A. From above we come to know that the longer the period of a M.A. more reliable conclusion can be drawn. Like wise the closing price of scrip in a 12 and 48 month average touches more number of times the M.A line. It means in long run the M.A especially exponential is more flat and continuous in an upward trend.

Regression analysis Weekly gives a picture about the best fitting in the situation. A value closer to 1 shows a close association between the closing price and average. From the close examine we have various results like in a long run the BSE regression goes down i.e. 0.45 but in the case of the 200 week M.A. On the contrary 12 and 48 week regression values are near 1 i.e. 0.9, 0.8, 0.7 etc. Infosys shows that regression seems to be strong it is having values near to 1; same case is with the Reliance which shows similar results. Cipla and SBI giving idea that 12, 48 week having strong bond with the variables but not similar case with the 200 week average. Regression analysis Monthly reveals certain facts that BSE, Infosys and Reliance regression 48 values are near to the 1. But in case of reg48 only in case in the year 2007 it shows value near to the 1, otherwise all are below .5. SBI after the year 2003 the reg48 shows the value around .8, .9 and .7 so from here we say that SBI stock is having regression value near 1 and it is good fit in the regression analysis.

TIME SERIES:

The tool of time series include to check the validity of the raw data that I is having and it give certain result like it is the 12 week t2/t1 and t2t1 (weekly and monthly) to average regression stands best fit to the relation of the ratio with the closing price. The other two are not that fitting to the line of regression and not as valid as the 12 week. It is evident from the fact that in the 12 week comparison many values try to touch 1 unlike the other two wherein they rarely or not at all go towards the 1 mark.

FIBONACCI SERIES:
The entire Top to Top price magnitude will follow in Fibonacci number. For example in case of BSE stock numbers like 89, 233, 610, and 1569 all are Fibonacci numbers and the BSE top to top will near these number. Similar case is with the ratio of price they fall near the numbers like .6, .5, and 1. All the scrips follow same pattern with their respective values. Similarly their time of top to top will follow the Fibonacci number like5,4,23,8 etc. so we can say that a human psychology is working behind the movement of a scrips. Bottom to Bottom shows that the price magnitude the value is near to the 13, 55, 8, 6, 89, 233, and 24. So all these will indicate the same. Similarly the ratios of these values are near to the 1, .6, and 1.6. Top to Bottom gives the value near to 3, 5, 8, and 4 and if we continue with other scrips like infosys the numbers like 21, 5 and 6 again all are follow the pattern of Fibonacci similar case is with remaining stocks. Bottom to Top shows the similar pattern of Fibonacci values. from above values we can say that in case of weekly pattern the human psychology is

exist in the Indian equity market. Monthly pattern shows that all stocks follow the Fibonacci pattern. All graphs including the price magnitude, ratio, time cycle fall near the Fibonacci number. So same pattern will fall in same category. All values are near to the numbers like 1.6, 1, 88, .5, 1.5 233 etc. all are effected by psychology of investor.

KONDRATIEFF CYCLE:
This concept also shows that most of the scrips are follow the Fibonacci pattern. If we look some value of scrips like BSE is having values like Rs 778, Rs 5005, and Rs 4227 which is near to the 4181, which is Fibonacci number. Cipla at initial phase it shows the values like Rs 14, Rs 53, which are near to the Fibonacci numbers. Similarly all other scrips like Reliance, SBI, and Infosys shows more or less same value and in both weekly and as well as in monthly.

CONCLUSION:
1. in 1945 end of world war II 2. 1947 independence and partition of India. 3. in 1965 Indo-Pak war 4. 1984 Indira Gandhi assassinated 5. 1987 Bofors scandal At last we can conclude that in spite of various odd events Indian stock market shows the up ward trend and also the related scrips. It reveals that odd events can cause temporary fluctuations in short run but in a long run the fundamentals is matter. A strong fundaments shows better growth in long run, an investor should have patience to earn efficient and healthy return on investment. From our study we conclude that long-term investment is better option for investor who seeks high profit because market moves 30 to 40 folds from 1988 to 2007. So our project is focus on long term trend. The stock related to BSE are having Fibonacci nature, it means that psychology of investor are reflecting. The regression of simple closing price with M.A. average is near to the value 1 and it suggests us that it is having strong relationship with the trend as compare to the time series (t2/t1 and t2-t1). The moving average like simple and exponential reflecting the smooth trend of related scrips. The M.A. shows continuous growth in taken scrips. Kondratieff cycle and kitchen cycle represents that longer the time period more surety of getting good returns on the investment made. It give an idea that long term investor are on safer side and make sure that their portfolio contain scrips which shows upward trend as far as long term is concern.

RECOMMENDATIONS:
Investors have to see the long term trend for better perspective. Investors have to look upon R-square regression of closing price and moving average of 48week, 200week and 48 months for better insight. Fibonacci series giving the investor clue about the likely movement in scrips and intuition of human psychology in Indian stock market. For better understanding about the trend investors are interested in kitchen and Kondratieff cycle. Fundamentals cant be ignored run and scrips take there actual shape in long run.

BIBLIOGRAPHY
Books: Martin J. Pring (2001), Technical Analysis Explained: The Successful Investor's Guide to Spotting Investment Trends and Turning Points, Tata McGraw-Hill, New York. D.N. Enhance, Veena Enhance, and B.M. Aggarwal Fundamentals of statistics Tata McGraw-Hill Publishing Company Limited, New Delhi, India. News papers: Capital market technical march 18-24, 1996 page 6. Introduction to market cycle (capital market technical, June 3rd to 9th, 1996 page no.18) Websites: www.trendandtimecycle.com www.matstat.com www.statisticxl.com