PROJECT REPORT ON TECHNICAL ANALYSIS IN RN PATWA SHARES AND STOCK BROKER (P) LTD

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF MASTER OF MANAGEMENT STUDIES

BY RINKESH MAHENDRA JAIN ROLL NO:- 201058 MMS-II (SEM III) YEAR 2010-2012

LALA LAJPATRAI INSTITUTE OF MANAGEMENT MAHALAXMI, MUMBAI - 400034 PROJECT REPORT ON

PROJECT REPORT ON TECHNICAL ANALYSIS IN RN PATWA SHARES AND STOCK BROKER (P) LTD

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF MASTER OF MANAGEMENT STUDIES

BY RINKESH MAHENDRA JAIN ROLL NO :- 201058 MMS-II (SEM III) YEAR 2010-2012

LALA LAJPATRAI INSTITUTE OF MANAGEMENT MAHALAXMI, MUMBAI - 400034

TECHNICAL ANALYSIS

Can put the logo of the company and can be colourful

SUBMITTED BY RINKESH MAHENDRA JAIN ROLL NO 201058 MMS II (SEM III) Year 2010-2012

COLOURED XEROX OF THE INTERNSHIP CERTIFICATE GIVEN BY THE COMPANY

Certificate

This is to certify that the project work titled Technical Analysis is a summer internship work carried out by Mr. Rinkesh Mahendra Jain The project was completed for RN Patwa Shares and Stock Broker (P) Ltd under the guidance of Mr.Vimal Pandiya I further certify that the said work has not been submitted in the part or in full, to any other University.

Date:

____________________
Prof. Arati Kale Project Guide

____________________
Dr V.B. Angadi Director, Lala Lajpatrai Institute of Management

DECLARATION

I, Mr. Rinkesh Mahendra Jain , student of Lala Lajpatrai Institute of Management of MMS II (Semester III) hereby declare that I have completed the summer internship project on Technical Analysis with RN Patwa Shares and Stock Broker (P) Ltd in the Academic year 20102012. The information submitted is true & original to the best of my knowledge.

Signature of the student

ACKNOWLEDGEMENT

At the outset of this project, I would like to express my profound thanks to a few people without whose help, completion of this project would not have been possible. First and foremost, I would like to express sincere thanks to RN Patwa Shares and Stock Broker (P) Ltd for giving me this opportunity to work with them. The list is endless but to name a few special people, I would like to thank Mr.Vimal Pandya for being extremely supportive and guiding me throughout my internship and giving me constant motivation and expert advice. I would also like to thank the entire member for providing me their precious time and making this internship a successful learning experience. I am very grateful to Dr. Angadi, Director of Lala Lajpat Rai Institute of Management, for giving me the opportunity to do this project in (name of the company). My sincere thanks to Prof. Arati Kale for her valuable guidance and advice in completing this project. I would also like to thank my Prof. Arati Kale for being an excellent mentor and helping me whenever I approached him/her. Last but not the least; I take pride in thanking my family, siblings and friends for their much valued support.

INDEX
SR. NO. 1 2 3 4 5 6 7 8 9 10 CONTENT Technical Analysis-An Introduction Charts Support and Resistance TrendLine Price Patterns CandleSticks Moving Averages Oscillators Conclusion Recommendations PAGE NO. 1 8 12 16 23 35 46

EXECUTIVE SUMMARY

Bombay stock Exchange

The Bombay Stock Exchange (BSE) is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE was US$1.63 trillion as of December 2010, making it the 4th largest stock exchange in Asia and the 8th largest in the world. The BSE has the largest number of listed companies in the world.

Equity Investments
An equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and firms in anticipation of income from dividends and capital gains, as the value of the stock rises. It may also refer to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup company. When the investment is in infant companies, it is referred to as venture capital investing and is generally regarded as a higher risk than investment in listed going-concern situations.

BOLT
To facilitate smooth transactions, BSE had replaced its open outcry system with the BSE On-line Trading (BOLT) facility in 1995. This totally automated, screen-based trading in securities was put into practice nation-wide within a record time of just 50 days. BOLT has been certified by DNV for conforming to ISO 27001:2005 security standards.

Central Depository Services (India) Limited (CDSL)

A Depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry by a Depository Participant (DP), who as an agent of the depository, offers depository services to investors. According to SEBI guidelines, financial institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has to open a demat account through any DP for dematerialisation of his holdings and transferring securities. The balances in the investors account recorded and maintained with CDSL can be obtained through the DP. The DP is required to provide the investor, at regular intervals, a statement of account which gives the details of the securities holdings and transactions.

What is Dematerialization?
Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited to the investors account with his Depository Participant (DP).

Fundamental Analysis
Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:

 to conduct a company stock valuation and predict its probable price evolution, to make a projection on its business performance, to evaluate its management and make internal business decisions, to calculate its credit risk.

Technical Analysis
Technical analysis is a financial term used to denote a security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. There are various charts like Line charts, Bar charts, Candlestick charts etc and various chart patterns and indicators used to forecast the trend of the price movements of the stocks. Techincal analysis does not consider Fundamental analysis for analyzing the stock.

Rolling Settlement?
Under rolling settlement all open positions at the end of the day mandatorily result in payment/ delivery n days later. Currently trades in rolling settlement are settled on T+2 basis where T is the trade day. For example,a trade executed on Monday is mandatorily settled by Wednesday (considering two working days from the trade day). The funds and securities pay-in and pay-out are carried out on T+2 days.

What is an Auction?
On account of non-delivery of securities by the trading member on the paying day, the securities are put up for auction by the Exchange. This ensures that the

buying trading member receives the securities. The Exchange purchases the requisite quantity in auction market and gives them to the buying trading member.

What is a No-delivery period?

Whenever a company announces a book closure or record date, the exchange sets up a no-delivery period for that security. During this period only trading is permitted in the security. However, these trades are settled only after the no-delivery period is over. This is done to ensure that investor's entitlement for the corporate benefit is clearly determined.

How to go about systematically analyzing a company?

You must look for the following to make the right analysis: Industry Analysis: Companies producing similar products are subset (form a part) of an Industry/Sector. For example, National Hydroelectric Power Company (NHPC) Ltd., National Thermal Power Company (NTPC) Ltd., Tata Power Company (TPC) Ltd. etc. belong to the Power Sector/Industry of India. It is very important to see how the industry to which the company belongs is faring. Specifics like effect of Government policy, future demand of its products etc. need to be checked. At times prospects of an industry may change drastically by any alterations in business environment. For instance, devaluation of rupee may brighten prospects of all export oriented companies. Investment analysts call this as Industry Analysis.

Corporate Analysis: How has the company been faring over the past few years? Seek information on its current operations, managerial capabilities, growth plans, its past performance vis--vis its competitors etc. This is known as Corporate Analysis.

Financial Analysis: If performance of an industry as well as of the company seems good, then check if at the current price, the share is a good buy. For this look at the financial performance of the company and certain key financial parameters like Earnings Per Share (EPS), P/E ratio, current size of equity etc. for arriving at the estimated future price. This is termed as Financial Analysis. For that you need to understand financial statements of a company i.e. Balance Sheet and Profit and Loss Account contained in the Annual Report of a company.

About RN Patwa Shares and Broker (P) Ltd

RN PATWA SHARES AND STOCK BROKER (P) LTD is a service providers for stock broking. Started in 1997, the company is continuously rising on the growth chart and setting very high quality standards. It strictly emphasis on quality which is combined with the latest technology to offer its customers a competitive edge. Since its inception, the company has established a reputation for itself as a supplier of quality products. It focus on quality and aim to achieve total customer satisfaction, both in the products it offer and in the service that follows. The highest priority is on customising products. They are committed to provide what customer wants and provide quality and consistency at the best value.