INTRODUCTION

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 not of 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.

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.

LITERATURE REVIEW

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 rate predictability 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 of trading 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.

OBJECTIVE

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.

RESEARCH METHODOLOGY

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 data are 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)

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 should be 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 successful investment. 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 19th century.

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ASSUMPTIONS FOR THE EQUITY ANALYSIS

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Works only in normal share-market conditions with great reliability, it also works in abnormal share-market conditions, but with low reliability. Equity analysis is purely based on the INVESTMENT PHILOSOPHY, so the investment object has vital importance associated to return along with risk. Cash management gets the magnitude role, because the scenario of equity analysis is revolving around the term money Portfolio management, risk management was up to the investors knowledge. Capital market trend is always a friend, whether it is short run or long run. You are buying stock & not companies, so dont be curious or panic to do postmortem of companies performances. History repeats: investors & speculators react the same way to the same types of events homogeneously. Capital market has a typical market psychology along with other issues like; perceptions, the crowd Vc the individual, traditions & trust. An individual perceptions about the investment return & differ from individual to individual. Although the equity analysis is art as well as sciences so, it also has some exceptions. associated risk may

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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. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Inflation rates Economic growth Governmental Exim & other policies regarding businesses & industry LPG (liberalization, privatization, globalization) Interest rates: standards of returns for measurement FIIs perception to share market Political feel Targeted Industrial growth Product line & other industry/company strengths Capacity installed & utilized Efficiencies; input output combination Demand: potential market: purchasing power Management board of company Companies prospects, growth 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 conditions in an effort to determine the value of a companys stock. Fundamental analysis typically focuses on key statistics in companys financial statements to determine if the stock price is correctly valued. Most fundamental information focuses on economic, industry and company statistics. 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 an idea as to what the company owns and owes, as well as the amount invested by the customer. 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 it that document the value of each. Accounts such as cash, inventory and property are on the asset side of the balance sheet, while on the liability side there are accounts such as accounts payable or long-term debt. The exact accounts on a balance sheet will differ by company and by industry, as there is no one set template that accurately accommodates for the differences between different types of businesses. It's called a balance sheet because the two sides balance out. This makes sense: a company has to pay for all the things it has (assets) by either borrowing money (liabilities) or getting it from shareholders (shareholders' equity). 13

The balance sheet is one of the most important pieces of financial information issued by a company. It is a snapshot of what a company owns and owes at that point in time. The income statement, on the other hand, shows how much revenue and profit a company 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 picture of a company's finances. The balance sheet shows the financial condition of a business at a given point of time. As per the Companies Act, the balance sheet of a company shall be in either the account form or the report form. Structure of Balance Sheet as per the companies Act Liabilities Assets Share Capital Reserves and Surplus Secured loans Unsecured loans Current liabilities and Provisions

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 or provide 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. Equity capital 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 capital represents the contribution of preference shareholders and the dividend rate payable on it is general fixed. Reserve and Surplus: Reserve and Surplus comprise retained earnings as well as nonearnings items like share premium and capital subsidy. In common practice for companies 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 the firm. 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 assets such as land, building, and plant and machinery. 14

Unsecured loans: in contrast to secured loans, unsecured loans are loans which are not secured by a charge on the assets of the firm. Current liabilities and Provisions: current liabilities and provisions represent obligations that are expected to mature within a year. Current liabilities include items such as bills payable, sundry creditors, interest accrued etc. and provisions include items such 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 under the Companies Act: Fixed Assets: fixed assets, also called non current assets, are assets that are expected to produce 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 into cash or which result in cash savings, during the operating cycle of the firm. The major components 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 on issue 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 the net 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. Also known 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 shareholders through 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 information provided should be adequate to reflect a true and fair picture of the operations of the company for the accounting period.

Structure of Profit and Loss A/C Income Sales Expenditure Material and other expenditure Interest Depreciation Profit before tax Provision for tax Profit after tax

While a single step profit and loss account aggregates all revenues and expenses, a multi step profit and loss account provides disaggregated information. Further, instead of showing only the final profit measure, the profit after tax figure, it presents profit measures 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 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 successful investment. 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 & analyze profitability & financial health is Ratio Analysis. For that matter a verity of ratios was consider. 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 financial ratios to assess the performances & status of the business unit. It is the tool of financial analysis, which not only studies but also reflecting the numerical & quantitative relationship between the important financial variables. Fundamental analysis facilitates comparison between two companies. It reflects the financial efficiency & financial position of a company. Fundamental analysis is fruitful in preparing plans for the future. However, fundamental Analysis should not be considering as the ultimate objective test but it may be carried further based on the outcome & 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 measuring performance of an organization. The ratio analysis concentrates on the inter-relationship among the figures appearing in the financial and accounting statements. The ratio analysis helps the investor to analyze the past performance of the firm and to make further future projection regarding financial position. Ratio analysis allows interested parties like shareholders, investors, creditors and government to make an evaluation of financial aspect of a firms performance. Fundamental analysis i.e. Ratio analysis is process of comparison of one figure against another, which makes a ratio, and appraisal of the ratios to make proper analysis about the strength and weakness of the firms operation. Fundamental analysis is extremely helpful in providing valuable insight into a companys financial picture. Ratios provide an easy way to compare present performance of businesses. Ratios depicts the areas in which a particular business competitively advantaged or disadvantaged through comparing ratios to those of other businesses of the same size within the same industry.

TYPES OF RATIOS
A ratios can be classified as follows1) Liquidity Ratio: The importance of adequate liquidity in the sense of the ability of a firm to meet current or short-term obligations. When they become due for payment can hardly be overstressed. 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 long term financial strength measured in terms of its ability to pay the interest regularly as well as 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. This ratios 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 its investors, shareholders depends ultimately on the profits earned by it. The profitability of a firm can be measured by its profitability ratio. Profitability ratio can be determined on the 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 the speed 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 also expected to be high. A pay out ratio & coverage ratios are in the scope of market test ratio. 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 full diluted equity capital. The industry P/E is the aggregate market capitalization of the industry divided by the aggregate net profit of the industry after excluding loss-making companies. The market capitalization is arrived at by multiplying the closing prices of shares 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 is the excess return of the stock above the risk-adjusted market return, given its level of risk as measured by beta. It indicates the return given by a stock in a stagnant market or when the market return is zero. A positive alpha indicates the stock has performed better than expected. Beta is the shares sensitivity to market movements. It indicates how much the script moves for a unit change in the market index. Beta could be positive or negative. A negative beta indicates that the share moves in direction opposite to the market. The beta of the index is 1. A higher beta indicates the stocks movements are sharper than that of the market index. Standard deviation in the returns of a stock measures the volatility of the stock over its trend. Mean is the average of daily returns of a script in the last 30 trading days. 18

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 mainly seeks to predict the short term price travels. It is important criteria for selecting the company to invest. It also provides the base for decision-making in investment. The one of the most frequently used yardstick to check & analyze underlying price progress. For that matter a verity of tools was consider. This Technical analysis is helpful to general investor in many ways. It provides important & 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 & graphical relationship 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 equity investment dating back to the late 19th century.

BASIC PREMISES OF TECHNICAL ANALYSIS 1. 2. 3. 4. 5. 6. Market prices are determined by the interaction of supply & demand forces. Supply & demand are influenced by variety of supply & demand affiliated factors both rational & irrational. These include fundamental factors as well as psychological factors. Barring minor deviations stock prices tend to move in fairly persistent trends. Shifts in demand & supply bring about change in trends. This shifts can be detected with the help of charts of manual & computerized action, because of the persistence of trends & patterns analysis of past market data can be used to predict future prices behaviors.

DRAWBACKS / LIMITATIONS OF TECHNICAL ANALYSIS 1 2 3 Technical analysis does not able to explain the rezones behind the employment or selection of specific tool of Technical analysis. The technical analysis failed to signal an uptrend or downtrend in time. 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. This type of chart is ideal for securities with no high or low price data i.e., mutual funds or that is 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. We also know that trends do not last forever. They eventually change direction and when they do, they rarely do so on a dime. Instead, prices typically decelerate, pause, and then 21

reverse. These phases occur as investors form new expectations and by doing so, shift the security'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 price behavior often follows these price patterns. Chart patterns can last from a few days to many months or even years. Generally speaking, the longer a pattern takes to form, the more 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 either side. The reason this reversal pattern is so common is due to the manner in which trends typically reverse. An up-trend is formed as prices make higher-highs and higher-lows in a stair-step fashion. The trend is broken when this upward climb ends. As you can see in the illustration (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 do so. This signifies the end of the up-trend. Confirmation of a new down-trend occurs when the "neckline" is penetrated.

During a healthy up-trend, volume should increase during each rally. A sign that the 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. 22

Following the penetration of the neckline, it is very common for prices to return to the neckline in a last effort to continue the up-trend. If prices are then unable to rise above the neckline, they usually decline rapidly on increased volume. An inverse (or upside-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 formed and then increases as prices rise above the neckline. Rounding Tops and Bottoms: Rounding tops occur as expectations gradually shift from bullish to bearish. The gradual, yet steady shift forms a rounded top. Rounding bottoms occur as expectations gradually 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 then decline 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 upside is down.

Double top reversal pattern:

Interpretation Tops T1 & T2 are almost at the same level & trend violated the support line formed 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 will be 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 resistances level formed with the help of top T1 hence; a Double bottom reversal pattern has been formed. To measure the likely upward reaction, measure the distances between the intervening 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 line formed with the help of bottom B1 because the B1 is the lowest bottom hence, a triple top reversal pattern has been formed. To measure the likely downward reaction, measure the distances between the intervening bottom & the triple tops. Deduct these distances from the 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 resistances level 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, measure the distances between the intervening top & the triple bottom. Deduct these distances from 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. Triangles typically occur as prices encounter a support or resistance level which constricts the prices.

A "symmetrical triangle" occurs when prices are making both lower-highs and higher-lows. "Symmetrical triangle" . Confused; wait & watch policy.

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An "ascending triangle" occurs when there are higherlows (as with a symmetrical triangle), but the highs are occurring at the same price level due to resistance. The odds 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 lowerhighs (as with a symmetrical triangle), but the lows are occurring at the same price level due to support. The odds favor a downside breakout from a descending triangle. "Descending triangle" . Selling pressure; usually has downward trend. Bearish rally.

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 breakout rapidly from a triangle. Breakouts are confirmed when they are accompanied by an increase 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. There are 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 be penetrated 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/resistance levels 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 B: short term trend 1.Secular variation 2. Cyclical variation 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 the trend can be classified into three ways as below discuss in detail: Rising trend: As shown in the following chart, a rising trend is defined by successively higher low-prices. A rising trend can be thought of 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 is defined by successively lower high-prices. A falling trend 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 & the support levels i.e. the script is moving in 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 classic supply and demand. Remembering supply / demand lines show what the supply and demand will be at a given price. Resistance is equivalent to a "supply" line. When prices increase, the quantity of sellers also increases as more investors are willing to sell at these higher prices. When too much selling occurs, however, prices retreat. When this happens repeatedly near a specific 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 investors are 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 for traders to question the new price levels. For example, after a breakout above a resistance level, buyers and sellers may both question the validity of the new price and may 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 warranted and prices will move back to their previous level; or investors will accept the new price and prices will continue to move in the direction of the penetration. When a resistance level is successfully penetrated, that level becomes a support level. Similarly, when a support 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 analysis of the security's average value over a predetermined time period is made. As the securities price changes, its average price moves up or down. There are several popular ways to calculate a moving average. General investors can 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 30

relationship between moving averages of the security's price with the security's price itself. A buy signal is generated when the security's price rises above its moving average and sell signal is generated when the security's price falls below its moving average. This type of moving average trading system is not intended to get you in at the exact bottom nor out at the exact top. Rather, it is designed to keep you in line with the security's price trend by buying shortly after the security's price bottoms and selling shortly 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 a moving average that would have been profitable. The key is to find a moving average that will 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 the major (long -term) market cycles. Moving Average Crossover 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 analysis of the securitys average value over the predetermined time period is made. As the securities 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: A shorter 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 price itself. However, you can also compare the relationship between a shorter-term moving average and a longer-term moving average. By entering 9 and 39 for the average calculation, 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 the shorter moving average crosses below the longer moving average. Moving Average Convergence/Divergence Overview: The MACD ( "Moving Average Convergence/Divergence" ) is a trend following momentum 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. 31

A 9-day exponential moving average, called the "signal" ("trigger") line is plotted on top of the MACD to show buy/sell opportunities. (Thus, he refers to these three moving averages as 7.5%, 15%, and 20% respectively.) Interpretation: The MACD proves most effective in wide-swinging trading markets. There are three 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 signal line. 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 shorter moving average pulls away dramatically from the longer moving average ( i.e., the MACD rises ), it is Likely that the security price is overextending and will soon return to more realistic levels. MACD overbought and oversold conditions exist vary from security to security. Divergences An indication that an end to the current trend may be near occurs when the MACD diverges from the security (page 32). A bearish divergence occurs when the MACD is making new lows while prices fail to reach new lows. A bullish divergence occurs when the MACD is making new highs while prices fail to reach new highs. Both of these divergences are most significant when they occur at relatively overbought/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 of the 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. 32

There are two ways to use the Momentum indicator: You can use the Momentum indicator as a trend-following oscillator similar to the MACD (this is the method I prefer). Buy when the indicator bottoms and turns up and sell when the indicator peaks and turns down. You may want to plot a short-term (e.g., 9period) 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 its historical values), you should assume a continuation of the current trend. For example, if the Momentum indicator reaches extremely high values and then turns down, you should assume prices will probably go still higher. In either case, only trade after prices confirm the 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 method assumes that market tops are typically identified by a rapid price increase (when everyone expects prices to go higher) and that market bottoms typically end with rapid price declines (when everyone wants to get out). This is often the case, but it is also a broad generalization. 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 a market 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 either points or percentages. The Price Oscillator is almost identical to the MACD, except that the Price Oscillator can use any two user-specified moving averages. (The MACD always 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-term moving 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 the security's price) falls below a longer-term moving average. The Price Oscillator illustrates the cyclical and often profitable signals generated by this one or two moving average system. 33

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 either points or as a percentage. The Momentum indicator displays the same information, but expresses 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 changing expectations as bulls and bears struggle to control prices. The ROC displays the wavelike motion in an oscillator format by measuring the amount that prices have changed over a given time period. As prices increase, the ROC rises; as prices fall, the ROC falls. The greater the change in prices, the greater is the change in the ROC. The time period used to calculate the ROC may range from 1-day (which results in a volatile chart showing the daily price change) to 200-days (or longer). The most popular time periods are the 12- and 25-day ROC for short to intermediate-term trading. These time periods were popularized by Gerald Appel and Fred Hitschler in their book, Stock Market Trading Systems. The 12-day ROC is an excellent short- to intermediate-term overbought / oversold indicator. The higher the ROC, the more overbought the security; the lower the ROC, 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 for some time. In fact, extremely overbought / oversold readings usually imply a continuation 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 of the ROC and relating the previous cycles to the current market.

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

34

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 band whereas a buy signal is generated at lower band. The optimum percentage shift depends on 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 to the 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 Bollinger Bands.

Bollinger Bands Overview: Bollinger Bands are similar to moving average envelopes. The difference between Bollinger Bands and envelopes is envelopes are plotted at a fixed percentage above and below a moving average, whereas Bollinger Bands are plotted at standard deviation levels above and below a moving average. Since standard deviation is a measure 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 be displayed on an indicator. These comments refer to bands displayed on prices. As with moving average envelopes, the basic interpretation of Bollinger Bands is that prices tend to stay within the upper- and lower-band. The distinctive characteristic of Bollinger Bands 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 become more forgiving. During periods of stagnant pricing (i.e., low volatility), the bands narrow to 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 is implied.

35

Bottoms and tops made outside the bands followed by bottoms and tops made inside 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. This observation is useful when projecting price targets.

Volume
The number of shares or contracts traded in a security or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 shares 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 measure the worth of a market move. If the market have made strong price move either up or down the perceived strength of that move depends on the volume of that period. The higher the volume during that price move the more significant the move.

36

DATA ANALYSIS AND INTERPRETATION

37

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 1) 2) 3) 4) 5) ONGC SBI (State bank of India) NTPC (NTPC Ltd ) COAL INDIA Market capitalization (%) 15.38 15.28 7.3 5.87

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

RSI = 100 (100 / 1+ RS)

= 100 (100 / 1+0.922049) RSI = 47.97

38

RSI CALCULATION Date 3-Oct-11 4-Oct-11 5-Oct-11 ]7-Oct-11 10-Oct-11 11-Oct-11 12-Oct-11 13-Oct-11 14-Oct-11 17-Oct-11 18-Oct-11 19-Oct-11 20-Oct-11 21-Oct-11 Close Price 268.55 264.4 264.2 264.45 273.5 268.35 270.5 265 266.65 269.5 263.6 268.35 266.8 265.4 change -4.15 -0.2 0.25 9.05 -5.15 2.15 -5.5 1.65 2.85 -5.9 4.75 -1.55 -1.4 Gain 0 0 0.25 9.05 0 2.15 0 1.65 2.85 0 4.75 0 0 Loss 4.15 0.2 0 0 5.15 0 5.5 0 0 5.9 0 1.55 1.4

39

Oil and Natural Gas Corporation Ltd

Half Yearly - Oil and Natural Gas Corporation Ltd Sep'12 Mar'12 INCOME: Net Sales Turnover 40,062.87 37,857.07 Other Income 2,939.59 1,951.13 Total Income 43,002.46 39,808.20 EXPENSES Stock Adjustments 6.49 5.26 Raw Material Consumed 266.32 340.01 Power and Fuel 0.00 0.00 Employee Expenses 875.32 671.77 Administration and Selling 0.00 0.00 Expenses Research and Development 0.00 0.00 Expenses Expenses Capitalised 0.00 0.00 Other Expenses 20,695.35 17,769.19 Provisions Made 0.00 0.00 TOTAL EXPENSES 21,843.48 18,786.23 Operating Profit 18,219.39 19,070.84 EBITDA 21,158.98 21,021.97 Depreciation 3,645.67 5,881.21 EBIT 17,513.31 15,140.76 Interest 32.37 24.29 EBT 17,480.94 15,116.47 Taxes 5,627.80 6,355.65 Profit and Loss for the Year 11,853.14 8,760.82 Extraordinary Items 0.00 0.00 Prior Year Adjustment 121.13 484.42 Other Adjustments 0.00 0.00 Reported PAT 11,974.27 12,385.79 KEY ITEMS Reserves Written Back 0.00 0.00 Equity capital 4,277.76 4,277.76 Reserves and Surplus 0.00 107,506.3 7 Equity Dividend Rate 0.00 0.00 Agg. Non-Promoter Shares 26,329.44 0.00 Agg. Non-Promoter Holding (%) 30.77 0.00 Government Share 0.00 0.00 Capital Adequacy Ratio 0.00 0.00 EPS (Rs.) 13.99 -40

Sep'11

Mar'11

Sep'10

39,327.28 36,912.08 32,253.29 1,859.94 1,254.81 1,313.39 41,187.22 38,166.89 33,566.68 -96.60 313.65 0.00 637.37 0.00 0.00 0.00 14,534.28 0.00 15,388.70 23,938.58 25,798.52 7,400.64 18,397.88 10.54 18,387.34 5,783.21 12,604.13 0.00 133.00 0.00 12,737.13 0.00 4,277.76 0.00 0.00 22,125.27 25.86 0.00 0.00 14.89 84.30 340.15 0.00 718.37 0.00 0.00 0.00 14,265.41 0.00 15,408.23 21,503.85 22,758.66 8,428.65 14,330.01 21.44 14,308.57 4,492.63 9,815.94 0.00 58.15 0.00 9,874.09 -97.21 281.31 0.00 584.82 0.00 0.00 0.00 11,969.35 0.00 12,738.27 19,515.02 20,828.41 7,514.34 13,314.07 3.67 13,310.40 4,654.13 8,656.27 0.00 393.64 0.00 9,049.91

0.00 0.00 4,277.76 2,138.89 92,430.65 0.00 0.00 22,125.27 25.86 0.00 0.00 11.54 0.00 5,531.32 25.86 0.00 0.00 42.31

Oil and Natural Gas Corporation Ltd (Historic Graphs)

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. 41

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 India Sep'12 INCOME: Net Sales Turnover Other Income Total Income EXPENSES Stock Adjustments Raw Material Consumed Power and Fuel Employee Expenses Administration and Selling Expenses Research and Development Expenses Expenses Capitalised Other Expenses Provisions Made TOTAL EXPENSES Operating Profit EBITDA Depreciation EBIT Interest EBT Taxes Profit and Loss for the Year Extraordinary Items Prior Year Adjustment Other Adjustments Reported PAT KEY ITEMS Reserves Written Back Equity capital Reserves and Surplus Equity Dividend Rate Agg. Non-Promoter Shares Agg. Non-Promoter Holding (%) Mar'12 Sep'11 Mar'11 Sep'10 58,523.53 56,356.92 50,164.53 43,134.14 38,260.22 6,845.43 7,389.99 6,961.46 8,129.43 7,695.17 65,368.96 63,746.91 57,125.99 51,263.57 45,955.39 0.00 0.00 0.00 8,417.31 0.00 0.00 0.00 4,990.46 4,281.93 17,689.70 40,833.83 47,679.26 0.00 51,961.19 36,430.87 15,530.32 3,838.69 11,691.63 0.00 0.00 -4,281.93 7,409.70 0.00 671.04 0.00 0.00 2,577.92 38.42 0.00 0.00 0.00 9,342.34 0.00 0.00 0.00 4,360.47 5,547.83 19,250.64 37,106.28 44,496.27 0.00 50,044.10 33,187.31 16,856.79 3,995.65 12,861.14 0.00 0.00 -5,547.83 7,313.31 0.00 671.04 83,280.16 0.00 2,577.92 38.42 42 0.00 0.00 0.00 7,631.70 0.00 0.00 0.00 4,734.48 7,542.40 19,908.58 30,255.95 37,217.41 0.00 44,759.81 30,043.06 14,716.75 2,780.37 11,936.38 0.00 0.00 -7,542.40 4,393.98 0.00 635.00 0.00 0.00 2,577.92 40.60 0.00 0.00 0.00 7,730.48 0.00 0.00 0.00 4,662.57 6,208.49 18,601.54 24,532.60 32,662.03 0.00 38,870.52 26,026.33 12,844.19 3,786.76 9,057.43 0.00 0.00 -6,208.49 2,848.94 0.00 635.00 64,351.04 0.00 2,577.92 40.60 0.00 0.00 0.00 6,749.70 0.00 0.00 0.00 3,872.69 4,172.85 14,795.24 23,464.98 31,160.15 0.00 35,333.00 22,841.62 12,491.38 2,902.96 9,588.42 0.00 0.00 -4,172.85 5,415.57 0.00 635.00 71,599.83 0.00 2,577.91 40.60

Government Share Capital Adequacy Ratio EPS (Rs.)

61.58 11.17 110.43

61.58 12.05 108.99

59.40 10.31 69.20

59.40 0.00 44.87

59.40 12.05 85.29

State Bank of India (Historic Graphs)

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 SBI Bank scrip. In the above Chart the sell point of 25-Oct. and 27-Jan. and 24-Oct indicate that there may be downturn & it is the right time to sell the scrip.

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

43

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 Ltd Sep'12 INCOME: Net Sales Turnover Other Income Total Income EXPENSES Stock Adjustments Raw Material Consumed Power and Fuel Employee Expenses Administration and Selling Expenses Research and Development Expenses Expenses Capitalised Other Expenses Provisions Made TOTAL EXPENSES Operating Profit EBITDA Depreciation EBIT Interest EBT Taxes Profit and Loss for the Year 140.19 6,340.45 6,480.64 8.05 5.43 3.65 164.61 0.00 0.00 0.00 130.98 13.05 325.77 -185.58 6,154.87 3.09 6,151.78 189.99 5,961.79 185.00 5,776.79 44 Mar'12 225.92 3,033.74 3,259.66 6.94 4.76 2.53 170.03 0.00 0.00 0.00 119.95 -52.01 252.20 -26.28 3,007.46 3.84 3,003.62 189.92 2,813.70 370.85 2,442.85 Sep'11 189.94 6,059.47 6,249.41 10.12 4.92 2.99 139.01 0.00 0.00 0.00 69.19 58.83 285.06 -95.12 5,964.35 3.12 5,961.23 174.98 5,786.25 164.00 5,622.25 Mar'11 306.84 1,454.98 1,761.81 -2.17 0.00 3.36 126.42 0.00 0.00 0.00 196.83 -2.88 321.56 -14.72 1,440.26 2.89 1,437.37 -16.25 1,453.62 -47.74 1,501.35 Sep'10 106.92 3,629.27 3,736.19 -6.37 0.00 3.55 117.16 0.00 0.00 0.00 45.99 83.58 243.91 -136.99 3,492.29 2.68 3,489.60 219.66 3,269.94 75.00 3,194.94

Extraordinary Items Prior Year Adjustment Other Adjustments Reported PAT KEY ITEMS Reserves Written Back Equity capital Reserves and Surplus Equity Dividend Rate Agg. Non-Promoter Shares Agg. Non-Promoter Holding (%) Government Share Capital Adequacy Ratio EPS (Rs.)

0.00 0.00 0.00 5,776.79 0.00 6,316.36 0.00 0.00 6,316.36 10.00 0.00 0.00 9.15

0.00 0.00 0.00 2,442.85 0.00 6,316.36 0.00 0.00 6,316.36 10.00 0.00 0.00 3.87

0.00 0.00 0.00 5,622.25 0.00 6,316.36 0.00 0.00 6,316.36 10.00 0.00 0.00 8.90

0.00 0.00 0.00 1,501.16 0.00 6,316.36 0.00 0.00 6,316.36 10.00 0.00 0.00 2.38

0.00 0.00 0.00 3,194.94 0.00 6,316.36 0.00 0.00 6,316.36 10.00 0.00 0.00 5.06

45

Coal India Ltd (Historic Graphs)

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 Coal India scrip. In the above Chart the sell point of 8-Dec., 19-January and 2-Sep. indicate that there may be downturn & it is the right time to sell the scrip.

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.

46

47

National Thermal Power Corporation Ltd

Half Yearly - NTPC Ltd Sep'12 INCOME: Net Sales Turnover Other Income Total Income EXPENSES Stock Adjustments Raw Material Consumed Power and Fuel Employee Expenses Administration and Selling Expenses Research and Development Expenses Expenses Capitalised Other Expenses Provisions Made TOTAL EXPENSES Operating Profit EBITDA Depreciation EBIT Interest EBT Taxes Profit and Loss for the Year Extraordinary Items Prior Year Adjustment Other Adjustments Reported PAT KEY ITEMS Reserves Written Back Equity capital Reserves and Surplus Equity Dividend Rate Agg. Non-Promoter Shares Agg. Non-Promoter Holding (%) Government Share Mar'12 Sep'11 Mar'11 Sep'10 32,517.28 31,746.25 30,223.39 29,943.33 28,416.45 1,495.49 1,530.99 1,331.37 407.65 480.41 34,012.77 33,277.24 31,554.76 30,350.98 28,896.86 0.00 0.00 20,530.38 1,687.12 0.00 0.00 0.00 2,007.29 0.00 24,224.79 8,292.49 9,787.98 1,546.74 8,241.24 802.81 7,438.43 1,797.41 5,641.02 0.00 0.00 0.00 5,641.02 0.00 8,245.46 0.00 0.00 12,781.03 15.50 0.00 0.00 0.00 21,236.24 1,615.15 0.00 0.00 0.00 1,711.55 65.16 24,628.10 7,118.15 8,649.14 1,492.29 7,156.85 936.62 6,220.23 1,496.40 4,723.83 0.00 0.00 0.00 4,723.83 0.00 8,245.46 65,045.71 0.00 12,781.03 15.50 0.00 48 0.00 0.00 20,399.22 1,475.33 0.00 0.00 0.00 1,569.33 0.02 23,443.90 6,779.49 8,110.86 1,299.41 6,811.45 705.52 6,105.93 1,606.03 4,499.90 0.00 0.00 0.00 4,499.90 0.00 8,245.46 47,460.55 0.00 12,781.03 15.50 0.00 0.00 0.00 18,064.20 1,396.71 0.00 0.00 0.00 1,613.46 289.37 21,363.74 8,579.59 8,987.24 1,296.69 7,690.55 1,023.13 6,667.42 1,514.10 5,153.32 0.00 0.00 0.00 5,153.32 0.00 8,245.46 59,646.79 0.00 12,781.03 15.50 0.00 0.00 0.00 17,309.58 1,393.00 0.00 0.00 0.00 1,234.37 1,262.78 21,199.73 7,216.72 7,697.13 1,189.00 6,508.13 1,125.95 5,382.18 1,432.91 3,949.27 0.00 0.00 0.00 3,949.27 0.00 8,245.46 39,282.12 0.00 12,781.03 15.50 0.00

Capital Adequacy Ratio EPS (Rs.)

0.00 6.84

0.00 5.73

0.00 5.46

0.00 6.25

0.00 4.79

National

Thermal

Power

Corporation

Ltd

(Historic Graphs)

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 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.

49

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 Electricals Ltd

Half Yearly - Bharat Heavy Electricals Ltd Sep'12 INCOME: Net Sales Turnover 19,000.56 Other Income 496.94 Total Income 19,497.50 EXPENSES Stock Adjustments -999.00 Raw Material Consumed 11,989.38 Power and Fuel 0.00 Employee Expenses 2,876.38 Administration and Selling 0.00 Expenses Research and Development 0.00 Expenses Expenses Capitalised 0.00 Other Expenses 2,032.14 Provisions Made 0.00 TOTAL EXPENSES 15,898.90 Operating Profit 3,101.66 EBITDA 3,598.60 Depreciation 444.70 EBIT 3,153.90 Interest 31.38 EBT 3,122.52 Taxes 927.17 Profit and Loss for the Year 2,195.35 Extraordinary Items 0.00 Prior Year Adjustment 0.00 Other Adjustments 0.00 Reported PAT 2,195.35

Mar'12

Sep'11

Mar'11

Sep'10

30,332.02 17,692.28 27,403.82 15,091.69 594.93 660.94 316.37 325.44 30,926.95 18,353.22 27,720.19 15,417.13 55.24 17,093.47 0.00 2,815.74 0.00 0.00 0.00 3,349.90 0.00 23,314.35 7,017.67 7,612.60 440.28 7,172.32 32.84 7,139.48 2,327.06 4,812.42 0.00 0.00 0.00 4,812.42 50 -878.44 11,146.38 0.00 2,650.09 0.00 0.00 0.00 1,894.25 0.00 14,812.28 2,880.00 3,540.94 359.72 3,181.22 18.44 3,162.78 935.24 2,227.54 0.00 0.00 0.00 2,227.54 391.05 13,378.88 0.00 2,808.57 0.00 0.00 0.00 4,460.02 0.00 21,038.52 6,365.30 6,681.67 283.13 6,398.54 44.97 6,353.57 2,229.98 4,123.59 0.00 77.68 0.00 4,201.27 -518.40 9,291.82 0.00 2,601.84 0.00 0.00 0.00 1,119.02 0.00 12,494.28 2,597.41 2,922.85 260.99 2,661.86 9.76 2,652.10 845.94 1,806.16 0.00 3.77 0.00 1,809.93

KEY ITEMS Reserves Written Back Equity capital Reserves and Surplus Equity Dividend Rate Agg. Non-Promoter Shares Agg. Non-Promoter Holding (%) Government Share Capital Adequacy Ratio EPS (Rs.)

0.00 489.52 0.00 0.00 7,900.48 32.28 0.00 0.00 8.97

0.00 489.52 24,883.69 0.00 7,900.48 32.28 0.00 0.00 19.66

0.00 489.52 0.00 0.00 1,580.10 32.28 0.00 0.00 45.51

0.00 489.52 19,664.32 0.00 1,580.10 32.28 0.00 0.00 85.83

0.00 489.52 0.00 0.00 1,580.10 32.28 0.00 0.00 36.98

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Bharat Heavy Electricals Ltd (Historic Graphs)

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 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 3-Oct-11 4-Oct-11 5-Oct-11 7-Oct-11 10-Oct-11 11-Oct-11 12-Oct-11 13-Oct-11 14-Oct-11 17-Oct-11 18-Oct-11 19-Oct-11 Close Price 1862.75 1786.7 1715.3 1751.85 1754.55 1765.1 1872.25 1886.95 1882.5 1891.8 1863.4 1919.1 101.5595222 104.2928304 111.8813036 1.559522212 4.292830358 11.88130356 ROC -1 Method (%) ROC -2 Method (%)

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 54

 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. 58

 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 in November. Twice buy & sell point occurs within 1 month duration. Support level is provided in September as result price started rising. With respect to ROC, falling trend has been observed & because of oversold 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 the buy 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 & may

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

overbought. 61

4) NTPC

Continuous fluctuation of prices has been found in scrip of NTPC. 2 Double bottoms & 2 Top bottoms has been found thus high variation in price & trend is followed. Raising trend is seen in December & again price reaches its historic value in January. Top Bottom head & shoulder are seen in March & August respectively.

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 are seen 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 picture on 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 the fact 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 selffulfilling 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 & more

people 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 fruitful investment. 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 the year 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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 www.indiabull.com

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