Final Copy of project

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INTRODUCTION

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INTRODUCTION

Technical analysis works, but not because of the rationale that some people accept

as true. The reality is that there are thousands of traders who over and over again make

money in the markets who are using technical analysis as their prime tool. Its not that

technical analysis is the Holy Grail or that it is a so called voodoo science. Technical

analysis is math and statistical based. It looks at the historic performance of currencies

and uses modern technology to analyze the future behaviour of prices.

The Technical analysis is a methodology to assist you in deciding the timing of

investments, which is very vital to make wise investment decisions. The technical

analysis is based on the assumption that history tends to repeat itself in the stock

exchange. If a certain pattern of activity has in the past produced certain results nine out

of ten, one can assume a strong likelihood of the same outcome whenever this pattern

appears in the future. However technical analysis lacks a strictly logical explanation.

Technical Analysis is the study of the internal stock exchange information and notof those external factors which are reflected in the stock market. All the relevant factors,

whatever they may be can be reduced to the volume of the stock exchange transactions

and the level of share price or more generally, the sum of the statistical information

produced by the market. Few of the most commonly used technical analysis methods for

share market Trading are Japanese Candlestick (most powerful stock charting method),

Price Curves, Trend Lines, High Low Charts and Moving averages. Our Technical

Analysis Software StocktechTM

will help you to become technical analyst on your own.

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NEED FOR THE STUDY TECHNICAL ANALYSIS

Technical analysis is believed to be more accurate than fundamental analysis

because it is supported by cold, hard facts but in the end, there's no 100% fail safe way to

foretell the currency market's actions. Technical analysts input past price information into

a computer which then supplies data on the patterns that have taken place in over a

century of forex trading. These patterns are evaluated with real time price movements and

forecasts are made.

Technical analysis is simpler to master than fundamental analysis which requires

years of practice to understand fully. Also taking into account the arrival of young

professionals into the realm of forex trading, it's not hard to comprehend why technology

are so greatly involved. Brought up on a staple food of computers and technology, instant

fulfillment and easy acquirement of knowledge, the computer age group has engaged

technical analysis with delight.

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LITERATURE

REVIEW

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LITERATURE REVIEW

Brown and Jennings (1989) showed that technical analysis has value in a model in

which prices are not fully revealing and traders have rational conjectures about the

relation between prices and signals.

Neely (1998) reconciles the fact that using technical trading rules to trade against

US intervention in foreign exchange markets can be profitable, yet, long- term, the

intervention tends to be profitable.

LeBaron (1999) shows that, when using technical analysis in the foreign exchange

market, after removing periods in which the Federal Reserve is active, exchange ratepredictability is dramatically reduced

Lo, Mamaysky and Wang (2000) examines the effectiveness of technical analysis

on US stocks from 1962 to 1996 and finds that over the 31-year sample period, several

technical indicators do provide incremental information and may have some practical

value.

Fern andez-Rodr guez, Gonz alez-Martel and Sosvilla-Rivero (2000) apply an

artificial neural network to the Madrid Stock Market and find that, in the absence oftrading costs, the technical trading rule is always superior to a buy- and-hold strategy for

both bear market and stable market episodes, but not in a bull market. One criticism

I have is that beating the market in the absence of costs seems of little significance unless

one is interested in finding a signal which will later be incorporated into a full system.

Secondly, it is perhaps nave to work on the premise that bull and bear markets exist.

Lee and Swaminathan (2000) demonstrate the importance of past trading volume.

Neely and Weller (2001) use genetic programming to show that technical trading

rules can be profitable during US foreign exchange intervention.

Cesari and Cremonini (2003) make an extensive simulation comparison of popular

dynamic strategies of asset allocation and find that technical analysis only performs well

in Pacific markets.

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OBJECTIVE

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OBJECTIVE

It was good opportunity to familiarize myself with the stock market i.e. the capital

market & their co-relation with economical environment through EQUITY

RESEARCH. The analysis of equity gives me the opportunity to understand thoroughly

this behavioral pattern of different equity & overall capital market.

The main objective of the project research is as follows.

1. To Study the equity analysis and obtain the knowledge of equity market

2. To know the concept of Fundamental Analysis & Technical Analysis.3. To determine the trend of the stock prices using Technical Analysis.

4. To Study the present behavior & predicting the future behavior of equity in

stock market.

5. To find out which equity share is preferable for the investors i.e., when to buy

& when to sell a particular stock.

6. To analyze the performance of companys through Balance Sheet &

Technical graph of their shares.

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RESEARCH

METHODOLOGY

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RESEARCH METHODOLOGY

Research Design was based on analytical research, on the other hand, the

researcher has to use facts or information already available, and analyze these to make

these to make a critical evaluation of the material.

DATA SOURCES

The main sources of data are collected through website, various publication books,magazines, newspaper and reports prepared by research scholars etc.

SECONDARY DATA

The study is purely based on secondary data. The methods of collecting secondary dataare published data or unpublished data. It takes short time and relatively low cost.

STATISTICAL TOOLS APPLIED

The analysis of data is carried out for secondary data by the following method.

Relative Strength Index(RSI)

Rate of Change (ROC)

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CONCEPTUAL FRAMEWORK

WHATS THIS EQUITY ANALYSIS?

Professional investor will make more money & less loss than, who let their heart

rule. Their head eliminate all emotions for decision making. Be ruthless & calculating,

you are out to make money. Decision should be based on actual movement of share price

measured both in money & percentage term & nothing else. Greed must be avoided

patience may be a virtue, but impatience can frequently be profitable.

In Equity Analysis anticipated growth, calculations are based on considered

FACTS & not on HOPE. Equity analysis is basically a combination of two independent

analyses, namely fundamental analysis & Technical analysis. The subject of Equity

analysis, i.e. the attempt to determine future share price movement & its reliability by

references to historical data is a vast one, covering many aspect from the calculating

various FINANCIAL RATIOS, plotting of CHARTS to extremely sophisticated

indicators.

A general investor can apply the principles by using the simplest of tools: pocket

calculator, pencil, ruler, chart paper & your cautious mind, watchful attention. It shouldbe pointed out that, this equity analysis does not discuss how to buy & sell shares, but

does discuss a method which enables the investor to arrive at buying & selling decision.

The financial analysts always need yardsticks to evaluate the efficiency &

performances of any business unit at the time of investment. Fundamental analysis is

useful in long term investment decision. In Fundamental analysis a companys goodwill,

its performances, liquidity, leverage, turnover, profitability & financial health was

checked & analysis with the help of ratio analysis for the purpose of long term successfulinvestment.

Technical analysis refers to the study of market generated data like prices &

volume to determine the future direction of prices movements. Technical analysis mainly

seeks to predict the short term price travels. The focus of technical analysis is mainly on

the internal market data, i.e. prices & volume data. It appeals mainly to short term traders.

It is the oldest approach to equity investment dating back to the late 19 th century.

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ASSUMPTIONS FOR THE EQUITY ANALYSIS

1. Works only in normal share-market conditions with great reliability, it also worksin abnormal share-market conditions, but with low reliability.

2. Equity analysis is purely based on the INVESTMENT PHILOSOPHY, so the

investment object has vital importance associated to return along with risk.

3. Cash management gets the magnitude role, because the scenario of equity analysis

is revolving around the term money

4. Portfolio management, risk management was up to the investors knowledge.

5. Capital market trend is always a friend, whether it is short run or long run.

6. You are buying stock & not companies, so dont be curious or panic to do

postmortem of companies performances.

7. History repeats: investors & speculators react the same way to the same types of

events homogeneously.

8. Capital market has a typical market psychology along with other issues like;

perceptions, the crowd Vc the individual, traditions & trust.

9. An individual perceptions about the investment return & associated risk may

differ from individual to individual.

10. Although the equity analysis is art as well as sciences so, it also has some

exceptions.

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ECONOMICAL ANALYSIS: ENVIRONMENTAL ANALYSIS.

An Economical analysis & Environmental analysis is the filter or scanner of the

surrounding at the time of equity research, which help the analyst to make a rational

decision. In the economical & environmental analysis, mainly the following factor is

considered as a whole with a perspective of industry & also considered with a perspective

of individual company:

1. Inflation rates

2. Economic growth

3. Governmental Exim & other policies regarding businesses & industry

4. LPG (liberalization, privatization, globalization)

5. Interest rates: standards of returns for measurement

6. FIIs perception to share market

7. Political feel

8. Targeted Industrial growth

9. Product line & other industry/company strengths

10. Capacity installed & utilized11. Efficiencies; input output combination

12. Demand: potential market: purchasing power

13. Management board of company

14. Companies prospects, growth

15. Technical know-how

EQUITY ANALYSIS

ENVIRONMENT & ECONOMICAL ANALYSIS

FUNDAMENTAL ANALYSIS TECHNICAL ANALYSIS

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FUNDAMENTAL ANALYSIS

Fundamental analysis is the study of economic, industry and company conditionsin an effort to determine the value of a companys stock. Fundamental analysis typicallyfocuses on key statistics in companys financial statements to determine if the stock priceis correctly valued.

Most fundamental information focuses on economic, industry and companystatistics. The typical approach to analyzing a company involves four basic steps:

1 Determine the condition of the general economy.2 Determine the condition of the industry.

3 Determine the condition of the company.4 Determine the value of the companys stock

Fundamental Analysis consist of following

Study of Balance sheet

Study of Profit and Loss a/c

Study of Ratios

BALANCE SHEET

A financial statement that summarizes a company's assets, liabilities and shareholders'equity at a specific point in time. These three balance sheet segments give investors anidea as to what the company owns and owes, as well as the amount invested by thecustomer.

The balance sheet must follow the following formula

Assets = Liabilities + Shareholders' Equity

Each of the three segments of the balance sheet will have many accounts within itthat document the value of each. Accounts such as cash, inventory and property are on theasset side of the balance sheet, while on the liability side there are accounts such asaccounts payable or long-term debt. The exact accounts on a balance sheet will differ bycompany and by industry, as there is no one set template that accurately accommodatesfor the differences between different types of businesses.

It's called a balance sheet because the two sides balance out. This makes sense: acompany has to pay for all the things it has (assets) by either borrowing money

(liabilities) or getting it from shareholders (shareholders' equity).

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The balance sheet is one of the most important pieces of financial informationissued by a company. It is a snapshot of what a company owns and owes at that point intime. The income statement, on the other hand, shows how much revenue and profit acompany has generated over a certain period. Neither statement is better than the other -

rather, the financial statements are built to be used together to present a complete pictureof a company's finances.

The balance sheet shows the financial condition of a business at a given point oftime. As per the Companies Act, the balance sheet of a company shall be in either theaccount form or the report form.

Structure of Balance Sheet as per the companies ActLiabilities Assets

Share Capital

Reserves and Surplus Secured loans

Unsecured loans

Current liabilities andProvisions

Fixed assets

Investments Current assets and Advances

Miscellaneous Exp.

LIABILITIES

Liabilities, defined very broadly, represent what the firm owes others. A liability

arises when a firm receives benefits or services and, in turn, promises to pay cash orprovide goods and services in future.

The format prescribed in the Companies Act classifies liabilities as follows: -

Share Capital: Share capital includes equity capital and preference capital. Equitycapital represents the contribution of equity shareholders who are the owners of the firm.Equity capital, being the risk capital, carries no fixed rate of dividend. Preference capitalrepresents the contribution of preference shareholders and the dividend rate payable on itis general fixed.

Reserve and Surplus: Reserve and Surplus comprise retained earnings as well as non-earnings items like share premium and capital subsidy. In common practice forcompanies to transfer from the profit and loss account to various reserve accounts. This

process is called appropriation.

Secured loan: Secured loan are loans that are secured by a charge on the assets of thefirm. The charge may be created in the form of pledge or hypothecation of movable

assets such as inventories and debtors and or in the form of mortgage of immovable assetssuch as land, building, and plant and machinery.

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Unsecured loans: in contrast to secured loans, unsecured loans are loans which are notsecured by a charge on the assets of the firm.

Current liabilities and Provisions: current liabilities and provisions representobligations that are expected to mature within a year. Current liabilities include itemssuch as bills payable, sundry creditors, interest accrued etc. and provisions include itemssuch as provision for taxes, dividend, and other exp.

ASSETS

Assets are resources which are expected to provide a firm with future economic benefits,by way of higher cash inflows or lower outflows. Assets are classified as follows underthe Companies Act:

Fixed Assets: fixed assets, also called non current assets, are assets that are expected toproduce benefits for more that one year. These assets may be tangible or intangible.Tangible fixed assets include items such as land, buildings, plant and machinery,furniture. Intangible assets include goodwill, patents, and copyrights.

Investment: investments represent financial securities owned by the firm. They are

divided into two categories, long term investment and current investment.

Current Assets: this category consists of cash and other assets which get converted intocash or which result in cash savings, during the operating cycle of the firm. The majorcomponents of current assets, loans and advances are: inventories, debtors, cash and bank

balances, other current assets and loans and advances.

Miscellaneous Exp : this comprise of items such as preliminary exp, discount allowed onissue of securities, interest paid out of capital during construction, and development

expenditure to the extent not written off or adjusted.

PROFIT AND LOSS A/C

A financial report that - by summarizing revenues and expenses, and showing thenet profit or loss in a specified accounting period - depicts a business entitys financial

performance due to operations as well as other activities rendering gains or losses. Alsoknown as the "profit and loss statement" or "statement of revenue and expense".

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The income statement is the most analyzed portion of the financial statements.It displays how well the company can assure success for both itself and its shareholdersthrough the earnings from operations.

The companies act has prescribed a standard form for the balance sheet, but none

for the profit loss account. However, the companies act does require that the informationprovided should be adequate to reflect a true and fair picture of the operations of thecompany for the accounting period.

Structure of Profit and Loss A/C

Income

Sales

Expenditure

Material and other expenditureInterestDepreciationProfit before taxProvision for tax

Profit after tax

While a single step profit and loss account aggregates all revenues and expenses, amulti step profit and loss account provides disaggregated information. Further, instead ofshowing only the final profit measure, the profit after tax figure, it presents profitmeasures at intermediate stages as well.

ITS ALL ABOUT THE FINANCIAL RATIO ANALYSIS

The financial analysts always need yardsticks to evaluate the efficiency &performances of any business unit at the time of investment. Fundamental analysis isuseful in long term investment decision. In Fundamental analysis a companys goodwill,its performances, liquidity, leverage, turnover, profitability & financial health waschecked & analysis with the help of ratio analysis for the purpose of long term successfulinvestment. It is important criteria for selecting the company to invest. It also provides the

base for decision-making in investment.

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The one of the most frequently used yardstick to check & analyzeprofitability & financial health is Ratio Analysis. For that matter a verity of ratios wasconsider. This Fundamental analysis is helpful to general investor in many ways. It

provides important & vital information regarding the financial position of the company.

Ratio analysis involves the use of various methods for calculating & interpreting financialratios to assess the performances & status of the business unit. It is the tool of financialanalysis, which not only studies but also reflecting the numerical & quantitativerelationship between the important financial variables.

Fundamental analysis facilitates comparison between two companies. It reflectsthe financial efficiency & financial position of a company. Fundamental analysis isfruitful in preparing plans for the future. However, fundamental Analysis should not beconsidering as the ultimate objective test but it may be carried further based on theoutcome & revelations about the cause of variations. Fundamental Analysis is helpful in

forecasting likely position of company in near future.

Fundamental analysis is a very powerful analytical tool useful for measuringperformance of an organization. The ratio analysis concentrates on the inter-relationshipamong the figures appearing in the financial and accounting statements. The ratio analysishelps the investor to analyze the past performance of the firm and to make further future

projection regarding financial position. Ratio analysis allows interested parties likeshareholders, investors, creditors and government to make an evaluation of financialaspect of a firms performance.

Fundamental analysis i.e. Ratio analysis is process of comparison of one figureagainst another, which makes a ratio, and appraisal of the ratios to make proper analysisabout the strength and weakness of the firms operation. Fundamental analysis isextremely helpful in providing valuable insight into a companys financial picture. Ratios

provide an easy way to compare present performance of businesses. Ratios depicts theareas in which a particular business competitively advantaged or disadvantaged throughcomparing ratios to those of other businesses of the same size within the same industry.

TYPES OF RATIOS

A ratios can be classified as follows-

1) Liquidity Ratio:

The importance of adequate liquidity in the sense of the ability of a firm to meetcurrent or short-term obligations. When they become due for payment can hardly beoverstressed. Liquidity ratio measures the ability of a firm to meet its short-term

obligation and reflect the short term financing strength in solvency of a firm.

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2) Leverage Ratio:

The long-term creditors would judge the soundness of a firm on the basis of the longterm financial strength measured in terms of its ability to pay the interest regularly as wellas repay the installment of the principal on due dates or in one lump sum at the time of

maturity. The long-term solvency of a firm can be examined by using leverage ratio. Thisratios also facilitates to know optimum capital structure i.e. relation between debt &equity.

3) Profitability Ratio:

The investors & owners invest their funds in the expectation of reasonable returns.The operating efficiency of a firm and its ability to ensure adequate returns to itsinvestors, shareholders depends ultimately on the profits earned by it. The profitability ofa firm can be measured by its profitability ratio. Profitability ratio can be determined onthe basis or establishing the relationship with either sales or investments i.e. Fix assets.

4) Activity/Component/Turnover Ratio:

Activity ratios are concerned with measuring the efficiency in the asset management.The efficiency with which the assets & equity capital are used would be reflected in thespeed and rapidity with which assets & equity capital are converted into sales.

5) Market test Ratio:The market test ratio relates the firms stock price to its earning and book value per

share. This ratio give investors an indication of what share market will think about the

companies past performance and future prospects, if the firm profitability and solvency,activity ratio are good, than the market test ratio will be high and its share price is alsoexpected to be high. A pay out ratio & coverage ratios are in the scope of market testratio. P/E has been arrived at by dividing the days closing prices of a script by its earning

per share (EPS). EPS is net profit calculated on a trailing 12 months basis divided by fulldiluted equity capital. The industry P/E is the aggregate market capitalization of theindustry divided by the aggregate net profit of the industry after excluding loss-makingcompanies. The market capitalization is arrived at by multiplying the closing prices ofshares with fully diluted equity capital. Return on capital employed is the ratio of net

profit of capital employed. Capital employed is net worth plus total borrowings. Alpha isthe excess return of the stock above the risk-adjusted market return, given its level of riskas measured by beta. It indicates the return given by a stock in a stagnant market or whenthe market return is zero. A positive alpha indicates the stock has performed better thanexpected. Beta is the shares sensitivity to market movements. It indicates how much thescript moves for a unit change in the market index. Beta could be positive or negative. Anegative beta indicates that the share moves in direction opposite to the market. The betaof the index is 1. A higher beta indicates the stocks movements are sharper than that ofthe market index. Standard deviation in the returns of a stock measures the volatility ofthe stock over its trend. Mean is the average of daily returns of a script in the last 30trading days.

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TECHNICAL ANALYSIS

Technical analysis refers to the study of market generated data like prices &

volume to determine the future direction of prices movements. Technical analysis mainlyseeks to predict the short term price travels. It is important criteria for selecting thecompany to invest. It also provides the base for decision-making in investment. The oneof the most frequently used yardstick to check & analyze underlying price progress. Forthat matter a verity of tools wasconsider.

This Technical analysis is helpful to general investor in many ways. It providesimportant & vital information regarding the current price position of the company.Technical analysis involves the use of various methods for charting, calculating &interpreting graph & chart to assess the performances & status of the price. It is the tool of

financial analysis, which not only studies but also reflecting the numerical & graphicalrelationship between the important financial factors.The focus of technical analysis is mainly on the internal market data, i.e. prices &

volume data. It appeals mainly to short term traders. It is the oldest approach to equityinvestment dating back to the late 19th century.

BASIC PREMISES OF TECHNICAL ANALYSIS

1. Market prices are determined by the interaction of supply & demand forces.2. Supply & demand are influenced by variety of supply & demand affiliated

factors both rational & irrational.3. These include fundamental factors as well as psychological factors.4. Barring minor deviations stock prices tend to move in fairly persistent trends.5. Shifts in demand & supply bring about change in trends.6. This shifts can be detected with the help of charts of manual & computerized

action, because of the persistence of trends & patterns analysis of past marketdata can be used to predict future prices behaviors.

DRAWBACKS / LIMITATIONS OF TECHNICAL ANALYSIS

1 Technical analysis does not able to explain the rezones behind theemployment or selection of specific tool of Technical analysis.

2 The technical analysis failed to signal an uptrend or downtrend in time.3 The technical analysis must be a self defeating proposition. As more & more

people use, employ it the value of such analysis trends to reduce.

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Usually the following tools & instruments are used to do the technical analysis

PRICE STYLES

Price in a chart can be displayed in three styles: bar, line, and candlestick.

Bar: It gives the detailed information about every aspect.

Line: A line chart simply connects the closing prices from one period to the next. Thistype of chart is ideal for securities with no high or low price data i.e., mutual funds or thatis even with the equity in case of base price.

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Japanese Candlestick: A candlestick is black if the closing price is lower than the

opening price. A candlestick is white if the closing price is higher than the opening price.

White Japanese Candlestick:

Black Japanese Candlestick:

Doji Japanese Candlestick:

PRICE PATTERNS

Overview:

A basic principle of technical analysis is that security prices move in trends. Wealso know that trends do not last forever. They eventually change direction and when theydo, they rarely do so on a dime. Instead, prices typically decelerate, pause, and then

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reverse. These phases occur as investors form new expectations and by doing so, shift thesecurity's supply/demand.

The changing of expectations often causes price patterns to emerge. Although no two

markets are identical, their price patterns are often very similar. Predictable pricebehavior often follows these price patterns. Chart patterns can last from a few days tomany months or even years. Generally speaking, the longer a pattern takes to form, themore dramatic the ensuing prices move.

PERPETRATION

Head and Shoulders: The Head-and-Shoulders price pattern is the most reliable and well-known chart

pattern. It gets its name from the resemblance of a head with two shoulders on eitherside. The reason this reversal pattern is so common is due to the manner in which trendstypically reverse.

An up-trend is formed as prices make higher-highs and higher-lows in a stair-stepfashion. The trend is broken when this upward climb ends. As you can see in theillustration (Intel, INTC), the "left shoulder" and the "head" are the last two higher-highs.The right shoulder is created as the bulls try to push prices higher, but are unable to doso. This signifies the end of the up-trend. Confirmation of a new down-trend occurswhen the "neckline" is penetrated.

During a healthy up-trend, volume should increase during each rally. A sign thatthe trend is weakening occurs when the volume accompanying rallies is less than the

volume accompanying the preceding rally. In a typical Head-and-Shoulders pattern,volume decreases on the head and is especially light on the right shoulder.

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Following the penetration of the neckline, it is very common for prices to return tothe neckline in a last effort to continue the up-trend. If prices are then unable to riseabove the neckline, they usually decline rapidly on increased volume. An inverse (orupside-down) Head-and-Shoulders pattern often coincides with market bottoms. As with

a normal Head-and-Shoulders pattern, volume usually decreases as the pattern is formedand then increases as prices rise above the neckline.

Rounding Tops and Bottoms:

Rounding tops occur as expectations gradually shift from bullish to bearish. Thegradual, yet steady shift forms a rounded top. Rounding bottoms occur as expectationsgradually shift from bearish to bullish. Volume during both rounding tops and rounding

bottoms often mirrors the bowl-like shape of prices during a rounding bottom. Volume,which was high during the previous trend, decreases as expectations shift and traders

become indecisive. Volume then increases as the new trend is established.

Double Tops and Bottoms:

A double top occurs when prices rise to a resistance level on significant volume,retreat, and subsequently return to the resistance level on decreased volume. Prices thendecline marking the beginning of a new down-trend.

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A double bottom has the same characteristics as a double top except it is upsideis down.

Double top reversal pattern:

Interpretation

Tops T1 & T2 are almost at the same level & trend violated the support lineformed with the help of bottom B1 hence, a Double top reversal pattern has been formed.To measure the likely downward reaction, measure the distances between the intervening

bottom & the double tops. Deduct these distances from the intervening bottom & that willbe the downward target of the double top reversal pattern.

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Double bottom reversal pattern:

Interpretation

Bottom B1 & B2 are almost at the same level & trend violated the resistanceslevel formed with the help of top T1 hence; a Double bottom reversal pattern has beenformed. To measure the likely upward reaction, measure the distances between theintervening top & the double bottom. Deduct these distances from the intervening top &that will be the upward target of the double bottom reversal pattern.

Triple top reversal pattern:

Interpretation

Tops T1, T2 & T3 are almost at the same level & trend violated the support lineformed with the help of bottom B1 because the B1 is the lowest bottom hence, a triple topreversal pattern has been formed. To measure the likely downward reaction, measure thedistances between the intervening bottom & the triple tops. Deduct these distances fromthe intervening bottom & that will be the downward target of the triple top reversal

pattern.

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Triple bottom reversal pattern:

Interpretation

Bottom B1, B2 & B3 are almost at the same level & trend violated the resistanceslevel formed with the help of top T1 because the T1 is the heights top hence, a triple

bottom reversal pattern has been formed. To measure the likely upward reaction, measurethe distances between the intervening top & the triple bottom. Deduct these distancesfrom the intervening top & that will be the upward target of the triple bottom reversal

pattern

Triangles:

A triangle occurs as the range between peaks and troughs narrows. Trianglestypically occur as prices encounter a support or resistance level which constricts the

prices.

A "symmetrical triangle" occurs when prices are makingboth lower-highs and higher-lows."Symmetrical triangle" .

Confused; wait & watch policy.

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An "ascending triangle" occurs when there are higher-lows (as with a symmetrical triangle), but the highs areoccurring at the same price level due to resistance. Theodds favor an upside breakout from an ascending triangle.

"Ascending triangle" .Buying pressure; usually has upward trend. Bullish

rally.

A "descending triangle" occurs when there are lower-highs (as with a symmetrical triangle), but the lows areoccurring at the same price level due to support. The oddsfavor a downside breakout from a descending triangle."Descending triangle" .

Selling pressure; usually has downward trend. Bearishrally.

Just as pressure increases when water is forced through a narrow opening, the"pressure" of prices increases as the triangle pattern forms. Prices will usually breakoutrapidly from a triangle. Breakouts are confirmed when they are accompanied by anincrease in volume. The most reliable breakouts occur somewhere between half and

three-quarters of the distance between the beginning and end (apex) of the triangle. Thereare seldom many clues as to the direction prices will break out of a symmetrical triangle.If prices move all the way through the triangle to the apex, a breakout is unlikely.

Trend lines:

In the previous section, we saw how support and resistance levels can bepenetrated by a change in investor expectations (which results in shifts of the

supply/demand lines). This type of a change is often immediate and "news based"

In this section, we'll review "trends." A trend represents a consistent change in

prices (i.e., a change in investor expectations). Trends differ from support/resistancelevels in that trends represent change, whereas support/resistance levels represent barriers.

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Types of trend lines:

1. Basically the trend can be classified on the basis of time factor into two ways,

namely; short term, long term.

A: long term trend 1.Secular variation .2. Cyclical variation

B: short term trend 1. Seasonal variation

2. Erratic variation.

[Chart for all type of trend lines]

2. But we are going to consider the trends as per its movement so, once again thetrend can be classified into three ways as below discuss in detail:

Rising trend:

As shown in the following chart, a rising trend is defined bysuccessively higher low-prices. A rising trend can be thoughtof as a rising support level--the bulls are in control and are

pushing prices higher.

Falling trend:

As shown in the next chart, a falling trend isdefined by successively lower high-prices. A fallingtrend can be thought of as a falling resistance level--the bears are in control and are pushing prices lower.

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Sidewise trend:

The upper & lower trend lines

will provide the resistances & thesupport levels i.e. the script is movingin the same range bound.

Support and Resistance lines:

The foundation of most technical analysis tools is rooted in the concept of supply

and demand. There is nothing mysterious about support and resistance -- it is classicsupply and demand. Remembering supply / demand lines show what the supply anddemand will be at a given price.

Resistance is equivalent to a "supply" line. When prices increase, the quantity of sellersalso increases as more investors are willing to sell at these higher prices. When toomuch selling occurs, however, prices retreat. When this happens repeatedly near aspecific price level, resistance forms at that price level. Support is equivalent to a"demand line. When prices decrease, the quantity of buyers increases as more investorsare willing to buy at lower prices. When too much buying occurs, however, prices rise.When this happens repeatedly near a specific price level, support forms at that price level.

Following the penetration of a support/resistance level, it is common fortraders to question the new price levels. For example, after a breakout above aresistance level, buyers and sellers may both question the validity of the new price andmay decide to sell. This creates a phenomena referred to as traders' remorse where

prices return to a support & resistance level following a price breakout.

The price action following this remorseful period is crucial. One of two things can

happen. Either the consensus of expectations will be that the new price is not warrantedand prices will move back to their previous level; or investors will accept the new priceand prices will continue to move in the direction of the penetration. When a resistancelevel is successfully penetrated, that level becomes a support level. Similarly, when asupport level is successfully penetrated, that level becomes a resistance level.

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Moving Average

Overview:A Moving Average is an indicator that shows the average value of a security's

price over a period of time. When calculating a moving average, a mathematical analysisof the security's average value over a predetermined time period is made. As thesecurities price changes, its average price moves up or down.

There are several popular ways to calculate a moving average. General investorscan calculate a "simple" moving average--meaning that equal weight is given to each

price over the calculation period.

Interpretation:

The most popular method of interpreting a moving average is to compare the

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relationship between moving averages of the security's price with the security's priceitself. A buy signal is generated when the security's price rises above its movingaverage and sell signal is generated when the security's price falls below its movingaverage.

This type of moving average trading system is not intended to get you in at theexact bottom nor out at the exact top. Rather, it is designed to keep you in line with thesecurity's price trend by buying shortly after the security's price bottoms and sellingshortly after it tops. The critical element in a moving average is the number of time

periods used in calculating the average. When using hindsight, you can always find amoving average that would have been profitable. The key is to find a moving average thatwill be consistently profitable. The most popular moving average is the 39 - week (or 200

day) moving average. This moving average has an excellent track record in timing themajor (long -term) market cycles.

Moving Average Crossover

Overview:

A Moving Average is an indicator that shows the average value of a security'sprice over a period of time. When calculating a moving average, a mathematical analysisof the securitys average value over the predetermined time period is made. As thesecurities price changes, its average price moves up or down. See the Moving Average

page for more information on moving averages.

The Moving Average Crossover indicator prompts you for two parameters: Ashorter moving average & a longer moving average.

Interpretation: The most popular method of interpreting a single moving average is to compare

the relationship between moving averages of the security's price with the security's priceitself. However, you can also compare the relationship between a shorter-term movingaverage and a longer-term moving average. By entering 9 and 39 for the averagecalculation, the computer program will plot both moving averages on the price chart.Look for possible buying opportunities when the shorter moving average crosses above

the longer moving average. Conversely, look for possible selling opportunities when theshorter moving average crosses below the longer moving average.

Moving Average Convergence/Divergence

Overview:

The MACD ( "Moving Average Convergence/Divergence" ) is a trend followingmomentum indicator that shows the relationship between two moving averages of

prices. The MACD was developed by Gerald Appeal, publisher of Systems and Forecasts.

The MACD is the difference between a 26-day and 12-day exponential moving average.

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A 9-day exponential moving average, called the "signal" ("trigger") line is plotted on topof the MACD to show buy/sell opportunities. (Thus, he refers to these three movingaverages as 7.5%, 15%, and 20% respectively.)

Interpretation: The MACD proves most effective in wide-swinging trading markets. There arethree popular ways to use the MACD: crossovers, overbought/oversold, and divergences.

Cross over:

The basic MACD trading rule is to sell when the MACD falls below its signalline. Similarly, a buy signal occurs when the MACD rises above its signal line. It is so

popular to buy/sell when the MACD goes above/below zero.

Overbought / Oversold Conditions

The MACD is also useful as an overbought/oversold indicator. When the shortermoving average pulls away dramatically from the longer moving average ( i.e., theMACD rises ), it is Likely that the security price is overextending and will soon return tomore realistic levels. MACD overbought and oversold conditions exist vary from securityto security.

Divergences

An indication that an end to the current trend may be near occurs when theMACD diverges from the security (page 32). A bearish divergence occurs when theMACD is making new lows while prices fail to reach new lows. A bullish divergenceoccurs when the MACD is making new highs while prices fail to reach new highs. Bothof these divergences are most significant when they occur at relativelyoverbought/oversold levels.

Momentum

Overview: The Momentum indicator measures the amount that a security's price has changed

over a given time span.

Interpretation:

The interpretation of the Momentum indicator is identical to the interpretation ofthe Price ROC. Both indicators display the rate-of-change of a security's price. However,the Price ROC indicator displays the rate-of-change as a percentage whereas the

Momentum indicator displays the rate-of-change as a ratio.

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There are two ways to use the Momentum indicator:

You can use the Momentum indicator as a trend-following oscillator similar to theMACD (this is the method I prefer). Buy when the indicator bottoms and turns up andsell when the indicator peaks and turns down. You may want to plot a short-term (e.g., 9-

period) moving average of the indicator to determine when it is bottoming or peaking.

If the Momentum indicator reaches extremely high or low values (relative to itshistorical values), you should assume a continuation of the current trend. For example, ifthe Momentum indicator reaches extremely high values and then turns down, you shouldassume prices will probably go still higher. In either case, only trade after prices confirmthe signal generated by the indicator (e.g., if prices peak and turn down, wait for prices to

begin to fall before selling).

You can also use the Momentum indicator as a leading indicator. This methodassumes that market tops are typically identified by a rapid price increase (when everyoneexpects prices to go higher) and that market bottoms typically end with rapid pricedeclines (when everyone wants to get out). This is often the case, but it is also a broadgeneralization.

As a market peaks, the Momentum indicator will climb sharply and then fall off--diverging from the continued upward or sideways movement of the price. Similarly, at amarket bottom, Momentum will drop sharply and then begin to climb well ahead of

prices. Both of these situations result in divergences between the indicator and prices.

Price Oscillator

Overview: The Price Oscillator displays the difference between two moving averages of a

security's price. The difference between the moving averages can be expressed in eitherpoints or percentages. The Price Oscillator is almost identical to the MACD, except thatthe Price Oscillator can use any two user-specified moving averages. (The MACDalways uses 12 and 26-day moving averages, and always expresses the difference in

points).

Interpretation:

Moving average analysis typically generates buy signals when a short-termmoving average (or the security's price) rises above a longer-term moving average.Conversely, sell signals are generated when a shorter-term moving average (or thesecurity's price) falls below a longer-term moving average. The Price Oscillatorillustrates the cyclical and often profitable signals generated by this one or two moving

average system.

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Price Rate-Of-Change (price ROC)

Overview: The Price Rate-of-Change ("ROC") indicator displays the difference between the

current price and the price x-time periods ago. The difference can be displayed in eitherpoints or as a percentage. The Momentum indicator displays the same information, butexpresses it as a ratio. .

Interpretation: It is a well recognized phenomenon that security prices surge ahead and retract in

a cyclical wave-like motion. This cyclical action is the result of the changingexpectations as bulls and bears struggle to control prices. The ROC displays the wave-like motion in an oscillator format by measuring the amount that prices have changedover a given time period.

As prices increase, the ROC rises; as prices fall, the ROC falls. The greater thechange in prices, the greater is the change in the ROC. The time period used to calculatethe ROC may range from 1-day (which results in a volatile chart showing the daily pricechange) to 200-days (or longer). The most popular time periods are the 12- and 25-dayROC for short to intermediate-term trading. These time periods were popularized byGerald Appel and Fred Hitschler in their book, Stock Market Trading Systems.

The 12-day ROC is an excellent short- to intermediate-term overbought / oversoldindicator. The higher the ROC, the more overbought the security; the lower theROC, the more likely a rally. However, as with all overbought / oversold indicators,it is prudent to wait for the market to begin to correct ( i.e., turn up or down ) before

placing your trade. A market that appears overbought may remain overbought forsome time. In fact, extremely overbought / oversold readings usually imply acontinuation of the current trend.

The 12-day ROC tends to be very cyclical, oscillating back and forth in a fairly

regular cycle. Often, price changes can be anticipated by studying the previous cycles ofthe ROC and relating the previous cycles to the current market.

Envelope

Overview: An envelope is comprised of two moving averages. One moving average is

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shifted upward and the second moving average is shifted downward.

Interpretation: Envelopes define the upper and lower boundaries of a security's normal

trading range. A sell signal is generated when the security reaches the upper bandwhereas a buy signal is generated at lower band. The optimum percentage shift dependson the volatility of the security - the more volatile, the larger the percentage.

The logic behind envelopes is that overzealous buyers and sellers push the price tothe extremes ( i.e., the upper and lower bands ) at which point the prices often stabilize

by moving to more realistic levels. This is similar to the interpretation of BollingerBands.

Bollinger Bands

Overview: Bollinger Bands are similar to moving average envelopes. The differencebetween Bollinger Bands and envelopes is envelopes are plotted at a fixed percentageabove and below a moving average, whereas Bollinger Bands are plotted at standarddeviation levels above and below a moving average. Since standard deviation is ameasure of volatility, the bands are self-adjusting: widening during volatile markets

& contracting during calmer periods. Bollinger Bands were created by John Bollinger..

Interpretation:

Bollinger Bands are usually displayed on top of security prices, but they can bedisplayed on an indicator. These comments refer to bands displayed on prices. As withmoving average envelopes, the basic interpretation of Bollinger Bands is that prices tendto stay within the upper- and lower-band. The distinctive characteristic of BollingerBands is that the spacing between the bands varies based on the volatility of the prices.

During periods of extreme price changes (i.e., high volatility), the bands widen to becomemore forgiving. During periods of stagnant pricing (i.e., low volatility), the bands narrowto contain prices.

Mr. Bollinger notes the following characteristics of Bollinger Bands.

Sharp price changes tend to occur after the bands tighten, as volatility lessens.

When prices move outside the bands, a continuation of the current trend isimplied.

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Bottoms and tops made outside the bands followed by bottoms and tops madeinside the bands call for reversals in the trend.

A move that originates at one band tends to go all the way to the other band. Thisobservation is useful when projecting price targets.

Volume

The number of shares or contracts traded in a security or an entire marketduring a given period of time. It is simply the amount of shares that trade hands fromsellers to buyers as a measure of activity. If a buyer of a stock purchases 100shares from a seller, then the volume for that period increases by the 100 shares

based on that transaction.

Volume is an important indicator in the technical analysis as it is used to measurethe worth of a market move. If the market have made strong price move either up ordown the perceived strength of that move depends on the volume of that period. Thehigher the volume during that price move the more significant the move.

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DATA ANALYSIS

AND

INTERPRETATION

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DATA ANALYSIS AND INTERPRETATION

STEP-1

As per the market capitalization we have selected five companies from the PSU sector.

The five companies are as follows.

As on 28/10/2012

Company name Market capitalization (%)

1) ONGC 15.38

2) SBI (State bank of India) 15.28

3) NTPC (NTPC Ltd ) 7.3

4) COAL INDIA 5.87

5) BHEL(Bharat Heavy Electricals Ltd) 5.44

Source: www.bseindia.com

STEP 2 - RSI CALCULATION

Calculation

FORMULA FOR CALCULATING RSI:

RSI = 100 (100/ 1+ Rs)

Average gain = Total Gains / n = (20.7/14) = 1.47857143

Average loss = Total Loss / n = (22.45/14) = 1.60357149

RS = 0.922049

= 100 (100 / 1+0.922049)

RSI = 47.97

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RSI = 100 (100 / 1+ RS)
http://www.bseindia.com/http://www.bseindia.com/


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RSI CALCULATION

Date Close Price change Gain Loss

3-Oct-11 268.55

4-Oct-11 264.4 -4.15 0 4.15

5-Oct-11 264.2 -0.2 0 0.2

]7-Oct-11 264.45 0.25 0.25 0

10-Oct-11 273.5 9.05 9.05 0

11-Oct-11 268.35 -5.15 0 5.15

12-Oct-11 270.5 2.15 2.15 0

13-Oct-11 265 -5.5 0 5.5

14-Oct-11 266.65 1.65 1.65 0

17-Oct-11 269.5 2.85 2.85 0

18-Oct-11 263.6 -5.9 0 5.9

19-Oct-11 268.35 4.75 4.75 0

20-Oct-11 266.8 -1.55 0 1.55

21-Oct-11 265.4 -1.4 0 1.4

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Oil and Natural Gas Corporation Ltd

Half Yearly - Oil and Natural Gas Corporation LtdSep'12 Mar'12 Sep'11 Mar'11 Sep'10

INCOME:Net Sales Turnover 40,062.87 37,857.07 39,327.28 36,912.08 32,253.29Other Income 2,939.59 1,951.13 1,859.94 1,254.81 1,313.39Total Income 43,002.46 39,808.20 41,187.22 38,166.89 33,566.68

EXPENSESStock Adjustments 6.49 5.26 -96.60 84.30 -97.21Raw Material Consumed 266.32 340.01 313.65 340.15 281.31Power and Fuel 0.00 0.00 0.00 0.00 0.00Employee Expenses 875.32 671.77 637.37 718.37 584.82Administration and SellingExpenses

0.00 0.00 0.00 0.00 0.00

Research and DevelopmentExpenses

0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00Other Expenses 20,695.35 17,769.19 14,534.28 14,265.41 11,969.35Provisions Made 0.00 0.00 0.00 0.00 0.00TOTAL EXPENSES 21,843.48 18,786.23 15,388.70 15,408.23 12,738.27

Operating Profit 18,219.39 19,070.84 23,938.58 21,503.85 19,515.02EBITDA 21,158.98 21,021.97 25,798.52 22,758.66 20,828.41Depreciation 3,645.67 5,881.21 7,400.64 8,428.65 7,514.34EBIT 17,513.31 15,140.76 18,397.88 14,330.01 13,314.07Interest 32.37 24.29 10.54 21.44 3.67EBT 17,480.94 15,116.47 18,387.34 14,308.57 13,310.40Taxes 5,627.80 6,355.65 5,783.21 4,492.63 4,654.13Profit and Loss for the Year 11,853.14 8,760.82 12,604.13 9,815.94 8,656.27Extraordinary Items 0.00 0.00 0.00 0.00 0.00Prior Year Adjustment 121.13 484.42 133.00 58.15 393.64Other Adjustments 0.00 0.00 0.00 0.00 0.00Reported PAT 11,974.27 12,385.79 12,737.13 9,874.09 9,049.91

KEY ITEMSReserves Written Back 0.00 0.00 0.00 0.00 0.00Equity capital 4,277.76 4,277.76 4,277.76 4,277.76 2,138.89Reserves and Surplus 0.00 107,506.3

70.00 92,430.65 0.00

Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00Agg. Non-Promoter Shares 26,329.44 0.00 22,125.27 22,125.27 5,531.32Agg. Non-Promoter Holding (%) 30.77 0.00 25.86 25.86 25.86Government Share 0.00 0.00 0.00 0.00 0.00

Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00EPS (Rs.) 13.99 -- 14.89 11.54 42.31

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Oil and Natural Gas Corporation Ltd (HistoricGraphs)

INTERPRETATION

The Relative Strength Index (RSI) is a financial technical analysis showing price

strength by comparing upward and downward close-to-close movements.

In the above Chart, blue color line indicates closing price of ONGC scrip.

In the above Chart the sell point of 3-January and 3-Feb and 3- July indicate that

there may be downturn & it is the right time to sell the scrip.

Similarly the Buy point 3-Dec. and 3-Jan and 18-may indicating that it is time to

pick up the scrip and the price of share is upward.

In this chart the double Top, formations are generated.

In 3- Nov the resistance level is generated.

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In the Dec., January and Jun month is over sold region, the investor can buy the scrip

In the month of January and July over bought region, the investor can sell the scrip.

State Bank of India

Half Yearly - State Bank of IndiaSep'12 Mar'12 Sep'11 Mar'11 Sep'10

INCOME:Net Sales Turnover 58,523.53 56,356.92 50,164.53 43,134.14 38,260.22Other Income 6,845.43 7,389.99 6,961.46 8,129.43 7,695.17

Total Income 65,368.96 63,746.91 57,125.99 51,263.57 45,955.39EXPENSESStock Adjustments 0.00 0.00 0.00 0.00 0.00Raw Material Consumed 0.00 0.00 0.00 0.00 0.00Power and Fuel 0.00 0.00 0.00 0.00 0.00Employee Expenses 8,417.31 9,342.34 7,631.70 7,730.48 6,749.70Administration and SellingExpenses

0.00 0.00 0.00 0.00 0.00


0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00Other Expenses 4,990.46 4,360.47 4,734.48 4,662.57 3,872.69Provisions Made 4,281.93 5,547.83 7,542.40 6,208.49 4,172.85TOTAL EXPENSES 17,689.70 19,250.64 19,908.58 18,601.54 14,795.24

Operating Profit 40,833.83 37,106.28 30,255.95 24,532.60 23,464.98EBITDA 47,679.26 44,496.27 37,217.41 32,662.03 31,160.15Depreciation 0.00 0.00 0.00 0.00 0.00EBIT 51,961.19 50,044.10 44,759.81 38,870.52 35,333.00Interest 36,430.87 33,187.31 30,043.06 26,026.33 22,841.62EBT 15,530.32 16,856.79 14,716.75 12,844.19 12,491.38Taxes 3,838.69 3,995.65 2,780.37 3,786.76 2,902.96

Profit and Loss for the Year 11,691.63 12,861.14 11,936.38 9,057.43 9,588.42Extraordinary Items 0.00 0.00 0.00 0.00 0.00Prior Year Adjustment 0.00 0.00 0.00 0.00 0.00Other Adjustments -4,281.93 -5,547.83 -7,542.40 -6,208.49 -4,172.85Reported PAT 7,409.70 7,313.31 4,393.98 2,848.94 5,415.57

KEY ITEMSReserves Written Back 0.00 0.00 0.00 0.00 0.00Equity capital 671.04 671.04 635.00 635.00 635.00Reserves and Surplus 0.00 83,280.16 0.00 64,351.04 71,599.83Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00

Agg. Non-Promoter Shares 2,577.92 2,577.92 2,577.92 2,577.92 2,577.91Agg. Non-Promoter Holding (%) 38.42 38.42 40.60 40.60 40.60

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Government Share 61.58 61.58 59.40 59.40 59.40Capital Adequacy Ratio 11.17 12.05 10.31 0.00 12.05EPS (Rs.) 110.43 108.99 69.20 44.87 85.29

State Bank of India (Historic Graphs)

INTERPRETATION



In the above Chart, blue color line indicates closing price of SBI Bank scrip.

In the above Chart the sell point of 25-Oct. and 27-Jan. and 24-Oct indicate that


Similarly the Buy point 25-Jan. and 3-May and 3-Aug. indicating that it is time to

pick up the scrip and the price of share is upward.

In this chart the double Top, formations are generated.

In the Oct., January and Oct. month is over sold region, the investor can buy the scrip

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In the month of January and May and Aug. over bought region, the investor can sell the scrip

Coal India Ltd

Half Yearly - Coal India LtdSep'12 Mar'12 Sep'11 Mar'11 Sep'10

INCOME:Net Sales Turnover 140.19 225.92 189.94 306.84 106.92

Other Income 6,340.45 3,033.74 6,059.47 1,454.98 3,629.27Total Income 6,480.64 3,259.66 6,249.41 1,761.81 3,736.19

EXPENSESStock Adjustments 8.05 6.94 10.12 -2.17 -6.37Raw Material Consumed 5.43 4.76 4.92 0.00 0.00Power and Fuel 3.65 2.53 2.99 3.36 3.55Employee Expenses 164.61 170.03 139.01 126.42 117.16Administration and SellingExpenses

0.00 0.00 0.00 0.00 0.00


0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00Other Expenses 130.98 119.95 69.19 196.83 45.99Provisions Made 13.05 -52.01 58.83 -2.88 83.58TOTAL EXPENSES 325.77 252.20 285.06 321.56 243.91

Operating Profit -185.58 -26.28 -95.12 -14.72 -136.99EBITDA 6,154.87 3,007.46 5,964.35 1,440.26 3,492.29Depreciation 3.09 3.84 3.12 2.89 2.68EBIT 6,151.78 3,003.62 5,961.23 1,437.37 3,489.60Interest 189.99 189.92 174.98 -16.25 219.66EBT 5,961.79 2,813.70 5,786.25 1,453.62 3,269.94

Taxes 185.00 370.85 164.00 -47.74 75.00Profit and Loss for the Year 5,776.79 2,442.85 5,622.25 1,501.35 3,194.94

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Extraordinary Items 0.00 0.00 0.00 0.00 0.00Prior Year Adjustment 0.00 0.00 0.00 0.00 0.00Other Adjustments 0.00 0.00 0.00 0.00 0.00Reported PAT 5,776.79 2,442.85 5,622.25 1,501.16 3,194.94

KEY ITEMS

Reserves Written Back 0.00 0.00 0.00 0.00 0.00Equity capital 6,316.36 6,316.36 6,316.36 6,316.36 6,316.36Reserves and Surplus 0.00 0.00 0.00 0.00 0.00Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00Agg. Non-Promoter Shares 6,316.36 6,316.36 6,316.36 6,316.36 6,316.36Agg. Non-Promoter Holding (%) 10.00 10.00 10.00 10.00 10.00Government Share 0.00 0.00 0.00 0.00 0.00Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00EPS (Rs.) 9.15 3.87 8.90 2.38 5.06

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Coal India Ltd (Historic Graphs)

INTERPRETATION



In the above Chart, blue color line indicates closing price of Coal India scrip.

In the above Chart the sell point of 8-Dec., 19-January and 2-Sep. indicate that


Similarly the Buy point 3-Nov. and 12-Oct indicating that it is time to pick up the

scrip and the price of share is upward.

In this chart the double Bottom formations are generated.

In 25- Dec the support level is generated.

The Head & Shoulder top and bottom are generated.

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National Thermal Power

Corporation Ltd

Half Yearly - NTPC LtdSep'12 Mar'12 Sep'11 Mar'11 Sep'10

INCOME:Net Sales Turnover 32,517.28 31,746.25 30,223.39 29,943.33 28,416.45Other Income 1,495.49 1,530.99 1,331.37 407.65 480.41Total Income 34,012.77 33,277.24 31,554.76 30,350.98 28,896.86

EXPENSESStock Adjustments 0.00 0.00 0.00 0.00 0.00Raw Material Consumed 0.00 0.00 0.00 0.00 0.00Power and Fuel 20,530.38 21,236.24 20,399.22 18,064.20 17,309.58Employee Expenses 1,687.12 1,615.15 1,475.33 1,396.71 1,393.00Administration and SellingExpenses

0.00 0.00 0.00 0.00 0.00


0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00

Other Expenses 2,007.29 1,711.55 1,569.33 1,613.46 1,234.37Provisions Made 0.00 65.16 0.02 289.37 1,262.78TOTAL EXPENSES 24,224.79 24,628.10 23,443.90 21,363.74 21,199.73

Operating Profit 8,292.49 7,118.15 6,779.49 8,579.59 7,216.72EBITDA 9,787.98 8,649.14 8,110.86 8,987.24 7,697.13Depreciation 1,546.74 1,492.29 1,299.41 1,296.69 1,189.00EBIT 8,241.24 7,156.85 6,811.45 7,690.55 6,508.13Interest 802.81 936.62 705.52 1,023.13 1,125.95EBT 7,438.43 6,220.23 6,105.93 6,667.42 5,382.18Taxes 1,797.41 1,496.40 1,606.03 1,514.10 1,432.91Profit and Loss for the Year 5,641.02 4,723.83 4,499.90 5,153.32 3,949.27

Extraordinary Items 0.00 0.00 0.00 0.00 0.00Prior Year Adjustment 0.00 0.00 0.00 0.00 0.00Other Adjustments 0.00 0.00 0.00 0.00 0.00Reported PAT 5,641.02 4,723.83 4,499.90 5,153.32 3,949.27

KEY ITEMSReserves Written Back 0.00 0.00 0.00 0.00 0.00Equity capital 8,245.46 8,245.46 8,245.46 8,245.46 8,245.46Reserves and Surplus 0.00 65,045.71 47,460.55 59,646.79 39,282.12Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00Agg. Non-Promoter Shares 12,781.03 12,781.03 12,781.03 12,781.03 12,781.03

Agg. Non-Promoter Holding (%) 15.50 15.50 15.50 15.50 15.50Government Share 0.00 0.00 0.00 0.00 0.00

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Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00EPS (Rs.) 6.84 5.73 5.46 6.25 4.79

National Thermal Power Corporation Ltd(Historic Graphs)

INTERPRETATION



In the above Chart, blue color line indicates closing price of NTPC scrip.

In the above Chart the sell point of 20-Feb and 18- July indicate that there may be

downturn & it is the right time to sell the scrip.

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Similarly the Buy point 26-Nov. and 18-May and 24-July indicating that it is time

to pick up the scrip and the price of share is upward.

In this chart the double Top and double bottom formations are generated.

Bharat Heavy ElectricalsLtd

Half Yearly - Bharat Heavy Electricals LtdSep'12 Mar'12 Sep'11 Mar'11 Sep'10

INCOME:Net Sales Turnover 19,000.56 30,332.02 17,692.28 27,403.82 15,091.69Other Income 496.94 594.93 660.94 316.37 325.44Total Income 19,497.50 30,926.95 18,353.22 27,720.19 15,417.13

EXPENSESStock Adjustments -999.00 55.24 -878.44 391.05 -518.40

Raw Material Consumed 11,989.38 17,093.47 11,146.38 13,378.88 9,291.82Power and Fuel 0.00 0.00 0.00 0.00 0.00Employee Expenses 2,876.38 2,815.74 2,650.09 2,808.57 2,601.84Administration and SellingExpenses

0.00 0.00 0.00 0.00 0.00


0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00Other Expenses 2,032.14 3,349.90 1,894.25 4,460.02 1,119.02Provisions Made 0.00 0.00 0.00 0.00 0.00TOTAL EXPENSES 15,898.90 23,314.35 14,812.28 21,038.52 12,494.28

Operating Profit 3,101.66 7,017.67 2,880.00 6,365.30 2,597.41EBITDA 3,598.60 7,612.60 3,540.94 6,681.67 2,922.85Depreciation 444.70 440.28 359.72 283.13 260.99EBIT 3,153.90 7,172.32 3,181.22 6,398.54 2,661.86Interest 31.38 32.84 18.44 44.97 9.76EBT 3,122.52 7,139.48 3,162.78 6,353.57 2,652.10Taxes 927.17 2,327.06 935.24 2,229.98 845.94Profit and Loss for the Year 2,195.35 4,812.42 2,227.54 4,123.59 1,806.16Extraordinary Items 0.00 0.00 0.00 0.00 0.00Prior Year Adjustment 0.00 0.00 0.00 77.68 3.77

Other Adjustments 0.00 0.00 0.00 0.00 0.00Reported PAT 2,195.35 4,812.42 2,227.54 4,201.27 1,809.93

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KEY ITEMSReserves Written Back 0.00 0.00 0.00 0.00 0.00Equity capital 489.52 489.52 489.52 489.52 489.52Reserves and Surplus 0.00 24,883.69 0.00 19,664.32 0.00Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00

Agg. Non-Promoter Shares 7,900.48 7,900.48 1,580.10 1,580.10 1,580.10Agg. Non-Promoter Holding (%) 32.28 32.28 32.28 32.28 32.28Government Share 0.00 0.00 0.00 0.00 0.00Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00EPS (Rs.) 8.97 19.66 45.51 85.83 36.98

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Bharat Heavy Electricals Ltd (Historic

Graphs)

INTERPRETATION



In the above Chart, blue color line indicates closing price of BHEL scrip.

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In the above Chart the sell point of 1-May indicate that there may be downturn &

it is the right time to sell the scrip.

Similarly the Buy point 21-Nov. and 16-Dec. indicating that it is time to pick up

the scrip and the price of share is upward.

In this chart the double Top formations are generated.

On 11- Oct. the resistance level is generated.

On 27-May and 14-Sep. the support level is generated.

In the Nov. and Dec. month is over sold region, the investor can buy the scrip

In the month of May over bought region, the investor can sell the scrip

STEP 4- CALCULATION OF ROC

Date Close Price ROC -1 Method(%)

ROC -2 Method(%)

3-Oct-11 1862.75

4-Oct-11 1786.75-Oct-11 1715.3

7-Oct-11 1751.85

10-Oct-11 1754.55

11-Oct-11 1765.1

12-Oct-11 1872.25

13-Oct-11 1886.95

14-Oct-11 1882.5

17-Oct-11 1891.8 101.5595222 1.55952221218-Oct-11 1863.4 104.2928304 4.292830358

19-Oct-11 1919.1 111.8813036 11.88130356

Formula for calculation of ROC

ROC= ((today's closing price - closing price at [period number of days ago]) closing

price at [period number of days ago]) x 100

ROC =

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ROC = {(1891.8-1862.75)/1862.75} * 100

= 1.559522212

CHART OF ROC METHOD FOR ALL FIVE SELECTED COMPANY

Oil and Natural Gas Corporation Ltd

INTERPRETATION

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ROC measures the rate of change between the current price & the price n

number of days in past. ROC helps to find out the overbought & oversold

positions in scrip.

In the above chart, scrips ROC reaches the historic high value in the month of

Jun, the scrip is in overbought region & a fall in the value can be anticipated. In

27-sep-2012, the investor can sell the scrip.

Similarly, scrips ROC reaches the historic low value in the month of January and

May, the scrip is in oversold region & a rise in the scrips price can be anticipated.

In January, the investor can buy the scrip.

The Double top & double bottom trend generated in January & February month.

Raising trend found from the month of August to September.

State Bank of India

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INTERPRETATION

Here in chart in the month of December we found falling trend.

In the month of May & September Raising trend found.

In January month Double top & in February Double Bottom trend found.

In month of September i.e. on 26 SEP 2012 overbought situation arise.

In month of December i.e. on 20 DEC 2011oversold situation arise.

Coal India Ltd

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INTERPRETATION

In December month Raising trend found & from 2 Dec 2011 trend starts to fall

downward side.

Here top head & shoulder I found in month of February

Between month of May & June bottom head & shoulder is found

In all chart patterns we found all price movement is within the limit.

Only two points are in the situation off over bought & over sold situation.

At 2-Dec 2011 value is overbought area.

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At 14 Dec 2012 the oversold situation arises.

National Thermal Power Corporation Ltd

INTERPRETATION

In December month downward trend found & from 20 Dec 2011 trend starts to

raise upward side.

Here bottom head & shoulder is found in the month of march

At the end of December trends starts falling i.e. history is repeating

In all chart patterns we found all price movement is within the limit.

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Top head & shoulder is also observed

Trend is following repeated pattern

Bharat Heavy Electricals Ltd

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INTERPRETATION

In month of February & March Over bought situation seen

While in the month of December oversold is there.

Bottom Head & shoulder pattern we can see in month of August.

As in month of September & October top head & shoulder pattern is seen.

FINDINGS

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FINDINGS

1) ONGC

Resistance level is provided thus the price started declining inNovember.

Twice buy & sell point occurs within 1 month duration.

Support level is provided in September as result price startedrising.

With respect to ROC, falling trend has been observed & because ofoversold it continuous.

Overbought along with double top trend has been seen In JAN end.

2) SBI

During November share price is at minimum point thus it gives thebuy signal to the investors.

Double top trend has been repeated twice, one is within limit &another is crossing the resistance level in the month of Jan & Feb.

In the month of April bottom Head & Shoulder is noticed

Raising trend has been found in the end of May & August.

3) COAL INDIA

Support level is provided in the beginning of Jan 12 as result price

rises.

Bottom Head & Shoulder has been found in May 12.

Buy call is twice & 3 sell call has been observed.

Double bottom is seen in November & April.

Top Bottom Head & Shoulder has been found in February & mayrespectively.

Raising trend is observed in the month of December as it isoverbought.

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4) NTPC

Continuous fluctuation of prices has been found in scrip of NTPC.

2 Double bottoms & 2 Top bottoms has been found thus highvariation in price & trend is followed.

Raising trend is seen in December & again price reaches its historicvalue in January.

Top Bottom head & shoulder are seen in March & Augustrespectively.

5) BHEL

Twice support level has been provided in the month of May &September.

Double top trend is observed in the month of July.

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Two Bottom head & shoulder and one top head & shoulder areseen in the charts.

One symmetric triangle is found in March.

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SUGGESTIONS

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SUGGESTIONS

The investors should be trained to use the technical analysis tools. Since it will

help them in their day to day investments to get more returns.

Fundamental analysis can also be suggested to the investors together corporate,

growth of earnings and profitability.

The company should orient the investors to mainly watch the business, economic,

social and political factors that affect the supply and demand for securities.

The investors can also use more number of charts which will depict a true pictureon the movement of the securities.

The investors should analyze market data in real time; plan your own market

timing strategy to make money, regardless of upwards and downwards trending

markets.

Minute by Minute trading volume shows the reversal points of the market, and

therefore when to buy and sell can be identified.

The trend is your Friend is the motto of technical analysis. So the investor has to

monitor the trend of stocks before investment.

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LIMITATIONS OF

THE STUDY

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LIMITATIONS OF THE STUDY

1. One of the most important limitations for most technical analysis methods is thefact that there are so many people using the basic technical analysis methods

already, and the number is increasing every day, making it harder for a single

trader to make money on the market with the methods.

2. Because of these methods are so widely spread and there is so much money

riding on the methods, some also claim that technical analysis has become self-

fulfilling prophecy, as people trend to enter the market and put their stops on the

same places, increasing the volatility towards the technical analysis method being

correct.

3. Technical analysis systems usually do not take into account correlation between

different markets. If you are analyzing several markets and they all give similar

signals, they may have close correlations, meaning that the risk profile for each is

very similar, and that the prices of the assets move in close steps with each other.

4. The technical analysis must be a self-defeating proposition. As more & morepeople use, employ it the value of such analysis trends to reduce.

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CONCLUSION

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CONCLUSION

Buying and selling of stock is not an easy task if you want to make money doing

it. Millions of investors have lost the money in past trying guessing stock price

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

right over 70% of the time.

In todays world, if you rely on fundamental analysis, brokers advice newspaper, articles

or business channels for your investing or trading decisions, you are asking for a painful

experience in the markets. So, this study on technical analysis will help the investors in

analyzing the scripts based on the technical tools and oscillators to earn fruitfulinvestment.

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

and predict prices of a given security. It is also becoming popular with the younger

generation. But further research has to be conducted to know whether the technical

analysis alone will guarantee profits to the investors. Knowledge of the stock markets is

the key to the success and emphasis should be on managing trading risk while technical

analysis can help you to control them.

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REFERENCES

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REFERENCES

1) BIBLIOGRAPHY

1. Ashwani Gujral; How to Make Money Trading with Charts; 2012, Vision Books.

2. Robert D. Edwards; Technical Analysis of Stock Trends; Edition: 9th; February

26, 2007.

3. Security Analysis and Portfolio Management by Dr. Punithavathi Pandian in theyear 2008 Publication: Vikas Publishing House Pvt Ltd

2) WEBLIOGRAPHY

www.nseindia.com

www.bseindia.com

www.technicaltrends.com

www.economictimes.indiatimes.com

www.moneycontrol.com

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http://www.nseindia.com/http://www.bseindia.com/http://www.technicaltrends.com/http://www.economictimes.indiatimes.com/http://www.moneycontrol.com/http://www.nseindia.com/http://www.bseindia.com/http://www.technicaltrends.com/http://www.economictimes.indiatimes.com/http://www.moneycontrol.com/


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http://www.indiabull.com/http://www.indiabull.com/

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