A Study on

Technical analysis of selected scrips in BSE

With reference to

AASMAA SECURITIES (INDIA) PVT LTD VISHAKAPATNAM

A project report submitted in partial fulfilment of the Requirements for the award of the Degree
of

MASTER OF BUSINESS ADMINISTRATION

By
DEVARASETTI NAVEEN
(Regd.no: 18331E0028)
Under the guidance of
Dr. EVPAS PALLAVI
MBA, PH.D.
SR. Assistant professor

DEPARTMENT OF MANAGEMENT STUDIES

MVGR COLLEGE OF ENGINEERING (AUTONOMOUS)
Approved by AICTE and permanently affiliated to JNTU-Kakinada
Accredited by NBA of AICTE and NAAC-A of U.G.C
Chintalavalasa, Vizianagaram — 535005
2018-2020

1
 DECLARATION

I, DEVARASETTI NAVEEN do hereby declare that this project report Entitled A Study on

“TECHNICAL ANALYSIS OF SELECTED SCRIPS” with reference to AASMAA

SECURITIES PVT.LTD, Visakhapatnam submitted by me one and is not submitted to any other

university any time before.

This project work is in partial fulfillment of the requirement for the award of Degree of

MASTERS OF BUSINESS ADMINISTRATION.

PLACE: (DEVARASETTI NAVEEN)

DATE:

2
 ACKNOWLEDGEMENT

I wish to express my heartful thanks to Mr. P.KRISHNA KUMAR, Assistant Vice-

president, AASMAA SECURITIES PVT.LTD, Visakhapatnam for giving me the opportunity

to under the project work

I would like to extend my sincere thanks to my guide Dr. EVPAS PALLAVI,

Sr.Assistant Professor, School of Management Studies, MVGR college of Engineering (A) for

her timely advice and guidance through the project.

I am indeed very grateful to Dr. GVSSN SANYASI RAJU, Professor and Head of the

Department, School of Management Studies, MVGR college of Engineering (A) for his valuable

knowledge and constantly inspiring us through suggestions.

I would like to extend my sincere thanks to Dr. K.V.L RAJU, Principal of MVGR

college of Engineering (A) for his support in the successful in completion of the project.

I am extremely grateful to my parents, faculty and friends for their full cooperation and

valuable support to complete this work. I thank everyone who has helped me directly and

indirectly in completion of this project work.

(DEVARASETTI NAVEEN)

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4
 LIST OF TABLES

S.No. Table No. Title of the Table Page no.

1 4.1 Total assessment of NTPC Ltd. For the year 2019 73

2 4.2 Moving averages calculations of NTPC ltd. 73

3 4.3 RSI calculations of NTPC ltd. 74
4 4.4 Total assessment of TATA power ltd. For the year 77

2019
5 4.5 Moving averages calculations of TATA power ltd. 77
6 4.6 RSI calculations of TATA Power ltd. 79
7 4.7 Total assessment of SJVN ltd. For the year 2019 81
8 4.8 Moving averages calculations of SJVN ltd. 81
9 4.9 RSI Calculations of SJVN ltd. 82
10 4.10 Total assessment of JSW energy ltd. For the year 84

2019
11 4.11 Moving average calculations of JSW energy ltd. 85
12 4.12 RSI calculations of JSW energy ltd. 86
13 4.14 Total assessment of NLC India ltd. For the year 88

2019
14 4.14 Moving average calculations of NLC India ltd. 89
15 4.15 RSI calculations of NLC India ltd. 90

LIST OF CHARTS

S.NO. Chart No. Title of the Chart Page No.

1 3.1 LINE Chart 42
2 3.2 BAR Chart 44
3 3.3 Candle stick chart 45
4 3.4 Uptrend line 47
5 3.5 Downtrend line 48
6 3.6 Pennant Chart pattern 50
7 3.7 Cup & Handle 51
8 3.8 Ascending triangle 52
9 3.9 Descending triangle 53
10 3.10 Flag chart pattern 56

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11 3.11 Double top chart 57
12 3.12 Simple moving average chart 60
13 3.13 Exponential moving average chart 61
14 3.14 MACD(2LINES) 62
15 3.15 Relative strength index 64
16 3.16 Rate of change index 65
17 4.1 Moving averages chart of NTPC ltd. 74
18 4.2 Moving averages chart of TATA 78

power ltd
19 4.3 Moving averages chart of SJVN LTD. 82
20 4.4 Moving averages chart of JSW energy 86

ltd.
21 4.5 Moving averages chart of NLC India 90

ltd.

6
 PREFACE

Market analysis is broadly categorized into two main methods, the first one is fundamental

analysis and the second one is technical analysis. In fundamental analysis an analyst needs to

look at the financial statements of a company, its business model, overall macroeconomic

scenarios, management capabilities and many more things for coming to a specific fair value of a

company. On the contrary the discipline of technical analysis is not at all concerned with this

detailed study of fundamental factors. On the contrary, a technical analyst only looks at price of a

stock derived as a result of supply-demand interaction. Technical Analysis is based on

presumption that history repeats itself. With conditions and factors similar to the past, market

participants will react in a similar way as previously. The activities of various market

participants are displayed on charts which transforms into patterns that repeat over time.

Identifying those trends and patterns at a relatively early stage is an art and for a trader or

investor who identifies them and act accordingly, the rewards can be enormous.

The entire discipline of technical analysis is based on these two data points, price

over time and volume. All patterns, indicators, concepts are derived from these two basic data

points. Technical analysis is a very interesting subject. This is not a definitive science, rather a

probabilistic discipline. In simple terms, it is more of an art than science. There are well known

chart patterns or indicators in the market. But nothing works 100% of time. We still follow them

7
because they work more number of times than they fail. Hence emerged the concept of

probability, the number of times anything works among the number of times that occur. This

ratio is different in different stocks in different phases. That is why it is called an art.

CONTENTS

PAGE NO.

CHAPER I INTRODUCTION TO TECHNICAL ANALYSIS (1-8)

INTRODUCTION 1
NEED AND SIGNIFICANCE OF THE STUDY 4
OBJECTIVES OF THE STUDY 5
METHODOLOGY OF THE STUDY 6
LIMITATIONS OF THE STUDY 7
FRAME WORK OF THE STUDY 8
CHAPTER II INDUSTRY AND COMPANY PROFILE (9-35)
INDUSTRY PROFILE 9
COMPANY PROFILE 25
CHAPTER III CONCEPTUAL APPROACH OF TECHNICAL ANALYSIS (36-71)

PART-A CONCEPTUAL REVIEW 36

PART-B LITERATURE REVIEW 67
CHAPTER IV DATA ANALYSIS AND INTEPRETATION (72-91)

TABULATION OF DATA AND ANALYSIS 72

CHAPTER V SUMMARY, FINDINGS & SUGGESTIONS (92-99)

8
 SUMMARY 92
FINDINGS 96
SUGGESTIONS 98
BIBLIOGRAPHY

BIBLIOGRAPHY
BOOKS:

 S. Kevin (2006), Security Analysis and Portfolio Management, Excel Publications.

 Punithavathy Pandian, Security Analysis and Portfolio Management, Vikas Publications.

 Technical Analysis from A-Z by Steven B.Achelis.

NEWS PAPERS:

 THE HINDU

 THE BUSINESS LINE

WEBSITES:

https://www.bseindia.com/

https://www.aasmaasecurities.com/

https://in.investing.com/

https://www.investopedia.com/articles/stocks/09/indian-stock-market.asp

JOURNAL ARTICLES:

9
 Swapnil H. Ukey, Dr. Priti Rai, Issue 08, (2019), International Journal for scientific

research and development.

 R. Chitra, March 2011, International Journal of Management & Business Studies.

 Dr. Pravin Choudhary, Prof. Apoorva Bhatnagar, Volume 9 Issue 2 (2018), ELK

ASIA PACIFIC JOURNAL OF FINANCE AND RISK MANAGEMENT.

 SHAILAJA.M.L, DHARSHITHA.M, Vol: I. Issue IV, August 2017, Asia pacific

journal of research.

 Ms. K. Hemalatha, Volume : 2 | Issue : 4 | April 2013, PARIPEX – INDIAN

JOURNAL OF RESEARCH.

10
CHAPTER-I
INTRODUCTION

11
 INTRODUCTION

TECHNICAL ANALYSIS OF SELECTED SCRIPS IN POWER SECTOR

SECURITY ANALYSIS

Security analysis refers to the fundamental, technical or quantitative techniques applied on

various tradable financial instruments in order to determine the fair value of assets and help

investors make better investment decisions. Security analysis helps a financial expert or security

analyst to determine the value of assets in portfolio.

The main objective of Security analysis is to appraise the intrinsic value of security. The

securities can broadly be classified into equity instruments (stocks), debt instruments

(bonds), derivatives (options) or some hybrid (convertible bonds). Considering the nature of

securities, security analysis can broadly be performed using the following two approaches:-

 Fundamental Analysis, and

 Technical Analysis.

FUNDAMENTAL ANALYSIS

This type of security analysis is an evaluation procedure of securities where the major goal is to

calculate the intrinsic value of shares. It studies the fundamental factors that effects stock’s

1
intrinsic value like profitability statement & position statements of a company, managerial

performance and future outlook, present industrial conditions and the overall economy.

The Fundamental analysis suggests that every Stock has an intrinsic value which should be equal

to the present value of the future Stream of income from that stock discounted at an appropriate

risk related rate of Interest. Estimate of real worth of a stock is made by considering the earnings

potential of firm which depends upon investment environment and factors relating to specific

industry, competitiveness, quality of management. Operational efficiency, profitability, capital

structure and dividend policy.

Thus, security analysis is done to evaluate the current market value of particular security with the

intrinsic or theoretical value. Decisions about buying and selling an individual security depend

upon the conferred relative value. Since this approach is based on relevant facts, it gives true

estimate of the value of a security and it is widely use in estimation of security prices.

There are various tools and techniques that can be used for fundamental analysis, but they have

been categorised into two types of fundamental analysis: top-down analysis and bottom-up

analysis. Top-down analysis takes a broader view of the economy, starting with the entire market

before narrowing down into a sector, industry and finally a specific company. Conversely,

bottom-up analysis starts with a specific stock and widens out to consider all the factors that

impact its price.

The tools that traders might choose for their fundamental analysis vary depending on which asset

is being traded. For example, share traders might choose to look at the figures in a company’s

2
earnings report: revenue, earning per share (EPS), projected growth or profit margins. While

forex traders may choose to assess the figures released by central banks that allow insight into

the state of a country’s economy.

TECHNICAL ANALYSIS

Technical analysis is a tool to study and forecast the stock market movements. It is a method of

measuring and evaluating the stocks by observing and analyzing the data or statistics provided

by market activity Such as past prices and volume etc,. Though it does not measure the

securities intrinsic value, but help to understand the signals through charts and other tools. In fact

decision made on the basis of technical analysis is done only after inferring a trend and judging

the future movement of the stock on the basis of the trend. The study on technical analysis of

selected scrips based is significant as it helps in understanding the intrinsic value of shares and

to know whether the shares are under priced orover priced or correctly price.

Technical analysis is based on analyzing current demand-supply of commodities, stocks, indices,

futures or any tradable instrument. Technical analysis involve putting stock information like

prices, volumes and open interest on a chart and applying various patterns and indicators to it in

order to assess the future price movements.

Technical analysis is based on three assumptions .

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  The market discounts everything

 Price moves in trends

 History tends to repeat itself

NEED AND SIGNIFICANCE OF THE STUDY

When it comes to investing in stocks, it is important that the investor is capable of conducting a

thorough technical analysis of stock charts. The Importance of Technical analysis is forecasting

future price movements based on the past price movements.With the help of technical analysis

that investors are able to make financial decisions of buying, holding, or selling stocks.

The purpose of technical analysis is to help the investor make a more financially sound

investment decision. The price is the key to success in stock market investment. The supply and

demand of stocks all depend upon technical analysis. By evaluating the history of stock prices,

you get a future reading of what a particular stock would be priced at.

With the help of technical analysis, you know exactly when to time your action. You are also

able to understand demand and supply levels, and breakouts to make better decisions. Buying

close to support levels or a breakout above resistance helps you earn greater returns on your

investment.

If you want to invest in stocks, you must be well aware of the current market trends. By

conducting technical analysis of stock charts, you will be able to learn about short term and long

term trends which will help you take informed investment decisions. In order to invest in stocks,

4
you must be aware of the historical and current stock trends and price fluctuations. And with the

help of technical analysis, you get all the information you need to make a sound decision that

doesn’t make you lose money.

OBJECTIVES OF THE STUDY

The project work is undertaken to develop knowledge on technical analysis of security prices

the following specific objectives

 To study and understand technical analysis and its elements

 To measure and evaluate performance of selected scrips and underlying technical factors

 To compare the performance of selected scrips through various technical factors.

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METHODOLOGY OF THE STUDY

The data collection methods are two types. They are

 Primary data

 Secondary data

Primary data:

The data that are collected first hand and have not had any previous meaningful interpretation.

The data obtained from news regarding capital markets, and data through watching online

trading market.

Secondary data:

Secondary data are already published data collected for some purposes other than the one

confronting the researcher at a given point of time. The secondary data can be gathered from

various sources like books, articles, research agencies etc.

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For this study data collected from various sources like referring online journals, referring text

book related to technical analysis, referring newspapers like business line, the Hindu. And also

search in SEBI, BSE, company websites and trading reports.

LIMITATIONS OF THE STUDY

 It is a probabilistic study and not deterministic study.

 Chart patterns are very subjective in nature.

 Does not works accurately for illiquid markets and underlying assets with controlled

regime.

 Past may not be the indicator of future.

 Contradicting views by different indicators.

 The forecasting accuracy isn’t 100%.

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FRAMEWORK OF THE STUDY

Chapter 1

 The first chapter deals with the introduction to the study technical analysis in capital

market (BSE), need and significance of the study, objectives, methodology, limitations

and framework of the study.

Chapter 2

 The second chapter portrays the industry profile and company profile of aasmaa

securities pvt.ltd

Chapter 3

The third chapter deals with two sections

 Section A: conceptual review on technical analysis in capital market.

 Section B: journals, articles on technical analysis in capital market

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Chapter 4

 The fourth chapter deals with data analysis and interpretation.

Chapter 5

 The fifth chapter evaluates the whole report in summary, findings suggestions and

conclusion.

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 CHAPTER-II

INDUSTRY PROFILE & COMPANY PROFILE

1
 INDUSTRY PROFILE

SECURITIES MARKET IN INDIA 

Securities market is a component of the wider financial market where securities can be bought

and sold between subjects of the economy, on the basis of demand and supply. Securities

markets encompasses stock markets, bond markets and derivatives markets where prices can be

determined and participants both professional and non-professionals can meet.

There are a number of professional participants of a securities market and these

include; brokerages, broker-dealers, marketmakers, investmentmanagers, speculators as well as

those providing the infrastructure, such as clearinghouses and securities depositories.

A securities market is used in an economy to attract new capital, transfer real assets in financial

assets, determine price which will balance demand and supply and provide a means to invest

money both short and long term.

Securities markets can be split into below two levels.

PRIMARY MARKET: Primary market is deals with the issue of new securities. Companies,

governments or public sector institutions can obtain funding through the sale of a new stock or

bond issue. This is typically done through a syndicate of securities dealers. The process of selling

new issues to investors is called underwriting.If the company is selling shares for the first time, it

is called INITIAL PUBLIC OFFERING. The company thus becomes public.

Features of primary markets are:

 In a primary issue, the securities are issued by the company directly to investors.

9
 The company receives the money and issues new security certificates to the investors.

 Primary issues are used by companies for the purpose of setting up new business or for

expanding or modernizing the existing business.

 The primary market performs the crucial function of facilitating capital formation in the

economy.

KEY PLAYERS IN PRIMARY MARKET

There are four players in primary market, they are

CORPORATIONS

A corporation is a legal entity that is separate and distinct from its owners. Corporations enjoy

most of rights and responsibilities that individual possess: enter into contracts, offer loan and

borrow money, hire employees, own assets and pay taxes. In the capital markets, corporations

behave as operating businesses that require capital to grow and run their operations. These

corporations can vary in industry, size, and geographical location.  Careers at corporations that

relate to the markets include corporate development, investor relations, and financial planning

and analysis. Examples of publically traded corporations include: alphabet, Amazon, apple, and

Toyota

INSTITUTIONS

Institutions consist of fund managers, institutional investors, and retail investors. These

investment managers provide capital to corporations that need the money to grow and operate

their businesses. In return for their capital, corporations issue debt or equity to the institutions in

the forms of bond and shares, respectively. The exchange of capital and debt or equity completes

10
the cycle of the two key players in the capital markets. Examples of top firms are: Blackstone,

the Carlyle group and Apollo global management.

INVESTMENT BANKS

The role of investment banks is to guide their clients in making right decisions and finalising

deals so that they face minimum loss. Investment banks also advise their clients to buy back their

shares from market at the right time and offer advisory services to big companies and corporate

bodies. Acting as an intermediary, investment banks are hired to facilitate deals between

corporations and institutions. The job of investment banks is to connect institutional investors

with corporionss, based on risk and return expectations, and investment styles. Careers in

investment banking involve extensive financial modeling and valuation analysis. Examples of

top banks are HSBC, Morgan Stanley, Goldman Sachs

PUBLIC ACCOUNTING FIRMS

Public accounting is a business that provides accounting services to other firms. Public

accountants provide accounting expertise, audit and tax services to their clients. Depending on

their divisions, public accounting firms can engage in multiple roles in the primary market.

These roles include financial reporting, auditing financial statements, taxes, consulting on

accounting systems, M&A advisory, and capital raising. Therefore, public accounting firms are

usually hired by corporations for their accounting and advisory services. Examples: Deloitte,

PwC, Ernst& Young, and KPMG.

SECONDARY MARKET: once new securities have been sold in the primary market, these

shares are traded in the secondary market. This is to offer a chance for investors to exist an

investment and sell the shares. Secondary market transactions are referred to trades where one

11
investor buys shares from another investor at the prevailing market price or at whatever price the

two parties agree upon.

The transactions of the secondary market are generally done through the medium of stock

exchange. If an individual has bought some security and he now wants to sell it, he can do so

through the medium of stock exchange to sell or purchase through the medium of stock exchange

requires the services of the broker presently.

PLAYERS IN SECONDARY MARKET

Unlike the primary market, where there is an initial issuance of debt or equity in exchange for

capital, the secondary market allows for the sale and trade of issued bonds and shares. The

secondary market allows players to enter and exit securities easily, making the market liquid.

BUYERS AND SELLERS

The buyers and sellers transact on an exchange in secondary market. In the secondary market,

fund managers or any investors who wish to purchase securities or debts will have to locate a

seller. Transactions are facilitated through a central marketplace, including a stock exchange or

Over the Counter (OTC).

INVESTMENT BANKS

The investment banks specialised in the field of debt and equity research and they work closely

with traders and security sales personnel to determine the approximate price of securities in

current market situation. While investment banks facilitate the issuance of bonds and shares in

the primary market, they expedite the sales and trading of issued debts and equities between

buyers and sellers in the secondary market. Investment banks provide equity research coverage

12
on each stock’s upside potential, downside risk, and rationale to help buyers and sellers make a

judgment. Moreover, investment banks sell and trade securities on behalf of the clients to

maximize their profits.

Significance of the securities market for the economy:

The capital market facilitates mobilization of savings of individuals and pools them into a

reservoir of capital which can be used for the economic development of the country. securities

market development is important for the economic development of the country.

In the stock market, the market indicesis the barometer of its performance and reflects the

prevailing sentiments of the entire economy. stock indices provide investors with the information

regarding the average share price in the stock market. Normally, investors conduct such

transactions using an intermediary such as a broker who facilitates the process.

Differences between primary market and secondary market:

The main points of distinction between the primary and the secondary market are as follows:

Functions: the main function of primary market is to raise long term funds through fresh issue of

securities ,the main function of secondary market is to provide continous and ready market for

the existing long term securities .

Participants: while the major players in the primary market are financial institutions mutual

funds, underwriters, and individual investors .the major players in the secondary market are all of

these and the stock brokers who are members of stock exchange.

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Listing requirement: while only those securities can be dealt with in the secondary market

which has been approved for the purpose (Listed), there is no such requirement in case of

primary market.

Determination of prices: incase of primary market the prices are determined by the

management with due compliance with SEBI requirements for new issue of securities is

determined by forces of demand and supply of the market and keeps on fluctuating.

THE FINANCIAL INSTRUMENT:

These are 3 financial instruments they are

 Equity

 Hybrid instruments

 Debt

SHARES (Equity): Equity shares are instruments issued by companies to raise capital and it

represents the title to the ownership of a company . you become an owner of the by subscribing

to its equity Capital or by buying its share from existing owners. As a shareholder , you bear the

entrepreneurial risk of the business venture and are entitled to benefits of the ownership like

sharing the distributed profit etc. the returns earned in equity depend upon the profits made by

the company. Company’s future growth etc.

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NOTE: some of the major difference between share and debentures are that shares are not to be

paid back by the company whereas debentures have to be paid back at the end of fixed period

and shareholders get dividendonly out of profit while debenture holders being creditors get

guaranteed interest, as agreed, Whether the company makes profit or not.

Hybrid instruments: these have both the features of equity and debentures. This kind of

instruments is called as hybrid instruments. Ex-convertible bonds, warrants etc.

Debt: instruments that are issued by the issuer for borrowing monies from the investor with a

defined tenure And mutually agreed terms and conditions for payment of interest and repayment

of principal.

INTERMEDIARIES

Brokers: a broker is regulated professional individual , usually associated with a brokerage firm

or broker.

Dealer, who buys and sells stocks and other securities for both retail and institutional cients

through a stock exchange or over the counter in return for a fee or commission.

Investment brokers: an investment banker is an individual who often works as a part of a

financial institute and is primarily concerned with raising capital for corporations government or

other entities.

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STOCK MARKETS:

Stock market represents the secondary market, where existing securities, shares and debentures

traded; A stock exchange provides an organized mechanism for purchase and sales of the

securities. At present, there are 24 stock exchanges in our country. The investors want liquidity

for their investments. Stock exchange provides a place, where securities of different companies

can be purchase and sold.

STOCK EXCHANGE:

A stock exchange, (formerly a securities exchange) is a corporation or mutual organization

which provides “trading” facilities for stock brokers and traders, to trade stocks and other

securities. Stock exchanges also provide facilities for the issue and redemption of securities as

well as other financial instruments and capital events including the payment of income and

dividends. The securities traded on a stock exchange includes: shares issued by companies, unit

trusts, derivatives, pooled investment products and bonds. To be able to trade a security on a

certain stock exchange, it has to be listed there. Usually there is a central location at least for

recordkeeping, but trade is less and less linked to such a physical place, as modern markets are

electronic networks, which gives them advantages of speed and cost of transactions. Trade on an

exchange is by members only. The initially offering of stocks and bonds to investors is by

definition done in the primary market and subsequent trading is done in the secondary market.

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Securities Includes:

 Shares, Scrip’s, Stocks, Bonds, Debentures stock or other marketable securities of a like

nature in or of any incorporated company or other body corporate;

 Government securities; and

 Rights or interest in securities.

HISTORY OF STOCK EXCHANGES

The history of stock exchanges can be traced to 12 th century in France, when the first

brokers are believed to have developed, trading in debt and government securities. Unofficial

share markets existed across Europe through the 1600’s, became the first official stock exchange.

When it began trading shares of the Dutch East India Company. These were the first company

shares ever issued.

The origin of stock exchange in India can be to the later half of 10 th century. After the American

civil war (1860-61) due to the share mania of the public the number of brokers dealing in the

share increased. July 9th 1875: Native brokers from Bombay started the native share and stock

brokers association with 318 members on the list.

Houses of Exchange arose in Europe during the 15 th century. Trading was carried on

Exchanges in terms of securities, which represented goods. Antwerp, Lyons, Amsterdam and

London Stock Exchange can be considered as the modern type of stock market. It had more than

500 members in 1802. During that time, the list of securities traded had considerably expanded

and a vast majority of them were international in contact with the home issues. In New York, the

17
stock exchange came into existence immediately after the 13 colonies became independent to

form the united states of America. In 1817, the brokers organised themselves into the New York

Exchange Board with a define constitution. There were many changes and re-organization and

amalgamations till 1969, during which the “The New York Stock Exchange” was formed with a

maximum membership limited to 1100.

The origin of Stock Exchanges in India is traceable in the later half of the 19 th century.

At that time, capital market dealings were limited to loan stock transaction of the East India

Company. By 1930, stock market took a turn with the emergency of some corporate stock and

development a global chance of quick profiteering by increasing exports of cotton to America

and Europe at exorbitant prices. The boom for trade led to the establishment of the stock

exchange in Bombay, Ahmadabad and Calcutta.

Stock Exchange in India:-

In 1860, the exchange flourished with 60 brokers. In fact the ‘Share Mania’ in India

began with the outbreak of American Civil War. At the end of war in 1874, the market found a

place in a street( now called Dalal Street). In 1887, “Native Share Brokers Association” was

established.

The next stock exchange, which emerged in the country, was ‘Ahmadabad Share and

Stock Brokers Association’ which was established in 1894. The third stock exchange was set up

at Calcutta in the year, 1908. Though some stock exchanges were set up before the

independence, there was no All India Legislation to regulate their working.

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 To rectify this situation and to regulate the working of stock exchange in the country, the

securities contracts (Regulation) act was passed in 1956.

Bombay Stock Exchange

Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, now spanning

three centuries in its 137 years of existence. What is now popularly known as BSE was

established as "The Native Share & Stock Brokers' Association" in 1875.

Over the past 137 years, BSE has facilitated the growth of the Indian corporate sector by

providing it with an efficient capital raising platform. BSE has the largest number of listed

companies in the world.

The Exchange has inserted new Rule No. 126 A in its Rules, Byelaws pertaining to constitution

of the Executive Committee of the Exchange. Accordingly, an Executive Committee, consisting

of three elected directors, three SEBI nominees or public representatives, Executive Director &

CEO and Chief Operating Officer has been constituted. The Committee considers judicial &

quasi matters in which the Governing Board has powers as an Appellate Authority, matters

regarding annulment of transactions, admission, continuance and suspension of member-brokers,

declaration of a member-broker as defaulter, norms, procedures and other matters relating to

arbitration, fees, deposits, margins and other monies payable by the member-brokers to the

Exchange etc.

The S&P BSE SENSEX (S&P Bombay Stock Exchange Sensitive Index), also

called the BSE 30 or simply the SENSEX is a free-float market-weighted stock market index of

30 well-established and financially sound companies listed on Bombay Stock Exchange. The 30

19
component companies which are some of the largest and most actively traded stocks are

representative of various industrial sectors of the Indian economy.

In addition to individual stocks, the BSE also has a market in derivatives, which was

the first to be established in India. Listed derivatives on the exchange include stock futures and

options, index futures and options, and weekly options. The Bombay Stock Exchange is also

actively involved with the development of the retail debt market. The debt market in India is

considered extremely important, as the country continues to develop and depends on this type

of investment for growth. Until recently, the debt market in India was limited to a wholesale

market, with banks and financial institutions as the only participants.

The Bombay Stock Exchange believes that a retail market will bring great opportunities to

individual investors through better diversification.

Historically an open-cry floor trading exchange, the Bombay Stock Exchange switched toan

electronic trading system in 1995. It took the exchange only fifty days to make this transition

National Stock Exchange

The National Stock Exchange of India Limited (NSE) is the leading stock exchange of India,

located in Mumbai. The NSE was established in 1992 as the first demutualized electronic

exchange in the country. NSE was the first exchange in the country to provide a modern, fully

automated screen-based electronic trading system which offered easy trading facility to the

investors spread across the length and breadth of the country. VikramLimaye is Managing

Director& Chief Executive Officer of NSE. NSE is mainly setup in the early 1990s to bring in

transparency in the markets. Instead of trading membership being confined to a group of brokers,

20
NSE ensured that anyone who was qualified, experienced and met minimum financial

requirements was allowed to trade.

NSE EMERGE is NSE’s new intuitive for SME & Start-up companies from India.

These companies can get listed on NSE without Initial Public Offer (IPO). This platform will

help SME & Start-up to connect with investor and help them for the funding. During

August2019, NSE gets 200th company listed on its SME platform.

POWER SECTOR IN INDIA

Power is one of the most critical components of infrastructure crucial for the economic growth

and welfare of nations. The existence and development of adequate infrastructure is essential for

sustained growth of the Indian economy.

India’s power sector is one of the most diversified in the world. Sources of power generation

range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power

to viable non-conventional sources such as wind, solar, and agricultural and domestic waste.

Electricity demand in the country has increased rapidly and is expected to rise further in the

years to come. In order to meet the increasing demand for electricity in the country, massive

addition to the installed generating capacity is required.

In May 2018, India ranked 4th in the Asia Pacific region out of 25 nations on an index that

measures their overall power.

21
Market Size

Indian power sector is undergoing a significant change that has redefined the industry outlook.

Sustained economic growth continues to drive electricity demand in India. The Government of

India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country. At the

same time, the competitive intensity is increasing at both the market and supply sides (fuel,

logistics, finances, and manpower).

Total installed capacity of power stations in India stood at 356.82 Gigawatt (GW) as of May

2019.

Investment Scenario

Between April 2000 and March 2019, the industry attracted US$ 14.32 billion in Foreign Direct

Investment (FDI), accounting for 3.41 per cent of total FDI inflows in India.

Some major investments and developments in the Indian power sector are as follows:

In November 2018, Renascent Power Ventures Pte Ltd acquired 75.01 per cent stake in

Prayagraj Power Generation Company Limited (PPGCL) for US$ 854.94 million.

In August 2018, Kohlberg Kravis Roberts & Co (KKR) acquired RamkyEnviro Engineers

Limited for worth US$ 530 million.

In April 2018 Renew Power made the largest M&A deal by acquiring Ostro Energy for US$

1,668.21 million.

22
Government Initiatives

The Government of India has identified power sector as a key sector of focus so as to promote

sustained industrial growth. Some initiatives by the Government of India to boost the Indian

power sector:

As of September 2018, a draft amendment to Electricity Act, 2003 has been introduced. It

discusses separation of content & carriage, direct benefit transfer of subsidy, 24*7 Power supply

is an obligation, penalisation on violation of PPA, setting up Smart Meter and Prepaid Meters

along with regulations related to the same.

Ujwal Discoms Assurance Yojana (UDAY) was launched by the Government of India to

encourage operational and financial turnaround of State-owned Power Distribution Companies

(DISCOMS), with an aim to reduce Aggregate Technical & Commercial (AT&C) losses to 15

per cent by FY19. As of August 2018, the Ministry of New and Renewable Energy set solar

power tariff caps at Rs 2.50 (US$ 0.04) and Rs 2.68 (US$ 0.04) unit for developers using

domestic and imported solar cells and modules, respectively.

The Government of India approved National Policy on Biofuels – 2018, the expected benefits of

this policy are health benefits, cleaner environment, employment generation, reduced import

dependency, boost to infrastructural investment in rural areas and additional income to farmers.

Achievements

Following are the achievements of the government in the past four years:

23
India’s rank jumped to 24 in 2018 from 137 in 2014 on World Bank’s Ease of doing business -

"Getting Electricity" ranking.

Energy deficit reduced to 0.7 per cent in FY18 from 4.2 per cent in FY14.

As of April 28, 2018, 100 per cent village electrification achieved under Deen Dayal Upadhyaya

Gram Jyoti Yojana (DDUGJY).

The Road Ahead

The Government of India has released its roadmap to achieve 175 GW capacity in renewable

energy by 2022, which includes 100 GW of solar power and 60 GW of wind power. The Union

Government of India is preparing a 'rent a roof' policy for supporting its target of generating 40

gig watts (GW) of power through solar rooftop projects by 2022.

Coal-based power generation capacity in India, which currently stands at 191.09 (As of May

2019) GW is expected to reach 330-441 GW by 2040.

India could become the world's first country to use LEDs for all lighting needs by 2019, thereby

saving Rs 40,000 crore (US$ 6.23 billion) on an annual basis.

All the states and union territories of India are on board to fulfil the Government of India's vision

of ensuring 24x7 affordable and quality power for all by March 2019, as per the Ministry of

Power and New & Renewable Energy, Government of India.

24
 COMPANY PROFILE

AASMAA GROUP
AASMAA Securities Pvt Ltd is the member of National level stock exchanges. National Stock

Exchange of India Ltd, Bombay Stock Exchange Ltd, MCX and NCDX Stock Exchange Ltd.

AASMAA is dealing in cash, Futures & Options and Currency Derivative segments of these

reputed exchanges with our Depository Participation with Central Depository Services Ltd.

AASMAA though young in its presence, however, carry a rich experience of more

than two decades into the financial markets and propel with a vision to provide high quality

enhanced financial services with an aim to achieve customer delight. Organisation focuses

always bestow upon high quality research & advisory to enable clients take informed decisions

for wealth creations. Team AASMAA strongly believe that trust and transparency in dealing

with the clients win multitude relationship(s).

The Group strive to empower the investing community by providing the best in class

‘Research’ , ‘Service Support’, best exchange supported Trading & Back Office System(s) and

above all the most competitive brokerage rates in the industry.

HISTORY OF THE COMPANY

In the year 2007, the journey of AASMAA started by 3 young and dynamic entrepreneurs with a

vision to create a full services financial entity that would someday become a name to reckon with

in the financial services space. In their endeavours, established AASMAA COMMODITIES

PVT LTD in the year 2007 and AASMAA SECURITIES PVT LTD in the year 2012. Since then

25
with a zeal to succeed and win the hearts of its esteemed client’s and associates and built upon

the pillars of trust and transparency across its dealings. With this passion envisaged growth,

spreading its wings with India presence. Visakhapatnam Branch was established in the year of

2014, they rendering the service as like all the financial services and they are engaged with 23

employees in their branch and nearly they are serving service to the 200 Demat account holders.

FEAUTRES OF THE COMPANY

 Trade on the go, Mobile/Tab/Desktop Trading with HTML5 responsive trading with all

supportive OS viz., Android/IOS & Windows.

 Optimized for touch interface and 3 different layouts based on screen resolution and

device( Desktop/Tablet/Mobile )

 Fully loaded with Technical charts and indicators. No plug-in or downloads required.

 Fully integrated with online Fund Transfer through atom.

 Fully integrated with Online Back office& RMS.

 Single screen for best 5/Intraday charts/Order Book/Trade Book.

 My holdings enabled Market Watch with Add on favourites...

MISSON AND VISION

 Mission: AASMAA Mission is to be the best in the eyes of Customers, Employees and

all the stakeholders.

 Vision: To be the most preferred financial services company providing high quality

services with innovate products with an aim to achieve highest degree of customer

satisfaction.

26
PROMOTERS & MANAGEMENT TEAM:

BOARD OF DIRECTORS

MANAGING DIRECTOR

DIRECTOR AND DIRECTOR AND

HEAD OF HEAD OF
DEPOSITORY OPERATIONS&CO
OPERATIONS MPLIANCE

BRANCH
MANAGER

EMPLOYEES

CLIENTS

27
SERVICES

Online Trading

We provide fully secured and smart online trading terminals using web based trading system and

direct access stock trading systems for effective market access.

Phone-in support: We also offer phone based helpline to clients to obtain professional advice

on various financial products and related investments.

Single Access Multi Trading: We facilitate clients to trade/invest different products like stocks,

ETFs, IPOs, OFSs, Futures and options Contracts, etc. Using the single Online Trading Platform.

Multi Market Trading: We provide online trading facility to trade in BSE, NSE& MSEI

Futures and Options markets.

We offer a more advanced and feature-rich online trading environment to help clients to maintain

their portfolios effectively. We have made our online trading facilities with high levels of

transparency, competitive brokering models, efficient-support systems etc

Off Line Trading:

Aasmaa Securities Pvt Ltd (ASPL) providing offline service for trading purpose i.e., Securities,

futures, currency, Gold etc..,

28
TRADING SERVICES PROVIDED BY THE AASMAA SECURITIES

PRIVATE LTD:-

Equity Trading/Investment

Structured Products F&O Trading

PRODUCTS
Advisory Currency Trading

IPO/NFO Margin Trading Facility Commodities

Equity Trading/Investment:-

Aasmaa Securities Pvt Ltd (ASPL) provides a platform to trade/invest in the equities

traded in all the reputed Indian Stock Exchanges, i.e. National Stock Exchange Ltd (NSE),

Bombay Stock Exchange Ltd (BSE), Metropolitan Stock Exchange Ltd (MSEI). ASPL also has

an expert team, who will engage in to designing Equity Investment Plan (EIP) that shall cater to

the individual investor needs and objectives. EIP Matrix has been developed in such a manner

29
that based on the Investor’s objective; it will scan over 5000 listed companies and come up with

final list of companies – where the funds will be parked in. This matrix will only be designed on

the request basis; one can send his/her queries and contact details for the further discussion by

filling up the simple form.

Futures & Options Trading

Derivatives are the very vital part of the stock and currency markets – Futures and Options

are considered as two of the most significant forms of the derivatives. They are financial

investment areas for deriving the underlying value. This value can be a stock offered by

company, a currency.

Derivatives instrument can be traded individually of the underlying asset. The value for such

instrument changes according to the changes in their underlying value. These derivatives can be

exchange traded or traded over the counter.

There are certain requirements, which are listed down by the SEBI/Exchange from time to time

to allow a stock to be traded in Future/Option segment.

Please refer the list of the future /Options traded in NSE and BSE – they are subject to change

upon the fulfilment of the requirement, prescribed by the exchange/SEBI.

Aasmaa Securities Pvt Ltd (ASPL) has its own in-house developed products, we at ASPL

have both mean reservation and momentum based products.

In the Mean Reservation based products, there are 15 Intra-Sector products are designed in

NIFTY 50 stocks and they are hedged product, hence no NAKED positions are built-that helps in

protecting one’s fund to an extend and maximize the return on the principle fund.

30
In the Momentum based products, they are designed to cater only indicates trade and no

position will be taken in the stocks.

 Currency Trading

Currency futures are showing a remarkable growth potentially. Today, the currency futures

market has become one of the most significant asset classes in stock trading and investment

arena. The currency futures market is predominantly influenced by price volatility and currency

risk hedging strategies.

It is quite evident that in the recent times, there is an increased interest in both the currency and

commodity sectors. Individual and institutions clients are showing more interests in these

markets. In the current challenging stock market scenario, investors are looking forward to

commercial institutions and private clients in the region. In the current economic climate, market

participant are looking for an alternative and effective management of their currency exposures.

The current volatility situation in currency markets is empoweringthe market investors by

encouraging them to invest in currency future market.

We do undertake periodical industry research to assess the real growth potential of the industry

and make long-term service delivery strategies for both individual and commercial investors.

We offer customized multi-currency trading on the futures contracts. We offer trading in the

multi variant ranges such as Indian Rupees, US Dollar, British Pound, Japanese Yen and in cross

31
 country trading. Thus, we facilitate clients to participate in most dynamic and attractive trading

in currency future market.

 Margin Trading Facility

One can carry Equity Segment – Delivery position by maintaining Margin only, as specified in

SEBI Circular. Margin can be bought in the form of stocks and cash Equivalent. To register

under MTF product type, kindly review the rights and Obligations document and duly sign the

MTF Declaration form.

 Commodities

Trading in the market based on rumours, investing done on basis of sentimental values of the

market are some of the very prominent scenarios prevalent in Today’s market in the retail

trader/investor category. We at Aasmaa commodities Pvt Ltd are very well equipped with trading

infrastructure and most importantly with the latest news and reports on various commodities

from the premium analysts group to support our respected clients trading and investing ideas. We

are dealing in all the available future & spot contracts in all reputed commodity exchange of

INDIA i.e. MCX, NCDEX & NSEL. Aasmaa provides continuous impetus with systematic

approach; it is the responsibility of us, the intermediates to deliver these in commodity market

these benefits at the door-steps of our esteemed clients. With our expertise in commodity market

covering various facets of international markets, we are all set to bring to you, the pleasure of

investing in this burgeoning market, which can touch upon lives of a vast majority of the

population from the farmer to the corporate alike. We confident that the commodity futures can

be a good value addition to your portfolio.

32
 The company provides investment, advisory and brokerage services in Indian commodities

markets. And most importantly, we offer a personal touch to our clients and professionalism is a

matter of fact only for our promoters and employees.

 IPO/NFO

Public Offering an FPO can only be given if there is an initial public IPO is Initial Public

Offering and FPO is Follow-up Public Offering. IPO comes first to Follow-up offering.

IPOs are more profitable than FPOs. A company makes an IPO for compiling money and FPO

for adding to the initial public offerings.

Initial Public Offering is the first sale whereas the Follow-up Offering is the second sale for

expanding business.

IPOs are risky investments as an individual investor cannot predict what will happen to the initial

trading in the coming days. But in the case of FPOs, the risk is lower as an investor already has

an idea about the investment and future growth of the company.

A company brings out an FPO for future growth. If accompany is coming out with an FPO, it

also means that the company is short of funds. FPO is raised for more funds or money or for

establishing new projects. FPOs can be of two types – dilutive and non-dilutive. In a dilutive

FPO, the board of directors of a company agrees to increase the shares by selling more equity. A

non-dilutive FPO means selling privatively held shares of the directors or insiders of a company.

In IPO and FPO, the company never repays the capital but gives the shareholders a right to future

profits of the company.

33
 Summary:

 IPO is Initial Public Offering and FPO is Follow-up Public Offering.

 A company makes an IPO for compiling money and an FPO for adding to the initial public

offerings.

 If a company is coming out with an FPO, it also means the company is short of funds. An FPO is

raised for more funds or money or for establishing new projects.

 Initial Public Offering is the first sale whereas the Follow-up Public Offering is the second sale

for expanding business.

 IPOs are risky investments as an individual investor cannot predict what will happen to the initial

trading in the coming days.

 In the case of FPOs, the risk is lower as an investor already has an idea about the investment and

future growth of the company.

 Initial Public Offerings are more profitable than Follow-up Public Offerings.

 Advisory

At ASPL, we provide analytical services in stocks & currencies traded on Bombay Stock

Exchange (BSE), National Stock Exchange (NSE), Metropolitan Stock Exchange (MSEI), NSE

Currency Derivative (NSE-CD).

Our team consists of dedicated financial professional analyst group. ASPL research team tracks

and analyses all the stock, Currency Market dynamics and various price trends. We provide you

with comprehensive advisory services on Nifty Index, NSE F&O Scrips, Blue chip scrip

included in indices and other stocks trades on Indian Stock Exchanges.

ASPL broadly provides included in indices and other stocks trades on Indian Stock Exchanges.

34
 ASPL broadly provides below listed services which consist of stock Recommendations and

Investment Advices.

 Daily Recommendations/News Letters

 Equity Investment Plan Designing

 Product Based Trading-Intra sector and Indices based

35
 CHAPTER-III

CONCEPTUAL REVIEW & LITERATURE REVIEW

9
PART-A CONCEPTUAL REVIEW

TECHNICAL ANALYSIS

Technical analysis is a tool to study and forecast the stock market movements. It is a method of

measuring and evaluating the stocks by observing and analyzing the data or statistics provided

by market activity Such as past prices and volume etc,. Though it does not measure the

securities intrinsic value, but help to understand the signals through charts and other tools. In fact

decision made on the basis of technical analysis is done only after inferring a trend and judging

the future movement of the stock on the basis of the trend. The study on technical analysis of

selected scrips based is significant as it helps in understanding the intrinsic value of shares and to

know whether the shares are under priced or over priced or correctly price.

Technical analysis is based on analyzing current demand-supply of commodities, stocks,

indices, futures or any tradable instrument. Technical analysis involve putting stock information

like prices, volumes and open interest on a chart and applying various patterns and indicators to

it in order to assess the future price movements.

Technical analysis is based on three assumptions,

 The market discounts everything

 Price moves in trends

36
  History tends to repeat itself

The market discounts everything

Many experts criticize technical analysis because it only considers price movements and ignores

fundamental factors. Technical analysts believe that everything from a company’s fundamentals

to broad market factors to market psychology is already priced into the stock. This removes the

need to consider the factors separately before making an investment decision. The only thing

remaining is the analysis of price movements, which technical analysts view as the product of

supply and demand for a particular stock in the market.

Price moves in trends

Technical analysts believe that prices move in short-, medium-, and long-term trend. In other

words, a stock price is more likely to continue a past trend than move erratically. Most technical

trading strategies are based on this assumption.

History tends to repeat itself

Technical analysts believe that history tends to repeat itself. The repetitive nature of price

movements is often attributed to market psychology, which tends to be very predictable based on

emotions like fear or excitement. Technical analysis uses chart patterns to analyze these

emotions and subsequent market movements to understand trends. While many form of technical

analysis 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.

37
 Dow Theory (Dow Jones Theory)
Is a trading approach developed by Charles Dow. Dow Theory is the basis of technical analysis

of financial markets. The basic idea of Dow Theory is that market price action reflects all

available information and the market price movement is comprised of three main trends.

Dow Theory Principles

I. The Averages Discount Everything.

Every knowable factor that may possibly affect both demand and supply is reflected in the

market price.

II. The Market Has Three Trends.

According to Dow an uptrend is consistently raising peaks and troughs. And a downtrend is

consistently raising lowering peaks and troughs. Dow believed that laws of action and reaction

apply to the markets just as they do to the physical universe, meaning that each significant

movement is followed by a certain pullback.

Dow considered a trend to have three parts:

1. Primary (compared to tide, reaching further and further inland until the ultimate

point is reached).

2. Secondary (compared to waves and representing corrections in the primary trend,

normally retracing between one-third and two-thirds of the previous trend movement and most

frequently about half of the previous move)

3. Minor (ripples) (fluctuations in the secondary trend).

III. Major Trends Have Three Phases.

Dow mainly paid attention to the primary (major) trends in which he distinguished three phases:

38
 1. Accumulation phase – the most astute investors are entering the market feeling

the change in the current market direction.

2. Public participation phase – a majority of technicians begin to join in as the

price is rapidly advancing.

3. Distribution phase – a new direction is now commonly recognized and well

hiked; economic news are all confirming which all ends up in increasing speculative volume and

wide public's participation.

IV. The Averages Must Confirm Each Oth er.

Dow used to say that unless both Industrial and Rail Averages exceed a previous peak, there is

no confirmation of inception or continuation of a bull market. Signals did no have to occur

simultaneously, but the quicker one followed another – the stronger the confirmation was.

V. Volume Must Confirm the Trend.

Volume increases or diminishes according to whether the price is moving in direction of a trend

or in reverse. Dow considered volume a secondary indicator. His buy or sell signals were based

on closing prices.

VI. A Trend Is Assumed to Be Contiunous Until Definite Signals of Its Reversal.

The overall technical approach in market analysis is based upon the idea that trends continue in

motion until there is an external force causing it to change its direction - just like any other

physical objects. And of course there are reversal signals to be looking for.

39
 Failure Swing.
The failure of the peak at C to overcome A, followed by the violation of the low at B, constitutes
a "sell" signal at S.

Nonfailure Swing.
Notice that C exceeds A before D falling below B. Some Dow theorists would see a "sell" signal
at S1, while others would need to see a lower high at E before turning bearish at S2.

Dow only took in consideration closing prices. Averages had to close higher than a previous
peak or lower than a previous trough to be significant. Intraday penetrations did not count.

Failure Swing Bottom.

The "buy" signal takes place when point B is exceeded (at Bl).

40
 Nonfailure Swing Bottom.
"Buy" signals occur at points B1 or B2.

CHARTS

Charts are graphical presentations of price information of securities over time. Charts plot

historical data based on a combination of price, volume as well as time intervals.

The use of charts is so prevalent, that technical analyst is often referred to as chartists.

Originally, charts were drawn manually, but a majority of charts nowadays are drawn by

computer.

Chart Types

The main chart types used by technical analysts are the line chart, bar chart, candlestick chart,

etc. Charts can also be presented on an arithmetic or logarithmic scale. The types of charts and

the scale used depend upon what information the technical analyst considers to be most

important, and which charts and which scale ideally shows that information.

Line Charts

41
Line charts are the most basic form of charts, They are composed of a single line from left to

right that links the closing prices. Generally, only the closing price is graphed, presented by a

single point.

This is a popular type of chart used in presentations and reports to give a very general view of

the historical and current direction.

Chart 3.1 line chart

It is clear as well as a simple way of getting a general idea of the price movement’s direction in

the market, which is preferred by some traders.

While this kind of chart doesn’t provide much insight into intraday price movements, many

traders consider the closing price to be more important than the open, high, or low price within a

given period.

42
Bar Chart

One of the basic tools of technical analysis is the bar chart. Bar charts are also referred to as

open-high-low-close (OHLC) charts. They are comprised of a series of vertical lines that indicate

the price range during that Time Frame.

Bar charts enable traders to discover patterns more easily as they take into account all the prices,

open, high, low and close. The opening price is the horizontal dash on the left side of the

horizontal line and the closing price is located on the right side of the line. If the opening price is

lower than the closing price, the line is often colored black (or green) to represent a rising period.

The opposite is true for a falling period, which is represented by a red color.

43
Chart 3.2 Bar chart

Candlestick Chart

Another kind of chart used in the technical analysis is the candlestick chart, so-called because the

main component of the chart which represents prices looks like a candlestick, with a thick ‘body’

and usually, a line extending above and below it, called the upper shadow and lower shadow,

respectively.

The top of the upper shadow represents the high price, while the bottom of the lower shadow

shows the low price. Patterns are formed both by the real body and the shadows. Candlestick

44
patterns are most useful over short periods of time, and mostly have significance at the top of an

uptrend or the bottom of a downtrend, when the patterns most often indicate a reversal of the

trend.

Chart 3.3 Candlestick chart

The wider part of the candlestick is shown between the opening and closing price. It is usually

colored in black/red when the security closes on a lower price and white/green the other way

around.

The thinner parts of the candlestick are commonly referred to as the upper/lower wicks or as

shadows. These show us the highest and/or lowest prices during that timeframe, compared to the

closing as well as opening price.

45
The relationship between the bodies of candlesticks is important to candlestick patterns.

Candlestick charts make it easy to spot gaps between bodies.

A slight drawback of the candlestick chart is that candlesticks take up more space than OHLC

bars. In most charting platforms, the most you can display with a candlestick chart is less than

what you can with a bar chart.

TREND LINES IN TECHNICAL ANALYSIS

 Trend lines are one of the most basic yet one of the most powerful tools in the hands of a

chartist. They help us to identify and confirm the prevailing trend. As Technical Analysis is

based on the very premise that prices tend to trend, a simple trendline can often help us to gauge

that very trend for positioning our trades accordingly.

In basic terms, a trendline is a line constructed by connecting at least two points that extends to

the right of the chart that may act as a future support or resistance level. The same principles that

are applicable for normal support and resistance levels are applicable in case of trendlines as

well. To know more on support and resistance, please read What is Support and

Types of Trend Lines

Uptrend Line: An uptrend line is drawn by connecting at least two low points on the chart

with the latter being higher than the previous one resulting in a positive slope for the trendline. A

third touch on the trendline makes it a valid one.

46
Chart 3.4 Uptrend line

An uptrend line indicates that demand is greater than supply and hence a bullish stance is taken

on the security. Till the time prices trade above the trendline, the uptrend is considered to remain

in force, while a break below it indicates that the inherent demand supply equation is changing

and hence a change in trend may be on the cards.

47
Downtrend Line: A downtrend line is drawn by connecting at least two high points on the

chart with the latter being lower than the previous one resulting in a negative slope for the

trendline. A third touch on the trendline makes it a valid one.

Chart 3.5 Downtrend line

A downtrend line indicates that supply is greater than demand and hence a bearish stance is taken

on the security. Till the time prices trade below the trend line, the downtrend is considered to

remain in force, while a break above it indicates that the inherent demand supply equation is

changing and hence a change in trend may be on the cards.

48
CHART PATTERNS

Stock chart patterns play an important role in any useful technical analysis and can be a powerful

asset for any trader at any level. We all love patterns and naturally look for them in everything

we do, that’s just part of human nature and using stock chart patterns is an essential part of

your trading psychology.

By learning to recognize patterns early on in trading, you will be able to work out how to profit

from breakouts and reversals. I am a believer in technical analysis and do feel that chart patterns

are a very powerful tool.

Importance of chart patterns

On a very basic level stock chart patterns are a way of viewing a series of price actions which

occur during a stock trading period. It can be over any time frame – monthly, weekly, daily and

intra-day. The great thing about chart patterns is that they tend to repeat themselves over and

over again. This repetition helps to appeal to our human psychology and trader psychology in

particular.

If you can learn to recognize these patterns early they will help you to gain a real competitive

advantage in the markets. Just as volume, support and resistance levels, RSI, and Fibonacci

Retracements can help your technical analysis trading, stock chart patterns can contribute to

identifying trend reversals and continuations.

1. Pennant

49
 Chart 3.6 Pennant chart pattern

A pennant is created when there is a significant movement in the stock, followed by a period of

consolidation – this creates the pennant shape due to the converging lines. A breakout movement

then occurs in the same direction as the big stock move. These are similar to flag patterns and

tend to last between one and three weeks. There will be significant volume at the initial stock

movement, followed by weaker volume in the pennant section, and growth in volume at the

breakout.

2. Cup and Handle

50
Chart 3.7 Cup and Handle

A cup and handle pattern gets its name from the obvious pattern it makes on the chart. The cup is

a curved u-shape, while the handle slopes slightly downwards. In general, the right-hand side of

the diagram has low trading volume, and it can last from seven weeks up to around 65 weeks.

3. Ascending Triangle

51
Chart 3.8 Ascending triangle

This triangle usually appears during an upward trend and is regarded as a continuation pattern. It

is a bullish pattern. Sometimes it can be created as part of a reversal at the end of a downward

trend, but more commonly it is a continuation. Ascending triangles are always bullish patterns

whenever they occur.

4. Triple Bottom

52
The Triple Bottom pattern is used in technical analysis as a predictor of a reverse position

following a long downward trend. The Triple Bottom occurs when the price of the stock creates

three distinct downward prongs, at around the same price level, before breaking out and

reversing the trend.

4. Descending Triangle

Chart 3.9 Descending triangle

53
The descending triangle is another continuation pattern, but this triangle is a bearish pattern and

is usually created as a continuation during a downward trend. Occasionally it can be seen as a

reversal during an upward trend (the opposite of the ascending triangle pattern), but it is

considered to be a continuation.

6. Inverse Head And Shoulders

The inverse head and shoulders stock chart pattern is used as a predictor for the reversal of a

downward trend. It is also sometimes called the “head and shoulders bottom” or even a “reverse

head and shoulders, ” but all of these names mean the same thing within technical analysis. It

gets the name from having one longer peak, forming the head, and two level peaks on either side

which create the shoulders.

7. Bullish Symmetric Triangle

54
The symmetrical triangle pattern is easy to spot thanks to the distinctive shape which is

developed by the two trendlines which converge. This pattern occurs by drawing trendlines,

which connect a series of peaks and troughs. The trendlines create a barrier, and once the price

breaks through these, a very sharp movement in price follows.

8. Rounding Bottom

55
This pattern is sometimes also called a “saucer bottom” and demonstrates a long-term reversal

showing that the stock is moving from a downward trend towards an upward trend instead. It can

last any time from several months to years. It is very similar to the cup and handle, but in this

case, there is no handle to the pattern, hence the name.

9. Flag Configuration

Chart 3.10 Flag chart pattern

The flag stock chart pattern forms through a rectangle. The rectangle develops from two

trendlines which form the support and resistance until the price breaks out. The flag will have

sloping trendlines, and the slope should move in the opposite direction to the original price

56
movement. Once the price breaks through either the support or resistance lines, this creates the

buy or sell signal.

10. Double Top

Chart 3.11 Double top

The flag stock chart pattern forms through a rectangle. The rectangle develops from two

trendlines which form the support and resistance until the price breaks out. The flag will have

sloping trendlines, and the slope should move in the opposite direction to the original price

movement. Once the price breaks through either the support or resistance lines, this creates the

buy or sell signal.

57
11. Bearish Symmetric Triangle

The symmetrical triangle pattern is easy to spot thanks to the distinctive shape which is

developed by the two trendlines which converge. This pattern is created by drawing trendlines,

which connect a series of peaks and troughs. The trendlines create a barrier, and once the price

breaks through these, it is usually followed by a very sharp movement in price.

12. Falling Wedge

58
The symmetrical triangle pattern is easy to spot thanks to the distinctive shape which is

developed by the two trendlines which converge. This pattern is created by drawing trendlines,

which connect a series of peaks and troughs. The trendlines create a barrier, and once the price

breaks through these, it is usually followed by a very sharp movement in price.

13. Head And Shoulders Top

59
The symmetrical triangle pattern is easy to spot thanks to the distinctive shape which is

developed by the two trendlines which converge. This pattern is created by drawing trendlines,

which connect a series of peaks and troughs. The trendlines create a barrier, and once the price

breaks through these, it is usually followed by a very sharp movement in price

Mathematical indicators

Simple moving average :

It gives equal weight to each price point over the specified period. The user defines whether the

high, low, or close is used and these price points are added together and averaged. This average

price point is then added to the existing string and a line is formed. With the addition of each

new price point the sample set drops off the oldest point. The simple moving average is probably

the most widely used moving average.

Chart 3.12 Simple moving average

60
Exponential moving average:

An exponential moving average multiplies a percentage of the most recent price by the previous

period's average price. Defining the optimum moving average for a particular currency pair

involves "curve fitting". Curve fitting is the process of selecting the right number of periods with

the correct type of moving average to produce the results the user is trying to achieve. By trial

and error, technicians work with the time periods to fit the price data.

Chart 3.13 Exponential moving average

MACD

The MACD (Moving Average Convergence/Divergence) is a momentum indicator used to show

the relationship between two moving averages. The MACD was developed by Systems and

61
forecasts publisher, Gerald appel. The MACD is simple and reliable. It uses moving averages to

include trend-following characteristics. These lagging indicators are turned into a momentum

oscillator and plotted as a line that moves above and below zero with no upper or

lower limits. The MACD proves most effective in studying wide –swigging trading markets.

MACD(2lines)

MACD (2-lines) shows the relationship between a 26-day and 12-day Exponential Moving

Average with a 9-day Exponential Moving Average (the "signal" or "trigger") line plotted on top

to show buy/sell opportunities.

Chart 3.14 MACD (2LINES)

62
Three popular ways to use the MACD are crossovers, overbought/oversold conditions and

divergences.

-Crossovers:

The basic MACD trading rule is sell when the MACD falls below its signal line and buy when

the MACD rises above it. It is also common to buy/sell when the MACD goes above/below zero.

-Overbought/Oversoldconditions

The MACD is also can be used as an overbought/oversold indicator. If the shorter moving

average pulls away dramatically from the longer moving average and the MACD rises it is likely

that the security price is overextended and will soon return to more realistic levels.

-Divergences:

Expect the end a current trend may be near when the MACD diverges from the price of a

security. A bearish divergence occurs when the MACD is making new lows while prices fail to

match these lows. Likewise, a bullis h divergence occurs when the MACD is making new highs

while prices fail to follow suit. Both of these divergences are most significant when they occur at

relatively overbought / over sold conditions.

Relative Strength Index (RSI):

RSI measures the momentum of price movements. It is also plotted on a scale ranging from 0 to

100. Traders will tend to look at RSI readings over 70 as an indicator of a market that is

overbought or susceptible to a downturn, and readings under 30 as a market that is oversold or

ready to turn higher. This logic therefore implies that prices cannot rise or fall forever and that by

63
using an RSI study, one can determine with a reasonable degree of certainty when a reversal will

come about. However, be very wary of trading on RSI studies alone. In many instances, an RSI

can remain at very lofty or sunken levels for quite a while without prices reversing course. At

these times, the RSI is simply telling you that a market is quite strong or quite weak and shows

no signs of changing course.

Calculation:

RSI = 100-(100/(1+U/D))

Where:

U - is the average number of positive price changes;

D - is the average number of negative price changes.

CHART 3.15 Relative strength index

64
Rate of change (ROC):

ROC is an oscillator that measures the relationship between the current price of a share with the

price prevailing a few days earlier. ROC measures the rate of change in prices over a specific

period of days on a regular and continuous basis. The ROC value can be zero,positive or

negetive. These values are plotted on graph with time on X-axis and ROC values on the Y-axis.

The ROC values oscillate around zero. ROC above zero indicates that prices are increasing and

ROC below zero indicates that prices are decreasing.

Chart 3.16 rate of change

The Ease of Movement Indicator was designed to illustrate the relationship between volume and

price change. It shows how much volume is required to move prices.

High Ease of Movement values occur when prices are moving upward with light volume. Low

values occur when prices are moving downward on light volume. If prices are not moving or if

65
heavy volume is required to move prices then the indicator will read near zero.

A buy signal is produced when it crosses above zero (an indication that prices is more easily

moving upward). A sell signal is produced when the indicator crosses below zero (prices are

moving downward more easily).

66
 PART B - LITERATURE REVIEW

Swapnil H. Ukey, Dr. Priti Rai, Issue 08, (2019), International Journal for scientific

research and development, Trading through Technical Analysis in Indian stock market,

ISSN (online): 2321-0613

This study is concluded that Technical analysis is an art or science of planting the stock info like

price movements, trading volume and market situation within the form of charts for the aim of

forecasting the future price trends. It will aid the investor’s to anticipate what's ‘possible’ to

happen to prices over the short time. And additionally, helps in understanding the intrinsic value

of shares and knowing whether or not the scripts are undervalued or over valued by scrutinizing

the turning points of the market. In today’s world, if the investors strictly depend on basic

analysis, broker’s recommendation, newspaper articles or business channels for investing/

trading selections, at that investor get painful expertise within the stock market. So, this analysis

study on technical analysis can facilitate the investors’ in analyzing the security supported

technical oscillators to earn fruitful investments. Technical Analysis is all concerning learning

the Art of creating Profits in all market conditions whether or not rising or falling information of

the stock markets. This analysis study tries to use technical analysis tools & techniques on

selective scripts to help precise investment call in Indian equity/stock market..

67
R. Chitra, March 2011, International Journal of Management & Business Studies,
Technical Analysis on Selected Stocks of Energy sector, ISSN: 2330-9519 (Online), ISSN:
2231-2463 (Print)

This study is observed that Technical Analysis is a study of the stock market considering factors

related to the supply and demand of stocks. Technical analysis is a method of evaluating

securities by analyzing the statistics generated by market activity, such as past prices and

volume. Technical analysts do not attempt to measure a securities intrinsic value, but instead use

charts and other tools to identify patterns that can suggest future activity. In fact the decision

made on the basis of technical analysis is done only after inferring a trend and judging the future

movement of the stock on the basis of the trend. Technical Analysis assumes that the market is

efficient and the price has already taken into consideration the other factors related to the

company and the industry. The objective of the present project is to make a study on the

technical analysis on selected stocks of energy sector and interpret on whether to buy or sell

them by using techniques. For the purpose of analysis, techniques like Beta, Relative Strength

Index and Simple Moving average is used for the analysis to know if the stock is technically

strong. As the financial market goes through brisk changes, investors should look for right

opportunities keeping in tune with the dynamics of market environment. Financial market

reflects a country’s economic growth as they supply necessary financial inputs for the

development of the country. Technical analysis gives investor a better understanding of the

stocks and also gives them right direction to go on further to buy or sell the stocks .Therefore, the

small investors and traders should not blindly make an investment rather they should analyze

using the various tools to check if the scrip is technically strong.

68
Dr. Pravin Choudhary, Prof. Apoorva Bhatnagar, Volume 9 Issue 2 (2018), ELK ASIA

PACIFIC JOURNAL OF FINANCE AND RISK MANAGEMENT, A Study on Technical

analysis of selected PSUs and their market movements with relation to BSE , ISSN 2349-

2325

The study observed that Technical Analysis is the method of forecasting of future financial price

movements based on an examination of past price movements. Technical analysis does not result

in absolute predictions about the future pricing. Instead, technical analysis can help investors to

anticipate what is "possible" to happen to stock prices over a period of time. Technical analysis is

a study of predicting prices of securities for future. The main aim of technical analysis is to

generate and analyze returns. This study provides the impact of market indices on Top PSUs.

Only one PSU (NTPC) is not affected from market indices for a particular year. It gives better

insights research found that the Indian Banking Sector is one of the wide sectors in the country

and the various factors which affect the share prices of Banking Companies. In this result a

detailed analysis of the trend in share price movement in terms of understanding the impact of

BSE Indices and PSUs in India.

SHAILAJA.M.L, DHARSHITHA.M, Vol: I. Issue IV, August 2017, Asia pacific journal of

research, A STUDY ON TECHNICAL ANALYSIS OF STOCKS LISTED IN NSE WITH

REFRENCE TO BANKING SECTOR, ISSN (Print): 2320-5504 ISSN (Online): 2347-4793

The study is analyzed that stock market investment decisions are made out of, by analyzing the

fundamental factors and/or technical analysis. It is truethat both these analysis aids the investors

to make sound financial investment decision with the objective of increase in return eitherin the

69
form of capital appreciation and/or investment income in the form of interest or dividend

payment. Both the techniques of analyzing the stock market behavior are used and helpful to

predict the price fluctuation in the future by considering historical data. In case of fundamental

analysis the historical data collected would be based on economic and industry condition, market

force, sales, company annual report etc. are taken into account; where as in technical analysis of

stock the past data would be price and volume history. The technical analysis are helpful in

identifying the entry and exit point which are identified by using market indicators such as

Moving average, Relative Strength Index, MACD, Rate of Change, Bollinger bands etc., the

chartist believes that technical analysis creates identifiable trading platform that can be exploited

by investors and they identify the change in the price trend & takes a suitable long or short

position. Through the technical analysis the investors can also enjoy the price advantage at every

price moment. The technical analysis is subjected to certain weakness such analyst bias, open to

interpretation, timing the market etc., the technical analysis consider the market to be 80%

psychological and remaining 20% would be logical. The technical analysis do not considers the

companies background and ignores the facts and nature of the company or bank. The analysis is

completely based on demand and supply of scrip at different level (i.e. ask bid and buy bid).

Ms. K. Hemalatha, Volume : 2 | Issue : 4 | April 2013, PARIPEX – INDIAN JOURNAL

OF RESEARCH, A Study on Technical Analysis of Canara Bank equity share, ISSN -

2250-1991

This study is concluded that millions of investors have lost the money in past trying guessing

stock price movements. In order to consistently make money in the stock market, investors have

to be right over 70% of the time. So, this study on technical analysis in Canara Bank will help

the investors in analyzing the scripts based on the technical tools and oscillators to earn fruitful

70
investment. Technical analysis is the art and science of chart patterns in order to better analyze

and predict prices of a given security. Technical analysis attempts to understand the emotions in

the market by studying the market itself, as opposed to its components. There are different types

of technical traders are there. Some rely on chart patterns; others use technical indicators and

oscillators, and most use some combination of the two. Unlike fundamental analysis, technical

analysts don’t care whether a stock is undervalued – the only thing that matters is a security’s

past trading data and what information this data can provide about where the society might move

in the future.

71
 CHAPTER IV
DATA ANALYSIS AND INTERPRETATION

72
 CHAPTER IV
This chapter contained that calculations of technical analysis mathematical indicators those are

simple moving averages and relative strength index. For those calculations I had taken data of

five companies in power sector.

The list of five companies in power sector is

 NTPC LTD

 TATA POWER CO. LTD

 SATLUJ JAL VIDYUT NIGAM LIMITED ( SJVN LTD)

 JSW ENERGY LTD

 NLC India Ltd (Neyveli Lignite Corporation Ltd)

In this chapter I had calculated the values of simple moving averages and relative strength index.

For calculating those calculations I had taken 14days period. I had collected the data of share

prices for 12months of five companies in power sector. I had drawn the graphs for moving

average calculations. Based on RSI values I had interpret the share price movements and identify

the strength of share price. In this chapter I had shown only January month calculations of every

company.

TECHNICAL ANALYSIS OF SELECTED SCRIPS IN POWER SECTOR

NTPC LTD
NTPC Ltd (formerly known as National Thermal Power Corporation Limited), is an Indian

Public Sector Undertaking, engaged in the business of generation of electricity and allied

activities. It is a company incorporated under the Companies Act 1956 and is promoted by the

Government of India. The headquarters of the company is situated at New Delhi. NTPC's core

72
 business is generation and sale of electricity to state-owned power distribution companies and

State Electricity Boards in India. The company also undertakes consultancy and turnkey project

contracts that involve engineering, project management, construction management and operation

and management of power plants.

TABLE 4.1 TOTAL ASSESSMENT of NTPC LTD. For the year 2019

MONTH OPENING PRICE HIGH PRICE LOW PRICE CLOSE PRICE

JANUARY 3334.15 3359.25 3285.85 3308.15
FEBRUARY 2730.8 2766.4 2681.3 2728.65
MARCH 2731.2 2797.7 2688 2741.15
APRIL 2575.05 2594.05 2548.15 2565.85
MAY 2869.1 2902.85 2827.6 2860.35
JUNE 2581.65 2600.8 2551.85 2575.3
JULY 3054.5 3087.05 3003.7 3035.15
AUGUST 2418.05 2456.3 2375.15 2414.95
SEPTEMBE
2299.55 2334.75 2262.6 2291.75
R
OCTOBER 2379.95 2400.8 2350.55 2375.1
NOVEMBER 2376.65 2390.4 2346.8 2359.3
DECEMBER 2415.05 2431.4 2388.85 2409.1
(Source: BSE Website)

Table 4.2 Moving Average calculations of NTPC LTD. For January month
Date Open Price High Price Low Price Close Price SMA
1-Jan-19 147.7 149.4 146.65 148.3
2-Jan-19 148.3 150.1 145.75 146.6
3-Jan-19 146.55 147.1 142.8 143.4
4-Jan-19 142.25 146.35 142.25 145.65
7-Jan-19 147 149.65 146.35 148.4
8-Jan-19 149.55 149.55 146 146.95
9-Jan-19 147.7 148.9 145.2 146.15
10-Jan-19 147.9 149.4 147 147.75
11-Jan-19 148.7 150.1 146.9 147.55
14-Jan-19 148.55 148.55 145 145.25

73
 15-Jan-19 147.6 147.6 144.2 145.8
16-Jan-19 146.3 148.4 145.4 146.1
17-Jan-19 146.8 147.65 144.45 145.3
18-Jan-19 145.6 146.3 144 144.35 146.25
21-Jan-19 147 147 142.6 143.3 145.90
22-Jan-19 143.35 143.55 142.05 142.8 145.63
23-Jan-19 143 144.3 140.15 140.55 145.42
24-Jan-19 141.8 142.1 139.15 140 145.02
25-Jan-19 140.05 141.8 138 138.3 144.30
28-Jan-19 139.8 139.8 136.75 138.4 143.69
29-Jan-19 139.4 139.5 137.5 138.55 143.14
30-Jan-19 139.05 140.25 138.35 138.8 142.50
31-Jan-19 140.2 141.9 139.35 139.9 141.96
(Source: BSE Website)

Chart 4.1 MOVING AVERAGES chart for NTPC Ltd.

150
148
146
144
142
Close Price
140 SMA
138
136
134
132
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Table 4.3 RSI Calculation of NTPC LTD for the month of JANUARY

JANUARY MONTH
AVG AVG
DATE CLOSE CHANGE GAIN LOSS GAIN LOSS RS RSI
01-01-2019 148.3              
02-01-2019 146.6 -1.7 0 1.7        
03-01-2019 143.4 -3.2 0 3.2        
04-01-2019 145.65 2.25 2.25 0        

74
07-01-2019 148.4 2.75 2.75 0        
08-01-2019 146.95 -1.45 0 1.45        
09-01-2019 146.15 -0.8 0 0.8        
10-01-2019 147.75 1.6 1.6 0        
11-01-2019 147.55 -0.2 0 0.2        
14-01-2019 145.25 -2.3 0 2.3        
15-01-2019 145.8 0.55 0.55 0        
16-01-2019 146.1 0.3 0.3 0        
17-01-2019 145.3 -0.8 0 0.8        
18-01-2019 144.35 -0.95 0 0.95        
21-01-2019 143.3 -1.05 0 1.05 0.53 0.81 0.65 39.52
22-01-2019 142.8 -0.5 0 0.5 0.53 0.89 0.60 37.44
23-01-2019 140.55 -2.25 0 2.25 0.53 0.80 0.66 39.84
24-01-2019 140 -0.55 0 0.55 0.53 0.74 0.72 41.97
25-01-2019 138.3 -1.7 0 1.7 0.37 0.78 0.48 32.40
28-01-2019 138.4 0.1 0.1 0 0.17 0.90 0.20 16.33
29-01-2019 138.55 0.15 0.15 0 0.18 0.79 0.23 18.68
30-01-2019 138.8 0.25 0.25 0 0.19 0.74 0.26 20.77
31-01-2019 139.9 1.1 1.1 0 0.10 0.74 0.13 11.59
(Source: BSE Website)

Calculation of RSI:-

RSI = 100-(100/ 1+ RS)

RS= AVERAGE GAIN / AVERAGE LOSS

Interpretation
The relative strength index (RSI) is a momentum indicator used in technical analysis that

measures the magnitude of recent price changes to evaluate overbought or oversold conditions in

the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves

between two extremes) and can have a reading from 0 to 100.

Traditional interpretation and usage of the RSI are that values of 70 or above indicate that a

security is becoming overbought or overvalued and may be primed for a trend reversal or

corrective pullback in price. An RSI reading of 30 or below indicates an oversold

or undervalued condition. The RSI indicator calculates for 14days period.

75
From the above table, we can observe that RSI value on the date 25 th January is 32.40 and the

values are decreasing in following days. It shows downtrend because during the downtrend the

indicator frequently hits 30 or under. By observing the table, the values are below the 30 and it

indicates the shares are oversold. Once the values are crosses back above 30, at that point we can

purchase the shares because that indicates start of uptrend.

TATA POWER CO. LTD

Tata Power Company Ltd was founded in the year 1910. It is headquartered in Mumbai,

Maharashtra, India. Its product range includes Electrical Power and Natural Gas. It is offering

electricity generation and distribution, production, natural gas exploration etc.

The Tata Power Company Limited is an integrated power company. The Company's principal

businesses are in the areas of generation, transmission, distribution-cum-retail, power trading,

power services, coal mines and logistics, strategic engineering for defense applications, solar

photovoltaic (PV) manufacturing, and engineering, procurement and construction (EPC)

services. The Company's segments include Power, Coal and Others. The Power segment includes

generation, transmission, distribution and trading of electricity. The Coal segment includes

mining and trading. The others segment includes defence engineering, solar equipment, project

contracts/infrastructure management services, investment, shipping and property development.

The Company has an operational generation capacity of approximately 9,180 megawatts based

on various fuel sources, such as thermal (coal, gas and oil), hydroelectric power, renewable

energy (wind and solar PV) and waste heat recovery.

Table 4.4 Total Assessment of TATA POWER CO.LTD for the year 2019

76
 OPENING
MONTH HIGH PRICE LOW PRICE CLOSE PRICE
PRICE
JANUARY 1716.8 1735.9 1687.8 1709.2
FEBRUARY 1357.85 1378.7 1331.75 1349.9
MARCH 1364.15 1385.6 1346.5 1363.45
APRIL 1357.45 1371.35 1331.75 1344.95
MAY 1444.55 1469.7 1419.6 1442.9
JUNE 1261.8 1276.3 1241.55 1256.4
JULY 1550.9 1571.05 1515.35 1539.35
AUGUST 1135.4 1155.45 1104.45 1129.35
SEPTEMBER 1177.25 1201.6 1154.05 1180.55
OCTOBER 1197.6 1210.55 1171.5 1188.2
NOVEMBER 1146.35 1157.9 1124.95 1137.05
DECEMBER 1157.75 1171.6 1140.9 1154.65
(Source: BSE Website)

Table 4.5 Moving Averages calculations TATA POWER Ltd. For January
2019
Date Open Price High Price Low Price Close Price SMA
01-Jan-19 76.2 77.3 76.2 76.85  
02-Jan-19 76.7 76.7 74.5 74.85  
03-Jan-19 75.8 76.2 73.9 74.15  
04-Jan-19 74 75.5 73.8 75.15  
07-Jan-19 75.35 75.7 74.25 74.7  
08-Jan-19 74.7 75.4 74.5 74.85  
09-Jan-19 75.1 75.35 73.85 74.3  
10-Jan-19 74.1 74.95 73.85 74.8  
11-Jan-19 74.9 75.25 73.8 75  
14-Jan-19 74.95 74.95 73.6 74.15  
15-Jan-19 74.55 75.25 74.35 74.95  
16-Jan-19 75.45 76.75 74.65 76.25  
17-Jan-19 76.5 76.85 74.9 76  
18-Jan-19 76.4 76.4 75.1 76 75.14
21-Jan-19 76 77.15 75.35 75.95 75.08
22-Jan-19 75.8 77.5 74.95 76.3 75.18
23-Jan-19 77.1 77.9 74.85 75.25 75.26
24-Jan-19 75.6 75.65 74.2 74.6 75.22
25-Jan-19 74.55 75.25 73.45 73.95 75.17
28-Jan-19 74.1 74.1 69.6 70.8 74.88
29-Jan-19 68.75 72.3 68.45 71 74.64
77
 30-Jan-19 71.45 71.7 67.75 68.05 74.16
31-Jan-19 68.75 71.8 67.95 71.3 73.90
(Source: BSE Website)

Chart 4.2 Moving averages chart of TATA POWER Ltd.

78

76

74

72

70 Close Price
sma
68

66

64

62
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Table 4.6 RSI CALUCULATIONS of TATA POWER Ltd.

AVG AVG
DATE CLOSE CHANGE GAIN LOSS GAIN LOSS RS RSI
01-01-2019 76.85              
02-01-2019 74.85 -2 0 2        
03-01-2019 74.15 -0.7 0 0.7        
04-01-2019 75.15 1 1 0        
07-01-2019 74.7 -0.45 0 0.45        
08-01-2019 74.85 0.15 0.15 0        
09-01-2019 74.3 -0.55 0 0.55        
10-01-2019 74.8 0.5 0.5 0        
11-01-2019 75 0.2 0.2 0        

78
 14-01-2019 74.15 -0.85 0 0.85        
15-01-2019 74.95 0.8 0.8 0        
16-01-2019 76.25 1.3 1.3 0        
17-01-2019 76 -0.25 0 0.25        
18-01-2019 76 0 0 0        
21-01-2019 75.95 -0.05 0 0.05 0.28 0.34 0.82 45.14
22-01-2019 76.3 0.35 0.35 0 0.28 0.35 0.81 44.89
23-01-2019 75.25 -1.05 0 1.05 0.31 0.20 1.51 60.14
24-01-2019 74.6 -0.65 0 0.65 0.31 0.23 1.34 57.33
25-01-2019 73.95 -0.65 0 0.65 0.24 0.28 0.86 46.15
28-01-2019 70.8 -3.15 0 3.15 0.24 0.29 0.81 44.90
29-01-2019 71 0.2 0.2 0 0.22 0.51 0.44 30.43
30-01-2019 68.05 -2.95 0 2.95 0.24 0.47 0.50 33.50
31-01-2019 71.3 3.25 3.25 0 0.20 0.69 0.30 22.89
(Source: BSE Website)

Calculation of RSI :-

RSI = 100 – (100/1+RS)

RS ( RELATIVE STRENGTH) = AVERAGE GAI N/ AVERAGE LOSS

Interpretation

The RSI provides technical traders signals about bullish and bearish price momentum, and it is

often plotted beneath the graph of an asset's price. An asset is usually considered overbought

when the RSI is above 70% and oversold when it is below 30%.

Traditional interpretation and usage of the RSI are that values of 70 or above indicate that a

security is becoming overbought or overvalued and may be primed for a trend reversal or

corrective pullback in price. An RSI reading of 30 or below indicates an oversold

or undervalued condition. The RSI indicator calculates for 14days period.

79
From the above table, we can observe that the RSI values are in between 30 and 70, and not

showing uptrend or downtrend. From the above table, it is observed that RSI value on 31 st

January below the 30 and it indicates downtrend. At that period shares are oversold. Once the

RSI value crosses back above 30, we can purchase the shares and it indicates the start of uptrend.

SATLUJ JAL VIDYUT NIGAM LIMITED ( SJVN LTD)

SJVN Limited, a Mini Ratna, Category-I and Schedule –‘A’ CPSE under administrative control

of Ministry of Power, Govt. of India, was incorporated on May 24, 1988 as a joint venture of the

Government of India (GOI) and the Government of Himachal Pradesh (GOHP). SJVN is now a

listed Company having shareholders pattern of 61.05 % with Govt. of India, 26.85% with Govt.

of Himachal Pradesh and rest of 12.10 % with Public. The present paid up capital and authorized

capital of SJVN is Rs. 3,929.80 Crore and Rs. 7,000 Crorerespectively.The Net Worth as on

31.03.2019 is Rs.11238.78 Crore.

Beginning with a single Project and single State operation (i.e. India’s largest 1500 MW

NathpaJhakri Hydro Power Station in Himachal Pradesh) the Company has commissioned five

projects totaling 2015.2 MW of installed capacity including wind and solar power. SJVN is

presently implementing power projects in Himachal Pradesh, Uttarakhand, Bihar, Maharashtra

and Gujarat in India besides neighbouring countries viz. Nepal and Bhutan

Table 4.7 TOTAL ASSESSMENT OF SJVN Ltd. for the year 2019

OPENING LOW
MONTH HIGH PRICE CLOSE PRICE
PRICE PRICE
JANUARY 589.25 593.85 582.4 587.05
FEBRUARY 500.15 506.9 493.5 499.1

80
 MARCH 461.95 468.55 456.05 460.85
APRIL 461.6 464.25 455.65 459.1
MAY 537.65 543.4 531.35 535.6
JUNE 476.6 480.6 471.9 474.55
JULY 575.9 581.75 565.3 573.8
AUGUST 487.25 491.6 481.75 485.6
SEPTEMBE
480.4 485.4 473.8 478.55
R
OCTOBER 491.6 495.85 485.85 490.15
NOVEMBER 496.5 498.8 490.4 492
DECEMBER 522.9 526.4 519.45 522.15
(Source: BSE Website)

Table 4.8 MOVING AVERAGES CALUCULTIONS of SJVN Ltd.

Open High Low
Date Price Price Price Close Price SMA
1-Jan-19 25.6 25.7 25.35 25.65  
2-Jan-19 25.35 26 25.35 25.7  
3-Jan-19 26.35 26.35 25.5 25.75  
4-Jan-19 25.55 25.6 25.1 25.5  
7-Jan-19 25.25 25.85 25.25 25.6  
8-Jan-19 25.35 25.65 25.35 25.45  
9-Jan-19 25.75 25.75 25 25.1  
10-Jan-19 25.15 25.6 24.75 24.8  
11-Jan-19 25.1 25.45 25 25.35  
14-Jan-19 25.45 25.6 25.4 25.5  
15-Jan-19 25.55 25.8 25.25 25.6  
16-Jan-19 25.75 25.8 25.6 25.65  
17-Jan-19 25.75 26 25.65 25.85  
18-Jan-19 25.75 25.8 25.35 25.55 25.50357
21-Jan-19 25.55 25.85 25.55 25.75 25.51071
22-Jan-19 25.9 25.9 25.7 25.75 25.51429
23-Jan-19 25.75 25.9 25.6 25.65 25.50714
24-Jan-19 25.75 25.85 25.6 25.65 25.51786
25-Jan-19 25.9 25.9 25.7 25.7 25.525
28-Jan-19 25.7 25.95 25.7 25.95 25.56071
29-Jan-19 25.75 25.9 25.65 25.8 25.61071
30-Jan-19 25.45 25.85 25.2 25.35 25.65
31-Jan-19 25.8 25.8 23.8 24.4 25.58214
(Source: BSE Website)

81
Chart 4.3 MOVING AVERAGES CHART of SJVN Ltd.

26.5

26

25.5

25
Close Price
SMA
24.5

24

23.5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Table 4.9 RSI CALUCULATIONS of SJVN Ltd.

AVG AVG
DATE CLOSE CHANGE GAIN LOSS GAIN LOSS RS RSI
01-01-2019 25.65              
02-01-2019 25.7 0.05 0.05 0        
03-01-2019 25.75 0.05 0.05 0        
04-01-2019 25.5 -0.25 0 0.25        
07-01-2019 25.6 0.1 0.1 0        
08-01-2019 25.45 -0.15 0 0.15        
09-01-2019 25.1 -0.35 0 0.35        
10-01-2019 24.8 -0.3 0 0.3        
11-01-2019 25.35 0.55 0.55 0        
14-01-2019 25.5 0.15 0.15 0        
15-01-2019 25.6 0.1 0.1 0        
16-01-2019 25.65 0.05 0.05 0        
17-01-2019 25.85 0.2 0.2 0        
18-01-2019 25.55 -0.3 0 0.3        
21-01-2019 25.75 0.2 0.2 0 0.09 0.10 0.93 48.08
22-01-2019 25.75 0 0 0 0.10 0.10 1.07 51.79
23-01-2019 25.65 -0.1 0 0.1 0.10 0.10 1.04 50.91

82
 24-01-2019 25.65 0 0 0 0.10 0.10 0.93 48.21
25-01-2019 25.7 0.05 0.05 0 0.10 0.09 1.13 52.94
28-01-2019 25.95 0.25 0.25 0 0.09 0.09 1.08 52.00
29-01-2019 25.8 -0.15 0 0.15 0.11 0.08 1.48 59.62
30-01-2019 25.35 -0.45 0 0.45 0.11 0.06 1.82 64.58
31-01-2019 24.4 -0.95 0 0.95 0.11 0.07 1.55 60.78
(Source: BSE Website)

Calculation of RSI:-

RSI (RELATIVE STRENGTH INDEX) = 100 – (100/1+RS)

RS (RELATIVE STRENGTH) = AVERAGE GAIN / AVERAGE LOSS

Interpretation

The relative strength index (RSI) is a popular momentum oscillator. The RSI provides technical

traders signals about bullish and bearish price momentum, and it is often plotted beneath the

graph of an asset's price. An asset is usually considered overbought when the RSI is above 70%

and oversold when it is below 30%. The primary trend of the stock or asset is an important tool

in making sure the indicator's readings are properly understood.  Many investors will apply a

horizontal trend line that is between 30% and 70% levels when a strong trend is in place to better

identify extremes.

From the above table, we can observe that the RSI values are in between 30 and 70 and moving

in uptrend. in the above table, we can observe that the RSI values are increasing in upward trend.

Once the values hit the 70 and above the 70 that indicates uptrend and shares are overbought.

When the RSI value crosses back below 70, we can sell the shares and that movement indicates

the start of downtrend.

JSW ENERGY LTD

83
JSW Energy Ltd was founded in the year 1994. It is headquartered in Mumbai, India. It is

offering a range of products including Electricity Generation, Hydroelectricity, Mining, Power

Plant Equipment, transmission etc.

JSW Energy Limited is a holding company. The Company is an integrated power company

primarily engaged in generation and sale of power. Its business segments include Power

Generation, Power Transmission, Mining, Power Trading and Equipment Manufacturing. Its

projects include Kutehr hydro Project, which is located at Kutehr, Himachal Pradesh; Kapurdi

Mine, and Jalipa Mine. It operates approximately 4,530 megawatts (MW) of power generation

capacity. Its Karcham Project is approximately 1,000 MW (4X250 MW) run of the river hydro

power plant in Kinnaur district of Himachal Pradesh. The Karcham Project has in-built capacity

of over 1,091 MW. The Company's approximately 300 MW (3X100 MW) Baspa Project is

located on the river Baspa, a tributary of river Satluj in district Kinnaur, Himachal Pradesh. The

design energy of Baspa Project is over 1,050 million units (MUs) for approximately 300 MW

capacities. Its plants include Vijayanagar Plant, Ratnagiri Plant, Barmer Plant and Himachal

Plant.

Table 4.10 Total Assessment of JSW ENERGY Ltd. For the year 2019

MONTH OPENING PRICE HIGH PRICE LOW PRICE CLOSE PRICE

JANUARY 1582.5 1599.9 1558.65 1578.9
FEBRUARY 1326.5 1340.55 1306.55 1321.45
MARCH 1292.95 1318.2 1267.5 1291.45
APRIL 1380.25 1399.8 1355.4 1373.8
MAY 1526.65 1554 1501.5 1527.05
JUNE 1315.9 1333.4 1293.55 1309.65
JULY 1612.9 1639.05 1590.3 1613.4
AUGUST 1365.95 1383.55 1342.3 1360.6

84
 SEPTEMBE
1250.3 1265.35 1234.1 1244.6
R
OCTOBER 1292.45 1313.8 1262.7 1289.25
NOVEMBER 1457.2 1498 1428.1 1456.85
DECEMBER 1513.8 1532.8 1484.45 1504.7
(Source: BSE Website)

Table 4.11

MOVING AVERAGE CALUCULATIONS of JSW ltd. For January month

Open Close
Date Price High Price Low Price Price SMA
1-Jan-19 69.3 70 68.7 69.8  
2-Jan-19 70.15 70.65 69.6 70.3  
3-Jan-19 70.65 70.65 69.5 69.9  
4-Jan-19 69.2 69.75 68.3 68.95  
7-Jan-19 70 70.25 69.25 70  
8-Jan-19 70 70.65 69.6 70.35  
9-Jan-19 70.1 70.5 69 70.05  
10-Jan-19 69.7 70.5 69.5 69.85  
11-Jan-19 70 70.45 69.2 70.1  
14-Jan-19 69.6 69.75 68 69.05  
15-Jan-19 69.15 70.2 68.4 68.9  
16-Jan-19 68.95 70.2 68.95 69.8  
17-Jan-19 69.8 69.8 68.55 69  
18-Jan-19 68.9 69.45 66.55 68.35 69.60
21-Jan-19 67.9 68.5 67.55 68.05 69.48
22-Jan-19 68.1 69.3 67.45 68.95 69.38
23-Jan-19 68.2 70 68.15 68.75 69.30
24-Jan-19 68.1 68.5 67.3 67.8 69.21
25-Jan-19 68 68.3 66.5 66.7 68.98
28-Jan-19 66.4 66.6 64.4 65.1 68.60
29-Jan-19 65.2 66 63.5 64.25 68.19
30-Jan-19 65.15 69.95 64.6 67.9 68.05
31-Jan-19 69.95 69.95 66.1 67 67.83
(Source: BSE Website)

Chart 4.4 MOVING AVERAGE CHART of JSW LTD.

85
 71
70
69
68
67
66 Close Price
SMA
65
64
63
62
61
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Table 4.12 RSI CALUCLATIONS of JSW ENERGY Ltd.

JANUARY
MONTH
CLOS CHANG GAI LOS AVG AVG
DATE E E N S GAIN LOSS RS RSI
01-01-19 69.8              
02-01-19 70.3 0.5 0.5 0        
03-01-19 69.9 -0.4 0 0.4        
04-01-19 68.95 -0.95 0 0.95        
07-01-19 70 1.05 1.05 0        
08-01-19 70.35 0.35 0.35 0        
09-01-19 70.05 -0.3 0 0.3        
10-01-19 69.85 -0.2 0 0.2        
11-01-19 70.1 0.25 0.25 0        
14-01-19 69.05 -1.05 0 1.05        
15-01-19 68.9 -0.15 0 0.15        
16-01-19 69.8 0.9 0.9 0        
17-01-19 69 -0.8 0 0.8        
18-01-19 68.35 -0.65 0 0.65        
21-01-19 68.05 -0.3 0 0.3 0.22 0.32 0.68 40.40
22-01-19 68.95 0.9 0.9 0 0.22 0.34 0.64 38.85
23-01-19 68.75 -0.2 0 0.2 0.25 0.34 0.72 41.82
24-01-19 67.8 -0.95 0 0.95 0.25 0.33 0.75 42.86
25-01-19 66.7 -1.1 0 1.1 0.25 0.33 0.75 42.86
28-01-19 65.1 -1.6 0 1.6 0.17 0.41 0.42 29.63
29-01-19 64.25 -0.85 0 0.85 0.15 0.52 0.28 21.93

86
 30-01-19 67.9 3.65 3.65 0 0.15 0.56 0.26 20.71
31-01-19 67 -0.9 0 0.9 0.41 0.55 0.75 42.70
(Source: BSE Website)

Interpretation
The relative strength index (RSI) is a momentum indicator used in technical analysis that

measures the magnitude of recent price changes to evaluate overbought or oversold conditions in

the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves

between two extremes) and can have a reading from 0 to 100.

Traditional interpretation and usage of the RSI are that values of 70 or above indicate that a

security is becoming overbought or overvalued and may be primed for a trend reversal or

corrective pullback in price. An RSI reading of 30 or below indicates an oversold

or undervalued condition. The RSI indicator calculates for 14days period.

From the above table, we are observing that the RSI value on 28 th January is 29.63 i.e. below

30,and the value decreasing in following 2days also. This movement indicates downtrend and

where the shares are oversold. RSI value on 31 st January crosses back above 30, at that point we

can purchase the shares because that is start of uptrend.

NLC INDIA LIMITED

NLC India Ltd (Neyveli Lignite Corporation Ltd) is India’s largest lignite company and also one

of the country’s leading power generation companies. The company was founded in the year

1956 and is headquartered in Neyveli, Tamil Nadu, India. The company owns various large

thermal power stations and coal mines. The company has four ISO certified  lignite mines spread

87
 across in Neyveli, Tamil Nadu and Basingsar, Rajasthan. The company has specialization

producing lignite an electric power.

Itis operating over four Thermal Power Stations at Neyveli, Tamil Nadu and approximately one

Thermal Power Station at Barsingsar, Rajasthan, with a total installed capacity of over 3,240

megawatts (MW). Its projects under construction/implementation include Neyveli New Thermal

Power Project-2x500 MW; Mine-I 10.5 MTPA (Area Expansion) & Expansion of Mine-IA

(from 3.0 MTPA to 7.0 MTPA); Bithnok Thermal Power Project (250 MW) with linked

BithnokMine (2.25 MTPA); Barsingsar Thermal Power Station Extension (250 MW) with linked

Hadla Mine (1.9 MTPA), and Wind Power Project (51 MW).

Table 4.13 Total Assessment of NLC India Ltd. For the year 2019

MONTH OPENING PRICE HIGH PRICE LOW PRICE CLOSE PRICE

JANUARY 1563 1574.65 1545.8 1558.05
FEBRUARY 1268.15 1293.25 1245.95 1266.6
MARCH 1366.6 1393.5 1347 1370.95
APRIL 1292.25 1300.7 1277.65 1288.9
MAY 1448.65 1467.35 1427.45 1444.35
JUNE 1222.48 1169.75 1211.15 1221.8
JULY 1446.4 1467.85 1419.65 1440.3
AUGUST 1102.35 1113.85 1080.2 1095.75
SEPTEMBE
1073.45 1089.9 1057.05 1072.3
R
OCTOBER 1115.85 1133.3 1096.45 1113.6
NOVEMBER 1110.55 1127 1092.8 1104.9
DECEMBER 1140.4 1150.6 1126.55 1139.6
(Source: BSE Website)

Table 4.14 MOVING AVERAGE CALUCULATIONS of NLC India ltd. For

January 2019
Open
Date Price High Price Low Price Close Price SMA

88
 1-Jan-19 69.7 69.7 68.5 69.35  
2-Jan-19 69.7 69.7 67.75 68.2  
3-Jan-19 68.75 68.75 67.9 68.05  
4-Jan-19 68.15 68.35 68 68.1  
7-Jan-19 68 68.85 67.5 68.45  
8-Jan-19 68.1 68.8 68 68.5  
9-Jan-19 68.3 68.4 68 68.3  
10-Jan-19 68 68.25 65 67.25  
11-Jan-19 68.25 68.25 67.1 67.35  
14-Jan-19 67.1 67.8 66.8 67.3  
15-Jan-19 67.2 68.05 67.15 67.45  
16-Jan-19 67.5 68.25 67.5 67.7  
17-Jan-19 68 68.15 67.3 67.75  
18-Jan-19 67.45 68.2 67.45 67.7 67.96
21-Jan-19 67.7 68.1 67.7 68.05 67.87
22-Jan-19 67.75 68.15 67.6 67.95 67.85
23-Jan-19 67.8 68.8 67.8 68.35 67.87
24-Jan-19 67.95 68.85 67.65 67.95 67.86
25-Jan-19 67.65 68.2 67.65 67.85 67.82
28-Jan-19 67.5 68.5 67.5 67.9 67.78
29-Jan-19 68.95 68.95 66.5 67.25 67.70
30-Jan-19 67 67.95 66.25 66.55 67.65
31-Jan-19 66.5 67.65 63.2 64.75 67.46
(Source: BSE Website)

Chart 4.5 Moving Averages chart of NLC India ltd.

89
 70

69

68

67

66 Close Price
SMA
65

64

63

62
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Table 4.15 RSI CALUCULATIONS of NLC India Ltd.

JANUARY MONTH

DATE CLOSE CHANGE GAIN LOSS AVG GAIN AVG LOSS RS RSI
1/1/2019 69.35
2/1/2019 68.2 -1.15 0 1.15
3/1/2019 68.05 -0.15 0 0.15
4/1/2019 68.1 0.05 0.05 0
7/1/2019 68.45 0.35 0.35 0
8/1/2019 68.5 0.05 0.05 0
9/1/2019 68.3 -0.2 0 0.2
10/1/2019 67.25 -1.05 0 1.05
11/1/2019 67.35 0.1 0.1 0
1/14/2019 67.3 -0.05 0 0.05
1/15/2019 67.45 0.15 0.15 0
1/16/2019 67.7 0.25 0.25 0
1/17/2019 67.75 0.05 0.05 0
1/18/2019 67.7 -0.05 0 0.05
1/21/2019 68.05 0.35 0.35 0 0.07 0.19 0.38 27.40
1/22/2019 67.95 -0.1 0 0.1 0.10 0.19 0.51 33.75
1/23/2019 68.35 0.4 0.4 0 0.10 0.11 0.84 45.76
1/24/2019 67.95 -0.4 0 0.4 0.12 0.10 1.21 54.69
1/25/2019 67.85 -0.1 0 0.1 0.12 0.13 0.92 47.89
1/28/2019 67.9 0.05 0.05 0 0.10 0.14 0.69 40.91

90
 1/29/2019 67.25 -0.65 0 0.65 0.10 0.14 0.69 40.91
1/30/2019 66.55 -0.7 0 0.7 0.10 0.17 0.56 36.00
1/31/2019 64.75 -1.8 0 1.8 0.10 0.15 0.66 39.71
(Source: BSE Website)

Calculation of RSI:-

RSI= 100-(100/1+RS)

RS (RELATIVE STRENGTH) = AVERAGE GAIN/ AVERAGE LOSS

Interpretation
The relative strength index (RSI) is the financial technical analysis and showing price strength

by comparing uptrend and downtrend close to close movements. The RSI will rise as the number

and size of positive closes increase, and it will fall as the number and size of losses increase. The

RSI values are calculated for 14days period.

From the above table we can observe that, on the date of 21st January the RSI value crosses

back  below 30 and that indicates there may be downtrend and that is the right time for sell the

shares and at the point of 22 nd January the value of RSI hits above 30 and it indicates uptrend

and where we can buy the shares .from the date on 23 rd jan. the values are increasing and when

the values hits above 70 that point indicates uptrend and where the shares are overbought.

91
 CHAPTER-V

SUMMARY, FINDINGS & SUGGESTIONS

72
 SUMMARY

The share prices in the stock market fluctuate on a daily basis due to continuous buying and

selling. Stock prices move in trends and cycles and are never stable. An investor in the

stock market is interested to get a good return on his investment and hence purchases securities

at a low price and sells them at a high price. However, to gain successfully return on investments

in a volatile stock market is not an easy job to do.

An investor should adequate knowledge about the working of the stock and

securities market and the kind of risks involved in it. Well defined information about

securities being traded in the markets, its fluctuation in prices provides the

investors with basic understanding of the markets and helps them in their investments, i.e.

investing in the right type of securities at the right time. Hence, this is where technical analysis

comes into picture.

Technical analysts consider a wide range of factors most importantly

price movements and volume to indicate the future trend of the market and the best buying and

selling opportunities of stocks.

Technical analysis is a tool to study and forecast the stock market movements. It

is a method of measuring and evaluating the stocks by observing and analyzing the data or

statistics provided by market activity Such as past prices and volume etc,. Though it does not

measure the securities intrinsic value, but help to understand the signals through charts and other

tools. In fact decision made on the basis of technical analysis is done only after inferring a trend

and judging the future movement of the stock on the basis of the trend. The study on technical

92
analysis of selected scrips based is significant as it helps in understanding the intrinsic value of

shares and to know whether the shares are under priced or over priced or correctly price.

The Importance of Technical analysis is forecasting future price movements based

on the past price movements. With the help of technical analysis that investors are able to make

financial decisions of buying, holding, or selling stocks.

The purpose of technical analysis is to help the investor make a more financially

sound investment decision. The price is the key to success in stock market investment. The

supply and demand of stocks all depend upon technical analysis. By evaluating the history of

stock prices, you get a future reading of what a particular stock would be priced at.

For this study, I collected the data from various sources like referring online

journals, referring text book related to technical analysis, referring newspapers like business line,

the Hindu. And also search in SEBI, BSE, company websites and trading reports.

AASMAA Securities Pvt Ltd is the member of National level stock exchanges.

National Stock Exchange of India Ltd, Bombay Stock Exchange Ltd, MCX and NCDX Stock

Exchange Ltd. AASMAA is dealing in cash, Futures & Options and Currency Derivative

segments of these reputed exchanges with our Depository Participation with Central Depository

Services Ltd.

In the year 2007, the journey of AASMAA started by 3 young and dynamic

entrepreneurs with a vision to create a full services financial entity that would someday become a

93
name to reckon with in the financial services space. In their endeavours, established AASMAA

COMMODITIES PVT LTD in the year 2007 and AASMAA SECURITIES PVT LTD in the

year 2012. Since then with zeal to succeed and win the hearts of its esteemed client’s and

associates and built upon the pillars of trust and transparency across its dealings. With this

passion envisaged growth, spreading its wings with India presence. Visakhapatnam Branch was

established in the year of 2014, they rendering the service as like all the financial services and

they are engaged with 23 employees in their branch and nearly they are serving service to the

200 Demat account holders.

In this study I selected few scrips of power sector which are trading with BSE and

forming a part of SENSEX. For this study I considered top five power sector scrips which are

traded at BSE. They are ; NTPC LTD, TATA POWER CO LTD, SJVN LTD, JSW ENERGY

CO.,NLC LTD.

In this study I took Simple Moving Average and Relative Strength Index are as

mathematical indicators of technical analysis and correlated stock prices with SENSEX

movements for one year i.e. from January to December.

Simple moving average gives equal weight to each price point over the specified

period. The user defines whether the high, low, or close is used and these price points are added

together and averaged. This average price point is then added to the existing string and a line is

formed. With the addition of each new price point the sample set drops off the oldest point. The

simple moving average is probably the most widely used moving average.

94
 RSI measures the momentum of price movements. It is also plotted on a scale

ranging from 0 to 100. Traders will tend to look at RSI readings over 70 as an indicator of a

market that is overbought or susceptible to a downturn, and readings under 30 as a market that is

oversold or ready to turn higher. This logic therefore implies that prices cannot rise or fall

forever and that by using an RSI study, one can determine with a reasonable degree of certainty

when a reversal will come about. However, be very wary of trading on RSI studies alone. In

many instances, an RSI can remain at very lofty or sunken levels for quite a while without prices

reversing course. At these times, the RSI is simply telling you that a market is quite strong or

quite weak and shows no signs of changing course.

95
 FINDINGS

It is observed that market fluctuates day by day as shares are rise or fall in the market SENSEX

points. Indian share market always depends upon Asian and European market as the share

markets in general influenced by other countries share market factors, inflation and information

regarding companies also have impact on the trading price of the shares. Daily market

information should be collected and to be updated for investor to invest in profitable scrips.

 I had taken daily closing prices of NTPC LTD stock for the month of January 2019. The

share price started at RS 147.7 and closing price of January was recorded at RS 139.9.

The share price was gained all time high in January month in 2019 was recorded at RS

148.4.It gained RS 2.75 was all time high gain per day in this month. The stock prices of

NTPC stock shown downtrend in this month. The RSI value was recorded high at RS

41.97, and the trend is downtrend and it is finding that the shares are oversold in this

month.

 I had taken daily closing prices of TATA POWER CO.LTD stock for the month of

January 2019. The share price was started at RS 76.2 and closing price of January month

was recorded at RS71.3. It gained all-time high in January month was recorded at

RS76.3. This stock gained RS 3.25 was all-time high gain per day in this month. The

RSI value was recorded high at RS 60.14 and it was found that the RSI trend in this

month initially shown uptrend and at that the stock was purchased. At the end of the

month the stock shown in downtrend and there were more no. of shares oversold.

 I had taken daily closing prices of SJVN LTD. Stock for the month of January 2019. The

stock price was started at RS 25.6 and closing price recorded at RS 25.85. it recorded All-

96
 Time high price at RS 26.35. The RSI value was recorded high at RS 64.58. The trend

shown in this month was uptrend and It is find that the stock values were increasing and

stock was purchased by investors.

 I had taken daily closing prices of JSW ENERGY LTD. Stock for the month January

2019. The share price was started at RS 69.3 and closing price was recorded at RS 67.

The stock gained all-time high at RS 70.65. The RSI value was recorded high at RS

41.86. The stock in this month was moving towards down. The RSI values indicates that

the share price trend was downtrend and at the point where it meets 30 or below, that

indicates shares were oversold.

 I had taken daily closing prices of NLC INDIA LTD. Stock for the month January 2019.

The share price was started at RS 69.7 and closing price was recorded at RS 64.25. The

stock gained all time high in this month was recorded at RS 69.7. The RSI value was

recorded high at RS 54.69. The RSI trend was shown strength of the stock. The trend in

the RSI values showing uptrend. The RSI value was recorded low at RS 27.40 and it is

finding that the shares were oversold, and the value hit backs above 30 and after that

moving in uptrend. That point was starting of uptrend.

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 SUGGESTIONS
Based on the insights gained from the study the following suggestions are made.

Stock market trading is a dynamic activity. Technical analysis is an integral part of the

investment analysis and it helps to track the changes in stock market trading. An astute investor

cannot ignore the importance of technical analysis. Hence, investors and brokers have to use a

mix of both fundamental and technical analysis while making an investment decision. It is

important to note that monitoring the market and intelligent stock selection are the key in earning

better returns in the market. As far as active investors are concerned, they have to monitor the

market before entering the market. Both market and stock specific indicators should be used in

the examination of market. Market indicators show the general trend in the market whereas the

stock specific indicators show the changes in the individual stocks. Particularly, market

indicators like trading volume and open interest in derivative market are highly useful market

indicators in the market. Open interest is highly important in India because almost 75 percentage

of the trade takes place in the derivative market. Moreover, systematic application of stock

specific indicators such as moving averages and relative strength index can lead to better yields.

Stock selection is another important step to attain better yield. An investor has to use

fundamental and technical analysis as and when required. However, investors 180 should use

more technical analysis and it provides real time position of stocks in the market. Hence, an

investor should make investment strategies which would accommodate both technical and

fundamental analysis, especially during the selection of the stock. Many experts advise the

investors to go for long term or hold investment without doing any trade in the market. However,

holding of investment for long term may not give good return. So, continuous monitoring of the

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investment in the market is highly essential. Technical analysis helps in keeping track of the

investment in the market and the investors can earn better return from the market. Misconception

about technical analysis is due to the lack of experience in the market and the lack of knowledge

in the subject as well. Hence, proper education and guidance should be given to investors and

analyst to help them learn better by using technical analysis.

At the outset, traders or investors should be aware of the position of the particular stock or scrip

in the market as well as the general condition of the market. Market participants can use stock

specific indicators such as moving averages, relative strength index, on balance volume and rate

of change to track the changes in individual share prices. To understand the general condition of

the market, indicators such as trading volume, open interest, advance decline ratio, mutual fund

cash ratio etc. can be used. Once the traders are aware of the situation of stocks in the market and

the general market environment, they can do the scrip or stock selection by which they can

achieve better yield from the market.

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