A PROJECT REPORT ON

OVERVIEW OF TECHNICAL ANALYSIS

Submitted by

Amir zaidi

Reg No: 2016MBA048

Under the guidance of

Dr R.C.Babu

Associate Professor

Programme Leader MBA

Jagran Lakecity Business School

Submitted in Partial Fulfillment of the requirements

Of Jagran Lakecity university for the Award of the degree in

Master of Business Administration

Jagran Lakecity Business School

JAGRAN LAKECITY UNIVERSITY

BHOPAL-462001

Session 2016-2018
 DECLARATION

I hereby declare that my summer internship training project report title OVERVIEW
OF TECHNICAL ANALYSIS is an authentic work done by me as a part of study.

The project was undertaken as a part of the course curriculum of MBA programme of
JAGRAN LAKECITY UNIVERSITY Bhopal this has not been submitted to any other
examination body.

DATE: - NIKITA SHARMA

SIGNATURE: - MBA III SEMESTER

 COMPANY PROFILE

Kalpataru is a wishful Devine Tree and in present context a widely Trusted,

Time tested and Transparent Share Broker, Investment Advisor and D.P. of
this region. Kalpataru offers a complete solution to all your Investment
problems, needs and requirements since 1992.

Kalpataru is a spectrum of vision, vibgyor, style, standard, creativity, craze

and honesty. All the seven colours of share business can be felt and enjoyed
in Kalpataru. Our field of operation is Share Trading, Commodity, Derivative
(F&O) Trading, Currency, IPO, Demat, Mutual Fund and Pan Card Services.

So when ever and where ever you need, you will find Kalpataru at your door
step to help you trade and transact with any stock exchange in India or
abroad.
MEMBER:

1. Bombay Stock Exchange Ltd. (BSE)

SEBI Regn. No. INB011115236

MEMBER ID: 3016

2. National Stock Exchange Ltd. (NSE)

SEBI Regn. No. INB-231115230

MEMBER ID: 11152

MCX Stock Exchange Ltd. (MCX-SX)

3. SEBI Regn. No. INE - 261115230

MEMBER ID: 53100

4. Multi Commodity Exchange (MCX)

FMC Regn. No. MCX/TCM/PROP/0834

FMC Regn. No. MCX/TCM/PROP/0834

5. National Commodities Exchange of India (NCDEX)

FMC Regn. No. NCDEX/TCM/PROP/0896

MEMBER ID: 00921

6. Depository Participant (DP) of CDSL

INVESTMENT

Everybody knows importance of saving. Saving is a portion of ones income

kept separately to meet certain specified and even unspecified purposes
such as Construction of a house, Marriage, Higher education of children,
Common and serious illness, Happy and worriless old age and retirement,
repayment of loans for house building, purchase of Car, tours and travels,
Provision for the family leftover after ..etc.

When this money saved is invested in any one of the various ways(Gold, Landed
properties, Storing commodities Promissory notes, Hundi, Bank FD, Post-office Small
saving schemes). It generates interest or dividend. One can say investment is to earn
money from your idle money or resources.

Difference between Saving and Investment:

Though these two words sound like the same but they are not the same or
synonymous. Saving is the money which you keep apart out of your total income before
your usual and regular- routine expenditure, where as Investment is to put that saving
in some financial instrument like MF or FD, so that amount should grow and earn
money for the appreciation of your money saved.

Objectives of Investment : Behind every Investment there are three main

objects-
1. Safety
2. Return
3. Liquidity

To achieve these goals, the investment depends on certain factors, they are-

1. Income of the investor ;

2. Age ;
3. Social status and life style ;
4. Horizon (Duration of investment ) ;
5. Appetite ( Necessity ) ; and
6. Risk bearing capacity of the investor.
Modes of Investments:

Broadly speaking, investment is of two types-

1. Equity shares (Picture of share market)

2. Interest or dividend based fixed income investment, such as Mf, Bank FD,
Post office small saving schemes (Picture and names of various MF, banks-
cash window, client filling forms.)

Again equity can be sub-divided in Primary Market and Secondary Market

Primary Market - IPO, FPO, Debentures, Convertible Debentures.

Secondary Market - Online buying and selling of equity shares of listed

Companies in Stock Exchanges.

Internet Trading: With the advent of Information Technology, an investor is

not required to go to terminal or the work station of the Broker. He can
transact/trade/buy/sell shares from anywhere he is, i.e. City in India or abroad,
house, office, car, train, plain, agricultural field or at his leisure.

Groups of Companies- Cash group or A group; B group, LARGE CAP, MID

CAP SMALL CAP.
Indices- SENSEX (30 ), NIFTY(50 )BSE(100), BSE (200), BSE (500)
BSE AUTO,BSE BANKEX,BSE-CAP-GOODS, BSE-CONSU DUREBLES, BSE-FMCG,
BSE-HEALTH CARE, BSE- METAL, BSE- OIL & GAS, BSE-PSU, BSE- IT SEC, BSE
REALITY, BSE-TECH, BSE- MID CAP, BSE- SMALL CAP

Indices introduced by ET (Economic Times) are- LIFEX , BANKEX,

MINDEX, Sectors- Core Sector includes Power, Cement, Steel, Infrastructure-
Auto, Automobile, Banking, Beauty Products, Capital goods, Computer Software,
Diversified, Chemicals, Electrical, Electrical Equipments, Energy (Thermal &
Hydro), Engineering, FMCG., FMCG & Food, Finance (Industrial & Housing),
Heavy Engineering, Hospitality& Hotels, IT, Logistics, Metals (Base & Bullion ).,
Oil & Natural Gas, Optional Energy, Pharmaceutical, Petrol, Power, Real Estates,
Readymade Garments, Refineries, Road & Building construction, Shipping, Steel,
Tele-communication, Textiles.

OUR Field of Operations

We at Kalpataru aim at exceeding expectation of our client, who happen to

be our patrons, on all service parameters, with this objective in mind, We
provide you a variety of conveniences and bring to you Top Quality
Personalized Service and Satisfaction in Share Trading.

1. Main Activity of Kalpataru is Online Share Broking and Investment

Advisory Service through Satellite based VSAT
instrument/equipment.

2. Derivative Futures & Options (F&O) Online through VSAT instrument.

3. Commodity Derivatives, Futures & Options, Currency Derivative F&O
through MCX, NCDEX, MCX-SX.

4. Depository Participant (DP) Service (DEMAT) through CDSL (Central

Depository Services Ltd.)We are First DP of CDSL in Bhopal.

5. Internet Trading: Kalpataru provides you hassle free facility to trade

through us on Internet. You need not come to our Office, Terminal or Work
Station at all. You can transact online with KML on BSE, NSE, MCX, NCDEX,
and MCX-SX and even settle your DP Account, DP Holding, and Portfolio with
your DP etc. You can do it from your Office, Home, Train, Plane, Car, Yacht,
Garden or Agriculture field.

6. SMS Services: Every morning 7:00AM to 3:30 PM you will get

information, Tips, Probabilities of Market Trend, Buy and Sell
Recommendations on your mobile, for share, commodity DP IPO and others.

New Issue: Primary Market Services, IPO of all most all reliable and good
Companies and PSU under Disinvestments Policy of the Govt.

7. Investment Advisory Services: We are prominent Financial and

Investment advisor of this region. We provide ready made and Tailor made
Investment Advice that which suits to your Need.

8. PAN Card Service Center: UTI has selected Kalpataru after many acid
tests, Goodwill, Turnover, Fair Practice and Capacity to handle the most
critical identification card of national value.
9. Value Added Services: Life Insurance LIC Pension fund, Education fund,
Dividend fund Children care fund and Housing loan schemes.

Recently Directors of Kalpataru have started giving guest lectures to

business Management School students on the request of Business
Management Institutions. We are in heavy demand. We provide those
students Live Demonstration, on the job training that, which is compulsory
to undergo as part of their curriculum of their training. We provide a
certificate after successful completion of their training to that effect. Training
certificate from KML is supposed to be the most valuable achievement of the
trainee concerned.

OUR GROUP INSTITUTION

Others may be of one or two, but no body in Bhopal, can claim membership of all
Exchanges as we are. It was a baptism by fire. After undergoing so many acid tests,
thank God, we achieved it at the last. It was not a miracle but our multi dimensional
efforts made it possible to get approval from those Exchanges. It is only our un-easing
efforts which will place KALPATARU on the forefront of the Capital Market.

Friends, for those who want to read the massage larger than life, they shall have to try
to read more than what meets the eye. Every New Year brings with it a looking forward
to new Horizons, fresher avenues and greater challenges. We know our limitations, but
one thing is for certain that we did never limit the challenge, but we always
challenged the limits, instead. While straddling the moments between retrospection
and anticipation we are face to face with a yet unfinished present and a demanding
future full of hopes and promises.

Single minded dedication and focus on our clients welfare is what that helped Kalpataru
to reach new heights of Success. Rewards and Recognitions attest our glaring growth.
We are an entity that believes in moving the growth chart not just vertically, but also
horizontally as well. As life is not mere existing, it requires growth, exertion, expansion
and makes others feel our presence by proper utilization of mind, might, machine and
money. These qualities gave us a solid ground to grow in with all its Strong Branches,
confirming only our belief that BRANCHES ARE OUR STRENGTH. We have opened
branches to reach our clients more nearly physically. "Kalpataru" has evolved itself from
a local Share-Broker to a Corporate and a National Organization in terms of our outlook,
focus, presence, customers, and volume. This has been achieved through our policies &
planning, technology & targets, vision & viability and in the last not the least, Ethics &
endurance. A step ahead from the usual, our foundation is not based on laurels of the
past (which has, in fact, become the identity of Kalpataru) but of the challenges of the
future. It was our steadfast commitment and an unwavering determination to carve a
niche on the checkered slate of Share-Market of our Great city and the State. It has
been our constant endeavor to improve the quality of services to our clients.

Truly, it was not possible without the fact, what we say, Honesty is not only in our
transactions, but it is in our genes. Yes we are known for our Trust, Transparency,
Tradition and Honesty above all since last five generations. These have become identity
of Kalpataru. Other significant qualities to which we say, our habits are adoptability,
adaptability, transformation and preparation for a better change. Kalpataru have been
able to anticipate change, manage change and create the change successfully.

Share business requires Concentration of mind, Self Confidence, Trust, Calculation of

time and above all identifiable urge to reach goal post exactly as an acrobat while
walking on rope. We dont claim to posses all above qualities perfectly, but our
endeavor is always to learn from each of our mistake and move towards perfection.

The World-wide IT has made the Geography virtually a History. We made full use of this
facility and opened the doors to our clients. We can say it with content that our office is
equipped with most sophisticated, latest and best tech, peck and rack available.

FY 2008-09 has seen the Blooms & Glooms both simultaneously. Sensex dipped 7697
and the Bulls lifted it to 17735 on 5th May, 2008. It was a journey between North- pole
to the South in a row. Market has seen miraculous feats of Bulls and Bears. We were
not a silent viewer during these dread full days. We injected optimism and confidence in
to our shivering clients to face the challenge of the Market and ultimately won over it.
Thank God and special thanks to our patrons- client who were with us through all
bouquet and brick bat, Our vibrant staff, dedicated to the cause worked relentlessly to
the need of hour and enabled us to hold our wheels on the track, adding more glitter to
our name and fame. Nevertheless, we know, still there is a hard time to breathe fresh
air.

In Kalpataru where man, mind and machine, talent and opportunities, entrepreneur and
environment, ambitions and appreciation can be seen working combined together day
and night under one roof. In addition to it naturally, you will find a need based solution
and of course, personalized service with bountiful smile for every customer. This is what
made us different and distinct. Trust begets Trust and recognition by all quarters
concerned shows a clear edge over others. Commodity Futures Trading under the
spacious umbrella of Kalpataru Group Kalpataru Multi Commodities can well be said a
proof of our convergence and divergence faculty.

No achievement is solitary, it requires a team, being our belief, we have gathered a

perfect team of professionals, willing workers, well-equipped-well furnished work Trade
stations with a healthy corporate environment to provide a tailor made service to every
client which suits him and fits in according to his need. In this way, with our diversified
share- investment and allied business under one roof, our branches in and out of
Bhopal, a well knit net work of nearly 200 active and vibrant agents/sub brokers, we are
with our clients in more places and in more ways. Over the years, Kalpataru has earned
a reputation of highly dependable top tier service provider in its chosen segment of
share broking, Investment Advisor and DP. Our endeavor had been to serve our
customers best and beyond their expectations to achieve leadership by providing value
added and high quality solution to our customers. A writing inscribed on the wall in our
office premises and on minds of our working hands Dont loose an opportunity at any
cost. Dont get frightened with failures. Find out solution and Be on job without loosing
any time and temper. We pin point our focus on our clients, the most valued one. Our
first priority is to look after their hard earned money with safety and security, multiply it
with maximum return. We have to be true to our name Multiplier, after all.
Some other salient features which places your Kalpataru ahead others:-

Today KML has a satisfied clientele crossing the barriers and stampedes of thousands of
thousand. Our ever increasing clientele is encompassing not only the capital market of
the Capital City but also many more cities and States. It includes youngest clint ageing
9 days and many of them reaching 9th decade of their age. It is a fine blend of different
TASTE, TEMPRAMENTS and TRADITIONS. It includes ranks and files of every walk of
life and from the length and breath of our Country i.e. Top Brass of Services Aristocrats,
Bureaucrats, Technocrats, Bankers, Retired and Working, Persons of High Profile and
Mediocre. Intelligent working women and Innocent house wives. Where persons
entering tenth decade of their age, infants entering their tenth day also are our valuable
clients

Our 'MANTRA' is 'Don't miss the opportunity and attack the problem on it's core.

Kalpataru has started giving training to the Students of MBA, BBA and Intermediate in
Business Management on request of Top Business Management Institutions.
 MANAGEMENT TEAM OF KALPATARU MULTIPLIER LIMITED

Founder & Chairman : Mr. Ramesh Chandra Manay Jain

Vice- chairman : Mr. Aditya Manya Jain

Managing Director : Mr.Amitabh Manya Jain

Team Working at GTB Complex ,New Market , Bhopal (M.P) Branch :

Branch Head : Mr. Anupam Tamarkar

Executive : Ms. Archana Pandey

Supporting Staff : Ms. Archana yadav

Dealers : Mr. Kavi Bhushan

:Mr. Rukmani Singh
 AWARDED AND ACHIVEMENTS
AWARD

Since we are adding more weight and value to our broking business and advisory
consultation, success, appreciation, recognition are bound to follow in the form of
Awards achievements. Improved efficiency is the key to competitiveness and success
ultimately. We follow in verbatim in words & spirit.

We have reaped a bumper Crop of Awards some important and uncommon awards and
achievements are:

11th position in India on the basis of commission earned in IPO business.

Rajiv Gandhi Award to Amitabh on MAIN HOON DON Award given by none other than
AMITABH BACHCHAN The Millennium Star and Brand Ambassado of ICICI.

ACHIEVEMENT

o ISE
o BSE
o NSE
o MCX
o NCDEX
o MCX-SX
o PAN Card Service center
o UTI
o HDFC
o LIC
o RELIANCE
o ICICI
Our achievements may be and are matter of pride but first we rae proud of our
association with our clients that is you. Our greater asset has been our Customers
Trust.
 RESEARCH DESIGN AND METHODOLOGY

PROBLEM STATEMENT

The above study is undertaken to compare the selected technical analysis tools available

for forecasting. The study tries to capture the contradicting views of different tools used

in technical analysis. This study is aims to exploration of the topic TECHNICAL

ANALYSIS.

Investment in the stock market and the process Portfolio management encompassing

many activities aimed at optimizing the investment of ones funds. Five Phases can be

identified in this process:

1. Security analysis

2. Portfolio analysis

3. Portfolio selection

4. Portfolio revision

5. Portfolio evaluation

Each phase is an integral part of the whole process and the success of portfolio

management depends upon the efficiency in carrying out each of these phases.

The very first step consists of examining the risk return characteristics of individual

securities. Security analysis is such a crucial activity because every investor has to

decide on the type, number and time timing of buying and selling of the shares.
Today, the thousands of securities available for an investor, he has to decide on;

Which stock to invest?

What type of security to buy?

When to sell the securities?

Where to Invest?

How to Invest?

Whether hold, sell or buy securities?

All these questions need to be answered before the investment can take place and also

determining prospective benefits from the investment in a security. The risk associated

with that investment.

OBJECTIVES OF THE STUDY

This study is aimed at undertaking technical analysis of selected companies included in

the CNX Nifty. I will also demonstrate how technical analysis can be of invaluable use

for the investors in marketing their investment decisions.

The following are the main objectives of this study.

To analyze tools of technical analysis can be used in forecasting stock prices.

To know the movements (upward or downward) of stock prices of selected

company stocks through Technical analysis.

To know how best we can utilize these analyses to meet the financial goals.
SCOPE OF THE STUDY

This study mainly focuses on investment decisions by predicting futures stock price

movements through the use of Technical analysis. This study is based on two companies

selected from those listed in National Stock Exchange and Bombay Stock Exchange.

Following are the main scope of this study

To help the investor in making decisions based on report

Analysis of the shares of companies.

Studying the stock price movement of the security market.

Helps to identify trend reversals at an earlier stage to formulate the buying and

selling strategy.
The stocks so selected are as follows.

Infosys

ITC

Techniques of data analysis:

Technical tools used for the study are:

Chart patterns

Line charts

Japanese candlestick chart

Indicators of the study

Line Chart Bollinger Bands

Moving average, convergence and

Relative strength index (RSI)
divergence.(MACD)

Simple Moving Average (SMA) Exponential Moving Average (EMA)

ChaikinMoney flow (Ch Mf) Volume

RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis of data in a

manner that aims to combine relevance to the research purpose with economy in

procedure. In fact, the research design is the conceptual structure within which research

is conducted. It constitutes the blue print for the collection, measurement and analysis of

data.

RESEARCH METHODOLOGY

For the study, 2 companies were selected from CNX Nifty. There are following steps in

methodology:

Use of technical tools i.e. Simple moving Average, Exponential Moving

Average, Relative Strength Index and Moving Average Convergence and

Divergence.

Identification of patterns and trends in the stock price movements.

Preparation of stock chart, Line chart, Bar chart and candle stick chart showing

the price and volume of the stocks over the period of time and Interpret charts.

Source of Data

The research design carried out is analytical research design. This research will mainly

deal on facts or information already available, and analyze them to make a critical

evaluation of the material and finding a solution to the problem. The analytical research

is mainly done based on the secondary data which is already published.

The data used in this study are publicly available data collected from secondary source.

The major source of the data is the website of NSE India. Text books and Business

journals and periodicals and newspapers are also to collect some data and information.

LIMITATIONS OF THE STUDY

Misleading Concept of Technical Analysis: The first thing we are misguided by

the Technical Analysis is the core principal of Technical Analysis which define

history repeat its self. History often repeats its self but not all the time. Some time

we see it never repeat or sometime it takes long time to be repeated. So investors

or traders should take a look of this misleading concept before use of Technical

Analysis.

Partial use Of Technical Analysis: If you are familiar with phrase of A little

knowledge is a dangerous thing This is the most appropriate phrase for investors

and traders in financial market. We see investor and trader learn a little part of

technical analysis and use it and at the end result the partial uses of technical

analysis fail most of the case of financial market. Never try to use your partial

knowledge of Technical Analysis cause its drop down you most of times of your

investment life cycle.

Misunderstand of Technical Indicators Direction: Many investors and traders

are trapped by the direction of technical indicators. As many of the technical

indicators dont work in most of the cases. It gives false buy or sell signal. The

technical indicators have been created on the basic concept of market movement

and mathematical calculation. So investor or trader who wants to use this sort of

indicators they should have the core concept and calculation of that indicator and

use it after analysis of present market movement.

 Unconsciously uses of Technical Analysis without a System: Technical

Analysis is a broad concept and a systematic approach of determining the future

price movement. Any investors or traders cannot use in unconsciously. He may

have good knowledge on technical analysis but if they do not use it in appropriate

way it may be bring a dangerous situation. Technical Analysis can only work

with long term value of your investment when you use it in a systematic way.

The systematic way refers to control emotions or psychological development and

an idea of your portfolio management.

Certain Powerful Control Fail the Technical Analysis: we are very much

familiar with market maker who can manipulates market any time during trading

session. Market makers are the powerful market controllers who always trade

against most of the traders with huge volume of trade. Technical Analysis doesnt

work in case of market makers handling as market doesnt moves in a certain

level when they enter into the market. So when we will use technical analysis we

should keep it mind of their powerful control of Market maker.

 THEORETICAL BACKGROUND

OVERVIEW OF TECHNICAL ANALYSIS

A method of evaluating securities by analyzing statistics generated by market activity,

such as past prices and volume, Technical analysts do not attempt to measure a securitys

intrinsic value, but instead use charts to identify patterns that can suggest future activity.

Technical analysts believe that the historical performance of stocks and markets are

indications of future performance.

Technical Analysis has become increasingly popular over the past several years, as more

and more people believe that the historical performance of a stock is a strong indication

of future performance. People using fundamental analysis have always looked at the

past performance of companies by comparing fiscal data from previous quarters and

years to determine future growth. The difference lies in the technical analysts belief that

securities move according to very predictable trends and patterns. These trends continue

until something happens to change the trend, and until this change occurs, Price levels

are predictable.

Investors successfully trade securities using only their knowledge of the securitys chart,

without even understanding what the company does. Although technical analysis is a

terrific tool, most agree it is much more effective when used in combination with

fundamental analysis.
DOW THEORY

The ideas of Charles Dow, the first editor of the Wall Street Journal, form the basis of

technical analysis today. Charles Dow created the Industrial Average, of top blue chip

stocks, and a second average of top railroad stocks (now the Transport Average). He

believed that the behavior of the averages reflected the hopes and fears of the entire

market. The behavior patterns that he observed apply to markets throughout the world.

Markets fluctuate in more than one time frame at the same time

The first is the daily variation due to local causes and the balance of buying

and selling at that particular time (Ripple).

The secondary movement covers a period ranging from days to weeks,

averaging probably between six to eight weeks (Wave).

The third move is the great swing covering anything from months to years,

averaging between 6 to 48 months. (Tide).

Bull markets are broad upward movements of the market that may last several

years, interrupted by secondary reactions. Bear markets are long declines

interrupted by secondary rallies. These movements are referred to as the

primary trend.
Primary Phases of Movements

Secondary movements normally retrace from one-third to two thirds of the primary trend

since the previous secondary movement.

Daily fluctuations are important for short-term trading, but are unimportant in analysis of

broad market movements.

Primary Movements have Three Phases

1. Bull markets

o Bull markets commence with reviving confidence as business conditions

improve.

o Prices rise as the market responds to improved earnings Rampant speculation

dominates the market and price advances are based on hopes and expectations

rather than actual result.

 2. Bear markets

o Bear markets start with abandonment of the hopes and expectations that sustained

inflated prices.

o Prices decline in response to disappointing earnings.

o Distress selling follows as speculators attempt to close out their positions and

securities are sold without regard to their true value.

3. Ranging Markets

o A secondary reaction may take the form of a line, which may endure for several

weeks.

o Price fluctuates within a narrow range of about five percent.

o Breakouts from a range can occur in either direction.

o Advances above the upper limit of the line signal accumulation and higher prices;

o Declines below the lower limit indicate distribution and lower prices;

o Volume is used to confirm price breakouts.

Bull Trends

A bull trend is identified by a series of rallies where each rally exceeds the highest point

of the previous rally. The decline, between rallies, ends above the lowest point of the

previous decline.
Successive higher highs and higher lows

The start of an uptrend is signaled when price makes a higher low (trough), followed by

a rally above the previous high (peak):

Start = higher Low + break above previous High.

The end is signaled by a lower high (peak), followed by a decline below the previous low

(trough):

End = lower High + break below previous Low.

Bear Trends: A bear trend starts at the end of a bull trend: when a rally ends with a

lower peak and then retreats below the previous low. The end of a bear trend is identical

to the start of a bull trend. Each successive rally fails to penetrate the high point of the

previous rally. Each decline terminates at a lower point than the preceding decline.

Successive lower highs and lower lows

Large Corrections: A large correction occurs when price falls below the previous low

(during a bull trend) or where price rises above the previous high (in a bear trend).

A bull trend 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).
HOW TECHNICAL ANALYSIS IS DONE

Technical analysis done by identifying the trend from past movements and then using it

as a tool to predict future price movements of the stock with the use of the tools of

technical analysis

ASSUMPTIONS OF TECHNICAL ANALYSIS

1. The Market Discounts Everything

A major criticism of technical analysis is that it only considers price movement, ignoring

the fundamental factors of the company. However, technical analysis assumes that, at

any given time, a stock's price reflects everything that has or could affect the company -

including fundamental factors. Technical analysts believe that the company's

fundamentals, along with broader economic factors and market psychology, are all

priced into the stock, removing the need to actually consider these factors separately.

This only leaves the analysis of price movement, which technical theory views as a

product of the supply and demand for a particular stock in the market.

2. Price Moves in Trends

In technical analysis, price movements are believed to follow trends. This means that

after a trend has been established, the future price movement is more likely to be in the

same direction as the trend than to be against it. Most technical trading strategies are

based on this assumption.

 3. History Tends To Repeat Itself

Another important idea in technical analysis is that history tends to repeat itself, mainly

in terms of price movement. The repetitive nature of price movements is attributed to

market psychology; in other words, market participants tend to provide aconsistent

reaction to similar market stimuli over time. Technical analysis uses chart patterns to

analyze market movements and understand trends. Although many of these charts have

been used for more than 100 years, they are still believed to be relevant because they

illustrate patterns in price movements that often repeat themselves

CHART PATTERN

1 Candlestick charting: Candlestick charts have been around for hundreds of years.

They are often referred to as Japanese candles because the Japanese would use them to

analyze the price of rice contracts.

Similar to a bar chart, candlestick charts also display the open, close, daily high and daily

low. The difference is the use of color to show if the stock went up or down over the

day.
The chart below is an example of a candlestick chart for AT&T (T). Green bars indicate

the stock price rose, red indicates a decline:

Figure: Candlestick charting

Investors seem to have a "love/hate" relationship with candlestick charts. People either

love them and use them frequently or they are completely turned off by them. There are

several patterns to look for with candlestick charts - here are a few of the popular ones

and what they mean.

. This is a bullish pattern - the stock opened at (or near) its low and closed near

its high

The opposite of the pattern above, this is a bearish pattern. It indicates that the

stock opened at (or near) its high and dropped substantially to close near its low.

Known as "the hammer", this is a bullish pattern only if it occurs after the stock

price has dropped for several days. A small body along with a large range identifies a

hammer. This pattern indicates that a reversal in the downtrend is in the works.
 Known as a "star. For the most part, stars typically indicate a reversal and or
indecision. There is a possibility that after seeing a star there will be a
reversal or change in the current trend.

2 Line Chart: The most basic of the four charts is the line chart because it represents

only the closing prices over a set period of time. The line is formed by connecting the

closing prices over the time frame. Line charts do not provide visual information of the

trading range for the individual points such as the high, low and opening prices.

However, the closing price is often considered to be the most important price in stock

data compared to the high and low for the day and this is why it is the only value used in

line charts.

Figure: Line Chart

3 Support and resistance: Support and resistance are price levels at which movement

should stop and reverse direction. Think of support/resistance (S/R) as levels that act as a

floor or a ceiling to future price movements.

Support - A price level below the current market price, at which buying interest should

be able to overcome selling pressure and thus keep the price from going any lower.

Resistance - A price level above the current market price, at which selling pressure

should be strong enough to overcome buying pressure and thus keep the price from
going any higher. One of two things can happen when a stock price approaches a

support/resistance level. On the one hand, it can act as a reversal point: in other words,

when a stock price drops to a support level, it will go back up. On the other hand, S/R

levels may reverse roles once they are penetrated.

For example - When the market price falls below a support level, that former support

level will then become a resistance level when the market later trades back up to that

level.

Figure:Support and resistance

This chart shows an excellent example of support and resistance levels for General

Electric (GE). Notice that once the stock price penetrated below the support level in

December, it became the resistance level. You also need to understand that S/R levels

vary in strength, leading to certain price levels being designated as major or minor S/R

levels. For example -- A five-year high on a bar chart would be a much more significant

and useful resistance level than a one-month resistance level.

4 Cup and Handle:This is a pattern on a bar chart that can be as short as seven weeks

and as long as 65 weeks. The cup is in the shape of a "U". The handle has a slight

downward drift. The right-hand side of the pattern has low trading volume. As the stock

comes up to test the old highs, the stock will incur selling pressure by the people who

bought at or near the old high. This selling pressure will make the stock price trade

sideways with a tendency towards a downtrend for anywhere from four days to four

weeks, then it will take off.

This pattern looks like a pot with a handle. It is one of the easier patterns to detect; and

investors have made a lot of money using it.

Figure: Cup and Handle

5 Head and Shoulders:This is a chart formation resembling an "M" in which a stock's

price:

o Rises to a peak and then declines, then

o Rises above the former peak and again declines, and then

o Rises again but not to the second peak and again declines.

The first and third peaks are shoulders, and the second peak forms the head. This

pattern is considered a very bearish indicator.

Figure:Head and Shoulders

6 Double Bottom: This pattern resembles a "W" and occurs when a stock price drops to

a similar price level twice within a few weeks or months. You should buy when the price

passes the highest point in the handle. In a perfect double bottom, the second decline

should normally go slightly lower than the first decline to create a shakeout of jittery

investors. The middle point of the "W" should not go into new high ground. This is a

very bullish indicator.

Figure: Double Bottoms

The belief is that, after two drops in the stock price, the jittery investors will be out and

the long-term investors will still be holding on.

7 Double Tops: Double tops point out a weakness of the uptrend and warn for a change

of trend generally a selling crazy starts when this formation is indicates.

Figure:Double Tops

8 Falling wedges: Falling wedges are opposite of the rising wedges and pull back

reactions during the up trends. Sellers continue to believe the securities in their hand do

not want to sell so, volume decreases significantly. When the upper line is broken,

generally a rally starts. So this formation is a chance to buy security available prices in

an uptrend.

Figure: Falling wedges

9 Symmetrical Triangles: All triangles formations are consolidation formations. In

symmetrical triangle direction of the trend is not known. It is only can be identified after

one of the line broken. Prices go up if upper line broken. And go down if lower line

broken. Volume is very important for triangle formations. Volume should decrease

during the formations.

Figure:Symmetrical Triangles

10 Descending triangles: It is a signal for down trend. Price target can be found

approximately by drawing a parallel line to descending line.

Figure: Descending triangles

11 Ascending Triangles: It is a signal for uptrend. By drawing a parallel line to

descending line, price target can be calculated approximately.

Figure:Ascending triangle

INDICATORS OF THE STUDY

Exponential Moving Average (EMA)

Are calculated by applying a percentage of todays closing price to yesterdays moving

average value. Use an exponential moving average to place more weight on recent

prices.

This moving average calculation uses a smoothing factor to place a higher weight on

recent data points and is regarded as much more efficient than the linear weighted

average. Having an understanding of the calculation is not generally required for most

traders because most charting packages do the calculation for you.

The most important thing to remember about the exponential moving average is that it is

more responsive to new information relative to the simple moving average.

This responsiveness is one of the key factors of why this is the moving average of choice

among many technical traders. As you can see in Figure 2, a 15-period EMA raises and

falls faster than a 15-period SMA. This slight difference doesnt seem like much, but it is

an important factor to be aware of since it can affect returns.

Figure: Exponential Moving Averages (EMA)

Moving Average Convergence Divergence (MACD)

Common, the MACD is a trend following, momentum indicator that shows the

relationship between two moving averages of prices. To Calculate the MACD subtract

the 26-day EMA from a 12-day EMA. A 9-day dotted EMA of the MACD called the

signal line is then plotted on top of the MACD. There are 3 common methods to

interpret the MACD:

Crossover When the MACD falls below the signal line it is a signal to sell. Vice versa

when the MACD rises above the signal line.

Divergence When the security diverges from the MACD it signals the end of the

current trend.

Overbought/Oversold When the MACD rises dramatically (shorter moving average

pulling away from longer term moving average) it is a signal the security is overbought

and will soon return to normal levels.

Other less common moving averages include triangular, variable, and weighted moving

average. All of them being slight deviations from the++ ones above and are used to

detect different characteristics such as volatility, and weighting different time spans.
One of the easiest indicators to understand, the moving average, shows the average value

of a securitys price over a period of time. To find the 50-day moving average, you

would add up the closing prices (but not always explain later) from the past 50 days

and divide them by 50. Because prices are constantly changing, the moving average will

move as well. It should also be noted that moving averages are most as well. It should

also be noted that moving averages are most often used then compared or used in

conjunction with other indicators such as moving average convergence divergence

(MACD) and exponential moving (E M A).

The most commonly used moving averages are 20, 30, 50,100 and 200 days. Each

moving average provides a different interpretation on what the stock will do-there is not

one right time frame. The longer the time spans, the less sensitive the moving average

will be to daily price changes. Moving averages are used to emphasize the direction of a

trend and smooth out price and volume fluctuations that can confuse interpretation.

Here is a visual example using stock price

Figure: Moving Average Convergence Divergences (MACD)

Notice that back, in September the stock price dropped well below its 50-day average

(the green line) there has been a steady downward trend since then and no really strong

divergence until the end of December when it rose above its 50-days average and

continued to rise for several weeks.

Typically, when a stock price moves below its moving average it is a bad sign because

the stock is moving on a negative trend. The opposite is true for stock that exceed their

moving average-in this case, hold on for the ride.

BOLLINGER BANDS WIDTH

Developed by John Bollinger, Bollinger Bands are an indicator that allows users to

compare volatility and relative price levels over a period time. The indicator consists of

three bands designed to encompass the majority of a security's price action. The purpose

of Bollinger Bands is to provide a relative definition of high and low. By definition

prices are high at the upper band and low at the lower band. This definition can aid in

rigorous pattern recognition and is useful in comparing price action to the action of

indicators to arrive at systematic trading decisions.

Bollinger Bands consist of a set of three curves drawn in relation to securities prices. The

middle band is a measure of the intermediate-term trend, usually a simple moving

average that serves as the base for the upper and lower bands. The interval between the

upper and lower bands and the middle band is determined by volatility, typically the

standard deviation of the same data that were used for the average. The default

parameters, 20 periods and two standard deviations, may be adjusted to suit your

purposes:
Middle Bollinger Band = 20-period simple moving average

Upper Bollinger Band = Middle Bollinger Band + 2 * 20-period standard deviation

Lower Bollinger Band = Middle Bollinger Band - 2 * 20-period standard deviation

Standard deviation is a statistical unit of measure that provides a good assessment of a

price plot's volatility. Using the standard deviation ensures that the bands will react

quickly to price movements and reflect periods of high and low volatility. Sharp price

increases (or decreases), and hence volatility, will lead to a widening of the bands.

Figure: Bollinger Bands Width

The center band is the 20-day simple moving average. The upper band is the 20-day

simple moving average plus 2 standard deviations. The lower band is the 20-day simple

moving average less 2 standard deviations.

On-Balance Volume

The on-balance volume (OBV) indicator is well-known technical indicators that reflect

movements in volume. It is also one of the simplest volume indicators to compute and

understand. Joe Granville introduced the On Balance Volume (OBV) indicator in his

1963 book, Granville's New Key to Stock Market Profits. This was one of the first and

most popular indicators to measure positive and negative volume flow. The concept
behind the indicator: volume precedes price. OBV is a simple indicator that adds a

period's volume when the close is up and subtracts the period's volume when the close is

down. A cumulative total of the volume additions and subtractions form the OBV line.

This line can then be compared with the price chart of the underlying security to look for

divergences or confirmation.

Calculation

As stated above, OBV is calculated by adding the day's volume to a running cumulative

total when the security's price closes up, and subtracts the volume when it closes down.

For example, if today the closing price is greater than yesterday's closing price, then the

new

OBV = Yesterday's OBV + Today's Volume

If today the closing price is less than yesterday's closing price, then the new

OBV = Yesterday's OBV - Today's Volume

If today the closing price is equal to yesterday's closing price, then the new

OBV = Yesterday's OBV

Use

The idea behind the OBV indicator is that changes in the OBV will precede price

changes. A rising volume can indicate the presence of smart money flowing into a

security. Then once the public follows suit, the security's price will likewise rise.
Like other indicators, the OBV indicator will take a direction. A rising (bullish) OBV

line indicates that the volume is heavier on up days. If the price is likewise rising, then

the OBV can serve as a confirmation of the price uptrend. In such a case, the rising price

is the result of an increased demand for the security, which is a requirement of a healthy

uptrend.

However, if prices are moving higher while the volume line is dropping, a negative

divergence is present. This divergence suggests that the uptrend is not healthy and should

be taken as a warning signal that the trend will not persist.

The numerical value of OBV is not important, but rather the direction of the line. A user

should concentrate on the OBV trend and its relationship with the security's price.

Figure: On-Balance Volumes

This chart shows how the OBV line can be used as confirmation of a price trend. The

peak in September was followed by lower price movements that corresponded with

volume spikes, thus implying that the downtrend was going to continue.
Aroon Oscillators

The Aroon indicator is a relatively new technical indicator that was created in 1995. The

Aroon is a trending indicator used to measure whether a security is in an uptrend or

downtrend and the magnitude of that trend. The indicator is also used to predict when a

new trend is beginning.

The indicator is comprised of two lines, an "Aroon up" line (blue line) and an "Aroon

down" line (red dotted line). The Aroon up line measures the amount of time it has been

since the highest price during the time period. The Aroon down line, on the other hand,

measures the amount of time since the lowest price during the time period. The number

of periods that are used in the calculation is dependent on the time frame that the user

wants to analyze.

Figure: Aroon Up And Down Oscillator

An expansion of the Aroon is the Aroon oscillator, which simply plots the difference

between the Aroon up and down lines by subtracting the two lines. This line is then

plotted between a range of -100 and 100. The centerline at zero in the oscillator is

considered to be a major signal line determining the trend. The higher the value of the

oscillator from the centerline point, the more upward strength there is in the security; the

lower the oscillator's value is from the centerline, the more downward pressure. A trend
reversal is signaled when the oscillator crosses through the centerline. For example,

when the oscillator goes from positive to negative, a downward trend is confirmed.

Divergence is also used in the oscillator to predict trend reversals. A reversal warning is

formed when the oscillator and the price trend are moving in an opposite direction.

The Aroon lines and Aroon oscillators are fairly simple concepts to understand but yield

powerful information about trends. This is another great indicator to add to any technical

trader's arsenal.

Money Flow Index

The Money Flow Index (MFI) is a momentum indicator that is similar to the Relative

Strength Index (RSI) in both interpretation and calculation. However, MFI is a more

rigid indicator in that it is volume-weighted, and is therefore a good measure of the

strength of money flowing in and out of a security. It compares "positive money flow" to

"negative money flow" to create an indicator that can be compared to price in order to

identify the strength or weakness of a trend. Like the RSI, the MFI is measured on a 0 -

100 scale and is often calculated using a 14 day period.

The "flow" of money is the product of price and volume and shows the demand for a

security and a certain price. The money flow is not the same as the Money Flow Index

but rather is a component of calculating it. So when calculating the money flow, we first

need to find the average price for a period. Since we are often looking at a 14-day period,

we will calculate the typical price for a day and use that to create a 14-day average.

Typical Price = (Day high + Day low + Day close) / 3

Money Flow = (Typical Price) X Volume

The MFI compares the ratio of "positive" money flow and "negative" money flow. If

typical price today is greater than yesterday, it is considered positive money. For a 14-

day average, the sum of all positive money for those 14 days is the positive money flow.

The MFI is based on the ratio of positive/negative money flow (Money Ratio).

Money Ratio = positive money flow / Negative money flow

Finally, the MFI can be calculated using this ratio:

Money Flow Index- 100-(100 / (1 + money ratio))

The fewer number of days used to calculate the MFI, the more volatile it will be.

The MFI can be interpreted much like the RSI in that it can signal divergences and

overbought/oversold conditions.

Positive and negative divergences between the stock and the MFI can be used as buy and

sell signals respectively, for they often indicate the imminent reversal of a trend. If the

stock price is falling, but positive money flow tends to be greater than negative money

flow, then there is more volume associated with daily price rises than with the price

drops. This suggests a weak downtrend that threatens to reverse as money flowing into

the security is "stronger" than money flowing out of it.

As with the RSI, the MFI can be used to determine if there is too much or too little

volume associated with a security. A stock is considered "overbought" if the MFI

indicator reaches 80 and above (a bearish reading). On the other end of the spectrum, a

bullish reading of 20 and below suggests a stock is "oversold".

Figure: Money Flow Index

Rate of change indicators (ROC)

It is a very popular oscillator which measures the rate of change of the current price as

compared to the price a certain number of days or weeks back. The ROC has to be used

along with price chart. The buying and selling signals indicated by the ROC should also

be confirmed by the price chart.

Figure: Rate of change

Relative strength index (RSI)

There are a few different tools that can be used to interpret the strength of a stock. One of

these is the Relative Strength Index (RSI), which is a comparison between the days that a

stock finishes up and the days it finishes down. This indicator is a big tool in momentum

trading.

The RSI is a reasonably simple model that anyone can use. It is calculated using the

following formula.

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

RS = (Avg. of n-day up closes)/(Avg. of n-day down closes)

n = days (most analysts use 9 - 15 day RSI)

The RSI ranges from 0 to 100. At around the 70 levels, a stock is considered overbought

and you should consider selling. In a bull market some believe that 80 is a better level to

indicate an overbought stock since stocks often trade at higher valuations during bull

markets. Likewise, if the RSI approaches 30, a stock is considered oversold and you

should consider buying. Again, make the adjustment to 20 in a bear market.

The smaller the number of days used, the more volatile the RSI is and the more often it

will hit extremes. A longer term RSI is more rolling, fluctuating a lot less. Different

sectors and industries have varying threshold levels when it comes to the RSI. Stocks in

some industries will go as high as 75-80 before dropping back, while others have a tough

time breaking past 70. A good rule is to watch the RSI over the long term (one year or

more) to determine at what level the historical RSI has traded and how the stock reacted

when it reached those levels.

The RSI is a great indicator that can help you make some serious money. Be aware that

big surges and drops in stocks will dramatically affect the RSI, resulting in false buy or

sell signals. Most investors agree that the RSI is most effective in "backing up" or

increasing confidence before making an investment decision - don't invest simply based

on the RSI numbers.

Figure: Relative Strength Index (RSI)

Above, we have an RSI chart for AT&T. The RSI is the green line, and its scale is the

numbers on the right hand side that go from 0 to 100. Notice the RSI was approaching

the 60-70 level in December and January, and then the stock (blue line) sold off. Also,

notice that when the RSI dropped to 25 around October the stock climbed up nearly 30%

in just a couple of weeks.

Using the moving averages, trend lines divergence, support and resistance lines along

with the RSI chart can be very useful. Rising bottoms on the RSI chart can produce the

same positive trend results as they would on the stock chart. Should the general trend of

the stock price tangent from the RSI, it might spark a warning that the stock is either

over- or under bought.

Momentum

The momentum is certainly the easiest one to compute. The momentum is the difference

between today's price and the one of n days before.

With: Pt today's price. Pt-n the price at the date t-n

The momentum is: MOt= Pt - Pt-n

TRIX (Triple exponential)

"Trix (or TRIX) is a technical analysis oscillator developed in the 1980s by Jack

Huston, editor of Technical Analysis of Stocks and Commodities magazine. It shows the

slope (i.e. derivative) of a triple-smoothed exponential moving average. The name Trix is

from "triple exponential

Trix is calculated with a given N-day period as follows:

o Smooth prices (often closing prices) using an N-day exponential moving average

o Smooth a third time, using a further N-day EMA

o Calculate the percentage difference between today's and yesterday's value in that

final smoothed series

Like any moving average, the triple EMA is just a smoothing of price data and therefore

is trend-following. A rising or falling line is an uptrend or downtrend and Trix shows the

slope of that line, so it's positive for a steady uptrend, negative for a downtrend, and a

crossing through zero is a trend-change, i.e. a peak or trough in the underlying average.

The triple-smoothed EMA is very different from a plain EMA. In a plain EMA the latest

few days dominate and the EMA follows recent prices quite closely; however, applying

it three times results in weightings spread much more broadly, and the weights for the
latest few days are in fact smaller than those of days further past. The following graph

shows the weightings for an N=10 triple EMA (most recent days at the left).

Graph shows the weightings for an N=10 triple EMA (most recent days at the left).

Figure: TRIX (Triple exponential)

Triple exponential moving average weightings, N=10 (percentage versus days ago)

Note that the distribution's mode will lie with pN-2's weight, i.e. in the graph above p8

carries the highest weighting. An N of 1 is invalid.

The easiest way to calculate the triple EMA based on successive values is just to apply

the EMA three times, creating single-, then double-, then triple-smoothed series. The

triple EMA can also be expressed directly in terms of the prices as below, with p0 today's

close, p1 yesterday's, etc, and with (as for a plain EMA).

The coefficients are the triangle numbers, n (n+1)/2. In theory, the sum is infinite, using

all past data, but as f is less than 1 the powers fn become smaller as the series progresses,

and they decrease faster than the coefficients increase, so beyond a certain point the

terms are negligible.

Williams %R

Developed by Larry Williams, Williams % R is a momentum indicator that works much

like the Stochastic Oscillator. It is especially popular for measuring overbought and

oversold levels. The scale ranges from 0 to -100 with readings from 0 to -20 considered

overbought, and readings from -80 to -100 considered oversold.

William %R, sometimes referred to as %R, shows the relationship of the close relative to

the high-low range over a set period of time. The nearer the close is to the top of the

range, the nearer to zero (higher) the indicator will be. The nearer the close is to the

bottom of the range, the nearer to -100 (lower) the indicator will be. If the close equals

the high of the high-low range, then the indicator will show 0 (the highest reading). If the

close equals the low of the high-low range, then the result will be -100 (the lowest

reading).

Calculation

%R = [(highest high over? periods - close) / (highest high over? periods - lowest low

over? periods)] * -100

Typically, Williams % R is calculated using 14 periods and can be used on intraday,

daily, weekly or monthly data. The time frame and number of periods will likely vary

according to desired sensitivity and the characteristics of the individual security.

Use
It is important to remember that overbought does not necessarily imply time to sell and

oversold does not necessarily imply time to buy. A security can be in a downtrend,

become oversold and remain oversold as the price continues to trend lower. Once a

security becomes overbought or oversold, traders should wait for a signal that a price

reversal has occurred. One method might be to wait for Williams %R to cross above or

below -50 for confirmation.

Price reversal confirmation can also be accomplished by using other indicators or aspects

of technical analysis in conjunction with Williams %R.

One method of using Williams %R might be to identify the underlying trend and then

look for trading opportunities in the direction of the trend. In an uptrend, traders may

look to oversold readings to establish long positions. In a downtrend, traders may look to

overbought readings to establish short positions.

Figure:Williams % R
The chart of Weyerhaeuser with a 14-day and 28-day Williams % R illustrates some key

points:

o 14-day %R appears quite choppy and prone to false signals.

o 28-day %R smoothed the data series and the signals became less frequent and

more reliable.

o When the 28-day %R moved to overbought or oversold levels, it typically

remained there for an extended period and the stock continued its trend.

o Some good entry signals were given with the 28-day %R by waiting for a move

above or below -50 for confirmation.

EVALUATION OF TECHNICAL ANALYSIS:

Technical analysis appears to be a highly controversial approach to security analysis. It

has its ardent votaries: it has its severe critics. The advocates of technical analysis offer

the following interrelated arguments in support of their position:

Under the influence of crowed psychology, trend persists for quite some time.

Tools of technical analysis that help in identifying these trends early are helpful

aids in investment decision making.

Shift in demand and supply are gradual rather than instantaneous. Technical

analysis helps in detecting these shifts rather early and hence provides clues to

future price movement.

Fundamental information about a company is absorbed and assimilated by the

market over a period. Hence, the price movement tends to continue in more or

less the same direction until the information is assimilated in the stock price.
 Charts provide what has happened in the past and hence give a sense of volatility

that can be expected from the stock. Future, the information on trading volume

which is ordinarily provide at the bottom of a bar chart gives a fair idea of the

extent of the public interest in the stock

The detractors of technical analysis believe that the technical analysis is a useless

exercise. Their arguments run as follows:

Most technical analyst are not able to offer convincing explanation for the tools

employed by them

Empirical evidence in support of the random-walk hypothesis casts its shadow

over the usefulness of technical analysis.

By the time an uptrend or down may have been signaled by technical analysis, it

already have taken place.

Ultimately, technical analysis must be a self-defeating proposition as more and

more people employ the value of such analysis tends to decline.

 DATA ANALYSIS AND INTERPRETATION

1. Infosys

Infosys (formerly Infosys Technologies) is an Indian multinational corporation that

provides business consulting, information technology, software engineering and

outsourcing services. It is headquartered in Bengaluru, Karnataka.Infosys is the third-

largest India-based IT services company by 2014 revenues, and the fifth largest employer

of H-1B visa professionals in the United States in FY 2013.[5] On 31 March 2014, its

market capitalization was INR 188,510 crores ($31.11 billion), making it India's fifth

largest publicly traded company.

Products and Services

It provides software development, maintenance and independent validation services to

companies in banking, finance, insurance, manufacturing and other domains.One of its

known products is Finacle which is a universal banking solution with various modules

for retail and corporate banking.

Acquisitions

In December 2003, Infosys had acquired Australia-based IT service provider

Expert Information Services for $23 million.

In December 2009, Infosys BPO acquired Atlanta-based McCamish Systems for

about $38 million.

In January 2012, Infosys BPO acquired Australia-based Portland Group, provider

of strategic sourcing and category management services, for about AUD 37

million.
 In September 2012, Infosys acquired Switzerland-based Lodestone Management

Consultants for about $345 million.

Current shareholding

Shareholders (as on 31-Mar-2014) Shareholding

Promoters group 15.94%

Foreign Institutional Investors (FII) 16.10%

ADR

Individual shareholders 09.95%

Banks, Financial Institutions and Insurance Companies 09.08%

Mutual Funds 04.58%

Others 02.25%

Awards:

Infosys was ranked 15th largest IT services provider in the world by HfS

Research in its 2013 ranking.

Infosys was ranked #19 amongst the world's most innovative companies by

Forbes.

The company was ranked number one among the best managed companies in

Asia Pacific in the annual EuromoneyBestManaged Companies in Asia survey,

2013 and named a leader in The ForresterWave: Enterprise Mobility Services,

Q1 2013 report.

Infosys was identified as one of the top 25 performers in Caring for Climate

Initiative by UN Global Compact and UN Environment Program the only

global consulting and technology major in the list.

Line Chart:-

Analysis:

Buy analyzing the above price trend; we come to know that the support level held very

strong at the levels indicated as black stars and the resistance levels held good at the

indicated red stars.

Bollinger Bands:

Interpretation:

Bollinger Bands, a chart indicator developed by John Bollinger, is used to measure a

market's volatility. Basically, this little tool tells us whether the market is quiet or

whether the market is loud. When the market is quiet, the bands contract and when the

market is loud, the bands expand.

By analyzing the above BBand, we can infer that the Asian paint stock prices increased

while the bands expanded during time frames (10 Jan 2013 and 25 Feb 2013) and the

prices went down during the band contractions during (9 Nov 2012, 8 Feb 2013 and 2

Apr 2013) throughout the 6 months observation period for this analysis.
Simple Moving Average:

A crossover occurs when a faster Moving Average (i.e. a shorter period Moving

Average) crosses either above a slower Moving Average (i.e. a longer period Moving

Average) which is considered a bullish crossover or below which is considered a

bearish crossover.

For those traders that want more confirmation when they use Moving Average

crossovers, the 3 Simple Moving Average crossover techniques could be used.

The first crossover of the quickest SMA (in the example above, the 10-day SMA) across

the next quickest SMA (20-day SMA) acts as a warning that prices are reversing trend;

however, usually a buy or sell order is not placed yet.

The second crossover of the quickest SMA (10-day) and the slowest SMA (50-day)

finally triggers the buy or sell signal.

From the analysis, we can find out that:

SMA(10) crosses below SMA(50) on 18 Oct 2012 which is a sure selling and exit

point.

SMA(10) crosses above SMA(20) at 09 Nov 2012 which is a trend change signal.

SMA(10) crosses below SMA(20) at 20 Nov 2012 which is a trend change signal.

SMA(10) crosses above SMA(20) at 29 Nov 2012, a trend change signal.

SMA(10) crosses below SMA(20) on 13 DEC 2012, a trend change sign.

SMA(10) crosses above SMA(50) 11 Jan 2013, which is a sure buy sign, an entry

point.

SMA(10) crosses below SMA(20) on 07 Feb 2013, a trend change signal.

SMA(10) crosses above SMA(20) on 21 Feb 2013, a trend change sign.

Chaikin Money Flow:

Positive CMF would confirm an uptrend, but negative CMF would call into question the

strength behind an uptrend. The reverse holds true for downtrends

The highest value of CMF was +.39 during 15 Jan 2013.

The lowest CMF value was -.2 during 14 Dec 2012 till 18 Dec 2012.

The CMF values went below the Zero line 2 times and sustained for certain

periods during 06 Dec 2012 and 12 Feb2013.

Moving Average Convergence Divergence (MACD):

The MACD Line oscillates above and below the zero line, which is known as the

centerline.

Positive MACD indicates that the 12-day EMA is above the 26-day EMA. Positive

values increase as the shorter EMA diverges further from the longer EMA. This means

upside momentum is increasing.

Negative MACD values indicate that the 12-day EMA is below the 26-day EMA.

Negative values increase as the shorter EMA diverges further below the longer EMA.

This means downside momentum is increasing.

Highest MACD (12, 26) = 126.51 was recorded on 23 Jan 2013.

EMA (9) = 95.45 and Divergence = 31.06

Lowest MACD (12, 26) = -42.1 was recorded on 29 Oct 2012.

EMA (9) = -26.02 and Divergence = =-16.08

MACD line was negative in the observation periods from 15 Oct 2012 27 Nov

2012 and from 07 Dec 2012 10 Jan 2013.

Relative Strength Index:

RSI oscillates between zero and 100.RSI is considered overbought when above 70 and

oversold when below 30.

RSI (14) values were above 70 and were overbought on the following trade days:

1. 14 Jan 2013 (80.99) 2. 14 Jan 2013 (80.99)

3. 15 Jan 2013 (83.69) 4. 15 Jan 2013 (83.69)

5. 18 Jan 2013 (79.62) 6. 18 Jan 2013 (79.62)

7. 22 Jan 2013 (78.56) 8. 22 Jan 2013 (78.56)

9. 24 Jan 2013 (76.88) 10. 24 Jan 2013 (76.88)

11. 25 Jan 2013 (77.32)

No RSI value is below 30. This means that the Infosys stocks were not oversold.
Volume Indicator:

Volume precedes price. Typically, before a stock price moves, volume comes into play.

Changes in volume can be used intra-day to determine short-term price movement or

over several days to determine a stock's two to three day trend direction.

The basic theory is this: if price and volume are moving in the same direction, the trend

of the stock price will continue. If they are running counter to each other, the trend will

reverse.

Volume High of 11606571 units was recorded at 11 Jan 2013.

Volume Low of 70407 units was recorded at 13 Nov 2012.

 FINDINGS

The various technical tools used in this study are as follows,

Line Chart

Bollinger Bands

Simple Moving Average

Chaikin Money Flow

Moving Average Convergence Divergence (MACD)

Relative Strength Index (RSI)

Volume Indicator

SUGGESTIONS

Technical analysis will improve the investment decision.

Technical analysis is simple and more reliable then fundamental analysis because

the information required for technical analysis is free available as compared to

fundamental analysis

Investor should have knowledge regarding the market terms so that they can take

maximum return from maximum investment

 In case a trader entering in a new industries first he has to select stock to buy in

new industries after making careful study prospects and charts of the stock

Even though technical analysis is enough for making decision In stock market,

simultaneous usage of both fundamental and technical analysis will reduce errors

in forecasting future prices

 CONCLUSION

Technical analysis is a particular approach to investing that will appeal to some

investors and not to others.

Whereas most investors concentrate on the fundamentals of a company (turnover,

profits, growth etc), technical analysts are concerned with the share price itself.

They believe that prices are driven by the psychology of investors rather than

fundamentals. By understanding investor psychology, they can predict which way

prices will move.

The tool they use for making predictions is the chart. They plot price and volume

data on a chart, and look for patterns and trends.

There are numerous theories within technical analysis. They all depend on market

psychology being predictable, and on chart patterns repeating themselves.

By its nature, technical analysis tends to be useful for short-term trading rather than

long-term investing.

Technical analysis and fundamental analysis are two very different approaches, but

one does not completely exclude the other. If you focus on fundamentals, it is still

worth checking out the chart of a company you are about to buy or sell. Similarly, if

you focus on technical signals, it is worth checking the fundamentals of companies.

BIBLIOGRAPHY

BOOKS:

Prassanachandran, Investment analysis and Portfolio management, New Delhi:

Tata Mc Graw- Hill Publishing Company Limited 2002.

Avadhani V A, Investment management, Mumbai : Himalaya Publishing House,

1998

Donald E. Fischer and Ronald. J. Jordan, Security Analysis and Portfolio

Management New Delhi: Prentice-Hall of India Private Limited.1998.

S. Kevinn, Portfolio Management, New Delhi: Prentice Hall of India Private

Ltd.1998.

JOURNALS, MAGAZINES AND NEWSPAPERS:

A. Economics Times

B. Business line

WEBSITES

www.nseindia.com

www.in.yahoo.finance.com

www.bseindia.com

www.icharts.com

www.stockcharts.com

www.moneycontrol.com