A SUMMER PROJECT REPORT

ON
A STUDY OF TECHNICAL ANALYSIS FOR THE INVESTMENT
DECISION IN CAPITAL MARKET UNDER TAKEN AT
DEVASHIS SECURITY PVT LTD ,BARDOLI.
BY
MS SONAL PARMAR
108120592011
BATCH: 201011
UNDER THE !UIDANCE OF
MS MUNE"A KA!"1 #I$%&'$()*
A++%. P',-&++,' TMES, MANDVI
SUBMITTED TO
!UJARAT TECHNOLO!ICAL UNIVERSITY, AHMEDABAD
FOR THE PARTIAL FULFILMENT 0F RE.UIREMENT OF THE
A/ARD FOR THE DE!REE OF
MASTER OF BUSINESS ADMINISTRATION
THROU!H
Page 1
THE MANDVI EDUCATION SOCIETY INSTITUTE OF
BUSINESS MANA!EMENT AND COMPUTER STUDIES,
MANDVI
C,))&0& C,1&: 812 BATCH CODE: 9
TABLE OF CONTENT
Page 2
SR NO. PARTICULARS PAGE NO.
1) PART-1 General Information
Chapter - 1 Compan
information ! Pro"#$t
profile
1%-2&
2) PART-2 Primar St#"
Chapter - 2 A'o#t the topi$
2.1 Intro"#$tion
2.2 A((#mption
2.) O'*e$ti+e
2., Important Of The St#"
2&-))
)) Chapter-) Re(ear$h
-etho"olo. ).1 Pro'lem
Statement ).2
O'*e$ti+e
).) Re(ear$h /e(i.n
)., Sample Si0e
),-,1
,) Chapter-, /ata anal(i( !
Interpretation
,2-1,
2) Chapter-2 3in"in. 12-14
4) Con$l#(ion 1&-11
&) 5i'lio.raph
PART -1 GENERAL IN3OR-ATION
1.1 International Stock Market
Major Markets International Investing Values Trend
Page )
The global major stock market value trend this month, after having risen five
consecutive months, as to decline a bit! The "organ #tanle$ Ca%ital &nde'
("#C&) dro%%ed *+ in local terms and ,!-+ in .# dollar terms! Over the
month, fourteen global major stock markets advanced and four fell!
Major Markets International Investing Values Appreciation
The global major stock market ith the highest a%%reciation as in the
Netherlands (u% -!/+)! France (u% ,!0+) and Belgium (u% ,!,+) folloed this
lead! Over the last *, months the to% global major stock markets have been
Austria rising 1,!*! + ith Nora$ u% 2*!3+ and Belgium u% -1!*+!
Major Markets International Investing Values Lowest Appreciation
The orst %erforming global major stock market for the month as 4ong 5ong
(6-!/+), the .!#! as don ,!0+ and 7a%an don 6*!2+! The loest rising
global major stock market for the last $ear is #it8erland (u% 9!*+), .!#! (u%
9!2+) and :erman$ (u% /!+)!
The si' to% value global major stock markets are Belgium, ;enmark, France,
:erman$, &tal$, Netherlands and Nora$ at e<ual eights! The seven major
markets international investing values that have a lo rating and are
recommended as sell candidates are Austria, Canada, 4ong 5ong, 7a%an,
#inga%ore, #it8erland and the .!#!
International Investment Update for August
#%otting Trends e'%ert "ichael 5e%%ler continuall$ researches ever$ major
global stock market and com%ares their value based on current book to %rice,
cash flo to %rice, earnings to %rice, average dividend $ield, return on e<uit$
and cash flo return! 4e com%ares these to each global major stock market
histor$ and from this develo%s his global major stock market value strateg$!
4ere is his most recent revie!
International Investment ecent !evelopments " #utlook
&nternational investment e<uit$ markets e'%erienced their highest monthl$
gain since ;ecember ,==-! For the month, the "organ #tanle$ Ca%ital
&nternational ("#C&) >orld Total ?eturn &nde' advanced -!/ + in local
currencies, -!0 + in .# dollars and -!, + in euros!
All eighteen international investment markets covered advanced both in the
month and $ear to date! :erman$ (@1!1 +), #inga%ore (@1 +) and 4ong 5ong
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(@0!/ +) gained most (in local currenc$)! The Netherlands (@*!9 +), 7a%an
(@,!, +) and Australia (@,!9 +) had the loest monthl$ gain! Aear to date
Nora$ (@,/!, +), Austria (@,0!, +) and ;enmark (@,2 +) gained most of
an$ international investment market, hile the .nited #tates (@- +), 7a%an
(@2 +) and 4ong 5ong (@3!0 +) came in last!
1.$ %ational Market
&articulars %S' (S' M)*
Founded *33, */90 ,==-
4ead<uarters "umbai "umbai "umbai
5e$ %eo%le ?avi Narain
(";)
"adhu 5anan
("; and CEO)
Lamon ?utten
("; and CEO)
No! of listings *00, 0=/0 6

N#E is the 3th largest stock e'change in the orld b$ market
ca%itali8ation and largest in &ndia b$ dail$ turnover!
%S'+ The National #tock E'change (N#E) is &ndiaBs leading stock e'change
covering around 2== cities and tons all over &ndia! N#E introduced for the
first time in &ndia, full$ automated screen based trading! &t %rovides a modern,
full$ com%uteri8ed trading s$stem designed to offer investors across the
length and breadth of the countr$ a safe and eas$ a$ to invest or li<uidate
investments in securities! #%onsored b$ the industrial develo%ment bank of
&ndia, the N#E has been co6s%onsored b$ other develo%mentC %ublic finance
institutions, L&C, :&C, banks and other financial institutions such as #B&
Ca%ital "arket, #tockholding cor%oration, &nfrastructure leasing and finance
and so on!
&ndia has had a histor$ of stock e'changes limited in their o%erating
jurisdiction to the cities in hich the$ ere set u%!N#E started e<uit$ trading
on November -, *332 and ithin a short s%an of * $ear became the largest
e'change in &ndia in terms of volumes transacted! Trading volumes in the
e<uit$ segment have gron ra%idl$ ith average dail$ turnover increasing
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from ?s!9 crores in November *332 to ?s!1939 crores in Februar$ ,==* ith
an average of 3!1 lakh trades on a dail$ basis! ;uring the $ear ,===6,==*,
N#E re%orted a turnover of ?s!*-, -3,0*= crores in the e<uities segment
accounting for 20+ of the total market!
The N#E re%resented an attem%t to overcome the fragmentation of regional
markets b$ %roviding a screen6based s$stem, hich transcends geogra%hical
barriers! 4aving o%erationalised both the debt and e<uit$ markets, the N#E is
%lanning for a derivative market, hich ill %rovide futures and o%tions in
e<uit$! &ts main objectives has been to set u% com%rehensive facilities for the
entire range of securities under a single umbrella, namel$,
To set u% a nationide trading facilit$ for e<uities, debt instruments and
h$bridsD
To ensure e<ual access to investors across the countr$ through an
a%%ro%riate communication netorkD
To %rovide a fair, efficient and trans%arent securities market to investors
using the electronic trading s$stemD
To ensure shorter settlement c$cles and book entr$ settlement
s$stemsD and
To meet the current international standards %revalent in the securities
&ndustr$Cmarkets!
COMPANY INFORMATION & PRODUCT PROFILE
COMPANY PROFILE:
#hri!5rishnakant ;esai is the chairman E shri!Ashish ;esai is the managing
director of the ;evashish #ecurities Fvt! Ltd!, as ell as ;evashish
Commodities Fvt! Ltd! ;uring 7une *331, the$ have started it as ;evashish
&nvestment, a famil$ firm ith %artners of 5rishankant ;esai and his son
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Ashish ;esai! #enior Fartner 5rishnakant ;esai had long e'%erience as
Accountant in Bardoli #ugar Factor$ and in #ardar Baga$at! ;evashish
&nvestment ith a gallo% start as Financial Advisors due to overhelming
su%%ort from surrounding residents of Bardoli areas as converted into
;evashish #ecurities Fvt! Ltd! ithin fe $ears!
#ince */3-, in their famil$ the$ had agenc$ of government of &ndia! Father of
Ashishbhai as an em%lo$ee of GBardoli sugar factor$H holding a ke$ %osition
of an accountant earned goodill of hundred of farmer member of the sugar
factor$! >ith this background, the$ launched in 7une *331D a %artnershi% firm
called G;evashish &nvestmentH Those ere the da$ hen there ere no official
share brokers in Bardoli! &nterested customer had to go to #urat for their share
dealing! Tele%hone facilit$ as %oor, on6line trading and E6mail facilitates
came in to the %icture $ear later!
;evashish #ecurities Fvt! Ltd is a recogni8ed sub6broker of #EB&, their
netork Fartner being "essrs! 5isan ?atilal Chokse$, Bomba$ based #hare
Brokers! :raduall$ the$ started other de%artments I "utual Fund I &nsurance
Com%an$ ;e%osits etc!
Their office accommodation hen the$ have started their Business Activities
as of *0= #<! Ft! of their on! No it is one of the established com%anies in
these areas having 20== #<! Ft! office s%ace!
The$ have full modern on6line e<ui%ments and infrastructure! The$ have also
established their ebsite! #o that their clients can track their %ortfolio, can
also kno market related da$6 to6da$ nes and informationJs!
:roth of the commercial activit$ of ;#FL E ;CFL demanded e'tension of
areas of de%artments! 4ence o%ening of branches at Navsari in 7anuar$ ,==0
E at K$ara in ma$ ,==1!
&n the %ervious $ear in 7une the$ successfull$ com%leted eleven $ear of their
e'istence! Fresentl$ strength of their man%oer on their %a$roll is -, in the
main office at Bardoli, *, in Navsari branch *- K$ara branch!
&n 7anuar$ ,==- ;#FL becomes the sub broker of messes G5ishan ?atilal
Chokse$ share E securit$ Fvt! Ltd!H, "umbai! ;#FL is also a%%roved as sub
broker firm of #EB&! ;#FL manage ;E"AT as section as sub6de%artment of
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messes G5 ? Chokse$H! Their ;F6C;# registration number is *,=*=9==!
Their clients run their ;F Account ith ;evashish in their office onl$!
;CFL is a direct no of G"ult$ Commodit$ e'changeH, "umbai! Their member
registration no! being ,3920! As registration a%%roved the broker of "CL, and
due to all on6line e6business machiner$ E e<ui%ment installed in their all of
three offices! Their clients do their commodit$ dealing from ;evashish office!
&n their head office at Bardoli E branch in Navsari and K$ara the$ have main
three de%artments I e<uit$ dealing, commodit$ dealing, saving investment vi8,
mutual funds, insurance schemes E com%an$ de%osit.
DEPARTMENTATION OF DEVASHISH
Departmentation:
The departmentation of the company is based on function performed by
different departments i.e. Finance, personnel, Marketing, system and operation, etc.
Each of this basic function is classified in subsidiary unit. Here each department
wise the responsibility of a particular work is assigned to an expert.
List o Departments:
1. ersonnel department
!. Finance department
". #ystem and operation department
$. Marketing department
%. &esearch 'epartment
(. roduct and ser)ice management department
!"#&'S#%%'L !'&ATM'%T+
Fersonnel management is also knon as human resource management! 4?"
is concern ith the %eo%le dimensions in the organi8ation! Fersonnel
de%artment includes recruitment6selection, training E develo%ment,
%erformance a%%raisal, ages E salar$, labor relation activities, transfer6
%romotion
GFersonnel management can be defining as the %rocess of accom%lished
organi8ational objective b$ ac<uiring, retaining, terminating, develo%ment, and
%ro%erl$ using the human resource in an organi8ation!
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Mr. ,etul &atel is the head of 4uman ?esource ;e%artment at ;evashish
#ecurities!
La-our elation Activities+
&n ;evashish #ecurities Fvt! Ltd! ?elation among em%lo$ees and
management is health$ and there is no union s$stem! For maintaining good
and health$ relations em%lo$ees can contact management directl$ via mail or
em%lo$ees can discuss their %roblems to their e'ecutives and then the
%roblem flos in hierarchal order to the to% management!
&a.roll S.stem
Fa$roll s$stem is the fundamental s$stem of all the organi8ation! Ever$
organi8ation should have fundamentall$ strong %a$roll s$stem! &f the
fundamental structure of organi8ation is strong than ever$ %erson satisf$ ith
the job and after all ever$one is %rimaril$ concerned ith the mone$!
&n ;evashish #ecurities %a$roll s$stem is fundamentall$ strong! The$ calculate
salaries on the basis of attendance record! One casual leave %er month is
alloed to each em%lo$ee and there are no fi'ed rules for #ick Leave but the$
allo sick leaves as %er the medical certificate! The salar$ is being %aid after
deducting Frovided Fund, Frofessional Ta' and %enalties if an$! Com%an$
uses electronic %unch card machine to kee% record of attendance!
Com%an$ gives different t$%es of alloances of em%lo$ee hich are added in
salar$ and ages likeM
;earness alloances
4ome rental alloances
Trans%ort alloances
Canteen alloances
"edical alloances
Education alloances
Leave travel alloances
.niform alloances
"obile alloances
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Fetrol alloancees
ecruitment
?ecruitment is the %rocess of searching for %ros%ective em%lo$ee and
stimulating and encouraging them to a%%l$ for jobs in an organi8ation!
There are basicall$ to sources of recruiting em%lo$eesM
* ) &nternal
, ) E'ternal
Com%an$ is using both sources to recruit em%lo$ees!
As a %art of internal recruitment com%an$ encourages relatives of the e'isting
em%lo$ees to a%%l$ for the job and the$ also use %romotion and transfer to fill
the vacanc$!
Com%an$ recruits an em%lo$ee e'ternall$ through folloing a$
The$ give advertisement in the nes%a%er
Through em%lo$ment e'change
Through Cam%us recruitment
Selection
#election is the %rocess of obtaining and using information about job
a%%licants in order to determine ho should be hired for long6 or short6 term
%ositions!
For selecting an em%lo$ee, com%an$ give first advertisement in various
nes%a%ers! After that a%%lication form a candidate has to fill u%! Then the$
take %ersonal intervie! The candidate is a%%roved on the basis of %ersonal
intervie, <ualification and ork e'%erience! Once the em%lo$ee is hired
heCshe must continue the job for ne't to $ears! &f an em%lo$ee ants to
resign heCshe has to give notice before one month of resignation so that
com%an$ can recruit ne em%lo$ee and in %eriod of one month the ne
recruited em%lo$ee can take training from that em%lo$ee!
&erformance Appraisal
&n ;evashish #ecurities %erformance a%%raisal is done on overall %erformance
or out%ut not on individual %erformance or out%ut! Though the com%an$ gives
a%%raisal certificate and monetar$ alloances to the deserved candidates!
Page 1%
?ecentl$ com%an$ has broken all the record of intrada$ transaction as ell as
deliver$ transaction! #o the com%an$ has arranged a function for all the
em%lo$ees and to motivate them the$ have given some amount to all the
em%lo$ees!
Training and !evelopment
>ith the change in technolog$ the training %rogrammed is organi8ed to give
technological knoledge to the orker for lots of advantages! #o ith the
%h$sical ork orker can adjust ith ne technological environment or ne
machineries! #ome training for the betterment of orker is also done like
safet$ training, first aid training!
Training is not onl$ for loer level %erson but it is also for higher level %erson!
For higher level %erson some seminar is conducted or some training %rogram
organi8ed and some %ractical ork given to them for more knoledge!
There are mainl$ to t$%es of training given to the em%lo$eeM
On the job training
Off the job training
;evashish #ecurities %rovide both t$%e of training! .nder on job training
em%lo$ees learn from their mistakes and from their seniors! All the em%lo$ees
of com%an$ are highl$ co6o%erative!
&n Off the job training com%an$ arrange seminars, lectures, grou% discussion,
%ersonalit$ develo%ment etc! For the training regarding ne anal$sis softare develo%ment etc! For the training regarding ne anal$sis softare
com%an$ encourages the em%lo$ees for im%arting training from "umbai b$ com%an$ encourages the em%lo$ees for im%arting training from "umbai b$
%a$ing the entire amount of that %articular course! %a$ing the entire amount of that %articular course!
Basicall$, the aim of training E develo%ment is to develo% some s%ecific skills
and knoledge, to im%rove em%lo$ee motivation and to im%rove %roductivit$
that achieves the organi8ational goal!
/elfare Activitie s
*!Clean ;rinking >ater Facilit$
The Com%an$ %rovides clean drinking ater facilit$ to their staff members!
The ater cooler facilit$ is %rovided for cold and clean ater!
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,!>ash room facilit$
>ash room is available for the em%lo$ees! The &6cards of each em%lo$ee
carr$ an electronic chi% through hich the$ can get entr$ in ash rooms and
rest rooms! The %ur%ose of this facilit$ is to maintain cleanliness!
-!Tour ArrangementM
Com%an$ arranges * or , da$ %icnic for its em%lo$ees!
Food and snacks
Advance %a$ment
Birthda$ celebration
&ndoor games on ever$ #aturda$
Cricket tournament
$0.1I%A%)' !'&ATM'%T
Finance is regarded as the life blood of a business organi8ation! The stud$ of
finance management relates to the %rocess of %rocuring financial resources E
its judicious utili8ation ith a vie ma'imi8ing the oner ealth! Efficient
management of ever$ business enter%rise is largel$ de%ends on the efficient
management of its finance!
All the activit$ of financial management %ertaining to the rising of funds using
of the funds and management of the earning are collectivel$ knon as
financial function!
GFinancial management means managerial function like %lanning, controlling,
%ertaining to ac<uisition and using of fund needed in the businessH
Sources of 1unds
&n ;evashish #ecurities both internal and e'ternal source is available to raise
the fund! The sources of funds of ;evashish #ecurities are as follos

Frofit generated b$ ;evashish #ecurities Fvt Ltd!

Frofit of ;evashish Commodities Fvt Ltd!

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Frofit of ;evashish Advisor$ services Fvt! Ltd!

Loan

Cash Credit
elations2ip wit2 ot2er !epartments
Marketing !epartment
The finance de%artment maintain all the reneal account related to the
marketing i!e! the claims of distribution the record of %a$ment of investors!
Finance is also linked ith marketing de%artment because finance is needed
for ever$ ste% of marketing! &n finance ca%ital budgeting involves %lanning the
availabilit$, controlling of long term investment funds for %romoting %roducts
through advertisement, selling and giving free sam%les, the finance is first
as%ects to be taken care! At the time of deciding cash discount on different
customer and different <uantit$, both finance and marketing manager sitting
together!
&ersonnel !epartment
The maintenance charges of rest room are %aid b$ the financial de%artment!
Finance is %rovided b$ finance de%artment to fulfill facilities %rovided to
em%lo$ees! "an$ other alloances and an$ other miscellaneous e'%enditure
incurred b$ the em%lo$ee are %aid b$ the financial de%artment! #alar$ is being
%aid b$ the finance de%artment!
S.stem and #perations !epartment
The account and finance de%artment arranged the fund for the %rocurement of
ne e<ui%ments like com%uters, %rinters, soft ares etc! The$ also monitor
and maintain budget of the e'%ense b$ #$stem and O%erations ;e%artment!
Page 1)
Accounting &olicies
There should not be naked debit in an$ investors account! That is an investor
having debit ithout having an$ securities in hisCher account is not alloed!

Credits are alloed to the investors for to da$s!

;e%reciation

Assets valuation

#alaries are %aid on monthl$ basis and if an$ em%lo$ee has taken advance
than that amount ill be deducted in installation and not on lum% sum basis
30 S4ST'M A%! #&'ATI#%S !'&ATM'%T
A s$stem is an organi8ed, %ur%oseful structure regarded as a hole and
consisting of interrelated and interde%endent elements (com%onents, entities,
factors, members, %arts etc!)! These elements continuall$ influence one
another (directl$ or indirectl$) to maintain their activit$ and the e'istence of the
s$stem, in order to achieve the goal of the s$stem!
O%erations traditionall$ refer to the %roduction of goods andCor services
se%aratel$, although the distinction beteen these to main t$%es of
o%erations is increasingl$ difficult to make as manufacturers tend to merge
%roduct and service offerings! "ore generall$, o%erations management aims
to increase the content of value6added activities in an$ given %rocess!
Fundamentall$, these value6adding creative activities should be aligned ith
market o%%ortunit$ (through marketing) for o%timal enter%rise %erformance!
;evashish #ecurities is not a manufacturing organi8ation! #o, here #$stem
and O%eration refers to maintain the e<ui%ments used b$ the com%an$ and to
construct a service la$out in such a a$ that at ever$ stage value is added
ith minimum efforts and the %rocess carr$ out ithout an$ obstacles!
Mr. Ma.ur &anc2al is the head of s$stem ;e%artment at ;evashish
#ecurities!
Page 1,
50 MA,'TI%6 !'&ATM'%T
"arketing is the s$stem of business activities! &t is designed to %lan, %rice,
%romote and distribute an$ goods E services! "arketing activities are taken
%lace here goods and services are offered for sell!
"arketing is a set of human activities directed, facilitating and consummating
e'change, it is e'change of goods and the trans%ortation is to satisf$ that
human needs and ants! 4uman efforts, finance and management constitute
the %rimar$ sources in marketing!
Mr. S2ailes2 (2avsar is the head of "arketing ;e%artment at the ;evashish
#ecurities!
Marketing Mi7
As ;evashish #ecurities is a service organi8ation the marketing mi' of
;evashish securities consist of 9%s!
*! Froduct
,! Frice
-! Flace
2! Fromotion
0! Feo%le
1! Frocess
9! Fh$sical evidence
&roduct
;evashish #ecurities offers folloing services to its customers
;emat account
Commodit$ trading
Fan card
"utual Fund
Lum% sum %lan
#&F( #$stematic &nvestment %lan)
Page 12
&rice
!emat accountM Charge for o%ening a demat account in ;evashish securities
is ?s!0==! For the %ur%ose of %romotion there are no maintenance charges for
*
st
$ear! After com%letion of * $ear it takes ?s! -0= as maintenance charges
%er $ear! The brokerage of ;evashish #ecurities is =!=9 on intrada$
transaction and =!10 on deliver$ transaction!
)ommodit. AccountM Charge for o%ening a commodit$ trading account is
?s!-0=! Traders of gold and silver can also get the %h$sical commodit$ hen
the$ ant to ithdra and the gold the$ can is 33!30+ %ure ith a mark of
?B&!
Mutual 1undM ;evashish #ecurities offers to t$%es of mutual fund schemes!
&n lum% sum investment minimum amount to be invested is ?s!0=== and in
s$stematic investment %lans minimum amount debited %er month is ?s!0==!
&lace
The head office of ;evashish #ecurities is situated at Bardoli! &t has number of
branches and franchisees!
BranchesM NAK#A?&, KAA?A, #.?AT, "A4.KA
FranchiseMFAL#ANA,5A"?E7,.NA&,#ON:A;4,#.?AT,B4A?.C4,
AN5LE#4>A?,NAN;.?BA?,;E4?A;.N,C4AN;&:A;4,&N;O?E,
C44AF?A,"."BA&, NA#&5, 7O;4F.?!
&romotion
;evashish securities uses various communication %latforms for %romoting its
%roduct and services like advertising, sales %romotion, %ublic relations etc!
The com%an$ gives advertisement in nes%a%ers and billboards! As a %art of
sales %romotion it gives discount for ne investors and to maintain Fublic
?elations Com%an$ organi8es a function ever$ $ear and invite all the %otential
investors!
&eople
There are more than 2= em%lo$ees orking at ;evashish #ecurities including
Technicians, "arket e'%erts, "anagement e'%ertise, rece%tionist and %eon!
All the em%lo$ees are e'%erts in their %articular field!
&rocess
Page 14
;evashish #ecurities takes minimum time in delivering its services! A
rece%tionist on front desk guides the customers and handles their <ueries! At
market time investors can trade through calls or through their login &;!
&2.sical 'vidence
>here is the service being deliveredN Fh$sical Evidence is the element of the
service mi' hich allos the consumer again to make judgments on the
organi8ation!
At ;evashish #ecurities em%lo$ees are bus$ and sincere regarding their
duties! &t maintains smooth flo of %roviding services! Almost = times in
delivering services! #itting arrangement is there for the investors ho ant to
trade! There are , conference room available for interaction beteen
em%lo$ees and management and em%lo$ees and customers!
80 'S'A)9 !'&ATM'%T
A de%artment in a brokerage or institutional investor ith the task of evaluating
securities to determine hich to recommend to brokers, clients, and other
interested %arties! The research de%artment develo%s investment strategies
de%ending on the current and %rojected future conditions of markets! &t ma$
use technical anal$sis, fundamental anal$sis, or an$ other techni<ue in
%erforming its duties! Through the research results research anal$st hel%s
%ortfolio advisor or investment advisor to trade on behalf of the customers!
A$OUT TOPIC:
%.10 I%T#!U)TI#%
T')9%I)AL A%A4SIS is research of market d$namics that is done mainl$
ith the hel% of charts ith the %ur%ose of forecasting future %rice
develo%ment! Technical anal$sis com%rises several a%%roaches to stud$ of
%rice movement hich are interconnected in the frameork of one
harmonious theor$! This t$%e of anal$sis studied the %rice movement on the
market b$ the means of anal$sis on the basis of three market factorsM %rice,
volumes, and in case of stud$ of future contractsJ market, of an o%en interest
(number of o%en %osition)! Of these three factors the %rimar$ one for technical
anal$sis is the %rices, hile the alterations in other factor are studies mainl$ in
Page 1&
order to confirm the correctness of the identified %rice trend! This technical
theor$, just like an$ theor$, has its core %ostulates!
!'1I%ITI#%+
GA method of evaluating securities b$ anal$8ing statics generated b$
market activit$, such as %ast %rices and volume!H
Technical Anal$sis do not attem%t to measure a securit$Js intrinsic value
, but instead use charts and other tools to identif$ %attern that can
suggest future activit$! A technical anal$st believes that share %rices are
determined b$ the demand and su%%l$ forces in the market!
&'at is Te('ni(a) Ana)*sis+
&t is a %rocess of identif$ing trend reversals at an earlier stage to formulate the
bu$ing and selling strateg$! >ith the several indicators the$ anal$se the
relationshi% beteen %rice6volume and su%%l$6demand for the overall market
and the individual stock! Kolume is favorable on the u%sing i!e the number of
shares traded is greater than before and on the donside the number of
shares traded!
$.$0 ASSUM&TI#%S+
*! The market value of the scri% is determined b$ the interaction of su%%l$
and demand!
,! The market discounts ever$thing! The %rice of the securit$ <uoted
re%resents the ho%s, fears and inside information received b$ the
market %la$ers! &nside information regarding the issuing of bonus
shares and right issues ma$ su%%ort the %rice!
-! The market ala$s moves in trend! E'ce%t for minor deviations, the
stock %rices move in trends! The %rice ma$ create definite %atterns too!
The trend ma$ be either increasing or decreasing! The trend continues
for sometimes and then it reverses!
2! The market technician assumes that %ast %rices %redict the future!
$.30#(:')TIV' M
To kno hich indicator can best suit to understand the %rice
movement!
To catch the %ro%er bu$ E sell signals to time the market su%%l$!
Page 11
To kno the carr$ out the %rice forecast!
To kno the finding the right com%an$ here invester can invest
in share is available to easil$!
$.50 IM&#TA%T #1 T9' STU!4+
The stud$ is useful for the finding the right com%an$ here
&nvester can invest in share is available to easil$!
The stud$ is useful to %in%oint o%timal entr$ and e'it in market!
The stud$ is useful to catch the %ro%er bu$ E sell signals to
time the market su%%l$!
To learn ho traders can avoid mistakes in their trading %attern
ith the use of technical Anal$sis!
$.80 LIT'ATU' 'V'VI'/+
This %a%er tests to of the sim%lest and most %o%ular trading rules66moving
average and trading range break66b$ utili8ing the ;o 7ones &nde' from */39
to *3/1! #tandard statistical anal$sis is e'tended through the use of bootstra%
techni<ues! Overall, their results %rovide strong su%%ort for the technical
strategies! The returns obtained from these strategies are not consistent ith
four %o%ular null modelsM the random alk, the A?(*), the :A?C46", and the
E'%onential :A?C4! Bu$ signals consistentl$ generate higher returns than
sell signals, and further, the returns folloing bu$ signals are less volatile than
returns folloing sell signals! "oreover, returns folloing sell signals are
negative, hich is not easil$ e'%lained b$ an$ of the currentl$ e'isting
e<uilibrium models! Co%$right *33, b$ American Finance Association!
&n a com%rehensive and influential stud$, Brock, Lakonishok, and LeBaron
OBrLL3,P, anal$8ed ,1 technical trading rules using 3= $ears of dail$ stock
%rices from the ;o 7ones &ndustrial Average u% to *3/9 and found that the$
all out%erformed the market!
B?OC5, >!, 7! LA5ON&#4O5 and B! LEBA?ON, *33,! #im%le Technical
Trading ?ules and the #tochastic Fro%erties of #tock ?eturns!
The authors investigate the informational role of volume and its a%%licabilit$
for technical anal$sis! The$ develo% a ne e<uilibrium model in hich
Page 16
aggregate su%%l$ is fi'ed and traders receive signals ith differing <ualit$! The
authors sho that volume %rovides information on information <ualit$ that
cannot be deduced from the %rice statistic! The$ sho ho volume,
information %recision, and %rice movements relate, and demonstrate ho
se<uences of volume and %rices can be informative! The authors also sho
that traders ho use information contained in market statistics do better than
traders ho do not! Technical anal$sis, thus, arises as a natural com%onent of
the agentsB learning The authors investigate the informational role of volume
and its a%%licabilit$ for technical anal$sis! The$ develo% a ne e<uilibrium
model in hich aggregate su%%l$ is fi'ed and traders receive signals ith
differing <ualit$! The authors sho that volume %rovides information on
information <ualit$ that cannot be deduced from the %rice statistic! The$ sho
ho volume, information %recision, and %rice movements relate, and
demonstrate ho se<uences of volume and %rices can be informative! The
authors also sho that traders ho use information contained in market
statistics do better than traders ho do not! Technical anal$sis, thus, arises as
a natural com%onent of the agentsB learning %rocess! Co%$right *332 b$
American Finance Association!%rocess! Co%$right *332 b$ American Finance
Association!
B?OC5, >!, 7! LA5ON&#4O5 and B! LEBA?ON, *33,! #im%le Technical
Trading ?ules and the #tochastic Fro%erties of #tock ?eturns!
The authors investigate the informational role of volume and its a%%licabilit$
for technical anal$sis! The$ develo% a ne e<uilibrium model in hich
aggregate su%%l$ is fi'ed and traders receive signals ith differing <ualit$! The
authors sho that volume %rovides information on information <ualit$ that
cannot be deduced from the %rice statistic! The$ sho ho volume,
information %recision, and %rice movements relate, and demonstrate ho
se<uences of volume and %rices can be informative! The authors also sho
that traders ho use information contained in market statistics do better than
traders ho do not! Technical anal$sis, thus, arises as a natural com%onent of
the agentsB learning %rocess! Co%$right *332 b$ American Finance
Association!
Page 2%
BL."E, L!, ;! EA#LEA and "! OB4A?A , *332! "arket #tatistics and
Technical Anal$sisM The ?ole of Kolume! The Journal of Finance. OCited b$
*3/P *9!,,
Economists have traditionall$ been ske%tical of the value of technical anal$sis,
the use of %ast %rice behavior to guide trading decisions in asset markets!
&nstead, the$ have relied on the logic of the efficient markets h$%othesis!
Christo%her 7! Neel$ briefl$ e'%lains the fundamentals of technical anal$sis
and the efficient markets h$%othesis as a%%lied to the foreign e'change
market, evaluates the %rofitabilit$ of sim%le trading rules, and revies recent
ideas that might justif$ e'tra%olative technical anal$sis!
QChristo%her 7! Neel$ briefl$ e'%lains the fundamentals of technical anal$sis
and the efficient markets h$%othesis as a%%lied to the foreign e'change
market, evaluates the %rofitabilit$ of sim%le trading rules, and revies recent
ideas that might justif$ e'tra%olative technical anal$sis!Q
NEELA, C!, *339! Technical Anal$sis in the Foreign E'change "arketM A
La$manBs :uide! Federal Reserve Bank of St. Louis Review.
This article reconciles an a%%arent contradiction found b$ recent research on
.!#! intervention in foreign e'change markets! LeBaron (*331) and #8akmar$
and "athur (*339) sho that e'tra%olative technical trading rules trade
against .!#! foreign e'change intervention and %roduce e'cess returns during
intervention %eriods! Leah$ (*330) shos that .!#! intervention itself is
%rofitable over long %eriods of time! &n other ords, technical trades make
e'cess returns hen the$ take %ositions contrar$ to .!#! intervention 6 .!#!
intervention itself is %rofitable, hoever! This article ill first %resent recent
research on these subjects! Then it ill discuss ho differing investment
hori8ons and var$ing returns and %osition si8es ma$ reconcile these facts!
This article reconciles an a%%arent contradiction found b$ recent research on
.!#! intervention in foreign e'change markets! LeBaron (*331) and #8akmar$
and "athur (*339) sho that e'tra%olative technical trading rules trade
against .!#! foreign e'change intervention and %roduce e'cess returns during
intervention %eriods! Leah$ (*330) shos that .!#! intervention itself is
%rofitable over long %eriods of time! &n other ords, technical trades make
e'cess returns hen the$ take %ositions contrar$ to .!#! intervention 6 .!#!
Page 21
intervention itself is %rofitable, hoever! This article ill first %resent recent
research on these subjects! Then it ill discuss ho differing investment
hori8ons and var$ing returns and %osition si8es ma$ reconcile these facts!
TECHNICAL INDICATOR:
*) MA)!;<Moving Average )onvergence=!ivergence0+
Introduction +
;evelo%ed b$ :erald A%%el, "oving Average ConvergenceC;ivergence
("AC;) is one of the sim%lest and most reliable indicators available!
"AC; uses moving averages, hich are lagging indicators, to include
some trend6folloing charistics!
These lagging indicators are turned into a momentum oscillator b$
subtracting the longer moving average from the shorter moving average!
The resulting %lot forms a line that oscillates above and belo 8ero, ithout
MA)!1ormula
The most %o%ular formula for the "AC; is the difference beteen a
securit$Bs ,16da$ and *,6da$ E'%onential "oving Averages(E"As)!
Out of the to moving averages that make u% "AC;, the *,6da$ E"A is
the faster and the ,16da$ E"A is the sloer! Closing %rices are used to
form the moving averages! .suall$, a 36da$ E"A of "AC; is %lotted along
side to act as a trigger line! A bullish crossover occurs hen "AC; moves
above its 36da$ E"A, and a bearish crossover occurs hen "AC; moves
belo its 36da$ E"A
)alculation
MA)!+ <1$; da. 'MA > $?; da. 'MA0
Signal Line+ @ > da. 'MA of 'MA 0
MA)! 9istrogram + MA)! > Signal Line
Trading Signal
B.AM >hen the lines are belo the 8ero line , if the "AC; Line
Crosses the average line from belo to above , itJs indicates
a bu$ing o%%ortunit$!
Page 22
#ELLM >hen the lines are above the 8ero line , crossing of the
"AC; lines from above to belo the average line signal
a selling o%%ortunit$!
$0 'LATIV' ST'%69T I%!'*+
7! >elles >ilder develo%ed the ?elative #trength &nde' (?#&) and introduced it
in the 7une *39/ article for Commodities maga8ine, hich is no Futures
maga8ine! >ilder %rovided further detail in his classic book, Ne Conce%ts in
Technical Trading #$stems, hich as also %ublished in *39/! This book
%rovides details on calculation, usage and signals for ?#& and man$ of
>ilderBs other indicators including Average True ?ange, Farabolic #A? and
A;L!
?#& is a momentum oscillator that measures the s%eed and change of %rice
movements! ?#& oscillates beteen 8ero and *==! Traditionall$, and according
to >ilder, ?#& is considered overbought hen above 9= and oversold hen
belo -=! #ignals can also be generated b$ looking for divergences, failure
sings and centerline crossovers! ?#& can also be used to identif$ the general
trend!
)alculation+
&#*+

&# + ,)erage -ain . ,)erage /oss
Trading signal M
B.A M>hen the ?#& has crossed the -= line from belo to above and
is rising , a bu$ing o%%ortunit$ is indicated!
#ELLM >hen it has crossed the 9= line from above to belo and is
falling , #ell signal is indicated!
3)ROC (Rate of Change):
The ?ate of Change (?OC) is a sim%le technical indicator that shos the
%ercentage difference beteen the current %rice and the %rice n %eriods ago!
The ?OC can be used as an$ momentum technical indicator b$ anal$8ing
%ositive and negative divergence, looking for high los and 8ero line
crossovers! The ?OC can be used to define overbought and oversold
Page 2)
markets! The higher ?OC is considered a more overbought securit$ and the
loer ?OC is a more oversold securit$! 4oever, in man$ cases, the
e'tremel$ overboughtCoversold ?OC ma$ indicate a continuation of the recent
trend!
The ?ate of Change (?OC) indicator measures the %ercentage change of the
current %rice as com%ared to the %rice a certain number of %eriods ago! The
?OC indicator can be used to confirm price moves or detect divergencesD it
can also be used as a guide for determining over-oug2t and oversold
conditions.
)alculation+
?OC A <)lose ; )lose % periods ago0 = )lose % periods ago B 1CC
Trading signal+
Rero line M &dentif$ bu$ing and selling o%%ortunit$!
B.AM .%side from belo to above the 8ero line that indicates a
Bu$ing o%%ortunit$!
#ELLM >hile donside crossing from above to belo the 8ero line
that indicates a selling o%%ortunit$!
?E#EA?C4 "ET4O;OLO:AM
3.10 &ro-lem statement+
G#tud$ of technical anal$sis tools for investment decision in ca%ital
market0
3.$0#-jective+
GTo kno the %ro%er bu$ E sell signals to invest for getting more return in
securit$ market!H
3.30 esearc2 !esign+
A research design is a frameork or blue for conducting the marketing
research %roject! &t s%ecifies the detail of the %rocedure necessar$ for
obtaining the information needed to structure and solve marketing
research %roblem!
A three t$%es of research designM
E'%lorator$ ?esearch
;escri%tive ?esearch
Page 2,
& selected descri%tive research design because the research to%ic based
on a %ast data!
The research design is descri%tive as it describes the result of technical
anal$sis tool to bu$ or sale the securit$! The stud$ is base on the secondar$
data collected from the National #tock E'! eb! The anal$sis is done using
"# e'cel! ?esearch em%lo$s three major indicators () for three com%anies
selected on the basis of market ca%itali8ation! (;ate)! ;ata collection duration
is from 7un ,==/ to 7.N ,=** for scri%ts! For data anal$sis the scri%tJs
o%ening, closing, high, lo %rices are considered!
3.50 !ata collection+
A to t$%es of data collectionM
*) Frimar$ data
,) #econdar$ data
&rimar. !ata+
Frimar$ data are freshl$ gathered data for s%ecific %ur%ose or for
s%ecific research %roject !H Frimar$ data are no one has collect the data
the first time search!
E'! Suestionaire, Focus grou% , &ntervie, #urve$ etc!
Secondar. !ata+
#econdar$ data are data that ere collected for another %ur%ose , and
alread$ e'ist some here!H
E'! &nternet, "aga8ine, ?esearch %a%er!
& #elected a secondar$ data because data collection through &nternet ,
maga8ine and research %a%er!
3.80Sample SiDe+
To% three Com%anies as %er market Ca%italisationM
?eliance
L E T
Tata #teel
A three &ndicator #uch asM
"AC;
?#&
?OC
Page 22
!ata collection !uration+7une ,==/6 to6 7une ,=**
3.?0 limitation of t2e stud.+
;ue to unavailabilit$ of the data as %er the re<uirement, the %rocess
becomes time consuming!
Page 24
T')9%I)AL I%!I)AT#
"AC;
These lagging indicators are turned into a momentum oscillator b$
subtracting the longer moving average from the shorter moving
average! The resulting %lot forms a line that oscillates above and belo
8ero, ithout an$ u%%er or loer limits!
?EL&NCE CO"FANAM
B&: A??O> M#4O> T4E B.A&N: #&:NAL
#"ALL A??O>M #4O> T4E #ELL&N: #&:NAL
:ra%h*M
:ra%h ,M
:ra%h -M
Page 2&
:ra%h 2M
:ra%h 0M
:ra%h 1
Page 21
:ra%h 9
:ra%h/
Page 26
:ra%h 3
TATA #TEELM
*
Page )%
,
-
Page )1
2
0
Page )2
1
9
Page ))
/
3
LET
*
Page ),
,
-
Page )2
2
0
Page )4
1
9
/
Page )&
3
&NTE?F?&TAT&ON OF "AC;
S %#. )#M&A%4
%AM'
(U4
<Time !uration0
S'LL
<Time !uration0
10 'LIA%)' $8;Aug;to;CE;%ov;CF
$$;to;$3;:an;C@
$E;1e-;to1E;Mar;C@
CF;:un;to;31;:ul;C@
1@;to;$8;Aug;C@
$1;:ul;to;$$;Aug;CF
1C;%ov;$1;:an;C@
$E;:an;to;$?;1e-;C@
1F;Mar;to;C8;:un;C@
C3;to1F;Aug;C@
Page )1
$3;#ct;to;13;%ov;C@
18;to;3C;!ec;C@
$1;:an;to;5;Mar;C@
$C;Apr;to;1C;:an;1C
$C;:ul;to;C@;sep;1C
1$;%ov;to;13;!ec;1C
11;:an;to;1E;1e-;11
1F;Apr;to;31;Ma.;11
1?;to;3C;:un;11
$?;Aug;to;$$;#ct;C@
1?;%ov;to;15;!ec;C@
31;!ec;to;$C;:an;1C
C8;Mar;to;1@;Apr;1C
11;:an;to;1@;:ul;1C
13;Sep;to;11;%ov;1C
15;!ec;to;1C;:an;11
1F;1e-;to;18;Apr;11
C1;to;18;:un;11
Page )6
$0 TATA ST''L (U4
<Time !uration0
$1;:ul;to;CE;%ov;CF
$3;:an;to;C?;1e-;C@
$5;1e-;to;13;Mar;C@
1F;:un;to;$5;:ul;CF
1E;Aug;to;11;Sep;C@
$E;#ct;to;1F;%ov;C@
1C;to;$$;!ec;C@
$$;:an;to;$?;1e-;1C
$3;Apr;to;18;:un;1C
1F;Aug;to;C1;Sep;1C
13;#ct;to;1C;!ec;1C
11;:an;to;$3;Mar;11
3C;Apr;to;C?;:un;11
15;to;$3;:un;11
S'LL
<Time !uration0
1C;%ov;$$;:an;C@
C@;to;$C;1e-;C@
1?;Mar;to;1E;:un;C@
$E;:ul;to;1E;Aug;C@
15;Sep;to;$?;#ct;C@
1@;%ov;to;C@;!es;C@
$3;!ec;to;$1;:an;1C
C$;Mar;to;$$;Apr;1C
1?;:un;to;1E;Aug;1C
C$;Sep;to;1$;#ct;1C
13;!ec;to;1C;:an;11
$5;Mar;to;$@;;Apr;11
CE;to;13;:un;11
$5;to;3C;:un;11
Page ,%
30 L " T (U4<Time !uration0 S'LL<Time !uration0
$1;:ul;to;$C;Aug;CF
CE;%ov;to;$C;:an;C@
$?;1e-;to;13;Mar;C@
1F;:un;to;$8;Aug;C@
C@;#ct;to;CE;!ec;C@
13;:an;to;1@;1e-;1C
18;Apr;to;1F;Ma.;1C
$F;:ul;to;CF;Sep;1C
15;#ct;to;C$;%ov;1C
18;%ov;15;1e-;11
C3;Ma.;to;$F;Ma.;11
$1;Aug;to;C?;%ov;CF
$1;:an;to;C@;1e-;C@
1C;to;$8;1e-;C@
1?;Mar;to;1E;:un;C@
$8;Aug;to;CF;#ct;C@
CF;!ec;to;1$;:an;1C
$$;1e-;to;13;Mar;1C
1@;Ma.;to;$E;:ul;1C
C@;Sep;to;13;#ct;1C
18;1e-;to;C$;Ma.;11
$5;Ma.;to;3C:un;11
?#&
Page ,1
elative strengt2 inde7 <SI0 is a %rice6folloing oscillator that ranges
beteen = and *==! >hen ilder introduce the ?#&, he recommended using
a*26da$s ?#&! #ince then, the 36da$s and ,06da$s relative strength inde'
indicators have also gained %o%ularit$!
A %o%ular method of anal$8ing the ?#& is look for a divergence in hich the
securit$ is making a ne high, but the ?#& is failing to sur%ass its %revious
high! This divergence is an indication of an im%ending reversal! >hen the ?#&
then turns don and falls belo its most recent trough, it is said to have
com%leted a Gfailure singH! The failure sing is considered a confirmation of
the im%ending reversal!
?eliance
*
,
Page ,2
-
2
Page ,)
0
1
Page ,,
9
L E TM
*!
Page ,2
,
-
2
Page ,4
0
1
9
Page ,&
/
3
TATA #TEELM
*
Page ,1
,
-
2
Page ,6
0
1
9
Page 2%
/
&NTE?F?ETAT&ONM
?#& values above 9= are consider to denote overbought condition E values
belo -= are consider to denote oversold condition! >hen ?#& crossed the -=
line from belo to above E is rising, a bu$ing o%%ortunit$ is indicated! >hen
?#& crossed the 9= line from above to belo E is falling, a sell signal
is indicated!
#)
Page 21
The ?ate of Change (?OC) is a sim%le technical indicator that shos the
%ercentage difference beteen the current %rice and the %rice n %eriods ago!
The ?ate of Change (?OC) indicator measures the %ercentage change of the
current %rice as com%ared to the %rice a certain number of %eriods ago! The
?OC indicator can be used to confirm price moves or detect divergencesD it
can also be used as a guide for determining over-oug2t and oversold
conditions.
'LIA%)'+
*
,
-
Page 22
2
5
1
Page 2)
9
/
TATA #TEEL
*
Page 2,
,
-
2
Page 22
0
1
9
Page 24
/
L E TM
*
,
Page 2&
-
2
0
Page 21

1
9
/
Page 26
&NTE?F?ETAT&ONM
&n the ?OC chart the overbought 8one is above the 8ero line E the oversold
8one is belo the 8ero line! "an$ anal$st use the 8ero line for the identif$ing
bu$ing E selling o%%ortunit$, u%side crossing from (belo to above the 8ero
line) indicates a bu$ing o%%ortunit$, hile a donsi8e crossing from (above to
belo the 8ero line) indicates a selling o%%ortunit$!
The ?OC has to be used along ith %rice chart! The bu$ing E selling signal
indicated b$ the ?OC should also be confirmed b$ the %rice chart!
F&N;&N:#
Page 4%
The following are the findings from the analysis1
1. The indicator of
Page 41
CONCL.#&ON
Thus from the abo)e analysis it can be concluded that the substantial number of selected
stocks listed on 2#E does follow random walk. This implies that these stocks can be predicted
by using historical information. *n other words, technical analysis plays an important role in
de)ising profitable trading rules on the bases of historical information on share price.
The indicators of all three companies shows the different position of buying 3 selling. Each
indicator has its each
$i,)io-rap'*
(ooks+
1. unitha)athy andean, 4#ecurity ,nalysis and ortfolio Management0, )ikas
publishing House )t. /td. p.g.!5"6!7
Page 42
!. 'onald E.Fischer and &onald 8. 8ordan, 4#ecurity ,nalysis and ortfolio
Management0 9y, #ixth Edition :!;;(< p.g.%"56%%5.
". #.=e)in, otfolio Management, second Eddition,renice6Hall of *ndia ri)ate
/T'.,2ew delhi6!;;>p.g.1!!61"!
/e- Links 1or !ata used+
http1..www.nseindia.com.
Home ? E@uities ? Market *nformation ? Historical 'ata ? #ecurity6wise rice Aolume
'ata
#ources of literature usedM
1. http788999.in+e(torhome.$om8emh.htm
2. http788en.9i:ipe"ia.or.89i:i8Effi$ient;mar:et;hpothe(i(<A((#mption(
). http788en.1662 ' Ameri$an 3inan$e A((o$iation.
Page 4)
Page 4,
Page 42