TECHNICAL ANALYSIS

PROJECT REPORT ON TECHNICAL ANALYSIS IN ARYAN SECURITIES LTD (A STUDY ON SELECTED STOCKS)

A project report submitted in partial fulfillment of the requirement for the award of Masters Degree in Financial Analysis and Management

University of Mysore Mysore

Submitted by Ashwini. H Reg. No. CM310004 MFAM, IV Semester

Under the guidance of Dr. B.NAGARAJU M.Com., Ph.D Associate Professor DOS in commerce Manasagangothri, University of Mysore Mysore May 2012
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UNIVERSITY

OF MYSORE

Department Studies in Commerce Manasagangothri, Mysore-06 Dr. G. Kotreshwar, M.Com., Ph.d., Professor and Chairman

May 2012

This is to certify that Ms. ASHWINI.H is a bonafide student of IV semester, MFAM program of this department. This project report titled TECHNICAL ANALYSIS IN ARYAN SECURITIES LTD: A STUDY ON SELECTED STOCKS has been prepared by her, in partial fulfillment of the requirements of MFAM program of university of Mysore.

(Dr. G. Kotreshwar)

TECHNICAL ANALYSIS

UNIVERSITY

OF MYSORE

Department Studies in Commerce Manasagangothri, Mysore-06 Dr. Nagaraju Associate Professor

May 2012

CERTIFICATE

This is to certify that the project titled TECHNICAL ANALYSIS IN ARYAN SECURITIES LTD: A STUDY ON SELECTED STOCKS submitted to the university of Mysore in partial fulfillment of the requirements for the award of Masters Degree in financial analysis and management. This report is a record of the original work done by Ms. Ashwini.H, under my supervision and guidance and that this project work has not formed the basis for the award of any degree / diploma / associateship / fellowship or similar title of this university or any other university.

Dr. B.NAGARAJU

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DECLARATION
I ASHWINI.H hereby declare that the project entitled TECHNICAL ANALYSIS IN ARYAN SECURITIES LTD: A STUDY ON SELECTED STOCKS is prepared by me during the academic year 2011-2012 under the guidance and supervision of Dr. B. NAGARAJU, Associate professor Department of studies in commerce, Manasagangothri, university of Mysore, in partial fulfillment for the award of masters degree in financial analysis and management [MFAM] from the University of Mysore, Mysore. Further, I extend my declaration that this project report has not been presented to any other institute or university for the award of any other degree, diploma, fellowship or any other similar titles or prizes.

Place: Mysore Date: May 2012 Reg. No: COM310004 (ASHWINI.H)

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ACKNOWLEDGEMENT

This project could not have been completed without the help, guidance, suggestions and encouragement of many. I will be failing in my duty if I do not mention the name of few. I am extremely grateful to my project guide Dr. B.NAGARAJU, Associate professor, DOS in commerce, Manasagangothri, university of Mysore, for this timely and periodical advice, and constant encouragement. I would like to express my sincere gratitude to Dr. G.KOTRESHWAR, professor and chairman, department of studies in commerce, Manasagangothri, University of Mysore, for providing me with an opportunity to undertake this project. It gives me immense pleasure to express my sincere hanks and profound sense of gratitude to all the faculty members of DOS in commerce, University of Mysore, for their much appreciated support and guidance. I express my sincere thanks to Mr. B.S.SHRIKANTH, Zonal Manager & Mr. K.R. SOMASHEKAR Branch Manager of ARYAN SHARE AND STOCK BROKERS LIMITED, MYSORE, and his staff for providing the valuable guidance and encouragement throughout the completion of this project and assisting me to bring out this report successfully. I thank my family members and my friend for their continuous co operation during my studies. Last but not least this project would not have been competed without the grace of almighty god.

Place: MYSORE Date: May 2012 ASHWINI.H

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SL NO. Chapter I Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6

CONTENTS Introduction Review of Literature Company profile Industry profile Analysis and Interpretation Summary And conclusion Bibliography

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CHAPTER - 1 INTRODUTION

Prices of security in the stock market fluctuate daily on account of continuous buying and selling. Stock price movie in trends and cycle and are never stable. An investor in the stock market is interested in buying securities at low price and selling them at a high price so as to get a good return on his investment. I would advocate every player who has some interest in stock should have a working knowledge of technical analysis. Going by the maxim of knowledge of power, technical studies provided handy tools akin to versatile Swiss army knife to all players. Technical analysis is the examination of past price movement of forecasting future price movement. This theory is applicable to stocks, indices, or any tradable instrument where the price is influenced by the force of demand and supply. Price of share is influenced by the many factors. The volatility in the share price takes please based on speculation and over sensitiveness and reaction among the investors. The objectives of project is conduct the technical analysis of stock of major banking sector, to know the impact of banking stocks and know how various tools of technical analysis tools used in predicting the future stock price.

PROBLEM STATEMENT The above study is undertaken to compare the selected technical analysis tools available for forecasting. The study tries to capture the contradicting views of different tools used in technical analysis. This study is aims to exploration of the topic TECHNICAL ANALYSIS AND ITS RELEVANCE.

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Technical analysis is one of tools used to analysis stocks to make decisions (buy, hold and sell) but, technical analysis alone cannot prove to be device. So, it can be used as a supplement to fundamental analysis. Technical analysis is very important to invest smartly. Every investor would like to have handful information to decide:

On what type of security to invest? When it should be bought? When it should be sold? Whether to hold the security?

The basic idea behind the research is to make buy, hold and sell decisions of stocks. To make this decision one should have sound information base. The increasing trend towards complexity in investment decisions calls for security analysis.

OBJECTIVE OF THE STUDY The objectives of the study are stated as under: To learn when to buy, sell and hold the securities. A sample of four is taken for this purpose. To analyze the recent pattern of price movement and help investor to make profits. To know the method of calculating the various technical indicators and to interpret it. To understand the repetitive trends which reappear in the course of time. To analyze the pattern of price

SCOPE OF THE STUDY

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Technical analysis of market data has long been a pervasive activity in both security and future markets. Technical analyst believe that price and volume data provide indicators of future price movements, and that by examining these data, information may be extracted on the fundamentals driving returns. If markets are efficient in the sense that the current price impounds all information then such activity is clearly pointless. But if the process by which prices adjust to information is not immediate, then the market statistics may impound information that is not yet incorporated in to the current market price.

1. The study mainly focuses on guiding the investors in making decisions (buy, hold or sell) by determine the value of the stocks through technical analysis. 2. The analysis has been done on five stocks of IT companies listed at National stock exchange and Bombay stock exchange. 3. Out of various tools of technical analysis only three such tools are used in this study. 4. To help the investor in making decisions based on report. 5. Helps to identify trend reversal at an earlier stage to formulate the buying and selling strategy.

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RESEARCH METHODOLOGY The type of research design adopted here is both exploratory and descriptive. This project seeks to describe technical analysis and the procedure adopted in conducting it. Technical tools used for the study are CHARTS:1. Line charts. 2. Candle stick. INDICATORS:1. Moving average convergence and divergence (MACD). 2. Relative strength index. 3. Rate Of Change method.

DATA RESOURCES:The study comprises of data collection from primary and secondary sources. The relevant data were collected from the branch office and from other well know publications and NSE websites. Analysis of these data has been done after consulting with various technical analysts and stock market traders.

SECONDARY DATA:The data collected for the research purpose are secondary data. Index prices were collected through National Stock Exchange website and through prowess website. It includes data collected from the following 1. The data regarding index share price was also taken from website: www.nseindia.com. www.yahoofinance.comindia www.stockcharts.com
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2. text books LIMITATIONS OF THE STUDY The tools used for analysis are limited. Data taken as input pertains to only one year. The analysis is being done only for five companies stocks. The study is only for academic purpose only. The study is too subjective and based on historical interpretations and may not continue with the same trend. The conclusion made is based on my limited knowledge

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CHAPTER - 2 THEORETICAL VIEW

1.1 INTRODUCTION

The methods used to analyze securities and make investment decisions fall into two very broad categories: fundamental analysis and technical analysis. Fundamental analysis involves analyzing the characteristics of a company in order to estimate its value. Technical analysis takes a completely different approach; it doesn't care one bit about the "value" of a company or a commodity. Technicians (sometimes called chartists) are only interested in the price movements in the market. Despite all the fancy and exotic tools it employs, technical analysis really just studies supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future. In other words, technical analysis attempts to understand the emotions in the market by studying the market itself, as opposed to its components. If you understand the benefits and limitations of technical analysis, it can give you a new set of tools or skills that will enable you to be a better trader or investor. In finance, technical analysis is security analysis discipline for

forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis build on and incorporate many of the same tools of technical analysis , which, being an aspect of active management, stands in contradiction to much of modern portfolio theory. The efficacy of both technical and fundamental analysis is disputed by hypothesis which states that stock market prices are essentially unpredictable. CHARACTERISTICS
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Technical analysis employs models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, inter-market and intra-market price

correlations, business cycles, stock market cycles or, classically, through recognition of chart patterns. Technical analysis stands in contrast to the fundamental

analysis approach to security and stock analysis. Technical analysis analyzes price, volume and other market information, whereas fundamental analysis looks at the facts of the company, market, currency or commodity. Most large brokerage, trading group, or financial institutions will typically have both a technical analysis and fundamental analysis team. Technical analysis is widely used among traders and financial professionals and is very often used by active day traders, market makers and pit traders. In the 1960s and 1970s it was widely dismissed by academics. In a recent review, Irwin and Park reported that 56 of 95 modern studies found that it produces positive results but noted that many of the positive results were rendered dubious by issues such as data snooping, so that the evidence in support of technical analysis was inconclusive; it is still considered by many academics to be pseudoscience. Academics such as Eugene Fama say the evidence for technical analysis is sparse and is inconsistent with the weak form of the efficient-market hypothesis. Users hold that even if technical analysis cannot predict the future, it helps to identify trading opportunities. In the foreign exchange markets, its use may be more widespread than fundamental analysis. This does not mean technical analysis is more applicable to foreign markets, but that technical analysis is more recognized as to its efficacy there than elsewhere. While some isolated studies have indicated that technical trading rules might lead to consistent returns in the period prior to 1987, most academic work has focused on the nature of the

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anomalous position of the foreign exchange market. It is speculated that this anomaly is due to central bank intervention, which obviously technical analysis is not designed to predict.] Recent research suggests that combining various trading signals into a Combined Signal Approach may be able to increase profitability and reduce dependence on any single rule Principles

Stock chart showing levels of support (4, 5, 6, 7, and 8) and resistance (1, 2, and 3); levels of resistance tend to become levels of support and vice versa. A fundamental principle of technical analysis is that a market's price reflects all relevant information, so their analysis looks at the history of a security's trading pattern rather than external drivers such as economic, fundamental and news events. Price action also tends to repeat itself because investors collectively tend toward patterned behavior hence technicians' focus on identifiable trends and conditions

Market action discounts everything Based on the premise that all relevant information is already reflected by prices, technical analysts believe it is important to understand what investors think of that information, known and perceived.

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Prices move in trends Technical analysts believe that prices trend directionally, i.e., up, down, or sideways (flat) or some combination. The basic definition of a price trend was originally put forward by Dow Theory. An example of a security that had an apparent trend is AOL from November 2001 through August 2002. A technical analyst or trend follower recognizing this trend would look for opportunities to sell this security. AOL consistently moves downward in price. Each time the stock rose, sellers would enter the market and sell the stock; hence the "zig-zag" movement in the price. The series of "lower highs" and "lower lows" is a tell tale sign of a stock in a down trend. In other words, each time the stock moved lower, it fell below its previous relative low price. Each time the stock moved higher, it could not reach the level of its previous relative high price. Note that the sequence of lower lows and lower highs did not begin until August. Then AOL makes a low price that does not pierce the relative low set earlier in the month. Later in the same month, the stock makes a relative high equal to the most recent relative high. In this a technician sees strong indications that the down trend is at least pausing and possibly ending, and would likely stop actively selling the stock at that point. . History tends to repeat itself Technical analysts believe that investors collectively repeat the behavior of the investors that preceded them. To a technician, the emotions in the market may be irrational, but they exist. Because investor behavior repeats itself so often, technicians believe that recognizable (and predictable) price patterns will develop on a chart. Technical analysis is not limited to charting, but it always considers price trends. For example, many technicians monitor surveys of investor sentiment. These surveys gauge the attitude of market participants,
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specifically whether they are bearish or bullish. Technicians use these surveys to help determine whether a trend will continue or if a reversal could develop; they are most likely to anticipate a change when the surveys report extreme investor sentiment. Surveys that show overwhelming bullishness, for example, are evidence that an uptrend may reverse; the premise being that if most investors are bullish they have already bought the market (anticipating higher prices). And because most investors are bullish and invested, one assumes that few buyers remain. This leaves more potential sellers than buyers, despite the bullish sentiment. This suggests that prices will trend down, and is an example of contrarian trading. Recently, Kim Man Lui, Lun Hu, and Keith C.C. Chan have suggested that there is statistical evidence of association relationships between some of the index composite stocks whereas there is no evidence for such a relationship between some indexes composite others. They show that the price behavior of these Hang Seng index composite stocks is easier to understand than that of the index.

ASSUMPTIONS OF TECHNICAL ANALYSIS The field of technical analysis is based on three assumptions: 1. The market discounts everything. 2. Price moves in trends. 3. History tends to repeat itself.

1. The Market Discounts Everything A major criticism of technical analysis is that it only considers price movement, ignoring the fundamental factors of the company. However, technical analysis assumes that, at any given time, a stock's price reflects everything that has or could affect the company - including fundamental factors. Technical analysts believe that the company's fundamentals, along
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with broader economic factors and market psychology, are all priced into the stock, removing the need to actually consider these factors separately. This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market. 2. Price Moves in Trends In technical analysis, price movements are believed to follow trends. This means that after a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. Most technical trading strategies are based on this assumption. 3. History Tends To Repeat Itself Another important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Technical analysis uses chart patterns to analyze market movements and understand trends. Although many of these charts have been used for more than 100 years,

Types of charts There are four main types of charts that are used by investors and traders depending on the information that they are seeking and their individual skill levels. The chart types are: the line chart, the bar chart, the candlestick chart and the point and figure chart. In the following sections, we will focus on the S&P 500 Index during the period of January 2006 through May 2006. Notice how the data used to create the charts is the same, but the way the data is plotted and shown in the charts is different.

1. Line Chart The most basic of the four charts is the line chart because it represents only the closing prices over a set period of time. The line is formed by
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connecting the closing prices over the time frame. Line charts do not provide visual information of the trading range for the individual points such as the high, low and opening prices. However, the closing price is often considered to be the most important price in stock data compared to the high and low for the day and this is why it is the only value used in line charts.

2. Bar Charts The bar chart expands on the line chart by adding several more key pieces of information to each data point. The chart is made up of a series of vertical lines that represent each data point. This vertical line represents the high and low for the trading period, along with the closing price. The close and open are represented on the vertical line by a horizontal dash. The opening price on a bar chart is illustrated by the dash that is located on the left side of the vertical bar. Conversely, the close is represented by the dash on the right. Generally, if the left dash (open) is lower than the right dash (close) then the bar will be shaded black, representing an up period for the stock, which means it has gained value. A bar that is colored red signals that

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the stock has gone down in value over that period. When this is the case, the dash on the right (close) is lower than the dash on the left (open).

3. Candlestick Charts The candlestick chart is similar to a bar chart, but it differs in the way that it is visually constructed. Similar to the bar chart, the candlestick also has a thin vertical line showing the period's trading range. The difference comes in the formation of a wide bar on the vertical line, which illustrates the difference between the open and close. And, like bar charts, candlesticks also rely heavily on the use of colors to explain what has happened during the trading period. A major problem with the candlestick color configuration, however, is that different sites use different standards; therefore, it is important to understand the candlestick configuration used at the chart site you are working with. There are two color constructs for days up and one for days that the price falls. When the price of the stock is up and closes above the opening trade, the candlestick will usually be white or clear. If the stock has traded down for the period, then the candlestick will usually be red or black, depending on the site. If the stock's price has closed above the

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previous days close but below the day's open, the candlestick will be black or filled with the color that is used to indicate an up day.

4. Point and Figure Charts The point and figure chart is not well known or used by the average investor but it has had a long history of use dating back to the first technical traders. This type of chart reflects price movements and is not as concerned about time and volume in the formulation of the points. The point and figure chart removes the noise, or insignificant price movements, in the stock, which can distort traders' views of the price trends. These types of charts also try to neutralize the skewing effect that time has on chart analysis.

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When first looking at a point and figure chart, you will notice a series of Xs and Os. The Xs represent upward price trends and the Os represent downward price trends. There are also numbers and letters in the chart; these represent months, and give investors an idea of the date. Each box on the chart represents the price scale, which adjusts depending on the price of the stock: the higher the stock's price the more each box represents. On most charts where the price is between $20 and $100, a box represents $1, or 1 point for the stock. The other critical point of a point and figure chart is the reversal criteria. This is usually set at three but it can also be set according to the chartist's discretion. The reversal criteria set how much the price has to move away from the high or low in the price trend to create a new trend or, in other words, how much the price has to move in order for a column of Xs to become a column of Os, or vice versa. When the price trend has moved from one trend to another, it shifts to the right, signaling a trend change. Conclusion Charts are one of the most fundamental aspects of technical analysis. It is important that you clearly understand what is being shown on a chart and
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the information that it provides. Now that we have an idea of how charts are constructed, we can move on to the different types of chart patterns.

Technical Analysis: Moving Averages Most chart patterns show a lot of variation in price movement. This can make it difficult for traders to get an idea of a security's overall trend. One simple method traders use to combat this is to apply moving averages. A moving average is the average price of a security over a set amount of time. By plotting a security's average price, the price movement is smoothed out. Once the day-to-day fluctuations are removed, traders are better able to identify the true trend and increase the probability that it will work in their favor.

Types of Moving Averages There are a number of different types of moving averages that vary in the way they are calculated, but how each average is interpreted remains the same. The calculations only differ in regards to the weighting that they place on the price data, shifting from equal weighting of each price point to more weight being placed on recent data. The three most common types of moving averages are simple, linear and exponential.

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Simple Moving Average (SMA) This is the most common method used to calculate the moving average of prices. It simply takes the sum of all of the past closing prices over the time period and divides the result by the number of prices used in the calculation. For example, in a 10-day moving average, the last 10 closing prices are added together and then divided by 10. As you can see in Figure 1, a trader is able to make the average less responsive to changing prices by increasing the number of periods used in the calculation. Increasing the number of time periods in the calculation is one of the best ways to gauge the strength of the long-term trend and the likelihood that it will reverse.

Many individuals argue that the usefulness of this type of average is limited because each point in the data series has the same impact on the result regardless of where it occurs in the sequence. The critics argue that the most recent data is more important and, therefore, it should also have a higher weighting. This type of criticism has been one of the main factors leading to the invention of other forms of moving averages.

Linear Weighted Average

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This moving average indicator is the least common out of the three and is used to address the problem of the equal weighting. The linear weighted moving average is calculated by taking the sum of all the closing prices over a certain time period and multiplying them by the position of the data point and then dividing by the sum of the number of periods. For example, in a five-day linear weighted average, today's closing price is multiplied by five, yesterday's by four and so on until the first day in the period range is reached. These numbers are then added together and divided by the sum of the multipliers.

Exponential Moving Average (EMA) This moving average calculation uses a smoothing factor to place a higher weight on recent data points and is regarded as much more efficient than the linear weighted average. Having an understanding of the calculation is not generally required for most traders because most charting packages do the calculation for you. The most important thing to remember about the exponential moving average is that it is more responsive to new information relative to the simple moving average. This responsiveness is one of the key factors of why this is the moving average of choice among many technical traders. As you can see in Figure 2, a 15-period EMA rises and falls faster than a 15-period SMA. This slight difference doesnt seem like much, but it is an important factor to be aware of since it can affect returns.

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Major Uses of Moving Averages Moving averages are used to identify current trends and trend reversals as well as to set up support and resistance levels. Moving averages can be used to quickly identify whether a security is moving in an uptrend or a downtrend depending on the direction of the moving average. As you can see in Figure 3, when a moving average is heading upward and the price is above it, the security is in an uptrend. Conversely, a downward sloping moving average with the price below can be used to signal a downtrend.

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Another method of determining momentum is to look at the order of a pair of moving averages. When a short-term average is above a longer-term average, the trend is up. On the other hand, a long-term average above a shorter-term average signals a downward movement in the trend. Moving average trend reversals are formed in two main ways: when the price moves through a moving average and when it moves through moving average crossovers. The first common signal is when the price moves through an important moving average. For example, when the price of a security that was in an uptrend falls below a 50-period moving average, like in Figure 4, it is a sign that the uptrend may be reversing.

The other signal of a trend reversal is when one moving average crosses through another. For example, as you can see in Figure 5, if the 15day moving average crosses above the 50-day moving average, it is a positive sign that the price will start to increase.

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If the periods used in the calculation are relatively short, for example 15 and 35, this could signal a short-term trend reversal. On the other hand, when two averages with relatively long time frames cross over (50 and 200, for example), this is used to suggest a long-term shift in trend. Another major way moving averages are used is to identify support and resistance levels. It is not uncommon to see a stock that has been falling stop its decline and reverse direction once it hits the support of a major moving average. A move through a major moving average is often used as a signal by technical traders that the trend is reversing. For example, if the price breaks through the 200-day moving average in a downward direction, it is a signal that the uptrend is reversing.

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Moving averages are a powerful tool for analyzing the trend in a security. They provide useful support and resistance points and are very easy to use. The most common time frames that are used when creating moving averages are the 200-day, 100-day, 50-day, 20-day and 10-day. The 200-day average is thought to be a good measure of a trading year, a 100-day average of a half a year, a 50-day average of a quarter of a year, a 20-day average of a month and 10-day average of two weeks. Moving averages help technical traders smooth out some of the noise that is found in day-to-day price movements, giving traders a clearer view of the price trend. So far we have been focused on price movement, through charts and averages. In the next section, we'll look at some other techniques used to confirm price movement and patterns

TRENDS One of the most important concepts in technical analysis is that of trend. The meaning in finance isn't all that different from the general definition of the term - a trend is really nothing more than the general direction in which a security or market is headed. Take a look at the chart below:

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It isn't hard to see that the trend in Figure 1 is up. However, it's not always this easy to see a trend

There are lots of ups and downs in this chart, but there isn't a clear indication of which direction this security is headed.

A More Formal Definition Unfortunately, trends are not always easy to see. In other words, defining a trend goes well beyond the obvious. In any given chart, you will probably notice that prices do not tend to move in a straight line in any direction, but rather in a series of highs and lows. In technical analysis, it is
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the movement of the highs and lows that constitutes a trend. For example, an uptrend is classified as a series of higher highs and higher lows, while a downtrend is one of lower lows and lower highs.

Figure 3 is an example of an uptrend. Point 2 in the chart is the first high, which is determined after the price falls from this point. Point 3 is the low that is established as the price falls from the high. For this to remain an uptrend each successive low must not fall below the previous lowest point or the trend is deemed a reversal.

Types of Trend There are three types of trend: 1. Uptrend 2. Downtrends 3. Sideways/Horizontal Trends As the names imply, when each successive peak and trough is higher, it's referred to as an upward trend. If the peaks and troughs are getting lower, it's a downtrend. When there is little movement up or down in the peaks and troughs, it's a sideways or horizontal trend. If you want to get really technical, you might even say that a sideways trend is actually not a trend on its own, but a lack of a well-defined trend in either direction. In any case, the market can really only trend in these three ways: up, down or nowhere.

1. Upward Trend
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An upward trend is denoted by the systematic and extended rise in the price of the given currency pair over some prolonged period of time. This does not mean that the price of the given currency pair never recedes, but merely that in the overall picture the price raises more than it falls in the given timeframe. A theoretical sketch of an uptrend is presented on the right. An example of upward trend is show below

If the graph shows upward trend, we can say that it is bullish in market (increase in prices). It give signal to sell.

2. Downward Trend A downward trend shares all the characteristics of the upward trend but in the reverse direction, thus denoting the fall in the price of a given currency pair.
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On the right we show a theoretical image of a downward trend, and a real life counterpart below.

3. Sideways Trend The sideways trend is also known as a trend less, ranging or flat market. Though similar to the other two types, the sideways trend shows no major difference in the price values between the beginning and the end of a specific time period. The sideways trend denotes market conditions in which prices may be moving back and forth between levels of support and resistance (covered next).

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Trend Lengths Along with these three trend directions, there are three trend classifications. A trend of any direction can be classified as a long-term trend, intermediate trend or a short-term trend. In terms of the stock market, a major trend is generally categorized as one lasting longer than a year. An intermediate trend is considered to last between one and three months and a near-term trend is anything less than a month. A long-term trend is composed of several intermediate trends, which often move against the direction of the major trend. If the major trend is upward and there is a downward correction
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in price movement followed by a continuation of the uptrend, the correction is considered to be an intermediate trend. The short-term trends are components of both major and intermediate trends. Take a look a Figure 4 to get a sense of how these three trend lengths might look.

When analyzing trends, it is important that the chart is constructed to best reflect the type of trend being analyzed. To help identify long-term trends, weekly charts or daily charts spanning a five-year period are used by chartists to get a better idea of the long-term trend. Daily data charts are best used when analyzing both intermediate and short-term trends. It is also important to remember that the longer the trend, the more important it is; for example, a one-month trend is not as significant as a five-year trend.

Trend lines A trend line is a simple charting technique that adds a line to a chart to represent the trend in the market or a stock. Drawing a trend line is as simple as drawing a straight line that follows a general trend. These lines are used to clearly show the trend and are also used in the identification of trend reversals. As you can see in Figure 5, an upward trend line is drawn at the lows of an upward trend. This line represents the support the stock has every time
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it moves from a high to a low. Notice how the price is propped up by this support. This type of trend line helps traders to anticipate the point at which a stock's price will begin moving upwards again. Similarly, a downward trend line is drawn at the highs of the downward trend. This line represents the resistance level that a stock faces every time the price moves from a low to a high.

Figure 5

Channels A channel, or channel lines, is the addition of two parallel trend lines that act as strong areas of support and resistance. The upper trend line connects a series of highs, while the lower trend line connects a series of lows. A channel can slope upward, downward or sideways but, regardless of the direction, the interpretation remains the same. Traders will expect a given security to trade between the two levels of support and resistance until it breaks beyond one of the levels, in which case traders can expect a sharp move in the direction of the break. Along with clearly displaying the trend, channels are mainly used to illustrate important areas of support and resistance.

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This illustrates a descending channel on a stock chart; the upper trend line has been placed on the highs and the lower trend line is on the lows. The price has bounced off of these lines several times, and has remained rangebound for several months. As long as the price does not fall below the lower line or move beyond the upper resistance, the range-bound downtrend is expected to continue.

The Importance of Trend It is important to be able to understand and identify trends so that you can trade with rather than against them. Two important sayings in technical analysis are "the trend is your friend" and "don't buck the trend," illustrating how important trend analysis is for technical traders

INDICATORS USED IN TECHNICAL ANALYSIS

1. Relative Strength Index The relative strength index (RSI) is another one of the most used and well-known momentum indicators in technical analysis. RSI helps to signal
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overbought and oversold conditions in a security. The indicator is plotted in a range between zero and 100. A reading above 70 is used to suggest that a security is overbought, while a reading below 30 is used to suggest that it is oversold. This indicator helps traders to identify whether a securitys price has been unreasonably pushed to current levels and whether a reversal may be on the way.

The standard calculation for RSI uses 14 trading days as the basis, which can be adjusted to meet the needs of the user. If the trading period is adjusted to use fewer days, the RSI will be more volatile and will be used for shorter term trades.

2. Moving Average Convergence The moving average convergence divergence (MACD) is one of the most well known and used indicators in technical analysis. This indicator is comprised of two exponential moving averages, which help to

measure momentum in the security. The MACD is simply the difference between these two moving averages plotted against a centerline. The centerline is the point at which the two moving averages are equal. Along
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with the MACD and the centerline, an exponential moving average of the MACD itself is plotted on the chart. The idea behind this momentum indicator is to measure short-term momentum compared to longer term momentum to help signal the current direction of momentum.

Moving average - longer term moving average When the MACD is positive, it signals that the shorter term moving average is above the longer term moving average and suggests upward momentum. The opposite holds true when the MACD is negative - this signals that the shorter term is below the longer and suggest downward momentum. When the MACD line crosses over the centerline, it signals a crossing in the moving averages. The most common moving average values used in the calculation are the 26-day and 12-day exponential moving averages. The signal line is commonly created by using a nine-day exponential moving average of the MACD values. These values can be adjusted to meet the needs of the technician and the security. For more volatile securities, shorter term averages are used while less volatile securities should have longer averages. Another aspect to the MACD indicator that is often found on charts is the MACD histogram. The histogram is plotted on the centerline and represented by bars. Each bar is the difference between the MACD and the signal line or, in most cases, the nine-day exponential moving average. The higher the bars are in either direction, the more momentum behind the direction in which the bars point. As you can see in Figure 2, one of the most common buy signals is generated when the MACD crosses above the signal line (blue dotted line), while sell signals often occur when the MACD crosses below the signal.

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3. ROC It is a very popular oscillator which measures the rate of change of the current price as Compared to the price a certain number of days or week back. To calculate a 7 day ROC, each Day price is divided by the price with prevailed 7 day ago and then 1 is subtracted from this Price, one should buy a share that is oversold and sell a share that is over brought. In ROC Chart, the overbought zone is above the zero line and over sold zone is below the zero line for identifying buying and selling opportunities. Upside crossing (from below to above the zero line). Indicates a buying opportunities. While down side crossing (from above to below the zero line) indicates a selling opportunity

Schools of technical analysis 1. Dow theory 2. Elliot wave theory

1. DOW THEORY

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The Dow Theory on stock price movement is a form of technical analysis that includes some aspects of sector rotation. The theory was derived from 255 Wall Street Journal editorials written by Charles H. Dow (1851 1902), journalist, founder and first editor of the Wall Street Journal and cofounder of Dow Jones and Company. Following Dow's death, William Peter Hamilton, Robert Rhea and E. George Schaefer organized and collectively represented Dow theory, based on Dow's editorials. Dow himself never used the term Dow Theory nor presented it as a trading system.

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Six basic tenets of Dow Theory

1.

The market has three movements The "main movement", primary movement or major trend may last

from less than a year to several years. It can be bullish or bearish. (2) The "medium swing", secondary reaction or intermediate reaction may last from ten days to three months and generally retraces from 33% to 66% of the primary price change since the previous medium swing or start of the main movement. (3) The "short swing" or minor movement varies with opinion from hours to a month or more. The three movements may be simultaneous, for instance, a daily minor movement in a bearish secondary reaction in a bullish primary movement.

2.

Market trends have three phases Dow Theory asserts that major market trends are composed of three

phases: an accumulation phase, a public participation phase, and a distribution phase. The accumulation phase (phase 1) is a period when investors "in the know" are actively buying (selling) stock against the general opinion of the market. During this phase, the stock price does not change much because these investors are in the minority demanding (absorbing) stock that the market at large is supplying (releasing). Eventually, the market catches on to these astute investors and a rapid price change occurs (phase 2). This occurs when trend followers and other technically oriented investors participate. This phase continues until rampant speculation occurs. At this point, the astute investors begin to distribute their holdings to the market (phase 3).

3.

The stock market discounts all news Stock prices quickly incorporate new information as soon as it

becomes available. Once news is released, stock prices will change to reflect
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this new information. On this point, Dow Theory agrees with one of the premises of the efficient market hypothesis.

4.

Stock market averages must confirm each other In Dow's time, the US was a growing industrial power. The US had

population centers but factories were scattered throughout the country. Factories had to ship their goods to market, usually by rail. Dow's first stock averages were an index of industrial (manufacturing) companies and rail companies. To Dow, a bull market in industrials could not occur unless the railway average rallied as well, usually first. According to this logic, if manufacturers' profits are rising, it follows that they are producing more. If they produce more, then they have to ship more goods to consumers. Hence, if an investor is looking for signs of health in manufacturers, he or she should look at the performance of the companies that ship the output of them to market, the railroads. The two averages should be moving in the same direction. When the performance of the averages diverges, it is a warning that change is in the air. Both Barron's Magazine and the Wall Street Journal still publish the daily performance of the Dow Jones Transportation Index in chart form. The index contains major railroads, shipping companies, and air freight carriers in the US.

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5.

Trends are confirmed by volume Dow believed that volume confirmed price trends. When prices move

on low volume, there could be many different explanations. An overly aggressive seller could be present for example. But when price movements are accompanied by high volume, Dow believed this represented the "true" market view. If many participants are active in a particular security, and the price moves significantly in one direction, Dow maintained that this was the direction in which the market anticipated continued movement. To him, it was a signal that a trend is developing.

6.

Trends exist until definitive signals prove that they have ended Dow believed that trends existed despite "market noise". Markets

might temporarily move in the direction opposite to the trend, but they will soon resume the prior move. The trend should be given the benefit of the doubt during these reversals. Determining whether a reversal is the start of a new trend or a temporary movement in the current trend is not easy. Dow Theorists often disagree in this determination. Technical analysis tools attempt to clarify this but they can be interpreted differently by different investors

2. ELLIOT WAVE THEORY:

R. N. Elliott believed markets had well-defined waves that could be used to predict market direction. In 1939, Elliott detailed the Elliott Wave Theory, which states that stock prices are governed by cycles founded upon the Fibonacci series (1-2-3-5-8-13-21.) There are many theories, which seek to explain the behavior of the stock market. One such theory, in technical analysis, is the wave theory formulated by Ralph Elliot, known as the Elliot wave theory. A wave is a movement of the market price from one change in the direction to the next
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change in the same direction. The waves are the result of buying and selling impulses emerging from the demand and supply pressures on the market. According to the Elliott Wave Theory, stock prices tend to move in a predetermined number of waves consistent with the Fibonacci series. Specifically, Elliott believed the market moved in five distinct waves on the upside and three distinct on the downside. Waves one, three and five represent the impulse, or minor up-waves is a major bull move. Waves two and four represent the corrective, or minor down-waves in the major bull move. The waves lettered A and C represents the minor down-waves in a major bear move, while B represents the one upwave in a minor bear wave. Elliott proposed that the waves existed at many levels, meaning there could be waves within waves. To clarify, this means that the chart above not only represents the primary wave pattern, but it could also represent what occurs just between points 2 and 4. The diagram below shows how primary waves could be broken down into smaller waves.

The basic shape of the wave is shown.

Elliott Wave theory describes names to the waves in order of descending size:

1. cycle
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Grand

Super

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2. 3. 4. 5. 6. 7. 8. 9.

Super cycle Cycle Primary Intermediate Minor Minute Minuette Sub-Minuette

The major waves determine the major trend of the market, and minor waves determine minor trends. This is similar to the way Dow Theory postulates primary and secondary trends. Elliott provided numerous variations on the main wave, and placed particular importance on the golden mean, 0.618, as a significant percentage for retracement. Trading using Elliott Wave patterns is quite simple. The trader identifies the main wave or Super cycle, enters long, and then sells or shorts, as the reversal is determined. This continues in progressively shorter cycles until the cycle completes and the main wave resurfaces. The caution to this is that much of the wave identification is taken in hindsight and disagreements arise between Elliott Wave technicians as to which cycle the market is in.

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CHAPTER - 3 COMPANY PROFILE

INTRODUCTION This section comprises of the profile of Aryan Share & Stock Brokers Ltd. Where the study of the project carried out for the purpose of collecting primary data. Aryan, a leading multicrore Share Broking company having Pan India Presence, is successfully assisting & establishing its large clientele base in the nifty gritty of financial business. With a strong infrastructure & experienced team across the country, Aryan Share & Stock Brokers Ltd. has established itself as a Intermediary in its more than a decade of existence. Adapting itself quickly to the changing times & financial markets across the globe, Aryan Share & Stock Brokers Ltd. is in a position to provide the much needed expertise that every client looks for in stock trading & financial planning.

ARYAN SHARE AND STOCK BROKERS LIMITED

Aryan - The people you can depend on as your Financial Lifeguards. ARYAN SHARE AND STOCK BROKERS LIMITED (ASSBL) is promoted by team of dynamic entrepreneurs, having stock market expertise for a couple of decades and a collective work experience of more than 100 man years. TEAM ARYAN formed in 1993 with the membership OF THE
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MADRAS STOCK EXCHANGE LIMITED, incorporated ASSBL during 1995 with a subscribed capital base of Rs 300 Lacs. Our maiden public issue during 1996, made ASSBL as one of the most widely held stock brokerage house in south India. Today our net worth exceeds the capital in multi folds and our esteemed clientele comprises all walks of financial world. (Viz.) INVESTORS, HIGH NET WORTH INDIVIDUALS, SUB BROKERS, TRADERS AND BODY CORPORATES. FOCUS AND SERVICES: Since inception we have always focused on retail stock brokering service and making the best in customized services solution for investors in the retail segment of stock market. We serve this segment of stock market through our own virtual private network connecting our clients through C-BAND V.sats, KU band V.sats, Leased Lines, integrated service digital network lines and broad band connectivity though internet. We are specialized in the secondary market operations, covering the capital market segment and the derivatives segment (F&O). At assbl, we also offer online trading facility (internet trading - online), covering services across major stretches of India. At ASSBL we have shrinked the communication barriers through a systematic network of channel partners. Our emphasis on the role of channel partners has been of core importance and their process we have categorized regional offices at: JAIPUR Northern zone VADODARA Western zone COIMBATORE Southern zone BHIMAVARAM Eastern zone NAGPR Central zone In addition to the above, the other value added services provided to our esteemed clients are Primary services and commodities and market operation (IPO distribution), Portfolio guidance, investment awareness programmes, Technical analysis guidance on stocks, conducting session on expertise to trade,

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Multi option deposits for trading and above all offering CTCL (computer to computer link) facility at different locations. Online internet trading (e. braking) Online facility of Demat services a commodities trading. INFRASTRUCTURE: The registered office operating on an owned space has space dealing room, separate segments for technical research studies and a fully automated marketing division. ASSBL has many firsts to its credit, we have taken pioneering initiatives to usher-in new generation, state of the art automated stock-broking house. We have exclusive offices for research team, marketing division, back office and accounts section. All the dealing offices are customized to the best comfort and convenience of our clientele. Our back office is complied with all the latest office automation and the software as well as networking devices used for various segment in our office are supplied and supported by leading establishments, maintaining world class standard for their products. CORE TEAM: MR.MANOJ.N.SHAH CHAIRMAN MR.SHANMUKH.N.SHAH MANAGING DIRECTOR MR.PARESH.N.S SHAH BUSINESS DIRECTOR MR.R.GIRIDHAR GENERAL MANAGER MR.ARUN MANDAVIYA MANAGER CORPORATE DIVISION MR B S SRIKANTH - ZONAL MANAGER, MR SOMASHEKAR K R - BRANCH MANAGER (MYSORE).

ASSBL understands the necessity of investors and their presence is very much vital for the retail segment, which is the first and most preferred need of entire stock market and fulfilling the financial solution in the retail segment can be done only on case to case basis. It is this thought team Aryan, has made us to be a preferred as well different solution for all different clients because here you find avenues unlimited. MYSORE BRANCH ADDRESS:
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MR B S SRIKANTH(ZONAL MANAGER), MR SOMASHEKAR K R(BRANCH MANAGER) +(91)-(821)-4269444, 4282933 +(91)-9035398392, 9972823434 www.assbl.com NO 1, 2ND FLOOR, ABOVE ISMAIL OPTICALS, OPP BAKE POINT, VISHWAMANAVA DOUBLE ROAD, SARASWATHIPURAM, MYSORE - 570009 |

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CHAPTER - 4 INDUSTRY PROFILE

This chapter comprises of the sample companies which are listed in the recognized stock exchange of india (nifty). The sample companies are as follows

BHARTI AIRTEL : Airtel Limited (NSE: BHARTIARTL, BSE: 532454), commonly known as Airtel, is an Indian telecommunications company that operates in 20 countries across South Asia, Africa and the Channel Islands. It operates a GSM network in all countries, providing 2G, 3G and 4G services depending upon the country of operation. Airtel is the third largest telecom operator in the world with over 243.336 million customers across 20 countries as of March 2012It is the largest cellular service provider in India, with over 181 million subscribers at the end of March 2012. Airtel is the third largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services. It offers its telecom services under the airtel brand, and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve Cisco Gold Certification. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. It is known for being the first mobile phone company in the world to outsource all of its business operations except marketing, sales and finance. Its networkbase stations, microwave links, etc.is maintained
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by Ericsson, Nokia Siemens twork and Huawei, and business support is provided by IBM, and transmission towers are maintained by another company (Bharti Infratel Ltd. in India). Ericsson agreed for the first time to be paid by the minute for installation and maintenance of their equipment rather than being paid up front, which allowed Airtel to provide low call rates of 1/minute (US$0.02/minute). During the last financial year (200910), Bharti negotiated for its strategic partner Alcatel-Lucent to manage the network infrastructure for the tele-media business Bharti airtel limited is a leading global telecommunications company with operations in 19 countries across Asia and Africa. The company offers mobile voice & data services, fixed line, high speed broadband, IPTV, DTH, turnkey telecom solutions for enterprises and national & international long distance services to carriers. bharti airtel has been ranked among the six best performing technology companies in the world by business week. bharti airtel had 200 million customers across its operations. Highlights Bharti Airtel selects Infosys as its technology partner for 'airtel money' Now use airtel money to make payments and transfer money across India Bharti Airtel announces its third quarter ended December 31, 2011 on February 8, 2012 Bharti Airtel appoints Suren Goonewardene as CEO Sri Lanka Bharti Airtel to Observe Silent period from December 31, 2011 Airtel Mobitude 2011 reveals data traffic trends on mobile devices in India

History
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Sunil Bharti Mittal founded the Bharti Group. In 1983, Sunil Mittal was into an agreement with Germany's Siemens to manufacture the company's push-button telephone models for the Indian market. In 1986, Sunil Bharti Mittal incorporated Bharti Telecom Limited (BTL) and his company became the first in India to offer push-button telephones, establishing the basis of Bharti Enterprises. This first-mover advantage allowed Sunil Mittal to expand his manufacturing capacity elsewhere in the telecommunications market. By the early 1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless telephones. In 1992, Sunil Mittal won a bid to build a cellular phone network in Delhi. In 1995, Sunil Mittal incorporated the cellular operations as Bharti TeleVentures and launched service in Delhi. In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar.'2009, Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel began operating end Today, Airtel is the largest cellular service in India and fifth largest in the world. Organizational Structure The organizational structure that existed till recently concentrated on the hierarchy of the operations(not services) inside the company as a whole. The structure depicts the corresponding operation/region of different incharges and hence it didn't hold anyone responsible for each of its services.
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So, the company found it better to restructure its organisational chart and it came into implementation from 1 August. The transformed organisational structure will have two distinct Customer Business Units (CBU) with clear focus on B2C (Business to Customer) and B2B (Business to Business) segments. Bharti Airtel's B2C business unit will comprehensively service the retail consumers, homes and small offices, by combining the erstwhile business units Mobile, Telemedia, Digital TV, and other emerging businesses (like M-commerce, M-health, M-advertising etc.). The B2C organization will consist of Consumer Business and Market Operations. It is the largest telecommunication company in India.

Registered Address Bharti Crescent 1, Nelson Mandela Road,,Vasant Kunj New Delhi Delhi 110070

Tel: 011-46666100 011-46666500 Fax: 011-46666137 011-41666149 Email: compliance.officer@bharti.in Website: http://www.airtel.com Group: Bharti Group Registrars Karvy Computershare Private Ltd. "Karvy House" 46, Avenue 4, Street No. 1
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Banjara Hills Tel: 040-23312454, 23320251/751/75 Fax: 040-23311968 Email: mailmanager@karvy.com Website: http://www.karvy.com

Wipro Limited: Wipro Limited (formerly Western India Products Limited(Amalner)is an Indian global IT services and consulting company headquartered in Bangalore, India. As of 2012, Wipro is the second largest IT services company by turnover in India, employing about 120,000 people worldwide as of December 2011. It provides outsourced research and development, infrastructure outsourcing, business process outsourcing (BPO) and business consulting services. The company operates in three segments: IT Services, IT Products, Consumer Care and Lighting. It is 9th most valuable brand in India according to an annual survey conducted by Brand Finance and The Economic Times in 2010. Wipro company profile is a medium which illustrates entire on goings projects and products of Wipro technology limited. This company deals in many products that are know in market as Wipro products and in these category Wipro computers are considered excellent ones. Many people all around world are using Wipro computers due to its very reliable services and reputation of company. Among various other Wipro products, Wipro consulting services also hold a major role. All clients all over world are tagged under Wipro consulting services. Latest and advanced innovations in Wipro technology make this organization a leading Information technology company in India. As per Wipro company profile, this organization has its head office in city of Bangalore in India. Wipro consulting services directs its clients towards consultancy services for their product to be dealt with. Apart from this, quality of product
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also comes under Wipro consulting services. Large numbers of clients are guided on terms of profitable products and ethical technology for best quality of these products by this organization. Wipro company profile tells that Wipro consulting services holds more than two hundred of clients in United States and Europe. Under other Wipro products, management of health care is also one. Latest Wipro technology has introduced devices in medical field. Through this latest range of Wipro products, doctors can regulate record of patients healthcare from distant locations. This Wipro technology has brought a boon in medical field. Wipro company profile enlightens that Wipro products are designed using such Wipro technology which keeps a view on benefits of customers. As per Wipro company profile, this organization was established in year of nineteen hundred and forty five but Wipro computers were introduced in later years. In the former years, other products which have also flourished greatly are dealt under the brand of Wipro. Charge of this company was handled by son of former chairman of company under whose chairmanship Wipro computers were introduced in the market. Logo of company on Wipro computers is a sign of effective and efficient functionality of windows program. Every user throughout world relies on functionalities of this brand product of Wipro Company History The company was established in 1945 by Mohamed Hasham Premji as Western India Products Limited listed on the New York Stock Exchange. Wipro was initially set up as a vegetable oil manufacturer in 1945 in Amalner, Maharashtra, producing sunflower Vanaspati oil and soaps. At that time, the company was called Western India Vegetable Products Limited (later abbreviated down to Wipro). The company logo still contains a sunflower to reflect their original business. During the 1970s and 1980s, the company shifted its focus and began to look into business opportunities in the IT and computing industry, which was at nascent stages in India at that time.
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Wipro marketed the first indigenous homemade PC from India in 1985. In 1966 Azim Premji, still the majority shareholder as the chairman of the company at the age of 21 and with the passage of time transformed it into one of the largest IT outsourcing services provider of the world. Wipro won the Golden Peacock Innovative Service Award for effective service delivery using state of art technology in 2001. Wipro was awarded SVG1, the highest rating in Stakeholder Value Creation and Governance Practices by ICRA, a premier credit rating agency in India and an associate of Moodys Investor Services of USA. Wipro was awarded the India Manufacturing Excellence Award for its factory in Pondicherry in the large enterprises category by Frost & Sullivan. Wipro was awarded the ASTD BEST Awards for 2005 by the American Society of Training and Development. Wipro's Global Command Centre won the Marico Foundation and Business World's Innovation for India Award in 2006. The conglomerate was rated as the No.1 Network Integrator and No.1 Network Security Services Provider by Voice & Data Magazine. Wipro was ranked 37 in The Brand Trust Report among the most trusted brands in India. Wipro BPO Wipro BPO employs over 22,000, of whom 3,150 are at its Hyderabad campus. The planned new recruitments will be from among science and commerce graduates and under-graduates. The majority of Wipro BPOs business comes from the US, followed by Europe. The rest of the world contributes only marginally to its top line. The company posted a turnover of $290 million in FY08. Founded in 2002, Wipro BPO has operations in Delhi, Pune, Kolkata, Chennai, Mumbai, Hyderabad, Navi-Mumbai (Belapur) Greater Noida, Mysore and Kochi in India. It also has offices in Bucharest and Timisoara in Romania (Europe), Shanghai and Cebu in Asia and Curitiba in Brazil and Warsaw and Katowice in Poland. It has 44 clients in segments such as
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banking & capital markets, insurance, travel & hospitality, hi-tech manufacturing, telecom and healthcare Wipro divisions The group companies of Wipro Limited.

Wipro Consumer Care & Lighting (WCCLG):- It has a profitable

presence in the branded retail market of toilet soaps, hair care soaps, baby care products and lighting products. WCCLG is also a leader. in institutional lighting in specified segments like software, pharma and retail.

Wipro Infrastructure Engineering:- It is generally known for

manufactures precision-engineered hydraulic cylinders and truck hydraulic solutions for the infrastructure and related industries. It the second largest independent Hydraulic Cylinder manufacturer in the world.

Wipro GE Medical Systems Limited:- It is a Joint venture between

Wipro Limited and General Electric basically delivering what it calls "quality solutions that effectively meet the needs of customers and patients". Its products and services range from diagnostics to IT, helping healthcare professionals combat cancer, heart disease and other ailments. Registered Address

Doddakannelli, Sarjapur Road,

Bangalore Karnataka 560035

Tel: 080-28440011 Fax: 080-28440256 Email: mailmanager@karvy.com Website: http://www.wipro.com Group: Wipro Group

Registrars
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Karvy Computershare Private Ltd TKN Complex, No.51/2, Vanivilas Road, Opp. National College Basavanagudi

Tel: 080-26621192, 26620003-5, 26621184

Fax: 080-26621169 Email: ksblbangalore@karvy.com Website:http://www.karvy.com

RANBAXY LABORATORIES LIMITED (RANBAXY)

Ranbaxy Laboratories Limited is an Indian pharmaceutical company that was incorporated in India in 1961. The company went public in 1973 and Japanese pharmaceutical company Daiichi Sankyo gained majority control in 2008. Ranbaxy exports its products to 125 countries with ground operations in 46 and manufacturing facilities in seven countries] In 2011, Ranbaxy Global Consumer Health Care received the Pharma OTC Company of the year award. History Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor for a Japanese company Shionogi. The name Ranbaxy is a combination of the names of its first owners Ranbir and Gurbax. Bhai Mohan Singh bought the company in 1952 from his cousins Ranbir and Gurbax. After Bhai Mohan Singh's son Parvinder Singh joined the company in 1967, the company saw an increase in scale. Wipro was ranked 37 in The Brand Trust Report among the most trusted brands in India.

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Ranbaxy Laboratories Limited (Ranbaxy), India's largest pharmaceutical company, is an integrated, research based, international pharmaceutical company, producing a wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies. Ranbaxy today has a presence in 23 of the top 25 pharmaceutical markets of the world. The Company has a global footprint in 46 countries, world-class manufacturing facilities in 7 countries and serves customers in over 125 countries. In June 2008, Ranbaxy entered into an alliance with one of the largest Japanese innovator companies, Daiichi Sankyo Company Ltd., to create an innovator and generic pharmaceutical powerhouse. The combined entity now ranks among the top 20 pharmaceutical companies, globally. The transformational deal will place Ranbaxy in a higher growth trajectory and it will emerge stronger in terms of its global reach and in its capabilities in drug development and manufacturing.

Mission Ranbaxy's mission is Enriching lives globally, with quality and affordable pharmaceuticals.

Financials Ranbaxy was incorporated in 1961 and went public in 1973. For the year 2010, the Company recorded Global Sales of US $ 1868 Mn. The Company has a balanced mix of revenues from emerging and developed markets that contribute 50% and 44% respectively. In 2009, North America, the Company's largest market contributed sales of US $ 660 Mn, followed by Europe garnering US $ 272 Mn and Asia clocking sales of US $ 468 Mn.

Strategy Ranbaxy is focused on increasing the momentum in the generics

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business in its key markets through organic and inorganic growth routes. Growth is well spread across geographies with focus on developed and emerging markets. It is the Companys constant endeavour to provide a wide basket of generic and innovator products, leveraging the unique Hybrid Business Model with Daiichi Sankyo. The Company will also increasingly focus in high growth potential segments like Vaccines and Biogenetics. These new areas will add significant depth to the existing product pipeline. R&D Ranbaxy views its R&D capabilities as a vital component of its business strategy that will provide a sustainable, long-term competitive advantage. The Company has a pool of over 1,200 R&D personnel engaged in path-breaking research.

Ranbaxy is among the few Indian pharmaceutical companies in India to have started its research program in the late 70's, in support of its global ambitions. A first-of-its-kind world class R&D centre was commissioned in 1994. Today, the Company has multi-disciplinary R&D centers at Gurgaon, in India, with dedicated facilities for generics research and innovative research. The R&D environment reflects its commitment to be a leader in the generics space offering value added formulations and development of NDA/ANDAs, based on its Novel Drug Delivery System (NDDS) research capability. Ranbaxys first significant international success using the NDDS technology platform came in September 1999, when the Company outlicensed its first once-a-day formulation to a multinational company. In July 2010, Ranbaxys New Drug Discovery Research (NDDR) was transferred to Daiichi Sankyo India Parma Private Limited as part of the strategy to strengthen the global Research and Development structure of the Daiichi Sankyo Group. While NDDR will now become an integral part of Daiichi Sankyo Life Science Research Center in India, based in Gurgaon, Ranbaxy will continue to independently develop and later commercialize the anti-malarial new drug, Arterolane + PQP, which is currently in Phase III
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TECHNICAL ANALYSIS

trials. Ranbaxy will also explore the further development of late stage programs developed by NDDR in the last few years, including the development programs in the GSK collaboration. Within Ranbaxy, R&D of Generics will now get a sharper focus, as the Company is increasingly working on more complex and specialist areas.

People The Companys business philosophy based on delivering value to its stakeholders constantly inspires its people to innovate, achieve excellence and set new global benchmarks. Driven by the passion of its around 14,000 strong multicultural workforces comprising of over 50 nationalities, Ranbaxy continues to aggressively pursue its mission of 'Enriching lives globally, with quality and affordable pharmaceuticals'.

Registered Address A-41, Industrial Area, Phase-VIII-A,,Sahibzada Ajit Singh Nagar Mohali Punjab 160071 Tel: 0172-5013655 Fax: 0172-5013376 Email: secretarial@ranbaxy.com Website: http://www.ranbaxy.com Group: Daiichi-Sankyo Registrars Alankit Assignment Ltd. 2E/8, Blazeflash House, R T A Division, 1st Floor handewalan Extension, Tel: 011-51540060, 51540061, 51540062, 51540063
61

TECHNICAL ANALYSIS

Fax: 011-51540064 Email: nahar@alankit.com

ICICI Bank

ICICI

(INDUSTRIAL OF

CREDIT

AND INDIA) is

INVESTMENT Bank an Indian

CORPORATION

Ltd. (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) diversified financial services company

headquartered

in Mumbai,

Maharashtra. It is the second largest bank in India by assets and third largest by market capitalization. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank has a network of 2,575 branches and 8,003 ATM's in India, and has a presence in 19 countries, including India. The bank has subsidiaries in the United Kingdom, Russia, and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The company's UK subsidiary has established branches in Belgium and Germany. ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab National Bank and HDFC Bankits main competitors History ICICI Bank was established in 1996 by the Industrial Credit and Investment Corporation of India, an Indian financial institution, as a wholly owned subsidiary. The parent company was formed in 1955 as a joint-venture of the World Bank, India's public-sector banks and publicsector insurance companies to provide project financing to Indian
62

TECHNICAL ANALYSIS

industry. The bank was initially known as the Industrial Credit and Investment Corporation of India Bank, before it changed its name to the abbreviated ICICI Bank. The parent company was later merged into ICICI Bank. ICICI Bank launched internet banking operations in 1998. ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering of shares in India in 1998, followed by an equity offering in the form of American Depositary Receipts on the NYSE in 2000. ICICI Bank acquired the Bank of Madura Limited in an all-stock deal in 2001, and sold additional stakes to institutional investors during 2001-02. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group, offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In 2000, ICICI Bank became the first Indian bank to list on the New York Stock Exchange with its five million American depository shares issue generating a demand book 13 times the offer size. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. In 2008, following the 2008 financial crisis, customers rushed to ATM's and branches in some locations due to rumors of adverse financial position of ICICI Bank. The Reserve Bank of India issued a clarification on the financial strength of ICICI Bank to dispel the rumors
63

TECHNICAL ANALYSIS

Subsidiaries Domestic

ICICI Lombard ICICI Prudential Life Insurance Company Limited ICICI Securities Limited ICICI Prudential Asset Management Company Limited ICICI Venture ICICI Home Finance ICICI direct.com ICICI Foundation

International

ICICI Bank UK PLC ICICI Bank Canada ICICI Bank Eurasia LLC

Acquisitions

2005: Investitsionno-Kreditny Bank (IKB), a Russian bank 2007: Sangli Bank 2010: Bank of Rajasthan

64

TECHNICAL ANALYSIS

Awards 2004: Best Bank in India Award presented by Euromoney Magazine 2007: ICICI Bank has been conferred the Euromoney Award 2007 for the Best Bank in the Asia-Pacific Region 2007: ICICI Bank wins the Excellence in Remittance Business award by The Asian Banker2009: ICICI Bank bags the "Best bank in SME financing (Private Sector)" at the Dun & Bradstreet Banking awards2011: ICICI Bank is the only Indian brand to figure in the BrandZ Top 100 Most Valuable Global Brands Report, second year in a row 2011: ICICI Bank ranked 5th in the list of "57 Indian Companies", and 288 th in World Rankings in Forbes Global 2000 list. 2011: ICICI Bank has won the "Banking Technology Awards 2010" at The Indian Banks Association in the following categories 2011: ICICI Bank was recognized for its Special Citation of the Fully Electronic Branch Service Channel, first set up at Hiranandani Estate, Thane, at the Financial Insights Innovation Awards held in conjunction with Asian Financial Services Congress 2011: For the second year in a row, ICICI Bank was ranked 70th in the Brandirectory league tables of the worlds most valuable brands by, The BrandFinance Banking 500 2011: ICICI Bank was ranked 1st in the Banking and Finance category and 9th in the "2010 Best Companies To Work For" by Business Today 2011: ICICI Bank UK, HiSAVE product range has been awarded the Consumer Moneyfacts Awards 2011 for the 'Best Online Savings Provider' 2011: For the second consecutive year, ICICI Bank was ranked second in the "India's 50 Biggest Financial Companies" , in The BW REAL 500 by Business World
65

TECHNICAL ANALYSIS

2011: ICICI Bank was one of the winners in the Global Awards for Enterprise & IT Architecture Excellence. ICICI Bank bagged the award in the Business Intelligence and Analytics' category. 2011: The Brand Trust Report ranks ICICI among the top 4 most trusted financial institutions. 2011: ICICI Bank awarded "House Of The Year (India)", by Asia Risk magazine, for eighth time in a row since 2004 2011: ICICI Bank awarded the most Tech-friendly Bank award by Business World 2011: ICICI Bank received the Best Trade Finance Bank in India by The Asset Triple A Award, Hong Kong 2011: ICICI Bank is the first and the only Indian brand to be ranked as the 45th most valuable global brand by BrandZ Top 100 Global Brands Report

TATA MOTORS Tata Motors Limited is an Indian multinational automotive corporation headquartered in Mumbai, India. It is the eighteenth largest motor vehicle manufacturing company in the world by volume. Part of the Tata Group, it was formerly known as TELCO (TATA Engineering and Locomotive Company). Its products include passenger cars, trucks, vans and coaches. Tata Motors is South Asias largest automobile company; it is the leader in commercial vehicles and among the top three in passenger vehicles. Worldwide it is the world's fourth-largest truck manufacturer and secondlargest bus manufacturer. It has auto manufacturing and assembly plants. Pantnagar, Lucknow, Sanand, Dharwad and Pune, India, as well as in Argentina, South Africa, Thailand and the United Kingdom. Tata Motors has produced and sold over 6.5 million vehicles in India since 1954. Originally a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in collaboration with Daimler-Benz AG,
66

TECHNICAL ANALYSIS

which ended in 1969. In 2010, Tata Motors surpassed Reliance to win the coveted title of 'India's most valuable brand' in an annual survey conducted by Brand Finance and The Economic Times. Tata Motors is a cross-listed company; its stock trades on the Bombay Stock Exchange and the New York Stock Exchange. History Tata Motors is a part of the Tata Group manages its share-holding through Tata Sons. The company expanded its operations to commercial vehicle sector in 1954 after forming a joint venture with Daimler-Benz AG of Germany. Despite the success of its commercial vehicles, Tata realized his company had to diversify and he began to look at other products. Based on consumer demand, he decided that building a small car would be the most practical new venture. So in 1998 it launched Tata Indica, India's first fully indigenous passenger car. Designed to be inexpensive and simple to build and maintain, the Indica became a hit in the Indian market. It was also exported to Europe, especially the UK. Tata acquired Spanish bus and coach manufacturer Hispano Carrocera in 2009. In 2006 it formed a joint venture with Marcopolo S.A. of Brazil, and introduced low-floor buses in the Indian Market under the name Tata Marcopolo Bus. Recently, it has acquired British Jaguar Land Rover (JLR), which includes the Daimler and Lanchester brand names. Acquisitions

In 2004 Tata Motors acquired Daewoo's truck manufacturing unit, now

known as Tata Daewoo Commercial Vehicle, in South Korea. In 2005, Tata Motors acquired 21% of Aragonese Hispano Carrocera giving it controlling rights of the company.

In 2007, formed a joint venture with Marcopolo of Brazil and introduced

low-floor buses in the Indian Market. In 2008, Tata Motors acquired British Jaguar Land Rover (JLR), which includes the Daimler and Lanchester brand names.
67

TECHNICAL ANALYSIS

In 2010, Tata Motors acquired 80% stake in Italy-based design and

engineering company Trilix for a consideration of 1.85 million. The acquisition is in line with the companys objective to enhance its styling/design capabilities to global standards.

Expansion The 2nd generation Tata Indica V2's fuel economy, powerful engine and aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry. After years of dominating the commercial vehicle market in India, Tata Motors entered the passenger vehicle market in 1991 by launching the Tata Sierra, a multi utility vehicle. After the launch of three more vehicles, Tata Estate (1992, a stationwagon design based on the earlier 'Tata Mobile' (1989), a light commercial vehicle), Tata Sumo (LCV, 1994) and Tata Safari (1998, India's first sports utility vehicle). Tata launched the Indica in 1998, the first fully indigenous passenger car of India. Though the car was initially panned by auto-analysts, the car's excellent fuel economy, powerful engine and aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry. A newer version of the car, named Indica V2, was a major improvement over the previous version and quickly became a mass-favorite. Tata Motors also successfully exported large quantities of the car to South Africa. The success of Indica in many ways marked the rise of Tata Motors.

Joint ventures Tata MarcoPolo released a low-floor bus in India and now it is widely used as public transport in Delhi, Mumbai, Pune, Chennai, Hyderabad, Kanpur, Bangalore, Chandigarh and Lucknow. Tata Motors has formed a 51:49 joint venture in bus body building with Marcopolo S.A. of Brazil. This joint venture is to manufacture and
68

TECHNICAL ANALYSIS

assemble fully built buses and coaches targeted at developing mass rapid transportation systems. The joint venture will absorb technology and expertise in chassis and aggregates from Tata Motors, and Marcopolo will provide know-how in processes and systems for bodybuilding and bus body design. Tata and Marcopolo have launched a low-floor city bus which is widely used by Chennai, Coimbatore, Delhi, Mumbai, Lucknow, Pune, Kochin, Trivandrum and Bengaluru transport corporations. Its manufacturing facility is based in Dharwad. Tata Motors also formed a joint venture with Fiat and gained access to Fiats diesel engine technology. Tata Motors sells Fiat cars in India through a 50/50 joint venture Fiat Automobiles India Limited, and is looking to extend its relationship with Fiat and Iveco to other segments. Tata has also formed several JV's with many small companies in various countries around the world. Tata Motors technology and design subsidiaries Tata has dozens of technology and design subsidiaries. These include the main ones. Telco Construction Equipment (TELCON) TELCON is a joint venture between Tata Motors and Hitach i, which focuses on excavators and other construction equipment. And research work is done. HV Transmission (HVTL) and HV Axles (HVAL) HVAL and HVTL are 100% subsidiary companies of Tata Motors engaged in the business of manufacture of gear boxes and axles for heavy and medium commercial vehicles, with production facilities and

infrastructure based at Jamshedpur. Tata Technologies Limited (TTL) TTL provides Engineering and Design (E&D) solutions to the Automotive Industry. Tata Motors holds 86.91% of TTLs share capital. TTL is based in Pune (Hinjawadi) and operates in the US and Europe through its
69

TECHNICAL ANALYSIS

wholly owned subsidiaries in Detroit and London respectively. It also has a presence in Thailand. Tata Technologies is a software service provider in the IT services and BPO space. Its global client list includes Ford, General Motors, Toyota and Honda, to name a few. It bought over the British engineering and design services company, Incat International Plc for 4 billion in August 2005. Incat specializes in engineering and design services and product lifecycle management in the international automotive, aerospace and engineering markets. With this acquisition, Tata Motors will have closer proximity to its global customers and be able to provide a wider range of services. Tata Motor European Technical Centre Tata Motor European Technical Centre is Tata's subsidiary based in the UK. It was the joint developer of the World Truck.

70

TECHNICAL ANALYSIS

CHAPTER - 5 DATA ANALYSIS AND INTERPRETATION

LINE CHART AND VOLUME Figure 3.1 depict line chart indicator of Bharti Airtel for period April 1st to march 31st 2012

The line chart is got by plotting the closing price of a stock on y axis and period on x axis. When a line chart is draw to the data of Bharti Airtels shares it found that the price of the stock crashed in the months of January 2012 to price of around Rs 320, and between the month July and September 2011 the price scaled up to Rs 440.

71

TECHNICAL ANALYSIS

72

TECHNICAL ANALYSIS

CANDLESTICK CHART Figure 3.2 depict candlestick chart indicator of bharti airtel for the period April 1st 2011 to march 31st 2012

We can see number of white and blue candlesticks. Long white candlesticks show strong buying pressure. Hence the volume is more in such a period where the long white candlesticks are seen. The longer white candlestick is, the future the close is above the open. This indicates that prices advanced significantly from open to close and buyers were aggressive. Long white candlestick implies the bullish. Long blue candlesticks show strong selling pressure. This indicates that prices indicate that prices declined significantly from the open and sellers were aggressive.

MACD Figure 3.3 the following chart depicts the MACD indicator of bharti airtel , for period April 1st 2011 to march 31st 2012
73

TECHNICAL ANALYSIS

The MACD is as a way to keep track of a moving average crossover system. MACD is defined as the difference between a 12 day and 26 day moving average. A 9 day moving average of this difference is used to generate signals. When a signal line goes from negative to positive, a buy signal is generated. When the signal line goes from positive to negative, a sell signal is generated. In the months May, August, November, February the MACD line crosses above 0 lines it indicates sell signal to the investors. In the months October, January and March the MACD line lies below the 0 signal line. It indicates to the buy signal to the investors.

RELATIVE STRENGTH INDEX

74

TECHNICAL ANALYSIS

Figure 3.4 the following chart depicts the relative strength index indicator of bharti airtel , for period April 1st 2011 to march 31st 2012

The RSI ranges from 0 to 100. An asset is deemed to be over brought once the RSI approaches the 70 level. Meaning that it may be getting over valued and is a good candidate for a pullback. In the month of May, July 2011 this indicates to the investor to sell the stock. Likewise, if the RSI approaches 30, it is an indication that the asset may be getting over sold and therefore likely to become undervalued. In the month of October and December 2011 the RSI reaches the 30% level giving indication to investor to buy the stock.

RATE OF CHANGE

Figure 3.5 the following chart depicts the rate of change indicator of bharti airtel , for period April 1st 2011 to march 31st 2012
75

TECHNICAL ANALYSIS

When the ROC line is above the 0 line, the price is rising and when it is below the 0 line, the price is falling. There is a lot of fluctuation in the ROC implying the market is volatile. The greatest fall in price is in the month of December 2011 and the highest peak in the price in the 1 year period is in the month of February 2012.

LINE CHART AND VOLUME Figure 3.6 depict line chart indicator Wipro ltd for period April 1 st to march 31st 2012

76

TECHNICAL ANALYSIS

The line chart is got by plotting the closing price of a stock on y axis and period on x axis. When a line chart is draw to the data of Wipro Ltds shares it found that the price of the stock crashed in the months of August 2011 to price of around Rs 320, and in the month May2011 the price scaled up to Rs 480.

CANDLESTICK CHART

Figure 3.7 depict candlestick chart indicator of Wipro ltd for the period April 1st 2011 to march 31st 2012

77

TECHNICAL ANALYSIS

The Candle stick is style of bar chart used primarily to describe price and movements of equity over time. It is combination line chart and bar chart, in that each bar represent the range of price movement over a given time interval.

78

TECHNICAL ANALYSIS

MACD

Figure 3.8 the following chart depicts the MACD indicator of Wipro ltd , for period April 1st 2011 to march 31st 2012

Up to October MACD line of Wipro Ltd lies below the signal line. It indicates buy signal to the investors. After October the MACD line of the company lies above signal line. It indicates investors sell signal.

79

TECHNICAL ANALYSIS

RELATIVE STRENGTH INDEX

Figure 3.9 the following chart depicts the relative strength index indicator of Wipro ltd, for period April 1st 2011 to march 31st 2012

The RSI indicates reaches 70% level in the month of December and February 2012. The stock is considered to be over bought and there is an indication to the investors to sell the stock. In the month of June and August 2011 the RSI reaches the 30% level giving an indication to the investors to buy the stock.

80

TECHNICAL ANALYSIS

RATE OF CHANGE

Figure 3.10 the following chart depicts the rate of change indicator of Wipro ltd , for period April 1st 2011 to march 31st 2012

When the ROC line is above the 0 line, the price is rising and when it is below the 0 line, the price is falling. There is a lot of fluctuation in the ROC implying the market is volatile. The greatest fall in price is in the month of August 2011 and the highest peak in the price in the 1 year period is in the month of December 2012.

81

TECHNICAL ANALYSIS

LINE CHART AND VOLUME

Figure 3.11 depict line chart indicator of Ranbaxy laboratories ltd for period April 1st to march 31st 2012

The line chart is got by plotting the closing price of a stock on y axis and period on x axis. When a line chart is draw to the data of Ranbaxy Laboratories Ltds shares it found that the price of the stock crashed in the months of December 2011to price of around Rs 380, and between the month July and September 2011 the price scaled up to Rs 560.

82

TECHNICAL ANALYSIS

CANDLESTICK CHART

Figure 3.12 depict candlestick chart indicator of Ranbaxy laboratories ltd for period April 1st 2011 to march 31st 2012

We can see number of white and blue candlesticks. Long white candlesticks show strong buying pressure. Hence the volume is more in such a period where the long white candlesticks are seen. The longer white candlestick is, the future the close is above the open. This indicates that prices advanced significantly from open to close and buyers were aggressive. Long white candlestick implies the bullish. Long blue candlesticks show strong selling pressure. This indicates that prices indicate that prices declined significantly from the open and sellers were aggressive.

MACD
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TECHNICAL ANALYSIS

Figure 3.13 the following chart depicts the MACD indicator of Ranbaxy laboratories ltd, for period April 1st 2011 to march 31st 2012

In the months June, July, August, October and January the MACD line crosses above 0 line it indicates sell signal to the investors. In the months October, December, January and March the MACD line lies below the 0 signal line. It indicates to the buy signal to the investors.

RELATIVE STRENGTH INDEX

Figure 3.14 the following chart depicts the relative strength index indicator of Ranbaxy laboratories ltd, for period April 1 st 2011 to march 31st 2012
84

TECHNICAL ANALYSIS

The RSI indicates reaches 70% level in the month of May, January and March 2012. The stock is considered to be over bought and there is an indication to the investors to sell the stock. In the month of August and December 2011 the RSI reaches the 30% level giving an indication to the investors to buy the stock.

RATE OF CHANGE

Figure 3.15 the following chart depicts the rate of change indicator of Ranbaxy laboratories ltd , for period April 1st 2011 to march 31st 2012

85

TECHNICAL ANALYSIS

When the ROC line is above the 0 line, the price is rising and when it is below the 0 line, the price is falling. There is a lot of fluctuation in the ROC implying the market is volatile. The greatest fall in price is in the month of August 2011 and the highest peak in the price in the 1 year period is in the month of May2011.

86

TECHNICAL ANALYSIS

LINE CHART AND VOLUME Figure 3.16 depict line chart indicator of ICICI Bank Ltd for period April 1st to march 31st 2012

The line chart is got by plotting the closing price of a stock on y axis and period on x axis. When a line chart is draw to the data of ICICI Bank Ltds shares it found that the price of the stock crashed in the months of December 2011to price of around Rs 650, and in the month May 2011 the price scaled up to Rs 1100.

87

TECHNICAL ANALYSIS

CANDLESTICK CHART

Figure 3.17 depict candlestick chart indicator of ICICI Bank Ltd for period April 1st 2011 to march 31st 2012

The Candle stick is style of bar chart used primarily to describe price and movements of equity over time. It is combination line chart and bar chart, in that each bar represent the range of price movement over a given time interval.

88

TECHNICAL ANALYSIS

MACD

Figure 3.18 the following chart depicts the MACD indicator of ICICI Bank Ltd, for period April 1st 2011 to march 31st 2012

In the months February and March 2012 the MACD line crosses above 0 line it indicates sell signal to the investors. In all other months of 1 year the MACD line of ICICI Bank lies below the signal line.. It indicates to the buy signal to the investors.

89

TECHNICAL ANALYSIS

RELATIVE STRENGTH INDEX

Figure 3.19 the following chart depicts the relative strength index indicator of ICICI Bank ltd, for period April 1st 2011 to march 31st 2012

The RSI indicator of ICICI Bank Ltd reaches 70% level in the month of January and February 2012. The stock is considered to be over bought and there is an indication to the investors to sell the stock. In the month of August 2011 the RSI reaches the 30% level giving an indication to the investors to buy the stock.

RATE OF CHANGE

Figure 3.20 the following chart depicts the rate of change indicator of ICICI Bank ltd , for period April 1st 2011 to march 31st 2012
90

TECHNICAL ANALYSIS

When the ROC line is above the 0 line, the price is rising and when it is below the 0 line, the price is falling. There is a lot of fluctuation in the ROC implying the market is volatile. The greatest fall in price is in the month of August 2011 and the highest peak in the price in the 1 year period is in the month of February 2012.

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TECHNICAL ANALYSIS

LINE CHART AND VOLUME

Figure 3.21 depict line chart indicator of Tata Motors ltd for period April 1st to march 31st 2012

The line chart is got by plotting the closing price of a stock on y axis and period on x axis. When a line chart is draw to the data of Tata Motors Ltds shares it found that the price of the stock crashed in the months of August and September 2011 to price of around Rs140, and between the months February and March the price scaled up to Rs280.

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TECHNICAL ANALYSIS

CANDLESTICK CHART

Figure 3.22 depict candlestick chart indicator of Tata Motors Ltd for period April 1st 2011 to march 31st 2012

We can see number of white and blue candlesticks. Long white candlesticks show strong buying pressure. Hence the volume is more in such a period where the long white candlesticks are seen. The longer white candlestick is, the future the close is above the open. This indicates that prices advanced significantly from open to close and buyers were aggressive. Long white candlestick implies the bullish. Long blue candlesticks show strong selling pressure. This indicates that prices indicate that prices declined significantly from the open and sellers were aggressive.

MACD
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TECHNICAL ANALYSIS

Figure 3.23 the following chart depicts the MACD indicator of Tata Motors Ltd, for period April 1st 2011 to march 31st 2012

In the months October, November, January, February and March the MACD line crosses above 0 lines it indicates sell signal to the investors. In the months May, June, August and September the MACD line lies below the 0 signal line. It indicates to the buy signal to the investors.

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TECHNICAL ANALYSIS

RELATIVE STRENGTH INDEX

Figure 3.24 the following chart depicts the relative strength index indicator of Tata Motors ltd, for period April 1st 2011 to march 31st 2012

The RSI indicator of Tata Motors Ltd reaches 70% level in the month of January and February 2012. The stock is considered to be over bought and there is an indication to the investors to sell the stock. In the month of June and August 2011 the RSI reaches the 30% level giving an indication to the investors to buy the stock.

RATE OF CHANGE

Figure 3.25 the following chart depicts the rate of change indicator of Tata Motors ltd , for period April 1st 2011 to march 31st 2012
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TECHNICAL ANALYSIS

When the ROC line is above the 0 line, the price is rising and when it is below the 0 line, the price is falling. There is a lot of fluctuation in the ROC implying the market is volatile. The greatest fall in price is in the month of August 2011 and the highest peak in the price in the 1 year period is in the month of November 2011.

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TECHNICAL ANALYSIS

SUMMARY OF FINDINGS

The study is focus on five companies operates in Tele communication, IT, Automobiles, Pharmaceutical and Banking sectors. Even though many different charting technicians, available, one method is not necessarily better than other. The data may be the same but each method will provide its own unique interpretation, with its own benefits and drawbacks. The choices of charting methods, to use will depend on personal preferences and trading or investing styles. Once we have chosen a particular charting methodology it is probably best stick with it and how learn best read the signals. Switching back and forth may cause confusion and undermine the focus of our analysis.

Table 1 4.1 Bharathi Airtel Ltd

TECHNICAL INDICATOR MACD

BUY SIGNAL

SELLING SIGNAL

October 2011, January May, and March 2012 November February 2012

August, 2011,

RSI ROC

May, July 2011 July

May, July 2011 December

2011,January, August, 2011

February 2012

According to calculation of MACD, the best months to buy the stock are October 2011, January and March 2012. The appropriate months to sell the stock are May, August, November 2011, and February 2012. According to calculation of RSI, the best months to buy the stock are May, July 2011. The appropriate months to sell the stock are May, July 2011.

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TECHNICAL ANALYSIS

According to calculation of ROC, the best months to buy the stock are July 2011, January, February 2012. The appropriate months to sell the stock is August, December 2011

Table 2

4.2 Wipro Ltd

TECHNICAL INDICATOR MACD

BUY SIGNAL

SELLING SIGNAL

May 2011

to

October From 20012

October to March

RSI

June and August December and February 2011 2012 December 2012

ROC

June, August 2011

According to calculation of MACD, the best months to buy the stock are May to October 2011. The appropriate months to sell the stock are from October to March 2 June and August 2011. According to calculation of RSI, the best months to buy the stock are. The appropriate months to sell the stock are December and February 2012 According to calculation of ROC, the best months to buy the stock are July August 2011. The appropriate months to sell the stock is December 2011

Table 3

4.3 Ranbaxy laboratories Ltd

TECHNICAL INDICATOR MACD

BUY SIGNAL

SELLING SIGNAL

October, December 2011, June, January and March 2012

July,

August,

October 2011 and January 2012

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TECHNICAL ANALYSIS

RSI

August 2011

and

December May2011, March 2012

January

and

ROC

August, November and May2011, December 2011 March 2012

January and

According to calculation of MACD, the best months to buy the stock are October, December 2011, January and March 2012.The appropriate months to sell the stock are June, July, August, October 2011 and January 2012. According to calculation of RSI, the best months to buy the stock are August and December 2011. The appropriate months to sell the stock are May2011, January and March 2012. According to calculation of ROC, the best months to buy the stock are August, November and December 2011. The appropriate months to sell the stock are May2011, January and March 2012.

Table 4

4.4 ICICI Bank Ltd

TECHNICAL INDICATOR MACD

BUY SIGNAL

SELLING SIGNAL

All

months and

expect

February and March

February 2011 RSI

March 2012

August 2011

January and February 2012

ROC

August, November and October

99

2011

and

TECHNICAL ANALYSIS

December 2011

February 2012.

According to calculation of MACD, the best months to buy the stock are all months expect February and March 2011. The appropriate months to sell the stock are February and March 2012. According to calculation of RSI, the best months to buy the stock are August 2011. The appropriate months to sell the stock are January and February 2012. According to calculation of ROC, the best months to buy the stock are August, November and December 2011. The appropriate months to sell the stock are October 2011 and February 2012.

Table 5

4.5 Tata Motors Ltd

TECHNICAL INDICATOR

BUY SIGNAL

SELLING SIGNAL October, November 2011, January and February 2012 January and February

MACD

May, June, August and September 2011

RSI

June and August 2011

2012

ROC

August 2011

October and November 2011.

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TECHNICAL ANALYSIS

According to calculation of MACD, the best months to buy the stock are May, June, August and September 2011. The appropriate months to sell the stock are October, November 2011, January and February 2012. According to calculation of RSI, the best months to buy the stock are June and August 2011. The appropriate months to sell the stock are January and February 2012. According to calculation of ROC, the best month to buy the stock is August 2011. The appropriate months to sell the stock are October and November 2011.

CHAPTER - 6 CONCLUSION & SUGGESTIONS

CONCLUSION

Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity. It is based on three assumptions: 1) The market discounts everything, 2) Price moves in trends and 3) History tends to repeat itself. a. One of the most important concepts in technical analysis is that of a trend, which the general direction that a security is headed is. There are three types of trends: uptrends, downtrends and sideways/horizontal trends.
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2. A trend line is a simple charting technique that adds a line to a chart to represent the trend in the market or a stock. 3. A channel, or channel lines, is the addition of two parallel trend lines that act as strong areas of support and resistance. 4. Support is the price level through which a stock or market seldom falls. Resistance is the price level that a stock or market seldom surpasses. 5. Volume is the number of shares or contracts that trade over a given period of time, usually a day. The higher the volume, the more active the security. 6. A chart is a graphical representation of a series of prices over a set time frame. 7. The time scale refers to the range of dates at the bottom of the chart, which can vary from decades to seconds. The most frequently used time scales are intraday, daily, weekly, monthly, quarterly and annually. 8. There are four main types of charts used by investors and traders: line charts, bar charts, candlestick charts and point and figure charts. 9. A chart pattern is a distinct formation on a stock chart that creates a trading signal, or a sign of future price movements. There are two types: reversal and continuation. 10.A triangle is a technical analysis pattern created by drawing trendlines along a price range that gets narrower over time because of lower tops and higher bottoms. Variations of a triangle include ascending and descending triangles. 11.A gap in a chart is an empty space between a trading period and the following trading period. This occurs when there is a large difference in prices between two sequential trading periods. 12.The moving average convergence divergence (MACD) is comprised of two exponential moving averages, which help to measure a security's momentum.
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13.The relative strength index (RSI) helps to signal overbought and oversold conditions in a security. 14.ROC is classed as a price momentum indicator or a velocity indicator because it measures the rate of change or the strength of momentum of change.

SUGGESTIONS

1. An investor should be very careful; in identifying the primary trend.

2. Once he identifies the primary trend any pull back in the rally is an opportunity for a re-entry provided the primary trend is intact.

3. One must take the help of indicators while taking the investment decisions.

4. An investor is supposed to identify the breakout in the RSI and MACD to its moving average and use this at an early entry level.

5. Investors must follow the principles laid down with portal clarity and in good faith which will help in reducing the psychological strain and pressure.

6. One most get away from market rumors and wrong information in order to take protection from market manipulation.

7. Investors should have knowledge regarding the market trends so that they can take maximum return with maximum investments.

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8. The investor should not hesitate in increasing his position on identifying the strength and hold on to his position until the trend gives a reverse signal.

BIBLIOGRAPHY

1 TEXT BOOKS:

Prasanna Chandra, Financial Markets and Services, Himalaya Publishing House, 2006. Achelis Steven, Technical Analysis from A-Z, electronic book. Active Portfolio Management - Richard C. Grinold and Ronald N. Kahn Investments - Bodie Kane Marcus Practical Investment Management - Robert A. Strong

WEBSITES:

www.nseindia.com www.bseindia.com www.icharts.in www.investopedia.com

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