Fundamental and Technical Analysis: Executive Summary

Fundamental and Technical Analysis
EXECUTIVE SUMMARY
The main objective of undergoing this project work was to understand the
organization and take up an in depth study of an issue/ problem in the area of
specialization. This project has two parts one is corporate exposure India Infoline Ltd
and another one is study of fundamental and technical analysis of Infosys
Technologies Ltd.
First part of the project describes about India Infoline. India Infoline is in the
Equity research and Brokerage industry since 1995. It is well established and well
diversified products and services line as well as has spread its operations all over India
and abroad also. It has a well diversified financial services portfolio which consists of
Security trading, Brokerage business, Insurance, Mutual Fund and Commodities
broking. Its products profile includes Equities, PMS, Commodities, Mortgages, Home
loans, Personal loans, IPOs, Insurance Mutual Funds etc. In simple words India
Infoline is “one stop shop” for financial services. It has well experienced and
committed employees who always set goals to be achieved and work in team to
achieve them.
Since inception India Infoline has grown to a greater extent and it has a bright
future as well. Both Indian economy and Indian Securities market are still developing
and are on the growth path, it opens the greater opportunities to the company to spread
its wings.
Second Part of the Project describes about Fundamental and Technical
analysis of Infosys Technologies ltd undertaken in India Infoline ltd. The project issue
was selected and the study was carried out with an objective of making efficient
buying and selling decisions in stock market. A study was conducted to understand
whether fundamental and technical analysis can guide for making efficient investment
decisions.
Fundamental analysis involves looking at any data beside the trading pattern of
the stock itself that can be expected to impact the price or perceived value of a stock.
This analysis focuses on creating a portrait of a company. Identifying the fundamental
value of its shares and buying or selling the stock based on that information.
JSS Academy of Technical Education, Bangalore. Page 1

Indicators used to assess fundamentals of the company include ratios like

Book value per share, Earnings per share, Current ratio, Net profit ratio, Price
earnings ratio. Levels in fundamental analysis are:
 Macro-economic situation
 Industry Analysis
 Company Analysis
Therefore, with the help of the company’s financial statements, fundamental

analysis attempts to forecast the future value of a stock.
Also, to understand whether technical analysis (study of Price, Volume, Open

interest) can guide for making efficient investment decisions a study of market action
with the help of charts and other technical indicators were studied, so as to forecast the
trend. Serial monthly closing prices of Infosys Technology Limited was taken for a
period of two years from Feb 2009 to Jan 2010 in order to compare with the technical
indicators like Relative Strength Index , Stochastics (k% d %), Williams %R, Simple
Moving Average (SMA), Moving Average Convergence/Divergence (MACD), and
Bollinger Bands.
This stock analysis with historical prices is an effort to determine the probable
future prices. Comparing current price action (i.e., current expectations) with
comparable historical price action can predict a reasonable outcome.
Hence, this study helps to take an investment decision on Infosys Technology

Limited based on Fundamental analysis for Long term or initial investment and
Technical analysis results a value that is used to anticipate future changes in prices
which helps the investors and traders (speculators).

1. INDUSTRY PROFILE
The Indian broking industry is one of the oldest trading industries that have
been around even before the establishment of the BSE in 1875. Despite passing
through number of changes in the post liberalization period, the industry has found its
way onwards sustainable growth. With the purpose of gaining a deeper understanding
about the role of the Indian stock broking industry in the country’s economy, we
present in this section some of the industry insights gleaned from analysis of data
received through primary research.
For the broking industry, we started with an initial database of over 1,800
broking firms that were contacted, from which 464 responses were received. The list
was further short listed based on the number of terminals and the top 210 were
selected for profiling. 394 responses, that provided more than 85% of the information
sought have been included for this analysis presented here as insights. All the data for
the study was collected through responses received directly from the broking firms.
The insights have been arrived at through an analysis on various parameters, pertinent
to the equity broking industry, such as region, terminal, market, branches, sub brokers,
products and growth areas.
Some key characteristics of the sample 394 firms are:
 On the basis of geographical concentration, the West region has the maximum
representation of 52%. Around 24% firms are located in the North, 13% in the
South and 10% in the East
 3% firms started broking operations before 1950, 65% between 1950-1995 and
32% post 1995.
 On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in

Ahmedabad, 7% in Kolkata, 4% in Chennai and 29% are from other cities
 From this study, we find that almost 36% firms trade in cash and derivatives
and 27% are into cash markets alone. Around 20% trade in cash, derivatives
and commodities

 In the cash market, around 34% firms trade at NSE, 14% at BSE and 52%
trade at both exchanges. In the derivative segment, 48% trade at NSE, 7% at
BSE and 45% at both, whereas in the debt market, 31% trade at NSE, 26% at
BSE and 43% at both exchanges
 Majority of branches are located in the North, i.e. around 40%. West has 31%,
24% are located in South and 5% in East
 In terms of sub-brokers, around 55% are located in the South, 29% in West,
11% in North and 4% in East
 Trading, IPOs and Mutual Funds are the top three products offered with 90%
firms offering trading, 67% IPOs and 53% firms offering mutual fund
transactions
 In terms of various areas of growth, 84% firms have expressed interest in

expanding their institutional clients, 66% firms intend to increase FII clients
and 43% are interested in setting up JV in India and abroad
 In terms of IT penetration, 62% firms have provided their website and around
94% firms have email facility
The securities market has essentially three categories of participants, viz., the
issuer of securities, the investors in the securities and the intermediaries. The issuers
are the borrowers or deficit savers, who issue securities to raise funds. The investors,
who are surplus savers, deploy their savings by subscribing to these securities. The
intermediaries are the agents who match the needs of users and suppliers of funds for
a commission. These intermediaries function to help both the issuers and investors to
achieve their respective goals. There are large variety and number of intermediaries
providing various services in the Indian securities market.
WHY DOES ONE NEED A BROKER?
As per SEBI (Securities and Exchange Board of India.) regulations, only

registered members can operate in the stock market. One can trade by executing a deal
only through a registered broker of a recognised Stock Exchange or through a SEBI-
registered sub-broker.

The financials and investment industry is a highly competitive in nature with

almost well established firms diversifying and entering into this industry. As of today
there are Over 2000 brokers, 10000 sub brokers and 1 crore investors. It is highly
competitive with entry of new aggressive players. Retail broking is highly fragmented
industry with falling brokerages Value added services and online trading, the new fad.
The main players in the brokerage industry are
 SHAREKHAN.
 RELIANCE MONEY.
 MOTILAL OSWAL SECURITIES.
 KOTAK SECURITIES.
 INDIAINFOLINE SECURITIES.
 INDIABULLS SECURITIES.
 ICICI DIRECT.
 IL & FS.
 RELIGARE SECURITIES.
 KARVY SECURITIES.
 GEOJIT SECURITIES.

2. COMPANY PROFILE
2.1 BACKGROUND AND INCEPTION OF THE COMPANY
A group of professionals formed a company on October 18, 19995 called Probity

Research & Services Pvt ltd. The name was later changed into India Infoline Ltd. The
objective was to provide unbiased and independent information to market
intermediaries and investors. The quality of the research soon caught the imagination
of all major participants in the financial market. In a span of 2 to 3 years the client list
read like the who’s who of Indian financial market.
Circa 2001. The internet bubble started bursting faster than anybody could have
imagined. India Infoline decided to focus on business where it could leverage its core
competencies to the maximum. The key business lines that emerged were mutual
funds, life insurance and e-broking.
The company became heavily dependent on its e-broking business for survival.
The odds were against them. There was no money available from the private equity at
any valuation. To add to it, the market was hit by a scam. They also had their price to
pay and lessons to learn.
There was a core group who never lost hope. They survived against all odds and
started capturing the market share. Not broking alone but mutual funds and life
insurance business also grew strongly. Then the story took an interesting turn. They
raised capital by way of an IPO.
In the last 10 years, India Infoline has faced numerous ups and downs, but has
never compromised on integrity. They continue to ensure highest standerds of
corporate governance.
2.2NATURE OF THE BUSINESS CARRIED
India Infoline is a one-stop financial services shop, most respected for quality of
its advice, personalised service and cutting-edge technology. India Infoline Limited is
listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai
(BSE) and the National Stock Exchange (NSE) and is also a member of both the

exchanges. It is engaged in the businesses of Equities broking, Wealth Advisory

Services and Portfolio Management Services.
It offers broking services in the Cash and Derivatives segments of the NSE as well
as the Cash segment of the BSE. It is registered with NSDL as well as CDSL as a
depository participant, providing a one-stop solution for clients trading in the equities
market. It has recently launched its Investment banking and Institutional Broking
business.
India Infoline Ltd, being a listed entity, is regulated by SEBI (Securities and
Exchange Board of India). It undertakes equities research which is acknowledged by
none other than Forbes as 'Best of the Web' and '…a must read for investors in Asia'.

India Infoline's research is available not just over the internet but also on international
wire services like Bloomberg (Code: IILL), Thomson First Call and Internet Securities
where it is amongst the most read Indian brokers.
Its various subsidiaries are in different lines of business and hence are
governed by different regulators. The subsidiaries of India Infoline Ltd are:
India Infoline Securities Pvt Ltd:
India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd,
which is engaged in the businesses of Equities broking and Portfolio Management
Services. It holds memberships of both the leading stock exchanges of India viz. the
Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). It offers
broking services in the Cash and Derivatives segments of the NSE as well as the Cash
segment of the BSE.
A SEBI authorized Portfolio Manager; it offers Portfolio Management

Services to clients. These services are offered to clients as different schemes, which
are based on differing investment strategies made to reflect the varied risk-return
preferences of clients.
India Infoline Commodities Pvt Ltd:
India Infoline Commodities Pvt Ltd is a 100% subsidiary of India Infoline Ltd,
which is engaged in the business of commodities broking. Our experience in securities
broking empowered us with the requisite skills and technologies to allow us offer
commodities broking as a contra-cyclical alternative to equities broking. We enjoy
memberships with the MCX and NCDEX, two leading Indian commodities
exchanges, and recently acquired membership of DGCX. We have a multi-channel
delivery model, making it among the select few to online as well as offline trading
facilities.
India Infoline Distribution Co Ltd (IILD)
India Infoline.com Distribution Co Ltd is a 100% subsidiary of India Infoline

Ltd and is engaged in the business of distribution of Mutual Funds, IPOs, Fixed

Deposits and other small savings products. It is one of the largest 'vendor-independent'
distribution houses and has a wide pan-India footprint of over 232 branches coupled
with a huge number of 'feet-on-street', which help source and service customers across
the length and breadth of India. Its unique value proposition of free doorstep expert
advice coupled with free pick-up and delivery of cheques has been met with an
enthusiastic response from customers and fund houses alike.
India Infoline Insurance Services Ltd:
India Infoline Insurance Services Ltd is also a 100% subsidiary of India

Infoline Ltd and is a registered Corporate Agent with the Insurance Regulatory and
Development Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential
Life Insurance Co
India Infoline Investment Services Ltd:
India Infoline Investment Service Ltd is also a 100% subsidiary of India

Infoline Ltd. It has an NBFC license from the Reserve Bank of India (RBI) and offers
margin-funding facility to the broking customers.
India Infoline Insurance Brokers Ltd:
India Infoline Insurance Brokers Ltd is a 100% subsidiary of India Infoline Ltd
and is a newly formed subsidiary which will carry out the business of Insurance
broking. We have applied to IRDA for the insurance broking license and the clearance
for the same is awaited.
Money Tree Consultancy Services:
MTCS Is a group company of India Infoline Ltd., focusing distribution on

Home Loans, Personal Loans, Credit Cards and Non – Life Insurance. MTCS turns
the table from a supplier oriented market place to a demand oriented market place.
Taking requirements from the customer, MTCS would provide a complete basket of
products across the entire retail asset portfolio. MTCS extends the distribution reach
of financial services providers by using alternate channels like the Internet, telephone,
wireless, sales force and events.

2.3 VISION STATEMENT OF THE COMPANY:
“Our vision is to be the most respected company in the financial services space”
Vision elaborated:
Shareholders General public
Growth at above industry rate Corporate governance

with de-risking
Transparency
High ROCE, ROE
Customers Employees
Cutting edge technology Skill development by investments in

training
High service standards
Empowerment and conducive work
environment
Core competencies:
 Superior original research
 Cutting edge technology
 Customer-centric values
1. Superior original research:
 Well organized database and well honed skill base
 Demonstrated ability to spot trends, winners ahead of market
 Well net worked in Indian Corporate world
 Over 200 CEO interviews in a year
 Over 300 company/ plant visits

2. Cutting edge technology:
 Trader Terminal
 A revolutionary way to trade online
 Incredible speed of order execution
 Streaming quotes
 Real time intraday charts
 Highly advanced data compression and management
2.4 PRODUCTS AND SERVICES PROFILE
Indiainfoline is a one-stop financial services shop, most respected for quality

of its advice, personalized service and cutting-edge technology.
Equities:
Indiainfoline provided the prospect of researched investing to its clients, which

was hitherto restricted only to the institutions. Research for the retail investor did not
exist prior to Indiainfoline. Indiainfoline leveraged technology to bring the
convenience of trading to the investor’s location of preference (residence or office)
through computerized access. Indiainfoline made it possible for clients to view
transaction costs and ledger updates in real time.
PMS:
Our Portfolio Management Service is a product wherein an equity investment

portfolio is created to suit the investment objectives of a client. Indiainfoline invest
your resources into stocks from different sectors, depending on your risk-return

profile. This service is particularly advisable for investors who cannot afford to give
time or don't have that expertise for day-to-day management of their equity portfolio.
Research:
Sound investment decisions depend upon reliable fundamental data and stock
selection techniques. Indiainfoline Equity Research is proud of its reputation for and
we want you to find the facts that you need. Equity investment professionals routinely
use our research and models as integral tools in their work.
Commodities:
Indiainfoline’s extension into commodities trading reconciles its strategic

intent to emerge as a one-stop solutions financial intermediary. Its experience in
securities broking has empowered it with requisite skills and technologies. The
Company’s commodities business provides a contra-cyclical alternative to equities
broking. The Company was among the first to offer the facility of commodities
trading in India’s young commodities market (the MCX commenced operations only
in 2003). Average monthly turnover on the commodity exchanges increased from Rs
0.34 bn to Rs 20.02 bn.
Mortgages:
During the year under review, Indiainfoline acquired a 75% stake in

Moneytree Consultancy Services to mark its foray into the business of mortgages and
other loan products distribution. The Company brings on board expertise in the loans
business coupled with existing relationships across a number of principals in the
mortgage and personal loans businesses. Indiainfoline now has plans to roll the
business out across its pan-Indian network to provide it with a truly national scale in
operations.
Home Loans:
 Get expert advice that suits your needs
 Loan against residential and commercial property

 Expert recommendations
 Easy documentation
 Quick processing and disbursal
 No guarantor requirement
Personal Loans:
 Freedom to choose from 4 flexible options to repay
 Expert recommendations
 Easy documentation
 Quick processing and disbursal
 No guarantor requirement
Invest Online:
Indiainfoline has made investing in Mutual funds and primary market so

effortless. All a person have to do is register with us and that’s all. No paperwork no
queues and No registration charges.
Invest In MF:
Indiainfoline offers a host of mutual fund choices under one roof, backed by
in-depth research and advice from research house and tools configured as investor
friendly.
Apply in IPO’s:
You could also invest in Initial Public Offers (IPO’s) online without going
through the hassles of filling ANY application form/ paperwork.
SMS:

There are three products under SMS Service:
• Market on the move.
• Best of the lot.
• VAS (Value Added Service )
Insurance:
An entry into this segment helped complete the client’s product basket;
concurrently, it graduated the Company into a one-stop retail financial solutions
provider. To ensure maximum reach to customers across India, we have employed a
multi pronged approach and reach out to customers via our Network, Direct and
Affiliate channels.
Wealth Management Service:
Imagine a financial firm with the heart and soul of a two-person organization.
A world-leading wealth management company that sits down with you to understand
your needs and goals. We offer you a dedicated group for giving you the most
personal attention at every level.
Newsletters:
The Daily Market Strategy is your morning dose on the health of the markets.
Five intra-day ideas, unless the markets are really choppy coupled with a brief on the
global markets and any other cues, which could impact the market. Occasionally an
investment idea from the research team and a crisp round up of the previous day's top
stories. That's not all. As a subscriber to the Daily Market Strategy, you even get
research reports of India Infoline research team on a priority basis.
2.5 AREA OF OPERATION:
India Infoline operates in India and in foreign country also. It has 1361
branches in 428 cities and towns in the country and some of the foreign country also.

The operations of the company are divided into foru regions in India (i. e. North,
South, East, and West). The head office is located in Mumbai.
It also provides the services to the customers who are in foreign countries. Its
coverage of foreign countries includes Singapore, Dubai, New York, Brazil, China,
Russia and United Kingdom.
2.6 OWNERSHIP PATTERN:
Table No.1: Share holding pattern of India Infoline Ltd.
Particular No. of shares(Mn) %
Foreign 75.12 26.30%

Domestic 62.28 21.80%
Non Promoter Corporate Holding 10.14 3.60%
Promoters 95.67 33.60%
Public & others 42 14.70%
Total 285.21 100%
The Board of Directors:
 Mr. Nirmal Jain (founder and chairman)
 Mr. R. Venkataraman (co-founder and executive director)
 Mr. Sat Pal Khattar (Non Executive Director)
 Mr. Sanjiv Ahuja (Independent Director)

 Mr. Nilesh Vikamsey (Independent Director)
 Mr. Kranti Sinha (Independent Director)
2.7 COMPETITORS INFORMATION:
Table No.2: Industry competition.
Last Market Sales Net Total Assets

Price Cap. Profit
Companies (Rs. cr.) Turnover
Indiabulls 140.25 4,346.59 2,003.09 99.45 10,392.97
Edelweiss Cap 436.4 3,274.64 191.39 26.37 1,865.28
India Infoline 111.75 3,188.30 571.5 103.59 1,049.99
Motilal Oswal F 163.6 2,342.30 57.26 45.31 433.49
HSBC Invest 282 1,985.23 24.31 -15.21 667.45
Network 18 139.95 1,596.94 94.5 -19.41 862.11
Future Capital 183.9 1,168.28 132.44 9.31 1,216.75
Geojit BNP 38.9 876.42 261.71 56.8 276.06
2.8 INFRASTRUCTURE FACILITIES:
India Infoline branches are designed to be placed where retail investors can
come and take the investment opportunities in an atmosphere of comfort and which
are very much convenient to the clients. The amphibian of the offices across the
country projects a consistent branch image for the company. Easily visible branches
set up in the commercial spaces of potential investment zones ranging between 750sft
to 1000sft.
 The branch buildings major area is dedicated to customers access center.

 Customers can go to the nearest braches and trade on a separate terminal
provided to them.
 Connectivity to NSE and BSE trading facilities.
 Clients will be provided with the trading terminal so that they can trade online
by their own from homes or offices etc…
 TV and other electronic medium to facilitate the real time update and
dissemination of information to our customers.
 Each branch will be having qualified and trained relationship managers to take
care of the needs of the customers.

 All the branches are connected internally via LAN and externally through
VSAT or ISDN network to provide real time data transfer.
 Help desk at each branch with full facilities and connectivity to the Head
office.
2.9 ACHIEVEMENTS AND AWARDS:
The India Infoline Group comprises the holding company, India Infoline Ltd,
which has 4 wholly-owned subsidiaries engaged in distinct yet complementary
businesses which together offer a whole bouquet of products and services to make
your money grow.
 Received ‘Best Broker in India’ award by Finance Asia in March 2008.
 The site has met with an overwhelming response and has been reviewed as the
most comprehensive financial content website in India by BBC World -
Money Watch, Business World, Business Line and others.
 The company also won the Golden Mouse Award in India Internet World 2000
for the "Best Finance" site.
 In May 2001, our website was included in the Top 200 Best of the Web list by
Forbes Global under the Asia Investing category. We were the only website
from India to be featured in any category. Since then it has been nominated
twice to this list.
 In its last review, Forbes editors have said, "www.indiainfoline.com is a must

read for the investors in South Asia..."Our research is also disseminated
electronically through Bloomberg, Investext, First Call/Thomson Financial and
Internet Securities.
KEY MILESTONES
 Incorporated on October 18, 1995 as Probity Research & Services.
 Launched Internet portal www.indiainfoline.com in May 1999.

 Launched online trading in shares and securities branded as www.5paise.com.

In July 2000.
 Started life insurance agency business in December 2000 as a corporate agent.
 Became a depository participant of NSDL in September 2001.
 Acquired commodities broking license in March 2004.
 Launched portfolio management services in August 2004.
 Listed on NSE and BSE on May 17, 2005.
 Acquired 75% stake in Moneytree Consultancy services in October 2005.
 In 2006 acquired membership of DGCX; launched internet banking services.
 In 2008 launched wealth management services under the ‘IIFL Wealth’ brand;
set up India Infoline Private Equity fund; received the Insurance broking
license from IRDA; received the venture capital license; received inprinciple
approval to sponsor a mutual fund; received ‘Best broker- India’ award from
FinanceAsia; ‘Most Improved Brokerage- India’ award from Asiamoney.
 In 2009 received registration for a housing finance company from the National
Housing Bank; received ‘Fastest growing Equity Broking House - Large firms’
in India by Dun & Bradstreet.
2.10 WORK FLOW MODEL (End to End):
Graph no. 1: Work flow model of India Infoline Ltd
Dealers/ salesmen/ surveyor obtain contact

information about prospective customer
Walk in of prospective clients

Relationship manager attends the client
Obtain clients details and Financial Requirements
(Short and Long Term)
Contacts clients and explains details of proposed

plan
Branch development manager, prepare and

decides on financial plan
Customer account is opened in India Infoline
 Mutual funds
 Insurance
 Equity & commodity services
Work flow model here consists the process by which a prospective client is contacted
and served.
2.11 FUTURE GROWTH PROSPECTS:
India Infoline Ltd. Established in the year 1995,till now grown to the greater extent
that now, its the major player in the industry. The company has the progressive future.
The following statements will support the inference.

 India is a developing economy, it has high rate of savings by the people.

Transferring these savings into investments will get more business for the
company.
 Increasing interest in domestic investor in the last three years.
 The rural public yet to invest in stock market. It can expand its wings to
expand into new areas.
 Company has opportunities to increase in mutual funds, insurance.
3. MCKINSEY 7S MODEL
Graph No. 2: Mckinsey 7s model of India Infoline Ltd.

I) STRUCTURE:
The design of an organization structure is a critical task of top management of an

organization. It is the selection of whole organization. It refers to organizational
arrangements & relationship. It prescribes formal relationship aming various position
and activities. Arrangements about reporting relationship, how an organization
member is is to communicate with other members. What role he has to perform and
what rules & procedure exist to guide the various activities performed by members are
in all part of organization structure.
India Infoline organization structure is flexible enough to counter balance of

external & internal environment. This will help in the smooth working of the
company. Figure shows organization structure.
There are four board of directors who decides on & have the authority to take
decision & in the next level the MD who controls over finance, research and
development, personnel & marketing departments who come under the top level
management.
Zonal offices, branch manager, territory manager, sales manager all of them come
under middle level management.
ORGANIZATIONAL CHART

Graph No. 3: Organisational Chart of India Infoline Ltd.
CHAIRMAN
MANAGING DIRECTOR
PRESIDENT
VP - VP - VP – DP V P – HEAD RISK - HR – HEAD,

DISTRIBUTION SECTION COO CORPORATE MUMBAI
ZONAL
BROKERI ZONAL (FINANCE)
NG
DP SECTION – ZONAL HR - ZONAL

AV P – RISK – ZONAL
ACTIVATION
BROKERING
D
EQUITY
TERRITORY ADVISOR
E
SMANAGER
A
RELATIONSHIP
AREA MANAGER L
MANAGER
TEAM LEADER
E
ASST. RM R
SR. BM BRANCH
MANAGER -2 -
NEAT /
SALES
BRANCH BACK OFFICE BOLT
MANAGER
MANAGER -1
THE FUNCTIONAL DEPARTMENTS ARE:
1. Finance Department
2. Research And Development

3. Personnel Department
4. Marketing Department
1. FINANCE DEPARTMENT:
Finance is said to be the lifeblood of any business thus Bata gives the proper
attention to the structure of the organization of the finance department. In modern
money- oriented economy finance is one of the basic foundations of all kinds of
economic activities.
The Major functions of the Finance department are as follows:
1. To Maintain Accounts.
2. To Act as custodian of the company property.
3. To advice the management on financial aspects.
2. RESEARCH DEPARMENT:
Sound investment decisions depend upon reliable fundamental data and stock
selection techniques. Indiainfoline Equity Research is proud of its reputation for and
we want you to find the facts that you need. Equity investment professionals routinely
use our research and models as integral tools in their work. It also undertakes research,
customized and off-the-shelf. Our research is also disseminated electronically through
Bloomberg, Investext, First Call/Thomson Financial and Internet Securities. On First
Call/Thomson Financial, we have been one of the largest read research houses from
Asia, which is a testimony to the quality and timeliness of our reports.
3. PERSONNEL DEPARTMENT:
The human resource is the key by which the goals and objectives of an
organization can be fulfilled.
FUNCTIONS:
1. To maintain good industrial relationship.
2. Recruitment of staff and their training and development.
3. Performance Appraisal.
4. Compensation Policy.

5. Providing various welfare polices to its employees.
4 .MARKETING DEPARTMENT:
Marketing is a total system of business activities designed to plan; price,

promotion and distribution of want satisfying products to target market to achieve
organization objectives. Thus the essence of marketing is a transaction for exchanger,
intended to satisfy human needs and wants. The major functions carried out are: -
A.INTEGRATED MARKETING:
1. Get the facts.

2. Facts analysis and interpretation.
3. Develop and Analyze.
4. Plan marketing surveys
5. Development marketing programs.
6. Layout of the program.
B.SELLING:
1. Controlling sales and field activities.

2. Territory and Quota allotment.
3. Development of trade channels.
4. Sales promotion and public relation.
C.PLANNING:
1. Formulating polices and implementation of program.

2. Planning and product lining for product development.
3. Forecasting research and development program.
4. Coordinate with other departments.
This is why the organization has developed an integrated marketing program to

reach at every segment of the society. The 2 major theories are as follows:
1. The entire system of business activities should be customer oriented.

Customer’s wants must be recognized and satisfied.

2. Marketing should start with an idea about a want satisfying product and should
not end satisfied, which may be sometimes after exchange is made.
ii) SKILLS
Skills are considered as one of the most attributes (or)capacities of an

organisation. The term skills include those characters which most people uses to
describe a company. The company has the skills needed to carry out the company
strategy like.
 A good specialized knowledge about the financial products and stock market
to serve the clients better.
 High levels of specialization in communication.
 Ability to convert the prospect into customers.
 Apart from this the company follows on job training.
At the executors level where are improved skills by employees in areas like
communication, leadership, administration, time management, computer knowledge,
presentation, team building and also they are trained under various other aspects like
self development.
The HR department identifies several areas for continuously updating

technical/professional skills for employees and brings out aatitudinal- change in
developing good work culture in all areas.
iii) STYLE
The objective of the organisation consists of two components
Organisational culture: The domain values & beliefs and norms which develop over
time and become relatively enduring features of organisational life.
Management style: More a matter of what managers do than what they say, what are
they focusing on. In India Infoline the leadership style followed is democratic group
effort. Here all employees play an active part in giving suggestions for decision
making. All major decision is taken in the branch concerned. The managing director

or the managers of the concerned departments and branches will take the major
decision.
In India Infoline providing the incentives are given to the employees, those
who are reaching targets and promote them to the higher levels.
iv) STRATEGY
Marketing Strategy:
At india Infoline , strategy and planning is a dynamic function keepingin mind

the dynamic environment we operate in. Our core strategy is to capture a larger slice
of the ‘Indian opportunity’ by leaveraging ‘People and ‘Technology’ more effectively.
The key words are:
People
 We provide our people with space where they can fulfill their aspirations
aligned with the company’s objectives.
 We are an aggressive and fast growing organization. Even in adverse market
conditions and difficult times, our teams always set aggressive targets and
difficult goals for themselves.
 And also our history shows, at India Infoline, NOTHING is impossible.No
target is too aggressive or unachievable.
 All you need is the aggression and spirit to make the commitment.
 We lay emphasize on team spirit. We prefer people who can work with a team
over people who are individually good performers but may not as well within
a team environment.
Technology
 We leverage technology to have a cost effective delivery system.

 At India Infoline, technology is all pervasive, it envelopes all the business and
every activity that we do.
 We expect all people at India Infoline to be technology friendly. People should
embrace technology and use it to increase their productivity, to smoothen
procedural obstacles and finally to bring a smile on the face of the customer.
v) SYSTEM
System in 7’s framework refers to the rules, regulations and procedures both
formal & informal that complement the organisation structure. It includes production
planning, control systems capital budgeting system. The system of India Infoline
includes:
 100% management information system.

 The company has 100% management information system. It helps the
company very much in their day-today business administration. It also helps
the company to achive their target more effectively.
 The office of India Infoline is fully automated i. e; they are looking forward
for a paper less office.
Reviews and meetings: India Infoline conducts periodical meetings every month
regarding the performance of the branch and also conducts meeting when ever
necessary. In the branch level the branch manager conducts meetings for all
relationship managers in the branch to review the performance and to set new targets.
Internet and Technology: India Infoline provides its employees the internet facility
and technological support to access and to share the information among as and when
they require it. It facilitates better communication among the employees. The
company publishes quarterly reports & annual report every year. India Infoline
 Honoring every commitment made

 Providing prompt and proactive customer services
 Ensuring safety and return on their investments
 Ensuring high quality services and products.

 Motivating every ne in the organization for active participation toward

continuous improvement in activities.
vii) STAFF
The staff of Mckinsy’s 7S framework includes the human resource

management, rewards and recognition. The main strength of India Infoline is its
research team’s efficiency and team work of the employees.Staff of India Infoline as
follows:
Human Resource Manager:-
The main function of the head of the department in India Infoline is

strategizing and goal setting. HOD oversees the future requirement of the company,
accordingly makes strategies and sets goals to achieve that target.
Regional manager:-
The function of the regional manager is to implement the planned programmes

for the company into action and get the feedback from their subordinate and based on
that feedback, they can modify or eliminate action put forward,
Branch Manager:-
Branch manager oversees the branch on sales, trading turnover, new clients
joining, administration and customer services. Branch manager set the target for sales
by seeing future expansion of the company. His activities are not only limited to target
setting but also contributes towards employee welfare by facilitating good working
atmosphere and provides good customer services.
Sales Manager:-
The function of the sales manager is to recruit relationship managers in

coordination with branch manager as per the benchmark framed by the company and
giving necessary training for their overall team development so as to attain the
business goal.
Vii) SHARED VALUES

The shared values includes the guiding concepts, values and beliefs of the
company. It also includes the long term vision of the company.
Shared values refer to a set of values & aspirations that goes beyond the
conventional formal statement of corporate objectives. Culture of an organisation is
usually determined by some of the value benefits and working practices that exist with
in an organisation operational standard.
The shared values considered by India Infoline are
OWNER MINDSET
What distinguishes India Infoline from other organizations is the fact that all
employees are driven by Owner Mindset. This is a privilege as well as a
responsibility.
The environment will provide tremendous autonomy to operate, be creative

and make mistakes. Each employee who is part of India Infoline is expected to have
an owner’s mindset and think and behave like one.
While there is no ‘the way’ of doing things, there are millions of things which
an owner would do differently as compared to a typical person with an employee
mindset. For instance, if work requires, sitting late or carrying the work home and
completing it to meet the exigencies of deadlines. Taking complete care of the office
property and material like his/her own. Suggestion and action on saving costs many
times for activities not pertaining to his/her own department. Helping team members
from his/her own functional areas as well as others. Ensuring that she/he projects the
best image of the organization outside, have positive influence on colleagues and
other team members, help seniors take corrective action against any possible damage,
sabotage or negative activity that comes to his/her knowledge. Generate ideas, which
may be related to the area of work, or may be general in nature for the benefit of
organization and all the people in the organization.
II) SWOT ANALYSIS

STRENGTHS:
 Original research
 Integrated technology platform
 “One stop” shop
 Pan-India distribution network
 “indiainfoline.com” and “5paisa.com” have developed into brands
OPPORTUNITIES:
 Changing demographics with higher disposable income and increasingly

complex financial instruments will drive demand for investment advisory
services.
 Rapid penetration of internet and computers means that technology enabled
financial services will gain market share.
WEAKNESSES:
 Lack of a banking arm to complete the bank broker-depository chain

 Insignificant presence in institutional segment
THREATS:
 Economic slowdown
 Volatile movement in indices and events like May 17, 2004.
 Stock market falls will have a cascading effect on mutual fund mobilization.
 Increases or decrease in the interest rates can affect the debt/income fund
mobilizations.
 Future changes in personal taxation rules can impact insurance sales
 Increasing competition from large and particularly foreign players
III) ANALYSIS OF FINANCIAL STATEMENT:

1. Return on capital employed ratio:
Table No.3: Return on capital employed ratio
Years Return on Capital Employed Ratio(%)
2004-2005 35.39
2005-2006 16.40
2006-2007 23.73
2007-2008 21.98
2008-2009 15.49
Graph No.4: Return on capital employed ratio
Interpretation:
Return on capital employed was high in the year 2004-05 as compared to

2008-09. It is decreased very much as the company has raised more capital and went
for expanding the operations throughout India, so the company can expect benefits in
the long run.
2. Current ratio:
Table No.4: Current ratio
Years Current Ratio (%)
2004-2005 2.43
2005-2006 5.65
2006-2007 1.16

2007-2008 1.11
2008-2009 1.11
Graph No.5: Current ratio
Current Ratio (%)

5.65
6
4
Current Ratio (%)
3 2.43
2 1.16 1.11 1.11

1
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Interpretation:
The current ratio was as high as 2.43 and 5.65 for the periods of 2004-05 and
2005-06 respectively. But for the year 2008-09 it is 1.11.The ideal ratio is 2, therefore
company should improve the current ratio or else it will affect the liquidity of the
company.
3. Debt Equity Ratio:
Table No.5: Debt Equity Ratio
Years Debt Equity Ratio
2004-2005 0.03
2005-2006 0.49
2006-2007 0.28

2007-2008 0.13
2008-2009 ---
Graph No.6: Debt Equity Ratio
Debt Equity Ratio

0.49
0.5
0.45
0.4
0.35 0.28
0.3 Debt Equity Ratio
0.25
0.2 0.13
0.15
0.1 0.03
0.05 0
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Interpretation:
The debt equity ratio is reducing every year and the company has the potential
to rise the debt is high as it has very low debt equity ratio.
4. Asset Turnover Ratio:
Table No.6: Asset Turnover Ratio
Years Asset Turnover Ratio
2004-2005 5.10
2005-2006 6.26
2006-2007 3.96
2007-2008 6.74

2008-2009 4.01
Graph No.7: Asset Turnover Ratio
Asset Turnover Ratio

6.74
7 6.26
6 5.1
5 3.96 4.01
Asset Turnover Ratio
4
3
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Interpretation: There is fluctuations in the asset turnover ratio every year .it was
lowest in the year 2006-07 at 3.96 and highest in the year 2007-08 at 6.74. in the year
2008 2009 it was 4.01 nearer to the lowest. So the company should be careful asset
turnover ratio which shows how efficiently the assets are used.
5. Earnings Per Share:
Table No.7: Earnings Per Share
Years Earnings Per Share
2004-2005 5.53
2005-2006 5.87
2006-2007 10.39
2007-2008 27.62
2008-2009 3.73

Graph No.8: Earnings Per Share
Earnings Per Share

30 27.62
25
20
Earnings Per Share
15
10.39
10
5.53 5.87
5 3.73
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Interpretation:
EPS in the year 2008-09 is the lowest at3.37 as compared to the all previous
five years and highest in the year 2007-08 which is 27.62.there is sudden fall in the
EPS. The company should be cautious and improve the EPS as it represents the
interest of the share holders of the company.
6. LEARNING EXPERIENCE:
The summer project was a great exposure for me to the practical business
operations in India Infoline Ltd. During this period I learnt about how the brokerage
industry operates. It was very important study in my desire to understand the stock
market better.
The trading mechanism was well understood by me in conversation with the

relationship managers and the branch manager. It was possible to understand the
theoretical concepts learnt in the classroom. All that theories applied in the day to day
functioning of the company.

I also learnt about how to deal with the clients, how to work in a team, setting the
goals and working to achieve them. The organisation study was about how the firm
will be having authority, responsibility relationships. Clients grievances handling and
serving them better. It was great exposure to speak to the higher ladder managers that
taught me about behaviour, interpersonal skills and decision making abilities
This training program was very much informative. Everyone to whom questioned
spent some time with me and shared their knowledge and experience.
Benefits derived from the in plant training:
 Knowledge about the company and industry operations.

 Products and services of the company.
 The working of the employees and their interpersonal relationships.
 Knowledge about stock market and trading mechanism.
 Observation about Investor behavior, preferences, attitude etc….
 Helped in comparing the theoretical concepts to the practical corporate world.
 The training, in essence, molded me to take up challenges in my career once I
complete my MBA course.
1. GENERAL INTRODUCTION :
The Sensex falls by 36% in a day of hectic trading. The Reserve Bank of India
lowers the repo rate by 25 basis points. The government of India raises rupees 4500
crores by issuing bonds with maturity of 10 years . So on and so forth all these are
examples of securities market at work. Most people are aware that this market has an
important bearing on modern life and glibly speak of “Dalal Street” The Guilt Edged
Market” and the “Nifty” with some what vague understanding of these terms.
Financial theoists define stock price at the present value of all future earnings
expectation of the company, divided by number of shares outstanding.what this means
is the earnings capacity of the company is what defines the price. Often , companies

can get significant value of a relatively smll investment in the assets because the
ability for those assets to make money is significant.
Even companies that loose money today can have ahigh share price because
price is based on the future earnings of the company. No enterprise is in the business
to loose money, so the expectation is that every business will make money some day.
So long as there is a potential for the future revenue streams to shareholders, there will
be a price there some one will pay for the shares.
BACKGROUN TO THE STOCK EXCHANGE:
A stock exchange is a organised place or market where listed securities are

traded. The Securities Contracts Regulation Act,1956 defines it as “ An Association “
organisation or body of individuals, whether incorporated or not established for the
purpose of assisting , regulation and controlling business in buying , selling and
dealing in securities. The working of the stock exchange in India is regulated by the
Securities Contracts (Regulation)rule 1957 & Exchange in India Act 1992 (SEBI Act).
The main objective of the act is to establish unitary control over all the stock exchange
by the central government with a view to making them really helpful for the economic
development of the country. A stock exchange , organised market for trading of
stocks and bonds. Such markets were originally open to all , but at present only
members of the owing association may buy and sell directly. Members or stock
brokers, buy and sell for themselves or for others , charging commissions for their
services. A stock may be bought or sold only if it is listed on the an exchange and it
may not listed unless it meets certain requirements set by the exchange’s board of
governors. There are stock exchanges an all important financial centres of the world:
the New York Stock Exchange (NYSE, in nearly continuous operation since 1792),
which has a trading volume of $7.3 trillion in 1998, is the largest in the world. Tokyo,
London and Frankfurt also have major facilities, and Euro next, an inter European.
Exchange combining facilities in Amesterdam, Brussels, Paris and other cities,

is also significant. By providing a centralised ,ready market for the securities, stock
exchanges greately facilitate the financing of business through floatation of stocks and
bonds. However , speculation in stocks can some times accentuate the instability of an
economy. The reality of great depression was emphasised by the stock market crash in
1929. The inter state sale of securities and certain stock exchange practices in the

united states are regulated by federal laws administered by the Securities and
Exchange Commission. Today , a large percentage of stocks are traded through such
over-the-counter organisationsas NASDAQ (National Association of Securities
Dealers Automatic Quotations) and its European equivalent, Nasdaq Europe (formerly
Easdaq)
THE MARKET MACHANISM
The value of publically traded shares is liquidity. Publically traded companies

are worth more than private ones simply because there is agreater access to buyers and
sellers, and market efficiency can better determine share price. The stock market
provides value to any company that chooses to list its shares because the company
gains liquidity. In a theoretical sense, any time some one buyes the shares of the
company in the market, they are effectively stating tha t they believe the shares of the
company are undervalued. The fact that their buying implies a belief and expectation
that the share price will increase in the future. At the same time , the person who is
selling the share is is experiencing the opposite belief . by selling , they imply thatthe
stock is over valued and expectation that the stock will go lower in the future. In this
way, the stock market is forum for debate on what the value of the company and its
shares.
FACTORS CAUSING MOVEMENTS IN STOCK PRICES
There are mainly four factors that cause movements in stock prices.
1. New information.
2. Uncertainty
3. Psychological factors.
4. Demand and Supply.
1. New Information:
Information is the key as it gives the market a reason to value a stock at a

particular price level. The market will price the stock based on all the information that

the public is aware of. As new information comes into the public realm, the market
will adjust the price up and down based on how the market perceives the information
will affect the future earnings capacity of the company. It is important to know how
information flows from company to public.
“Buy on rumour, and sell on news” is a saying that has grown popular
because it is often the case that stocks move up in anticipation of positive news and
then sell off when expectation is answered by the news released.technical analysis is
very important because it provides tools that allows investors to identify the signs that
new information is been stocked into the market before the news is released. In this
way technical analysis helps to reveal fundamental changes in the before the broader
market is aware of it.
2. Uncertainty :
The uncertain future of the company will bring some volatility in share prices
even during a period in which there is no new information. Companies that have
established a performance record will tend to show less volatility as determined by
uncertainty. Because of uncertainty the stock will trade difficulty and will provide
different kinds of trading opportunities.
3. Psychological factors:
Humans are behind the activities of the trading market. That means human
characteristics are also factors in how share prices move. Understanding human
psychology is extremely important in evaluating investment opportunities because
human psychology creates and accentuates many of the opportunities that the investor
can capitalise on. For example: Greed often causes stocks to go higher than the
present value of the future earnings potentials can justify.
4. Supply and Demand:

The majority of the stocks that we can choose to invest do not have much
liquidity. As a result stocks that trade smaller value of shares are subjected to
fluctuation because of supply and demand. If a large share holder wants to sell a large
number of shares into the market with weak liquidity, the share holder can
dramatically move share price.
List of stock exchanges in India:
1) Bombay stock exchange (BSE)

2) National Stock Exchange(NSE)
Regional Stock Exchanges:
Ahmadabad, Bangalore, Bhuvaneshwr, Cacutta, Coimbattore, Delhi, Guvahati,

Hyderabad, Jaipur, Ludhiana, Madhya Pradesh, Madras, Magadh, Mangalore, Meerut,
OTC exchange of India, Pune, Sourashtra Kutch, Uttar Pradesh, Vadodara Stock
Exchange.
These are the 21 regional Stock Exchanges . However, the BSE and NSE have
established themselves as the two leading stock exchanges and account for about 80%
of the equity volume traded in India.
1.1 STATEMENT OF THE PROBLEM:
The Indians securities market has always witnessed fluctuations. Moreover this
study helps the potential investors make better investment decision based on
fundamental and technical analysis made using several indicators.
With these fluctuations, several investors have gained as well as lost in the
stock market. One way to determine the stock price is fundamental analysis, which in
turn is composed of economy, industry and company. The other way is technical
analysis, which says that the past trends will repeat in the future.

Moreover this study helps the potential investors make better investment
decision based on fundamental and technical analysis made using several indicators.
Title of the Study:
“Fundamentals and Technical Analysis of Infosys Technologies Limited Stock

prices in comparison with Index”
NEED OF THE STUDY:
 Investor’s wealth is precious. Hence needs to analyze the prevailing economic

conditions of the country and also the shares of the respective companies.
 Investment is the commitment of fund expectation with some positive rate o
return and is always associated with risk, may be diversifiable non-
diversifiable or both for reducing the risk and increasing the return, analyzing
the securities, considering the price movement of the shares and performance
of the companies is a must.
 As each investor has his own preference and choice of investments,
considering the shares and the relative movement of he shares and price
movements with companies performances enables of getting better portfolio.
 Portfolio management is assuming importance and more and more people are
showing interest in investing in companies which are doing good.
Therefore, the study of security is very important. Hence analytical study of

securities traded on Exchange as to be made.
1.2 OBJECTIVES OF THE STUDY:

 The main objective of the study is to analyze the stock price of Infosys
Technologies Limited with the help of Fundamental and Technical
indicators and to provide guidance for investors in determining what types of
analysis is useful.
 To aid investor in assessing the worth of the equities.

 To identify the returns of the equities considering the risk, growth and other
related variables.

 To analyze whether technical indicators can be used to guide the investors in

buying and selling decisions in stock market.
 To identify whether past stock price movements have any impact on the
present stock prices.
 To study the analysis of price movement of shares and company
performance.
 To study the various factors affecting the price movement of shares and
company performance.
1.3 SCOPE OF THE STUDY
One of the most important functions of market index is to show in which

direction the set of scrip’s are heading towards. The market index as a benchmark
against which, the investor evaluate the performance of their own or institutional
portfolio.
Historical data projects the future trends, by the help of this, investor can
forecast and take decisions accordingly to buy or sell or to hold securities. This
research seeks to investigate and constructively contribute with the help of
fundamental analysis and technical analysis.
 Research starts from broad Economic analysis to the industry like

contribution towards GDP, Interest rate etc., which influences the share
price and finally analyzing the company’s potentiality by considering possible
risks associated with equities.
 Since share price of the company is empirically found to depend up to 50% on

the industry performance, studying those related fields like competitors
performance, external factors and internal factors provide insights for
selecting the equities.
 As research studies shows more than 35% of the share price movements
depend on the company’s performance. So, analyzing the companies’ potential
growth through ratio analysis provides the valuable insights. Comparability
between the companies enables the investors selecting particular equities.

 This helps the investor to understand the working of market index and other
related concepts.
 This study also serves as a reference for any further research.
1.4 METHODOLOGY OF THE STUDY:
Historical Research:
The name itself indicates the meaning of the research. Historical study is a
study of past records and data I order to understand the future trends and development
of the organization or market. There is no direct observation. The research has to
depend on the conclusions or inferences drawn in the past.
For example: investors in the share market study the past records or prices of
shares which he/she intends to buy. Studying the share prices of a particular company
enables the investor to take decision whether to invest in the shares of a company.
 Identification of the study period
 Identification of an industry, which is considered to be leading indicator of

stock market through survey.
 Collection of financial statements of the company for analyzing fundamentals.
 Collection of monthly closing prices of equity stocks of company for the

study.
 Collection of NSE indices closing values for the same period on a monthly
basis.
 Invesar standard 2007 software was used for analyzing the technical
indicators
(a) Sources of the Data:
Both primary and secondary data are collected for the study purpose.

PRIMARY DATA :
 Collected through unstructured personal interview conducted with the

managers, stockbrokers, technical analysts frequently.
SECONDARY DATA :
The data collected through secondary sources are :
 Text books and Journals
 Websites: Moneycontrol.com, NSEindia.com,

Equitymaster.com,financeyahoo.com, Indiainfoline.com, 5paise.com
 Newspapers: Economic Times, Business line
 Stock exchange BSE, BGSE,NSE
1.5 LIMITATIONS OF THE STUDY:
The subject of comparison of the securities with market index study is vast and
it has restricted the researcher with certain limitations in the study. Though the
researcher put his sincere efforts, attempts during the research work, certain
limitations cannot be avoided. They are
 Due to time constraint study is confined to only few fundamental ratios and
some Technical analysis indicators.
 Technical analysis is done based on one year stock price listed on NSE.
 The research work does not consider other types of securities such as
debentures, short term and long term loans etc.,
 Accuracy of testing the performance of selected securities in comparison with

market index depends on experience of the researcher.
 Variables like CAGR, EPS, P/E, etc., are used for recommending good
company but there are other factors like labour strikes, internal management

policies, poor employer employee relationship also affect company

performance.
 The study is mainly based on the secondary data. As such it is subject to the
limitations of the secondary data
2. DATA ANALYSIS AND INTERPRETATION

SECURITY ANALYSIS
 Traditional investment analysis, when applied to securities, emphasizes

projection of prices and dividends. That is, the potential prices of a firm’s
common stock and future dividend stream are forecast, and then discounted
back to the present.
 Basically modern security analysis deeply rooted in the fundamental concept.
But the more modern approach to common stock analysis emphasizes risks
and return estimate rather than mere price and dividend estimates, of course
dependent on share price and accompanying the dividend stream.
SECURITY EVALUATION
It refers to the act of assessing the true worth of security. Before committing
the fund on stock exchange securities, the investor should make thorough comparison
of the prices of the security with its true value. The price refers to the price quoted for
the security at the stock exchange at a given movement of time. Value refers to the
intrinsic worth. Only with the help of such evaluation the investor can decide as to buy
hold or sell.
DIFFERENT APPROACHES TO EVALUATION
There are essentially three approaches or school of thoughts on the matter of

security price evaluation, classified as Fundamental Approach. The concept of time
value of money is the business of this approach. Money has a time value. A rupee now
is worth more than rupee a year from now. For different securities, future benefits may
me received at different times. Even when the amount of future payment is the same,

differences in the speed of their receipt may create differences in value. Time value of
money suggests that earlier receipt is more desirable than later receipt, even when the
both are equal in the amount of certainty. Because, earlier receipt can be re invested to
generate additional returns before later receipt come in. The force operating is the
principle of compound interest.
Framework: The proper order in which to proceed in Fundamental analysis

is, first to analyze the overall economy and securities markets. Second, analyze the
industry with in which a particular company operates. Finally, analysis of the
company should be considered. The above analysis involves making a careful estimate
of expected stream of benefits and required return of common stock. The intrinsic
value then can be obtained through the present value analysis — that is, the dividend
discounts model. An alternative method of valuation is the P/E ratio or earning
multiplier approach.
Economic Analysis
Industry Analysis
Company Analysis
Strategic considerations of economic, industry and company analyses are as

follows: Economic wide factors 30-35%
Industry factors 15-20%
Company factors 30-35%
Other factors 15-25%
2.1FUNDAMENTAL ANALYSIS
ECONOMIC ANALYSIS
The level of economic activity has an impact on price movement of share and
company performance in many ways. If the company grows rapidly, the industry can
be expected to show rapid growth and vice-versa. When the level of economic activity

is high stock prices are high reflecting the prosperous outlook for sales and profits of
the firms.
Industrial Growth rate
The country ranks fourteenth in the factory output in the world. The
industrial sector accounts for around 27.6% of the GDP. Industry growth rate in India
GDP:
Table No.8: Contribution of industry to GDP over the years
Industry Growth rate

Year
towards GDP
2002 -03 5.2%
2003 -04 6.6%
2004 -05 7.4%
2005 -06 7.6%
2006 -07 9.8%
Graph No.9: Contribution of industry to GDP over the years
Industry Growth rate towards GDP

10.00%
8.00%
Industry Growth rate
6.00% towards GDP
4.00%
2.00%
0.00%
2002 2003 2004 2005 2006
-03 -04 -05 -06 -07
An investor ultimately invests his money In the securities of one or more

specific companies. Each company can be characterized as belonging to as industry.
The performance of companies would, therefore, be influenced by the fortune of the

industry to which it belongs. For this reason as analyst has to study the fundamental
factors affecting the performance of different countries.
Foreign Exchange Reserves:
Graph No.10: Foreign Exchange Reserves
Chart 1 shows how foreign exchange reserves, which had been increasingly
steadily over the past few years, started declining after June 2008. Not that the earlier
build-up of reserves reflected any great macroeconomic strength, since unlike China it
was not based on current account surpluses. Instead, the Indian economy experienced
an inflow of hot money, especially in the form of portfolio capital of FII investment.
INDUSTRY ANALYSIS

Indian software industry has a mix of a few large companies and several small
to medium sized companies. Currently 37 Indian companies have exports of more
than Rs l billion. These few large companies would however be classified as small
companies by US standards. First generation entrepreneurs, who had limited access to
finance and low risk taking capability, operate most of these large companies. Smaller
companies, which are also typically entrepreneur run companies, have a similar
potential to strike it rich.
Competitive Advantage- Low Cost and Location
Much of India’s strong growth in software in the past is attributable to the low
cost of Indian programmers. Indian programmers repaid only about 15- 20% of his/
her counterpart in developed nations. Even among competing countries Indian
software professionals were paid the least. India enjoys a location advantage. The
advantage it enjoys over other countries is a 12-hour difference with the world’s
largest market - the USA. This enables US companies to establish round the clock
software factories by subcontracting to Indian companies.
Export Performance
The performance of the Indian software and service exports sector for the first
three quarters, April to December 2007, FY 2007-08, the survey revealed that
software and services exports from India generated revenues of Ks. 34,000 crores in
April-Dec, 2007. This was up from Rs. 26,600 crores for the corresponding period in
the previous year, and represented a growth of 28% over the same period last year.
Government Policies
Government policies so far have been favorable to software companies. If tax

exemption on exports is withdrawn it could affect software companies adversely.
WTO regards tax exemptions on exports as an indirect subsidy and hence the
government may phase out exemption in the near future. Software industry has
enjoyed virtually unbridled liberty to conduct its business in the best possible manner.
Government has also encouraged the industry by providing tax benefits to exporters.
PROFILE OF THE ORGANIZATION

Table No.9: Infosys Technologies Ltd at glance
INFOSYS TECHNOLOGIES LTD
Company Name Infosys Technologies Ltd.
Type Public Limited compny.
Founded July 2, 1981
Headquarters Bangalore, India. Electronic City, Hosur Road
Key People N R Narayan Murthy(Chairman and Chief Mentor),

Nandan Nilekhani (Co-chairman), Kris Gopalkrishnan
(CEO and MD), S.D Shibulal (COO and Director).
Industry Software services
Products Finacle (a universal banking product)
Services Information Technology consulting services and

solutions
Revenue Rs. 21,693 crore ($4.66 billion) (FY 2008-09)
Net income Rs. 5,988 crore ($1.28 billion) (FY 2008-09)
Auditors Bharat S Rout & co.
Bankers Bank of America, ICICI Ltd.
Employees 104,850
Subsidiaries Infosys BPO, Infosys Consulting, Infosys Australia,

Infosys China, Infosys Mexico, Infosys Sweden
Competition:
Table No.10: Table showing Industry Competition
Last Price Market Cap. Sales Net Profit Total

Assets
Infosys 2,682.95 153,876.64 20,264.00 5,819.00 17,809.00
TCS 791.60 154933.61 22,404.00 4696.21 13486.62
Wipro 709.40 104,109.56 20,987.30 2,973.80 17,528.90

HCL 360.40 24,340.79 4,675.09 997.31 4,001.97

Oracle 2,298.55 19,274.46 2,212.62 695.71 3,509.43
TechMahindra 903.50 11,043.92 4,357.76 986.65 1,880.90
Mphasis 648.50 13,594.56 3,405.02 836.87 2,151.30
Patni
517.65 6,684.21 1,751.33 542.73 2,522.94
Computers
COMPANY ANALYSIS:
1. Book Value per share:
The difference between assets and liabilities gives net worth of the company. Net
worth is that part of business, which belongs to the common shareholders (the
owners). Net worth per share of the company is known as book value per share. It is a
value received by the shareholders on the sale of company’s assets at prices
mentioned in the balance sheet.
Book Value per share = Net worth (Paid Equity Capital + Reserves + Surplus) /
Numbers of Outstanding Equity Shares
Book Value = 286.00+17523.00 = 310.90
342.3621
Table No.11: Book value per share:
Year Book value per share
2004-05 193.73
2005-06 250.29
2006-07 195.41
2007-08 235.84
2008-09 310.90

Graph No.11: Book value per share
Book value per share

350
300
250
200 Book value per share
150
100
50
0
2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation:
The book value of Infosys Technologies limited as increased 60.44% and 31.82
compared to 04-05 and previous year 07-08. this indicates the growth in the book
value of Infosys Technologies limited share.
2. Earnings per share:
Its is a portion of a company’s profit allocated to each outstanding share of

common stock. It serves as an indicator of a company’s profitability.
EPS = Net income(PAT)/Number of outstanding share
EPS = 34777.14/342.3621 =101.58
Table No.12: Earning per share

Year EPS
2004-05 70.38
2005-06 87.86
2006-07 66.23
2007-08 78.15
2008-09 101.58
Graph No.12: Earnings Per Share
EPS
120
100
80 EPS
60
40
20
0
2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation:
The EPS of Infosys Technologies limited has increased by Rs. 23.43 when
compared to previous year 07-08. This proves that the company is more efficient and
profitable for investment.
3. Current Ratio:
A liquidity ratio is ratio that measures a company’s ability to pay short-term

obligations. This ratio gives an idea of the company’s ability to pay back its short-
term liabilities with its short-term assets. The idle current ratio preferable is 2:1.
Current Ratio = Current asset / Current Liabilities
Current ratio = 15732.00 = 4.71
3342.00

Table No.13: Table showing current ratio:
Current Current
Year Ratio
Asset Liability
2004-05 3,764.65 1,346.04 2.80
2005-06 6,105.00 2,217.00 2.75
2006-07 9,040.00 1824.00 4.96
2007-08 12,326.00 3731.00 3.30
2008-09 15732.00 3342.00 4.71
Graph No.13:Current Ratio
Current Ratio
5
4.5
4
3.5
3 Current Ratio
2.5
2
1.5
1
0.5
0
2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation:
Current ratio for the year 08-09 is 4.71. This is considered to be over liquid
ratio because it is not equal to the idle ratio i.e., 2:1.
4. Price Earnings Ratio:
Price earnings ratio is a valuation ratio of a company’s current share price

earnings. it gives the relationship between the market price of the stock and its
earnings by revealing how earnings affect the market price of the firm’s stock. It is

sometime referred to “Multiple”, because it shows how much investors are willing to
pay per rupee of earnings.
Price-earning Multiple = Market price of the share/ Earning per share
P/E ratio = 1323.90/101.58 = 13 times
Table No.14: Table showing Price Earnings Ratio
Year MPS EPS P/E ratio
2004-05 2257.20 70.38 32
2005-06 2981.40 87.86 33
2006-07 2018.65 66.23 30
2007-08 1439.90 78.15 18
2008-09 1323.90 101.58 13
Graph No.14: P/E Ratio
P/E ratio
35
30
25
P/E ratio
20
15
10
0
2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation:
This ratio is useful to compare the P/E ratio of one company to other companies in the
same industry.
2.2 TECHNICAL ANALYSIS:

Technical analysis is the study of market action through the help of charts and
other technical indicators so as to forecast the trend. It is also a process of analyzing a
security's historical prices in an effort to determine probable future prices. This is
done by comparing current price action (i.e., current expectations) with comparable
historical price action to predict a reasonable outcome.
The roots of modern-day technical analysis stem from the Dow Theory,
developed around 1900 by Charles Dow. His focus on the basics of security price
movement gave rise to a completely new method of analyzing the markets.
Therefore, Technical Analysis is the study of:
 Price
 Volume
 Open Interest
This study has been conducted using one year NSE stock prices of Infosys
Technologies Limited. The result is a value that is used to anticipate future changes in
prices. Much of technical analysis focuses on changes in prices over time.
The indicators used for the study are:-
1. RELATIVE STRENGHT INDEX (RSI)
The Relative Strength Index (RSI) is one of the most popular

overbought/oversold (OB/OS) indicators. RSI technique was developed by J. Welles
Wilder. It is the most popular and trusted Oscillator tool used by most of the traders,
which smoothens the noise found in most of the other oscillator tools.
RSI for share is calculated by using the following formula.
RSI = 100 - [100/(1+ RSI)]
Where: RS = Average of x days UP close
Average of x days DOWN close

14 days is popularly used for the calculation of RSI. Shorter the time period,
more sensitive the oscillator becomes and wider is its amplitude. It works best at the
extreme points of the band. 5,7 and 9 days are used as variations of the shorter time
period RSI and 21 or 28 days is used for the longer time duration. The 14 days RSI
becomes over bought above 70 and oversold below 30.
Trading Uses
There are two basic ways to use the RSI, (1) as an overbought/oversold
indicator, and (2) as a way to spot divergences between the movement of the RSI and
the price of the underlying instrument.
(1) RSI as an Overbought/Oversold Indicator - As an OB/OS indicator, a 9-day

RSI value approaching 80 means that the market is overbought, i.e., the price is very
high and almost everyone interested in this contract has already taken a position so
that there are very few traders left to maintain buying pressure to push the price
higher. There is also the possibility that because the price is so high, weak longs will
begin to get out of the market. While the indicator by itself is not enough to trigger an
automatic sell signal, it is a warning to be alert for any hint that long liquidation
selling is beginning.
Conversely, a 9-day RSI value under 20 means that the market is oversold, i.e.,
the price is very low and almost everyone interested in this contract has either
liquidated his position or has entered a short position, suggesting that there are very
few sellers left to maintain the downward pressure on the contract. There is also the
possibility that because the price is so low, new buying will soon begin to take place.
The RSI is very useful for gaining an overview of the overbought/oversold condition
of the market. It should not be used in isolation as a trading signal, however. When the
RSI rallies to 80, for example, the market is in a strong bullish trend and a trader who
enters a new short position simply because the RSI is at 80 is trading against a strong
bull trend. Rather, a trader watching a market with an RSI of 80 should perhaps wait
for a better buying opportunity and possibly liquidate some of the long positions
he/she may already own. If the trader is bearish on a market with an RSI of 80, he/she
should at least wait to enter a short position until he/she gets some other indication
that the bull trend is reversing, such as an outside-day-down reversal pattern or a
breakdown in a trend-following indicator. Overbought/oversold indicators are useful

tools when used in conjunction with other indicators, but are somewhat dangerous
when used alone.
(2) RSI and Divergence with Price Movement - Another effective use of the
RSI is to watch for divergences between the RSI and the price of the underlying
instrument. For example, when prices have rallied to a new high but the RSI cannot
rally to a comparable new high, then a divergence occurs. The weakness of the RSI is
showing that prices are not as strong as they were during the previous rally and that
the upward trend may therefore be warning.
Table No.15: RSI Calculations
Date Close RSI Date Close RSI Date Close RSI

2-Feb-09 1279.65 52.1734 6-Apr-09 1414.05 42.6277 9-Jun-09 1794.8 50.6374
3-Feb-09 1282.5 52.7065 8-Apr-09 1425.15 43.69 10-Jun-09 1808.8 52.7129
4-Feb-09 1281.65 52.5722 9-Apr-09 1427 43.8591 11-Jun-09 1750.95 43.8882
5-Feb-09 1255.85 48.4492 13-Apr-09 1409.3 41.8593 12-Jun-09 1728.45 39.833
6-Feb-09 1288.9 54.0371 15-Apr-09 1370.6 37.3267 15-Jun-09 1715.1 37.3379
9-Feb-09 1312.1 58.4297 16-Apr-09 1345.2 34.2004 16-Jun-09 1724.65 38.3956
10-Feb-09 1308.4 57.9232 17-Apr-09 1397.3 37.7909 17-Jun-09 1711.45 36.0714
11-Feb-09 1301.9 57.0699 20-Apr-09 1393.45 37.3395 18-Jun-09 1725.75 37.4944
12-Feb-09 1254.55 50.2443 21-Apr-09 1362.45 33.745 19-Jun-09 1770.4 42.3367
13-Feb-09 1251.65 49.7903 22-Apr-09 1381.1 34.8622 22-Jun-09 1766.4 41.7105
16-Feb-09 1221.45 44.9314 23-Apr-09 1450.45 39.3619 23-Jun-09 1747.35 38.7698
17-Feb-09 1173.95 35.8671 24-Apr-09 1448.6 39.1674 24-Jun-09 1757.55 39.7673
18-Feb-09 1178.8 36.4357 27-Apr-09 1435.9 37.8976 25-Jun-09 1775 41.4619
19-Feb-09 1208.85 40.0926 28-Apr-09 1430.75 37.4057 25-Jun-09 1759.1 39.2724
20-Feb-09 1177.15 33.5607 29-Apr-09 1509.25 42.1294 26-Jun-09 1827.1 46.1234
24-Feb-09 1185.55 34.4859 4-May-09 1628.2 51.2328 29-Jun-09 1782.95 39.791
25-Feb-09 1217.45 38.1994 5-May-09 1582.05 47.1159 30-Jun-09 1776.5 38.8155
26-Feb-09 1236 40.5576 6-May-09 1573.25 46.3135 1-Jul-09 1795.2 40.5858
27-Feb-09 1231.25 39.6721 7-May-09 1552.75 44.4914 2-Jul-09 1796.65 40.7196
2-Mar-09 1219.05 37.4497 8-May-09 1520.7 41.6148 3-Jul-09 1805.15 41.4632
3-Mar-09 1197.6 33.4469 11-May-09 1517.65 41.3463 6-Jul-09 1761.2 46.2084
4-Mar-09 1199.2 33.5958 12-May-09 1598.45 46.6224 7-Jul-09 1737.9 32.6508
5-Mar-09 1181.95 30.4981 13-May-09 1573.95 44.6331 8-Jul-09 1706.4 28.1728
6-Mar-09 1219.35 33.6593 14-May-09 1567.2 44.1001 9-Jul-09 1677.55 23.8678

9-Mar-09 1202.05 30.5681 15-May-09 1592.8 45.6476 10-Jul-09 1721.15 26.0597

12-Mar-09 1227.8 32.6722 18-May-09 1800.1 62.0089 13-Jul-09 1770.1 28.8187
13-Mar-09 1297.05 39.4543 19-May-09 1558.95 38.0071 14-Jul-09 1811.8 31.4528
16-Mar-09 1287.8 37.8542 20-May-09 1530.9 33.467 15-Jul-09 1791.65 28.5212
17-Mar-09 1265.5 33.9465 21-May-09 1502.4 28.5287 16-Jul-09 1795.1 28.7165
18-Mar-09 1278.05 35.0999 22-May-09 1522.3 29.971 17-Jul-09 1866.3 33.0527
19-Mar-09 1297.2 36.8751 25-May-09 1511.05 28.0618 20-Jul-09 1971.4 41.6793
20-Mar-09 1296.2 36.7199 26-May-09 1547.65 30.5805 21-Jul-09 1943.15 37.6155
23-Mar-09 1331.3 39.9185 27-May-09 1588.15 33.6872 22-Jul-09 1919.8 34.0905
24-Mar-09 1320.75 38.4214 28-May-09 1579 32.2431 23-Jul-09 1958.75 37.3603
25-Mar-09 1338.95 40.0187 29-May-09 1605.1 34.2168 24-Jul-09 2003.65 41.6349
26-Mar-09 1379.15 43.7492 1-Jun-09 1676.5 40.5169 27-Jul-09 2027.9 44.1694
27-Mar-09 1344.9 39.2705 2-Jun-09 1688.65 41.731 28-Jul-09 1997.05 39.8436
30-Mar-09 1301.3 32.9611 3-Jun-09 1641.5 34.6775 29-Jul-09 1984.7 38.0595
31-Mar-09 1323.9 34.6961 4-Jun-09 1629.9 32.8196 30-Jul-09 2013.95 40.7151
1-Apr-09 1373.75 38.8889 5-Jun-09 1698.9 38.9361 31-Jul-09 2064.35 45.8315
2-Apr-09 1419.4 43.3427 8-Jun-09 1742.1 43.6673 3-Aug-09 2076.45 47.1525
Date Close RSI Date Close RSI Date Close RSI
4-Aug-09 2043.75 43.0321 5-Oct-09 2323.1 57.5454 3-Dec-09 2376.95 23.3826
5-Aug-09 2098.6 48.9801 6-Oct-09 2312.35 56.4255 4-Dec-09 2383.6 24.0711
6-Aug-09 2058.4 43.6824 7-Oct-09 2252.75 49.5788 7-Dec-09 2390.6 24.7845
7-Aug-09 2039.65 41.0305 8-Oct-09 2210.8 43.8081 8-Dec-09 2446.5 31.7652
10-Aug-09 2087.7 44.4823 9-Oct-09 2177.6 38.6479 9-Dec-09 2456.55 33.3325
11-Aug-09 2084.7 45.8119 12-Oct-09 2239.4 45.9399 10-Dec-09 2452.95 32.2202
12-Aug-09 2042.8 40.085 14-Oct-09 2255.85 48.1872 11-Dec-09 2460.75 33.3394
13-Aug-09 2063.8 42.1586 15-Oct-09 2217.4 42.0328 14-Dec-09 2498.75 39.555
14-Aug-09 2042.35 39.1742 16-Oct-09 2189.95 37.0782 15-Dec-09 2506.05 40.9157
17-Aug-09 1982.5 29.7884 17-Oct-09 2193.4 37.4518 16-Dec-09 2544.9 49.2963
18-Aug-09 1973.35 28.2159 20-Oct-09 2188.35 36.5833 17-Dec-09 2559 52.9514
19-Aug-09 1951.5 24.4646 21-Oct-09 2216.6 39.427 18-Dec-09 2525.95 43.8974
20-Aug-09 1990.45 26.7812 22-Oct-09 2213.15 38.8883 21-Dec-09 2510.1 38.639
21-Aug-09 2033.1 29.6344 23-Oct-09 2260 43.8002 22-Dec-09 2502.4 35.9301
24-Aug-09 2075.9 32.9006 26-Oct-09 2273.9 45.3792 23-Dec-09 2583.75 63.3805
25-Aug-09 2095 34.4752 27-Oct-09 2242.6 40.9261 24-Dec-09 2591.8 68.1658
26-Aug-09 2179.65 42.9306 28-Oct-09 2256.7 42.3711 29-Dec-09 2577.15 63.5101
27-Aug-09 2191.8 44.3813 29-Oct-09 2208.35 35.0715 30-Dec-09 2580 65.2335
28-Aug-09 2190.65 44.2156 30-Oct-09 2206.2 34.7302 31-Dec-09 2601.1 68.1936
31-Aug-09 2131.15 34.8986 3-Nov-09 2143.05 23.8039 4-Jan-10 2612.6 69.7232
1-Sep-09 2144.9 36.1959 4-Nov-09 2237.15 30.9797 5-Jan-10 2621.35 72.8573
2-Sep-09 2164.85 38.1042 5-Nov-09 2221.65 27.6434 6-Jan-10 2583.1 72.0384
3-Sep-09 2187.2 40.3152 6-Nov-09 2218.6 26.9987 7-Jan-10 2525.05 69.9473
4-Sep-09 2201.05 41.7079 9-Nov-09 2232.1 28.0251 8-Jan-10 2464.2 67.4659
7-Sep-09 2224.2 44.0707 10-Nov-09 2217.95 25.2596 11-Jan-10 2489.65 67.8935
8-Sep-09 2203.8 41.352 11-Nov-09 2306.75 32.5468 12-Jan-10 2586.95 66..1735
9-Sep-09 2189.7 39.4634 12-Nov-09 2326.4 34.5978 13-Jan-10 2683.5 65.3487
10-Sep-09 2240.3 44.2072 13-Nov-09 2359.7 38.4061 14-Jan-10 2689.75 65.4798

11-Sep-09 2267.4 47.0181 16-Nov-09 2351.95 36.9052 15-Jan-10 2675.8 63.7583

14-Sep-09 2250.15 44.9492 17-Nov-09 2398.3 42.681 18-Jan-10 2686.65 64.6484
15-Sep-09 2270.55 46.963 18-Nov-09 2433.3 47.9421 19-Jan-10 2635.9 60.4389
16-Sep-09 2320.05 52.2362 19-Nov-09 2409.95 43.6382 20-Jan-10 2657.7 58.7399
17-Sep-09 2361.9 57.2859 20-Nov-09 2426.7 46.1815 21-Jan-10 2625.2 55.7389
18-Sep-09 2364.25 57.5761 23-Nov-09 2406.95 42.5133 22-Jan-10 2575.6 51.8573
22-Sep-09 2410.15 63.4017 24-Nov-09 2434.7 46.6628 25-Jan-10 2542.3 49.3874
23-Sep-09 2366.95 59.8515 25-Nov-09 2438.55 47.2571 27-Jan-10 2502.25 46.7397
24-Sep-09 2284.45 51.5104 26-Nov-09 2393.45 38.7762 28-Jan-10 2491.75 41.7395
25-Sep-09 2240.5 45.9561 27-Nov-09 2327.85 21.7907 29-Feb10 2475.5 39.0946
29-Sep-09 2295.35 52.9902 30-Nov-09 2379.35 27.315
30-Sep-09 2306.4 54.5521 1-Dec-09 2395.75 29.5286
1-Oct-09 2336.75 58.9866 2-Dec-09 2395.4 29.4153
Graph No.15: RSI Indicator
INTERPRETATION:
When the RSI value crosses 80 , the prices were high .It indicates an over
bought conditions .There was a high selling pressure at this point and started falling
.At this point investors can make decision to sell.

When the RSI value falls below 20, prices were low. It indicates an oversold
condition .There was a high selling pressure at this point and the prices started
rising .At this point investors can make decision to buy.
2. STOCHASTICS:
The stochastic indicator was developed by George Lane in the early 1960's. It is
based on the observation that as price increases, closing price will be closer to day’s
high on an uptrend and on a downtrend, closing price will be closer to day’s low.
%K line and % D line are the two lines used in Stochastics. "Fast Stochastic" refers to
comparing Raw K and %K, while "Slow Stochastic" refers to comparing the slower
%K and %D values. However, it should be noted that there are a wide variety of
different names for the stochastic values. %K for share is calculated by using the
following formula.
% K = 100 [(C-Lx)/ (Hx-Lx)]
Where: C = Latest closing price, Ln = Lowest close for the last “x”days, Hn =
Highest close for the last “x” days .Since %K and %D are both moving averages, they
move more slowly than their underlying values and therefore present smoother lines.
The %D line moves the slowest because it is a moving average of a moving average.
20% and 80% are considered to be the bands of overbought and oversold areas (D
line).
Trading Uses
Stochastic can be used as both an overbought/oversold indicator and for cross-over

signals. The first alert comes when the %D line moves into the territory above 80 or

below 20. This indicates that the market has consistently rallied or sold-off versus its
9-day trading range and that the market movement may be overdone. It is next
necessary to analyze the data to determine if there is a divergence between the
movement of the stochastic values and the actual price of the instrument being
followed. The actual sell signal for this example occurs when the %K line crosses
over the %D line, especially on the right side of the %D line, i.e., after the %D line
has turned down. The stochastics system generally only has value when the market is
in an overbought or oversold condition, i.e., when the %K and %D values are over 80
or below 20. It is therefore a type of overbought/oversold indicator and care must be
taken when trading against a strong trend. According to Lane himself, the best use of
stochastics is to buy into an established uptrend and to sell into an established down
trend.
Table No.16: Calculations of Stochastics
Date %K %D Date %K %D Date %K %D

2-Feb-09 40.27539 36.97646 6-Apr-09 35.31489 66.3178 9-Jun-09 93.48371 59.68857
3-Feb-09 52.89855 34.18901 8-Apr-09 87.84389 66.46818 10-Jun-09 61.06667 36.83379
4-Feb-09 17.75544 44.154 9-Apr-09 75.79462 65.87757 11-Jun-09 24.51535 27.71643
5-Feb-09 31.91304 66.50475 13-Apr-09 35.76602 51.1127 12-Jun-09 24.91935 46.00444
6-Feb-09 82.79352 70.75596 15-Apr-09 86.07208 61.46 15-Jun-09 33.7146 55.49267
9-Feb-09 84.80769 72.47539 16-Apr-09 31.5 51.19273 16-Jun-09 79.37938 61.76156
10-Feb-09 44.66667 47.5098 17-Apr-09 66.80791 47.80829 17-Jun-09 53.38403 61.42392
11-Feb-09 87.95181 39.67755 20-Apr-09 55.27027 51.7954 18-Jun-09 52.52128 58.51597
12-Feb-09 9.910913 15.07446 21-Apr-09 21.3467 63.72048 19-Jun-09 78.36645 63.43268
13-Feb-09 21.16992 17.31605 22-Apr-09 78.76923 84.07607 22-Jun-09 44.66019 59.6698
16-Feb-09 14.14254 39.37159 23-Apr-09 91.0455 77.78145 23-Jun-09 67.27141 54.8734
17-Feb-09 16.63569 64.11385 24-Apr-09 82.41347 55.74998 24-Jun-09 67.0778 49.8775
18-Feb-09 87.33655 71.48728 27-Apr-09 59.88539 58.40482 25-Jun-09 56.7635 42.8765
19-Feb-09 88.3693 71.08477 28-Apr-09 24.95108 69.5599 25-Jun-09 21.97581 36.932
20-Feb-09 38.75598 68.18857 29-Apr-09 90.37801 75.41065 26-Jun-09 84.82353 44.55771
24-Feb-09 86.12903 85.26991 4-May-09 93.3506 59.11444 29-Jun-09 3.996656 37.91628
25-Feb-09 79.6807 83.44195 5-May-09 42.50335 45.5041 30-Jun-09 44.85294 63.6192
26-Feb-09 90 82.499 6-May-09 41.48936 40.64864 1-Jul-09 64.89926 76.71016
27-Feb-09 80.64516 59.73004 7-May-09 52.5196 45.06258 2-Jul-09 81.1054 60.31482
2-Mar-09 76.85185 50.14562 8-May-09 27.93696 58.73619 3-Jul-09 84.12582 39.25191
3-Mar-09 21.69312 28.83051 11-May-09 54.73118 60.97667 6-Jul-09 15.71325 22.59886
4-Mar-09 51.89189 47.7459 12-May-09 93.54043 63.48309 7-Jul-09 17.91667 23.65278
5-Mar-09 12.9065 45.82827 13-May-09 34.65839 55.44611 8-Jul-09 34.16667 35.53997
6-Mar-09 78.43931 54.01217 14-May-09 62.25045 61.16169 9-Jul-09 18.875 55.31639
9-Mar-09 46.139 59.58661 15-May-09 69.42949 41.88928 10-Jul-09 53.57824 78.41228
12-Mar-09 37.45819 62.59436 18-May-09 51.80513 24.34064 13-Jul-09 93.49593 78.40045

13-Mar-09 95.16264 60.60212 19-May-09 4.433198 12.57491 14-Jul-09 88.16267 65.77557

16-Mar-09 55.16224 40.638 20-May-09 16.78359 39.34898 15-Jul-09 53.54273 66.15653
17-Mar-09 31.48148 44.58228 21-May-09 16.50794 51.07595 16-Jul-09 55.6213 75.56211
18-Mar-09 35.27027 43.81067 22-May-09 84.7554 70.1861 17-Jul-09 89.30556 70.22003
19-Mar-09 66.99507 58.94404 25-May-09 51.96451 68.04609 20-Jul-09 81.75948 51.46794
20-Mar-09 29.16667 43.15694 26-May-09 73.83838 69.10353 21-Jul-09 39.59505 46.2757
23-Mar-09 80.67039 57.01088 27-May-09 78.33537 69.57407 22-Jul-09 33.0493 58.58995
24-Mar-09 19.63377 52.55548 28-May-09 55.13683 72.97898 23-Jul-09 66.18275 69.48211
25-Mar-09 70.72848 54.85807 29-May-09 75.25 73.60003 24-Jul-09 76.53779 61.42073
26-Mar-09 67.30419 50.04014 1-Jun-09 88.55009 58.46747 27-Jul-09 65.72581 61.0478
27-Mar-09 26.54155 47.22837 2-Jun-09 57 48.85435 28-Jul-09 41.9986 64.9667
30-Mar-09 56.27466 68.94419 3-Jun-09 29.85232 56.47935 29-Jul-09 75.41899 74.96335
31-Mar-09 58.86889 73.6051 4-Jun-09 59.71074 74.36191 30-Jul-09 77.48252 70.67083
1-Apr-09 91.68901 65.75376 5-Jun-09 79.875 85.61957 31-Jul-09 71.98853 56.25541
2-Apr-09 70.25739 64.47206 8-Jun-09 83.5 79.35013 3-Aug-09 62.54144 59.67291
Date %K %D Date %K %D Date %K %D
4-Aug-09 34.23627 49.0094 5-Oct-09 72.86203 47.3066 3-Dec-09 23.40619 26.26577
5-Aug-09 82.24101 52.36716 6-Oct-09 43.58795 32.50847 4-Dec-09 25.07042 49.67989
6-Aug-09 30.55092 44.28683 7-Oct-09 25.46983 21.30644 7-Dec-09 30.3207 70.09766
7-Aug-09 44.30956 50.75337 8-Oct-09 28.46764 42.87498 8-Dec-09 93.64855 82.16446
10-Aug-09 58 57.0646 9-Oct-09 9.981851 52.80135 9-Dec-09 86.32371 59.21422
11-Aug-09 49.95054 56.98109 12-Oct-09 90.17544 61.69434 10-Dec-09 66.52111 54.32977
12-Aug-09 63.24324 54.30526 14-Oct-09 58.24675 34.63006 11-Dec-09 24.79784 55.47821
13-Aug-09 57.74947 40.19444 15-Oct-09 36.66083 29.84639 14-Dec-09 71.67035 75.21418
14-Aug-09 41.92308 35.50811 16-Oct-09 8.982585 29.08444 15-Dec-09 69.96644 72.91137
17-Aug-09 20.91078 32.53375 17-Oct-09 43.89575 46.76822 16-Dec-09 84.00576 59.86195
18-Aug-09 43.69048 53.29573 20-Oct-09 34.375 44.57961 17-Dec-09 64.7619 48.19606
19-Aug-09 33 66.77668 21-Oct-09 62.0339 58.49916 18-Dec-09 30.81818 32.21436
20-Aug-09 83.19672 80.71496 22-Oct-09 37.32993 58.90669 21-Dec-09 49.00808 50.81068
21-Aug-09 84.13333 81.57457 23-Oct-09 76.13365 57.11976 22-Dec-09 16.81682 60.94893
24-Aug-09 74.81481 83.51004 26-Oct-09 63.25648 57.17035 23-Dec-09 86.60714 67.3036
25-Aug-09 85.77555 82.5349 27-Oct-09 31.96916 44.23232 24-Dec-09 79.42284 50.16962
26-Aug-09 89.93976 82.46093 28-Oct-09 76.28541 53.55721 29-Dec-09 35.88083 42.20108
27-Aug-09 71.8894 59.32453 29-Oct-09 24.44238 31.8119 30-Dec-09 35.20518 46.85944
28-Aug-09 85.55363 46.39008 30-Oct-09 59.94385 49.45652 31-Dec-09 55.51724 58.27253
31-Aug-09 20.53057 42.78887 3-Nov-09 11.04949 53.93691 4-Jan-10 49.85591 42.23821
1-Sep-09 33.08605 61.05548 4-Nov-09 77.37624 65.36834 5-Jan-10 69.44444 28.95778
2-Sep-09 74.75 74.28302 5-Nov-09 73.38501 66.32626 6-Jan-10 7.414272 8.974511
3-Sep-09 75.3304 76.97977 6-Nov-09 45.34378 50.21598 7-Jan-10 10.01462 23.49549
4-Sep-09 72.76867 57.0317 9-Nov-09 80.25 65.81567 8-Jan-10 9.49464 50.99061
7-Sep-09 82.84024 42.97628 10-Nov-09 25.05415 60.30698 11-Jan-10 50.9772 79.40187
8-Sep-09 15.48619 39.78255 11-Nov-09 92.14286 77.31908 12-Jan-10 92.5 87.42528
9-Sep-09 30.60241 64.22526 12-Nov-09 63.72392 60.69109 13-Jan-10 94.7284 75.40985
10-Sep-09 73.25905 74.73012 13-Nov-09 76.09047 68.33867 14-Jan-10 75.04744 73.88274
11-Sep-09 88.81432 79.40567 16-Nov-09 42.25888 68.67435 15-Jan-10 56.45372 53.20749
14-Sep-09 62.11699 80.00924 17-Nov-09 86.66667 81.49761 18-Jan-10 90.14706 53.04489

15-Sep-09 87.28571 87.34909 18-Nov-09 77.09751 75.16911 19-Jan-10 13.0217 35.97887

16-Sep-09 90.625 74.54377 19-Nov-09 80.72867 67.25144 20-Jan-10 55.96591 45.20152
17-Sep-09 84.13655 72.56768 20-Nov-09 67.68116 66.49663 21-Jan-10 38.949 42.13813
18-Sep-09 48.86975 50.97026 23-Nov-09 53.34448 62.19605 22-Jan-10 40.68966 40.85945
22-Sep-09 84.69676 44.8823 24-Nov-09 78.46425 55.6603 25-Jan-10 46.77575 32.71179
23-Sep-09 19.34426 20.81671 25-Nov-09 54.77941 37.37434 27-Jan-10 35.11294 41.87478
24-Sep-09 30.60587 41.91838 26-Nov-09 33.73724 41.8578 28-Jan-10 16.24668 30.17046
25-Sep-09 12.5 54.88582 27-Nov-09 23.60637 49.47779 29-Jan-10 74.26471 24.7549
29-Sep-09 82.64925 76.89419 30-Nov-09 68.22978 66.54233
30-Sep-09 69.5082 73.63178 1-Dec-09 56.59722 51.60114
1-Oct-09 78.52512 64.9917 2-Dec-09 74.8 41.09221
Graph No.16: Stochastics Indicator
INTERPRETATION
After the values of %K line crosses over the %D line (after the %D line has
turned down) the prices were declining .This point gives the investor a selling signal.
After the values of %K line crosses over the %D line (after the %D line has
turned up) the prices were rising .This point gives the investor a buying signal.

3. Williams % “R”:
Developed by Larry Williams, Williams %R is a momentum indicator that

works much like the Stochastic Oscillator. It is especially popular for measuring
overbought and oversold levels. The scale ranges from 0 to -100 with readings from 0
to -20 considered overbought, and readings from -80 to -100 considered oversold.
William %R, sometimes referred to as %R, shows the relationship of the close
relative to the high-low range over a set period of time. The nearer the close is to the
top of the range, the nearer to zero (higher) the indicator will be. The nearer the close
is to the bottom of the range, the nearer to -100 (lower) the indicator will be. If the
close equals the high of the high-low range, then the indicator will show 0 (the highest
reading). If the close equals the low of the high-low range, then the result will be -100
(the lowest reading).
General formula for William % R:
%R =((Highest high over ‘n’ periods – close)/(highest high over ‘n’ periods –
lowest low over ‘n’ periods))*-100
Typically, Williams’s %R is calculated using 14 periods and can be used on

intraday, daily, weekly or monthly data. The time frame and number of periods will
likely vary according to desired sensitivity and the characteristics of the individual
security.

It is important to remember that overbought does not necessarily imply time to

sell and oversold does not necessarily imply time to buy. A security can be in a
downtrend, become oversold and remain oversold as the price continues to trend
lower. Once a security becomes overbought or oversold, traders should wait for a
signal that a price reversal has occurred. One method might be to wait for Williams
%R to cross above or below -50 for confirmation. Price reversal confirmation can also
be accomplished by using other indicators or aspects of technical analysis in
conjunction with Williams %R.
One method of using Williams %R might be to identify the underlying trend and
then look for trading opportunities in the direction of the trend. In an uptrend, traders
may look to oversold readings to establish long positions. In a downtrend, traders may
look to overbought readings to establish short positions.
 28 days %R is preferable over 14 day’s %R because of the following reasons:
 14-day %R appears quite choppy and prone to false signals.
 28-day %R smoothed the data series and the signals became less frequent and
more reliable.
 When the 28-day %R moved to overbought or oversold levels, it typically

remained there for an extended period and the stock continued its trend.
 Some good entry signals were given with the 28-day %R by waiting for a
move above or below -50 for confirmation.

Table No.17: Calculations of Williams %R
Date Close %R Date Close %R Date Close %R

2-Feb-09 1279.65 78.36871 6-Apr-09 1414.05 67.4164 9-Jun-09 1794.8 70.48497
3-Feb-09 1282.5 79.72812 8-Apr-09 1425.15 57.47126 10-Jun-09 1808.8 78.81583
4-Feb-09 1281.65 79.32268 9-Apr-09 1427 37.78109 11-Jun-09 1750.95 18.95084
5-Feb-09 1255.85 67.01646 13-Apr-09 1409.3 32.50931 12-Jun-09 1728.45 13.23511
6-Feb-09 1288.9 82.78083 15-Apr-09 1370.6 20.98287 15-Jun-09 1715.1 9.84377
9-Feb-09 1312.1 93.84689 16-Apr-09 1345.2 7.977208 16-Jun-09 1724.65 12.26978
10-Feb-09 1308.4 92.08204 17-Apr-09 1397.3 16.54425 17-Jun-09 1711.45 8.91655
11-Feb-09 1301.9 98.4173 20-Apr-09 1393.45 13.68815 18-Jun-09 1725.75 10.4332
12-Feb-09 1254.55 77.484 21-Apr-09 1362.45 2.652189 19-Jun-09 1770.4 18.80759
13-Feb-09 1251.65 82.8068 22-Apr-09 1381.1 9.129815 22-Jun-09 1766.4 20.10526
16-Feb-09 1221.45 73.34946 23-Apr-09 1450.45 33.64937 23-Jun-09 1747.35 19.3375
17-Feb-09 1173.95 47.01163 24-Apr-09 1448.6 19.04041 24-Jun-09 1757.55 22.85185
18-Feb-09 1178.8 45.16014 27-Apr-09 1435.9 4.214559 25-Jun-09 1775 27.16049
19-Feb-09 1208.85 41.01651 28-Apr-09 1430.75 2.586732 25-Jun-09 1759.1 23.23457
20-Feb-09 1177.15 20.09524 29-Apr-09 1509.25 16.41869 26-Jun-09 1827.1 40.02469
24-Feb-09 1185.55 25.42857 4-May-09 1628.2 32.51373 29-Jun-09 1782.95 29.12346
25-Feb-09 1217.45 43.53135 5-May-09 1582.05 22.77797 30-Jun-09 1776.5 53.34928
26-Feb-09 1236 53.11125 6-May-09 1573.25 20.71152 1-Jul-09 1795.2 39.57447
27-Feb-09 1231.25 46.39325 7-May-09 1552.75 15.89762 2-Jul-09 1796.65 40.0152
2-Mar-09 1219.05 35.84505 8-May-09 1520.7 8.371492 3-Jul-09 1805.15 42.59878
3-Mar-09 1197.6 22.08383 11-May-09 1517.65 7.655278 6-Jul-09 1761.2 29.24012
4-Mar-09 1199.2 22.8503 12-May-09 1598.45 26.62909 7-Jul-09 1737.9 20.71023
5-Mar-09 1181.95 12.39821 13-May-09 1573.95 20.8759 8-Jul-09 1706.4 10.8976
6-Mar-09 1219.35 27.62622 14-May-09 1567.2 19.29083 9-Jul-09 1677.55 3.303501
9-Mar-09 1202.05 5.772947 15-May-09 1592.8 25.30234 10-Jul-09 1721.15 14.78021
12-Mar-09 1227.8 9.027405 18-May-09 1800.1 73.98145 13-Jul-09 1770.1 20.06981
13-Mar-09 1297.05 36.31445 19-May-09 1558.95 23.84256 14-Jul-09 1811.8 18.51174
16-Mar-09 1287.8 17.30337 20-May-09 1530.9 17.1755 15-Jul-09 1791.65 10.83038
17-Mar-09 1265.5 4.009434 21-May-09 1502.4 5.508811 16-Jul-09 1795.1 8.63706

18-Mar-09 1278.05 6.397059 22-May-09 1522.3 10.5539 17-Jul-09 1866.3 21.08197

19-Mar-09 1297.2 15.51512 25-May-09 1511.05 5.793415 20-Jul-09 1971.4 42.76066
20-Mar-09 1296.2 15.02336 26-May-09 1547.65 10.9661 21-Jul-09 1943.15 23.5596
23-Mar-09 1331.3 32.28424 27-May-09 1588.15 21.60012 22-Jul-09 1919.8 12.21048
24-Mar-09 1320.75 27.09614 28-May-09 1579 18.80067 23-Jul-09 1958.75 19.87179
25-Mar-09 1338.95 36.04623 29-May-09 1605.1 11.17298 24-Jul-09 2003.65 34.80679
26-Mar-09 1379.15 55.8151 1-Jun-09 1676.5 31.0189 27-Jul-09 2027.9 49.00468
27-Mar-09 1344.9 38.97222 2-Jun-09 1688.65 36.01068 28-Jul-09 1997.05 30.94262
30-Mar-09 1301.3 17.53135 3-Jun-09 1641.5 16.63928 29-Jul-09 1984.7 23.71194
31-Mar-09 1323.9 14.06574 4-Jun-09 1629.9 11.87346 30-Jul-09 2013.95 36.84375
1-Apr-09 1373.75 43.58898 5-Jun-09 1698.9 30.51576 31-Jul-09 2064.35 71.86111
2-Apr-09 1419.4 70.62481 8-Jun-09 1742.1 39.12526 3-Aug-09 2076.45 78.58333
Date Close %R Date Close %R Date Close %R

4-Aug-09 2043.75 60.41667 5-Oct-09 2323.1 84.13978 3-Dec-09 2376.95 6.182343
5-Aug-09 2098.6 90.88889 6-Oct-09 2312.35 78.36022 4-Dec-09 2383.6 5.939933
6-Aug-09 2058.4 68.55556 7-Oct-09 2252.75 53.34365 7-Dec-09 2390.6 6.933333
7-Aug-09 2039.65 41.36364 8-Oct-09 2210.8 33.14586 8-Dec-09 2446.5 29.92108
10-Aug-09 2087.7 56.7658 9-Oct-09 2177.6 8.248969 9-Dec-09 2456.55 18.31248
11-Aug-09 2084.7 55.65056 12-Oct-09 2239.4 61.62864 10-Dec-09 2452.95 12.42523
12-Aug-09 2042.8 40.07435 14-Oct-09 2255.85 74.03591 11-Dec-09 2460.75 5.946096
13-Aug-09 2063.8 47.88104 15-Oct-09 2217.4 51.39829 14-Dec-09 2498.75 26.95821
14-Aug-09 2042.35 39.90706 16-Oct-09 2189.95 35.23697 15-Dec-09 2506.05 14.20606
17-Aug-09 1982.5 17.65799 17-Oct-09 2193.4 37.26818 16-Dec-09 2544.9 33.04242
18-Aug-09 1973.35 13.64769 20-Oct-09 2188.35 34.29497 17-Dec-09 2559 44.88889
19-Aug-09 1951.5 5.59322 21-Oct-09 2216.6 50.92729 18-Dec-09 2525.95 30.2
20-Aug-09 1990.45 10.91398 22-Oct-09 2213.15 44.91617 21-Dec-09 2510.1 23.15556
21-Aug-09 2033.1 23.45725 23-Oct-09 2260 59.34217 22-Dec-09 2502.4 18.73418
24-Aug-09 2075.9 19.03211 26-Oct-09 2273.9 58.83797 23-Dec-09 2583.75 51.34749
25-Aug-09 2095 25.01042 27-Oct-09 2242.6 45.99346 24-Dec-09 2591.8 54.63454
26-Aug-09 2179.65 43.93761 28-Oct-09 2256.7 46.08664 29-Dec-09 2577.15 48.65251
27-Aug-09 2191.8 46.32258 29-Oct-09 2208.35 24.97606 30-Dec-09 2580 49.81625
28-Aug-09 2190.65 34.46341 30-Oct-09 2206.2 24.28982 31-Dec-09 2601.1 58.43201
31-Aug-09 2131.15 4.463571 3-Nov-09 2143.05 4.060834 4-Jan-10 2612.6 63.12781
1-Sep-09 2144.9 9.291045 4-Nov-09 2237.15 26.94828 5-Jan-10 2621.35 66.70069
2-Sep-09 2164.85 14.90033 5-Nov-09 2221.65 19.98944 6-Jan-10 2583.1 51.08207
3-Sep-09 2187.2 17.99369 6-Nov-09 2218.6 9.850633 7-Jan-10 2525.05 27.37852
4-Sep-09 2201.05 15.3713 9-Nov-09 2232.1 12.49027 8-Jan-10 2464.2 2.531646
7-Sep-09 2224.2 19.34426 10-Nov-09 2217.95 6.766771 11-Jan-10 2489.65 28.4636
8-Sep-09 2203.8 10.98361 11-Nov-09 2306.75 39.17004 12-Jan-10 2586.95 61.10366
9-Sep-09 2189.7 5.204918 12-Nov-09 2326.4 23.3118 13-Jan-10 2683.5 93.49212
10-Sep-09 2240.3 15.22402 13-Nov-09 2359.7 35.09006 14-Jan-10 2689.75 95.58873
11-Sep-09 2267.4 27.93807 16-Nov-09 2351.95 29.91995 15-Jan-10 2675.8 94.19534
14-Sep-09 2250.15 11.54543 17-Nov-09 2398.3 60.84056 18-Jan-10 2686.65 98.82539
15-Sep-09 2270.55 22.44845 18-Nov-09 2433.3 84.18946 19-Jan-10 2635.9 81.60311

16-Sep-09 2320.05 56.44013 19-Nov-09 2409.95 68.61241 20-Jan-10 2657.7 94.22504

17-Sep-09 2361.9 76.76887 20-Nov-09 2426.7 77.2111 21-Jan-10 2625.2 84.80185
18-Sep-09 2364.25 77.69261 23-Nov-09 2406.95 63.45726 22-Jan-10 2575.6 83.23587
22-Sep-09 2410.15 95.73506 24-Nov-09 2434.7 70.28367 25-Jan-10 2542.3 83.25764
23-Sep-09 2366.95 84.44679 25-Nov-09 2438.55 62.32812 27-Jan-10 2502.25 64.92338
24-Sep-09 2284.45 63.36022 26-Nov-09 2393.45 40.94358 28-Jan-10 2491.75 57.92805
25-Sep-09 2240.5 39.73118 27-Nov-09 2327.85 8.336681 29-Jan-10 2475.5 74.26471
29-Sep-09 2295.35 69.22043 30-Nov-09 2379.35 13.12585
30-Sep-09 2306.4 75.16129 1-Dec-09 2395.75 18.78313
1-Oct-09 2336.75 91.47849 2-Dec-09 2395.4 17.48072
Graph No.17: Williams %R Indicator
INTERPRETATION
When the values of %R ranges between 0 and -20 the prices were high. It
indicates an over bought condition. There was a high selling pressure. Actual selling
decision should be made only after %R values crosses below -50.

When the values of %r ranges between -80 and -100 the prices were low .It
indicates an oversold condition. There was a high buying pressure but the actual
buying decision should be made only after %R values crosses above -50.
5. SIMPLE MOVING AVERAGE ( SMA)
A simple moving average is formed by computing the average (mean) price of a

security over a specified number of periods. While it is possible to create moving
averages from the Open, the High, and the Low data points, most moving averages are
created using the closing price.
An average is the sum of prices of a share for a specific number of days

divided by number of days. In a simple moving average , a set of averages are
calculated for a specific number of days , each average being calculated by including a
new price and excluding an old price.
The merit of this type of moving average system (i.e., buying and selling when
prices penetrate their moving average) is that you will always be on the "right" side of
the market--prices cannot rise very much without the price rising above its average
price. The disadvantage is that you will always buy and sell late. If the trend doesn't
last for a significant period of time, typically twice the length of the moving average,
you'll lose money.

Table No.18: Calculations of Simple Moving Average
Date Close SMA Date Close SMA Date Close SMA

2-Feb-09 1279.65 1257.157 6-Apr-09 1414.05 1406.521 9-Jun-09 1794.8 1752.554
3-Feb-09 1282.5 1249.836 8-Apr-09 1425.15 1413.321 10-Jun-09 1808.8 1754.861
4-Feb-09 1281.65 1242.911 9-Apr-09 1427 1427.825 11-Jun-09 1750.95 1753.014
5-Feb-09 1255.85 1238.325 13-Apr-09 1409.3 1438.9 12-Jun-09 1728.45 1754.839
6-Feb-09 1288.9 1236.907 15-Apr-09 1370.6 1450.611 15-Jun-09 1715.1 1759.607

9-Feb-09 1312.1 1232.789 16-Apr-09 1345.2 1463.621 16-Jun-09 1724.65 1765.432
10-Feb-09 1308.4 1226.143 17-Apr-09 1397.3 1476.157 17-Jun-09 1711.45 1771.182
11-Feb-09 1301.9 1218.229 20-Apr-09 1393.45 1484.754 18-Jun-09 1725.75 1774.736
12-Feb-09 1254.55 1210.893 21-Apr-09 1362.45 1499.396 19-Jun-09 1770.4 1775.604
13-Feb-09 1251.65 1205.707 22-Apr-09 1381.1 1514.504 22-Jun-09 1766.4 1771.032
16-Feb-09 1221.45 1203.4 23-Apr-09 1450.45 1527.796 23-Jun-09 1747.35 1764.686
17-Feb-09 1173.95 1202.014 24-Apr-09 1448.6 1537.964 24-Jun-09 1757.55 1762.814
18-Feb-09 1178.8 1205.861 27-Apr-09 1435.9 1563.071 25-Jun-09 1775 1763.711
19-Feb-09 1208.85 1214.307 28-Apr-09 1430.75 1571.861 25-Jun-09 1759.1 1766.339
20-Feb-09 1177.15 1219.946 29-Apr-09 1509.25 1579.014 26-Jun-09 1827.1 1768.664
24-Feb-09 1185.55 1226.257 4-May-09 1628.2 1578.525 29-Jun-09 1782.95 1766.379
25-Feb-09 1217.45 1232.864 5-May-09 1582.05 1570.961 30-Jun-09 1776.5 1772.332
26-Feb-09 1236 1238.561 6-May-09 1573.25 1565.889 1-Jul-09 1795.2 1786.254
27-Feb-09 1231.25 1242.861 7-May-09 1552.75 1564.061 2-Jul-09 1796.65 1796.821
2-Mar-09 1219.05 1250.007 8-May-09 1520.7 1566.589 3-Jul-09 1805.15 1805.618
3-Mar-09 1197.6 1257.271 11-May-09 1517.65 1570.754 6-Jul-09 1761.2 1816.589
4-Mar-09 1199.2 1267.368 12-May-09 1598.45 1577 7-Jul-09 1737.9 1833.907
5-Mar-09 1181.95 1280.221 13-May-09 1573.95 1582.575 8-Jul-09 1706.4 1854.621
6-Mar-09 1219.35 1291.861 14-May-09 1567.2 1590.768 9-Jul-09 1677.55 1875.382
9-Mar-09 1202.05 1297.714 15-May-09 1592.8 1596.075 10-Jul-09 1721.15 1897.321

12-Mar-09 1227.8 1306.418 18-May-09 1800.1 1598.725 13-Jul-09 1770.1 1918.236

13-Mar-09 1297.05 1316.843 19-May-09 1558.95 1591.496 14-Jul-09 1811.8 1939.254
16-Mar-09 1287.8 1325.582 20-May-09 1530.9 1604.579 15-Jul-09 1791.65 1958.157
17-Mar-09 1265.5 1334.6 21-May-09 1502.4 1623.429 16-Jul-09 1795.1 1976.164
18-Mar-09 1278.05 1346.004 22-May-09 1522.3 1645.314 17-Jul-09 1866.3 1997.843
19-Mar-09 1297.2 1356.643 25-May-09 1511.05 1661.646 20-Jul-09 1971.4 2011.564
20-Mar-09 1296.2 1364.65 26-May-09 1547.65 1677.175 21-Jul-09 1943.15 2016.439
23-Mar-09 1331.3 1369.964 27-May-09 1588.15 1689.136 22-Jul-09 1919.8 2026.764
24-Mar-09 1320.75 1370.957 28-May-09 1579 1698.886 23-Jul-09 1958.75 2038.543
25-Mar-09 1338.95 1376.425 29-May-09 1605.1 1708.346 24-Jul-09 2003.65 2044.546
26-Mar-09 1379.15 1380.318 1-Jun-09 1676.5 1716.964 27-Jul-09 2027.9 2048.843
27-Mar-09 1344.9 1379.125 2-Jun-09 1688.65 1723.671 28-Jul-09 1997.05 2049.875
30-Mar-09 1301.3 1381.711 3-Jun-09 1641.5 1729.225 29-Jul-09 1984.7 2048.836
31-Mar-09 1323.9 1392.364 4-Jun-09 1629.9 1736.786 30-Jul-09 2013.95 2048.025
1-Apr-09 1373.75 1401.271 5-Jun-09 1698.9 1745.904 31-Jul-09 2064.35 2043.564
2-Apr-09 1419.4 1405.711 8-Jun-09 1742.1 1751.339 3-Aug-09 2076.45 2038.286
Date Close SMA Date Close SMA Date Close SMA
4-Aug-09 2043.75 2035.189 5-Oct-09 2323.1 2232.193 3-Dec-09 2376.95 2472.504
5-Aug-09 2098.6 2037.486 6-Oct-09 2312.35 2228.679 4-Dec-09 2383.6 2487.275
6-Aug-09 2058.4 2037.229 7-Oct-09 2252.75 2223.696 7-Dec-09 2390.6 2502.146
7-Aug-09 2039.65 2045.889 8-Oct-09 2210.8 2223.979 8-Dec-09 2446.5 2515.471
10-Aug-09 2087.7 2056.757 9-Oct-09 2177.6 2223.804 9-Dec-09 2456.55 2525.007
11-Aug-09 2084.7 2064.111 12-Oct-09 2239.4 2225.846 10-Dec-09 2452.95 2535.332
12-Aug-09 2042.8 2067.429 14-Oct-09 2255.85 2218.964 11-Dec-09 2460.75 2546.736
13-Aug-09 2063.8 2074.721 15-Oct-09 2217.4 2217.629 14-Dec-09 2498.75 2558.207
14-Aug-09 2042.35 2081.939 16-Oct-09 2189.95 2217.932 15-Dec-09 2506.05 2564.232
17-Aug-09 1982.5 2092.286 17-Oct-09 2193.4 2219.979 16-Dec-09 2544.9 2565.589
18-Aug-09 1973.35 2107.896 20-Oct-09 2188.35 2222.743 17-Dec-09 2559 2559.825
19-Aug-09 1951.5 2125.814 21-Oct-09 2216.6 2224.857 18-Dec-09 2525.95 2554.871
20-Aug-09 1990.45 2143.836 22-Oct-09 2213.15 2231.296 21-Dec-09 2510.1 2559.229
21-Aug-09 2033.1 2158.068 23-Oct-09 2260 2239.386 22-Dec-09 2502.4 2571.614
24-Aug-09 2075.9 2172.868 26-Oct-09 2273.9 2246.507 23-Dec-09 2583.75 2584.996
25-Aug-09 2095 2186.546 27-Oct-09 2242.6 2252.082 24-Dec-09 2591.8 2591.571
26-Aug-09 2179.65 2197.629 28-Oct-09 2256.7 2263.204 29-Dec-09 2577.15 2598.346
27-Aug-09 2191.8 2204.121 29-Oct-09 2208.35 2275.818 30-Dec-09 2580 2602.543
28-Aug-09 2190.65 2213.282 30-Oct-09 2206.2 2290.218 31-Dec-09 2601.1 2608.093
31-Aug-09 2131.15 2225.514 3-Nov-09 2143.05 2305.968 4-Jan-10 2612.6 2609.814
1-Sep-09 2144.9 2242.164 4-Nov-09 2237.15 2324.818 5-Jan-10 2621.35 2607.171
2-Sep-09 2164.85 2261.111 5-Nov-09 2221.65 2338.929 6-Jan-10 2583.1 2601.525
3-Sep-09 2187.2 2275.546 6-Nov-09 2218.6 2354.421 7-Jan-10 2525.05 2595.75
4-Sep-09 2201.05 2282.493 9-Nov-09 2232.1 2366.911 8-Jan-10 2464.2 2593.371
7-Sep-09 2224.2 2285.311 10-Nov-09 2217.95 2373.75 11-Jan-10 2489.65 2594.179
8-Sep-09 2203.8 2290.393 11-Nov-09 2306.75 2385.279 12-Jan-10 2586.95 2653.4
9-Sep-09 2189.7 2297.721 12-Nov-09 2326.4 2391.636 13-Jan-10 2683.5 2683.017
10-Sep-09 2240.3 2308.225 13-Nov-09 2359.7 2396.564 14-Jan-10 2689.75 2684.067
11-Sep-09 2267.4 2314.139 16-Nov-09 2351.95 2397.796 15-Jan-10 2675.8 2666.117

14-Sep-09 2250.15 2317.35 17-Nov-09 2398.3 2400.057 18-Jan-10 2686.65 2660.083

15-Sep-09 2270.55 2317.536 18-Nov-09 2433.3 2399.507 19-Jan-10 2635.9 2639.6
16-Sep-09 2320.05 2313.268 19-Nov-09 2409.95 2400.45 20-Jan-10 2657.7 2619.5
17-Sep-09 2361.9 2303.093 20-Nov-09 2426.7 2403.779 21-Jan-10 2625.2 2581.033
18-Sep-09 2364.25 2294.343 23-Nov-09 2406.95 2405.654 22-Jan-10 2575.6 2540.05
22-Sep-09 2410.15 2286.6 24-Nov-09 2434.7 2409.496 25-Jan-10 2542.3 2512.1
23-Sep-09 2366.95 2272.832 25-Nov-09 2438.55 2414.071 27-Jan-10 2502.25 2489.833
24-Sep-09 2284.45 2260.189 26-Nov-09 2393.45 2418.893 28-Jan-10 2491.75 2484.564
25-Sep-09 2240.5 2253.686 27-Nov-09 2327.85 2429.711 29-Jan-10 2475.5 2481.703
29-Sep-09 2295.35 2249.961 30-Nov-09 2379.35 2446.221
30-Sep-09 2306.4 2244.336 1-Dec-09 2395.75 2456.693
1-Oct-09 2336.75 2237.675 2-Dec-09 2395.4 2464.861
Graph No.18: Simple Moving average indicator
INTERPRETATION
When the SMA is moving up it shows a strong buying pressure and also the
prices are increasing. It is the right time for the investor to buy.
When the SMA is moving down it shows a strong selling pressure and also the
prices are declining. It is the right time for the investor to sell.

6. Moving Average Convergence /Divergence (MACD)
The MACD is calculated by subtracting a 26-day moving average of a security's

price from a 12-day moving average of its price. The result is an indicator that
oscillates above and below zero.
When the MACD is above zero, it means the 12-day moving average is higher
than the 26-day moving average. This is bullish as it shows that current expectations
(i.e., the 12-day moving average) are more bullish than previous expectations (i.e., the
26-day average). This implies a bullish, or upward, shift in the supply/demand lines.
When the MACD falls below zero, it means that the 12-day moving average is less
than the 26-day moving average, implying a bearish shift in the supply/demand lines.
A 9-day moving average of the MACD (not of the security's price) is usually
plotted on top of the MACD indicator. This line is referred to as the "signal" line. The
signal line anticipates the convergence of the two moving averages (i.e., the
movement of the MACD toward the zero line).
The MACD is the difference between two moving averages of price. When
the shorter-term moving average rises above the longer-term moving average (i.e., the
MACD rises above zero), it means that investor expectations are becoming more
bullish (i.e., there has been an upward shift in the supply/demand lines). By plotting a
9-day moving average of the MACD, we can see the changing of expectations (i.e.,
the shifting of the supply/demand lines) as they occur.

Table No.19:Calculations of MACD
Date 12MAvg 26MAvg Signal Date 12MAvg 26MAvg Signal

24-Mar-09 1229.394 -37.6896 -4.66319 28-May-09 1529.119 -43.7521 -66.2538
25-Mar-09 1232.592 -47.575 -9.43117 29-May-09 1538.523 -36.9437 -62.9971
26-Mar-09 1235.471 -58.0125 -14.8291 1-Jun-09 1546.769 -37.8062 -60.1981
27-Mar-09 1240.367 -65.0208 -20.406 2-Jun-09 1553.213 -39.35 -57.8817
30-Mar-09 1248.917 -62.5958 -25.0937 3-Jun-09 1562.708 -16.6375 -53.299
31-Mar-09 1255.838 -57.9125 -28.7403 4-Jun-09 1573.24 -12.0188 -48.7123
1-Apr-09 1259.69 -61.2229 -32.3494 5-Jun-09 1582.021 -17.2375 -45.2151
2-Apr-09 1265.804 -67.9333 -36.3032 8-Jun-09 1587.048 -32.1854 -43.7674
6-Apr-09 1273.646 -71.425 -40.2056 9-Jun-09 1589.994 -51.9479 -44.6763
8-Apr-09 1282.06 -73.6729 -43.9242 10-Jun-09 1596.663 -70.0917 -47.5002
9-Apr-09 1289.479 -77.1542 -47.6164 11-Jun-09 1605.894 -77.8021 -50.8671
13-Apr-09 1297.558 -75.575 -50.7229 12-Jun-09 1616.563 -78.825 -53.9735
15-Apr-09 1306.223 -71.0646 -52.9831 15-Jun-09 1626.156 -80.5729 -56.929
16-Apr-09 1315.044 -62.7646 -54.07 16-Jun-09 1634.94 -81.7521 -59.6871
17-Apr-09 1322.185 -57.1354 -54.4106 17-Jun-09 1639.8 -79.8042 -61.9224
20-Apr-09 1328.988 -54.3792 -54.4071 18-Jun-09 1646.079 -76.6167 -63.5551
21-Apr-09 1336.402 -52.0604 -54.1463 19-Jun-09 1652.09 -81.3479 -65.5321
22-Apr-09 1344.377 -48.8521 -53.5581 22-Jun-09 1657.629 -87.1833 -67.9377
23-Apr-09 1349.988 -49.6333 -53.122 23-Jun-09 1656.392 -92.4583 -70.6623
24-Apr-09 1353.49 -48.5646 -52.6156 24-Jun-09 1665.035 -85.1021 -72.2667
27-Apr-09 1360.267 -43.6083 -51.6148 25-Jun-09 1674.054 -74.4333 -72.5074
28-Apr-09 1367.896 -36.4458 -49.9294 25-Jun-09 1684.685 -59.6604 -71.08
29-Apr-09 1374.473 -36.7229 -48.462 26-Jun-09 1695.215 -55.4771 -69.3463
4-May-09 1380.038 -49.4 -48.5662 29-Jun-09 1705.55 -49.6833 -67.1615
5-May-09 1388.915 -58.1438 -49.6304 30-Jun-09 1717.194 -43.1563 -64.4943
6-May-09 1401.285 -64.7771 -51.3133 1-Jul-09 1725.31 -40.9188 -61.8748
7-May-09 1412.173 -66.8437 -53.0389 2-Jul-09 1733.54 -39.7896 -59.4209
8-May-09 1421.935 -67.6854 -54.6663 3-Jul-09 1741.46 -38.4854 -57.0947
11-May-09 1429.169 -73.3854 -56.7462 6-Jul-09 1746.467 -32.7125 -54.3856

12-May-09 1436.494 -84.1729 -59.7936 7-Jul-09 1751.321 -25.4833 -51.1742

13-May-09 1445.508 -85.45 -62.6443 8-Jul-09 1756.308 -17.0833 -47.3863
14-May-09 1456.948 -83.8938 -65.0054 9-Jul-09 1760.808 -5.91667 -42.7786
15-May-09 1465.29 -88.6271 -67.63 10-Jul-09 1761.121 -1.11667 -38.1495
18-May-09 1471.448 -113.248 -72.6987 13-Jul-09 1758.431 -4.72292 -34.4354
19-May-09 1478.896 -109.942 -76.8368 14-Jul-09 1755.363 -6.51667 -31.3333
20-May-09 1494.519 -86.2104 -77.8783 15-Jul-09 1753.75 -8.85417 -28.8357
21-May-09 1500.017 -74.075 -77.4557 16-Jul-09 1756.285 -7.86875 -26.506
22-May-09 1505.083 -64.7625 -76.0454 17-Jul-09 1758.919 -11.1604 -24.8009
25-May-09 1510.575 -55.7958 -73.7954 20-Jul-09 1762.252 -22.3896 -24.533
26-May-09 1517.954 -50.6625 -71.2251 21-Jul-09 1768.154 -27.9875 -24.9168
27-May-09 1522.694 -51.7979 -69.0665 22-Jul-09 1778.985 -30.3729 -25.5231
23-Jul-09 1788.044 -39.7187 -27.1004 18-Sep-09 2145.898 -110.815 -78.3716
24-Jul-09 1794.269 -58.2646 -30.5631 22-Sep-09 2159.213 -116.079 -82.5614
27-Jul-09 1802.283 -79.4458 -35.9945 23-Sep-09 2175.119 -113.998 -86.0543
28-Jul-09 1812.963 -91.7583 -42.1905 24-Sep-09 2193.319 -100.819 -87.6948
29-Jul-09 1824.227 -98.3771 -48.4334 25-Sep-09 2210.629 -86.5667 -87.5695
30-Jul-09 1833.479 -105.971 -54.8265 29-Sep-09 2222.879 -83.1208 -87.0752
31-Jul-09 1842.879 -119.296 -61.9897 30-Sep-09 2231.521 -79.9875 -86.2876
3-Aug-09 1850.665 -134.956 -70.0971 1-Oct-09 2240.665 -76.6229 -85.2138
4-Aug-09 1862.39 -138.019 -77.644 5-Oct-09 2249.473 -73.8937 -83.956
5-Aug-09 1874.888 -136.121 -84.1414 6-Oct-09 2256.019 -70.8313 -82.4977
6-Aug-09 1885.244 -135.369 -89.8333 7-Oct-09 2261.49 -59.7521 -79.9704
7-Aug-09 1897.825 -132.775 -94.6046 8-Oct-09 2266.56 -42.0896 -75.7614
10-Aug-09 1908.377 -132.969 -98.8673 9-Oct-09 2271.627 -21.4687 -69.7289
11-Aug-09 1919.979 -128.121 -102.118 12-Oct-09 2274.373 -4.49375 -62.4806
12-Aug-09 1934.554 -114.788 -103.525 14-Oct-09 2274.904 5.295833 -54.9498
13-Aug-09 1950.317 -104.588 -103.643 15-Oct-09 2277.079 13.05833 -47.3934
14-Aug-09 1965.535 -94.1729 -102.591 16-Oct-09 2279.363 19.55417 -39.9548
17-Aug-09 1979.813 -77.275 -99.7783 17-Oct-09 2279.079 27.76667 -32.4302
18-Aug-09 1991.156 -58.3479 -95.1749 20-Oct-09 2278.502 37.02708 -24.7127
19-Aug-09 1998.269 -40.8229 -89.1358 21-Oct-09 2278.656 47.19375 -16.7231
20-Aug-09 2005.84 -28.8104 -82.433 22-Oct-09 2276.492 54.19167 -8.84367
21-Aug-09 2012.356 -16.8354 -75.1444 23-Oct-09 2274.375 56.4375 -1.59021
24-Aug-09 2017.529 -13.1208 -68.2528 26-Oct-09 2272.833 53.13333 4.490187
25-Aug-09 2020.1 -15.1625 -62.3539 27-Oct-09 2272.394 50.04375 9.551694
26-Aug-09 2025.631 -17.2938 -57.3472 28-Oct-09 2270.471 41.52917 13.10475
27-Aug-09 2032.931 -18.9188 -53.0774 29-Oct-09 2265.5 39.14583 15.9982
28-Aug-09 2042.135 -22.0354 -49.6283 30-Oct-09 2261.019 38.80208 18.53197
31-Aug-09 2049.975 -19.8083 -46.315 3-Nov-09 2252.61 36.58958 20.53837
1-Sep-09 2056.756 -21.5729 -43.5658 4-Nov-09 2245.913 25.95833 21.14059
2-Sep-09 2062.344 -31.1813 -42.1898 5-Nov-09 2240.021 17.7125 20.75969
3-Sep-09 2069.019 -42.3271 -42.205 6-Nov-09 2239.881 15.05208 20.12551
4-Sep-09 2075.306 -56.8354 -43.8306 9-Nov-09 2236.81 10.68958 19.07707
7-Sep-09 2080.425 -71.1958 -46.8712 10-Nov-09 2233.152 6.63125 17.6942

8-Sep-09 2085.617 -80.2292 -50.5777 11-Nov-09 2228.792 -1.625 15.54763

9-Sep-09 2093.135 -82.1938 -54.0906 12-Nov-09 2224.41 -10.3813 12.66664
10-Sep-09 2097.519 -89.9187 -58.0715 13-Nov-09 2224.177 -20.3729 8.995578
11-Sep-09 2102.99 -91.7604 -61.8147 16-Nov-09 2227.246 -25.2417 5.191439
14-Sep-09 2111.35 -88.2625 -64.7533 17-Nov-09 2233.45 -34.8667 0.740539
15-Sep-09 2118.838 -87.4333 -67.2733 18-Nov-09 2240.715 -46.5271 -4.51142
16-Sep-09 2125.731 -96.2813 -70.4964 19-Nov-09 2247.335 -62.1479 -10.9155
17-Sep-09 2135.221 -104.875 -74.3163 20-Nov-09 2254.729 -70.55 -17.5415

23-Nov-09 2262.752 -77.9688 -24.2557 24-Dec-09 2442.654 -73.425 -54.1016
24-Nov-09 2272.617 -86.1125 -31.1286 29-Dec-09 2449.896 -76.2333 -56.5607
25-Nov-09 2281.515 -94.4188 -38.1609 30-Dec-09 2456.775 -79.9417 -59.1586
26-Nov-09 2291.779 -98.7792 -44.8962 31-Dec-09 2463.867 -84.5458 -61.9794
27-Nov-09 2301.027 -91.2896 -50.0511 4-Jan-10 2469.921 -87.9792 -64.8682
30-Nov-09 2308.54 -88.1896 -54.2887 5-Jan-10 2476.694 -90.8146 -67.7512
1-Dec-09 2311.367 -88.3667 -58.0751 6-Jan-10 2485.825 -84.8667 -69.6529
2-Dec-09 2315.76 -87.5938 -61.355 7-Jan-10 2498.054 -69.8083 -69.6702
3-Dec-09 2322.142 -79.4333 -63.3637 8-Jan-10 2506.544 -56.1729 -68.1705
4-Dec-09 2327.921 -69.5125 -64.0469 11-Jan-10 2511.931 -49.0812 -66.0494
7-Dec-09 2334.946 -60.875 -63.6944 12-Jan-10 2514.798 -53.2604 -64.6284
8-Dec-09 2342.338 -55.1333 -62.7432 13-Jan-10 2519.494 -56.8771 -63.7672
9-Dec-09 2352.652 -48.9521 -61.2109 14-Jan-10 2527.967 -56.5667 -62.9671
10-Dec-09 2361.375 -41.75 -59.0485 15-Jan-10 2540.171 -52.5833 -61.8134
11-Dec-09 2371.163 -33.8125 -56.2445 18-Jan-10 2550.306 -51.3354 -60.6491
14-Dec-09 2380.927 -32.8229 -53.6421 19-Jan-10 2559.442 -45.1 -58.9215
15-Dec-09 2390.454 -38.1458 -51.9203 20-Jan-10 2569.179 -39.1208 -56.7214
16-Dec-09 2402.154 -40.2417 -50.6227 21-Jan-10 2576.477 -32.1438 -53.9905
17-Dec-09 2410.458 -45.5417 -50.0581 22-Jan-10 2583.1 -24.8958 -50.7578
18-Dec-09 2419.563 -47.3167 -49.7535 25-Jan-10 2588.065 -21.3688 -47.4923
21-Dec-09 2427.867 -50.1083 -49.793 27-Jan-10 2589.344 -23.2604 -44.7999
22-Dec-09 2435.117 -52.7583 -50.1224 28-Jan-10 2588.648 -24.1313 -42.5034
23-Dec-09 2439.775 -64.1958 -51.6862 29-Jan-10 2587.66 -15.8313 -39.5398

Graph No.19: MACD Indicator
INTERPRETATION
When the lines are below the zero line, if the MACD line crosses the average
line from below to above , it indicates a buying opportunity. At this point prices were
low and the investor can make buying decision.
When the lines are above the zero line, crossing of MACD line from above to
below the average line, signals a selling opportunity. After that point prices were
declining and the investor can make selling decision.

6. BOLLINGER BANDS:
Developed by John Bollinger. Using Standard deviation, upper and lower

bands are fixed above and below the moving average. 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. 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.
The indicator consists of three bands designed to encompass the majority of a

security's price action.
1. A simple moving average in the middle
2. An upper band (SMA plus 2 standard deviations)
3. A lower band (SMA minus 2 standard deviations)
Standard deviation is a statistical unit of measure that provides a good

assessment of a price plot's volatility. Using the standard deviation ensures that the
bands will react quickly to price movements and reflect periods of high and low
volatility. Sharp price increases (or decreases), and hence volatility, will lead to a
widening of the bands.

Closing prices are most often used to compute Bollinger Bands. Other
variations, including typical and weighted prices, can also be used.
 Typical Price = (high + low + close)/3

 Weighted Price = (high + low + close + close)/4
Bollinger recommends using a 20-day simple moving average for the center
band and 2 standard deviations for the outer bands. The length of the moving average
and number of deviations can be adjusted to better suit individual preferences and
specific characteristics of a security.
Trial and error is one method to determine an appropriate moving average

length. A simple visual assessment can be used to determine the appropriate number
of periods. Bollinger Bands should encompass the majority of price action, but not all.
After sharp moves, penetration of the bands is normal. If prices appear to penetrate the
outer bands too often, then a longer moving average may be required. If prices rarely
touch the outer bands, then a shorter moving average may be required.
A more exact method to determine moving average length is by matching it

with a reaction low after a bottom. For a bottom to form and a downtrend to reverse, a
security needs to form a low that is higher than the previous low. Properly set
Bollinger Bands should hold support established by the second (higher) low. If the
second low penetrates the lower band, then the moving average is too short. If the
second low remains above the lower band, then the moving average is too long. The
same logic can be applied to peaks and reaction rallies. The upper band should mark
resistance for the first reaction rally after a peak.

Table No.20: Calculations of Bollinger Bands

Date Upper Lower Date Upper Lower Date Upper Lower
9-Apr-09 1567.654 1365.786 15-Jun-09 1887.945 1623.99 12-Aug-09 2198.941 2008.059
13-Apr-09 1574.649 1373.486 16-Jun-09 1906.103 1606.437 13-Aug-09 2203.595 2018.095
15-Apr-09 1582.661 1381.264 17-Jun-09 1916.107 1600.978 14-Aug-09 2211.815 2027.525
16-Apr-09 1594.387 1391.758 18-Jun-09 1924.751 1602.369 17-Aug-09 2229.975 2031.87
17-Apr-09 1618.13 1413.505 19-Jun-09 1933.933 1599.777 18-Aug-09 2246.3 2042.31
20-Apr-09 1624.743 1423.057 22-Jun-09 1936.863 1599.317 19-Aug-09 2263.301 2055.029
21-Apr-09 1630.485 1431.06 23-Jun-09 1935.771 1610.399 20-Aug-09 2270.766 2084.419
22-Apr-09 1635.291 1440.249 24-Jun-09 1944.222 1624.353 21-Aug-09 2276.815 2115.515
23-Apr-09 1640.843 1448.817 25-Jun-09 1948.957 1638.178 24-Aug-09 2284.38 2141.065
24-Apr-09 1652.308 1443.412 25-Jun-09 1949.322 1652.293 25-Aug-09 2303.234 2155.636
27-Apr-09 1661.036 1444.589 26-Jun-09 1956.562 1665.018 26-Aug-09 2314.07 2171.995
28-Apr-09 1668.626 1452.224 29-Jun-09 1963.719 1675.516 27-Aug-09 2321.714 2174.831
29-Apr-09 1676.451 1459.224 30-Jun-09 1980.591 1683.139 28-Aug-09 2330.262 2171.153
4-May-09 1681.483 1463.777 1-Jul-09 1993.411 1692.374 31-Aug-09 2336.212 2175.673
5-May-09 1683.987 1466.103 2-Jul-09 2002.133 1702.602 1-Sep-09 2341.512 2187.898
6-May-09 1684.237 1476.513 3-Jul-09 2015.058 1711.407 2-Sep-09 2348.794 2199.801
7-May-09 1680.161 1487.414 6-Jul-09 2034.215 1718.17 3-Sep-09 2355.306 2209.114
8-May-09 1679.815 1495.475 7-Jul-09 2056.946 1726.964 4-Sep-09 2361.092 2215.843
11-May-09 1689.368 1503.742 8-Jul-09 2075.495 1739 7-Sep-09 2364.909 2217.196
12-May-09 1706.621 1508.934 9-Jul-09 2092.455 1761.26 8-Sep-09 2368.757 2212.008
13-May-09 1713.189 1522.001 10-Jul-09 2098.494 1793.306 9-Sep-09 2367.211 2210.934
14-May-09 1724.831 1533.844 13-Jul-09 2100.467 1823.183 10-Sep-09 2369.828 2213.287
15-May-09 1740.63 1536.42 14-Jul-09 2108.73 1846.68 11-Sep-09 2371.454 2213.216
18-May-09 1749.194 1541.421 15-Jul-09 2115.713 1866.987 14-Sep-09 2370.33 2209.34
19-May-09 1743.19 1538.925 16-Jul-09 2109.284 1898.531 15-Sep-09 2367.118 2206.532
20-May-09 1754.482 1544.203 17-Jul-09 2092.648 1942.037 16-Sep-09 2361.155 2204.78
21-May-09 1763.563 1553.177 20-Jul-09 2084.785 1967.505 17-Sep-09 2354.047 2198.718
22-May-09 1770.264 1568.811 21-Jul-09 2102.585 1950.815 18-Sep-09 2345.841 2192.394
25-May-09 1781.602 1582.283 22-Jul-09 2121.491 1934.929 22-Sep-09 2336.242 2186.883
26-May-09 1786.068 1603.352 23-Jul-09 2144.401 1915.189 23-Sep-09 2315.448 2192.662
27-May-09 1787.356 1622.034 24-Jul-09 2160.383 1902.377 24-Sep-09 2304.256 2194.549
28-May-09 1791.081 1635.249 27-Jul-09 2168.691 1897.014 25-Sep-09 2302.34 2192.28
29-May-09 1790.864 1655.066 28-Jul-09 2171.21 1899.295 29-Sep-09 2300.078 2196.162
1-Jun-09 1788.843 1672.487 29-Jul-09 2177.634 1902.666 30-Sep-09 2302.631 2184.909
2-Jun-09 1796.847 1679.543 30-Jul-09 2187.148 1912.647 1-Oct-09 2304.697 2172.823
3-Jun-09 1801.3 1684.52 31-Jul-09 2194.994 1922.586 5-Oct-09 2317.078 2141.072
4-Jun-09 1800.523 1698.797 3-Aug-09 2197.17 1933.04 6-Oct-09 2314.248 2135.307

5-Jun-09 1790.303 1725.547 4-Aug-09 2196.732 1938.948 7-Oct-09 2314.722 2125.763

8-Jun-09 1794.621 1731.004 5-Aug-09 2198.835 1946.96 8-Oct-09 2318.545 2118.525
9-Jun-09 1799.557 1732.373 6-Aug-09 2198.231 1954.189 9-Oct-09 2320.185 2119.015
10-Jun-09 1813.932 1714.638 7-Aug-09 2198.84 1966.46 12-Oct-09 2327.974 2115.261
11-Jun-09 1832.856 1688.624 10-Aug-09 2203.896 1977.544 14-Oct-09 2327.265 2122.705
12-Jun-09 1857.777 1659.248 11-Aug-09 2202.085 1993.005 15-Oct-09 2328.05 2128.975
Date Upper Lower Date Upper Lower

16-Oct-09 2331.102 2140.153 24-Nov-09 2524.625 2363.145
17-Oct-09 2338.376 2149.079 25-Nov-09 2521.34 2373.2
20-Oct-09 2352.434 2155.511 26-Nov-09 2526.62 2382.44
21-Oct-09 2369.657 2162.783 27-Nov-09 2543.495 2385.4
22-Oct-09 2382.584 2169.191 30-Nov-09 2556.073 2397.752
23-Oct-09 2398.073 2175.057 1-Dec-09 2570.196 2403.694
26-Oct-09 2404.935 2182.89 2-Dec-09 2583.465 2410.96
27-Oct-09 2414.275 2189.63 3-Dec-09 2595.066 2421.079
28-Oct-09 2428.055 2195.445 4-Dec-09 2603.536 2437.049
29-Oct-09 2434.701 2202.474 7-Dec-09 2606.831 2453.704
30-Oct-09 2442.9 2206.225 8-Dec-09 2602.681 2471.299
3-Nov-09 2450.39 2216.05 9-Dec-09 2602.43 2473.32
4-Nov-09 2450.415 2241.295 10-Dec-09 2603.937 2475.123
5-Nov-09 2457.85 2249.685 11-Dec-09 2608.917 2483.543
6-Nov-09 2465.492 2257.573 14-Dec-09 2617.412 2497.323
9-Nov-09 2472.864 2266.701 15-Dec-09 2628.734 2505.101
10-Nov-09 2481.065 2274.35 16-Dec-09 2638.705 2512.105
11-Nov-09 2484.21 2294.06 17-Dec-09 2649.481 2515.504
12-Nov-09 2491.665 2301.585 18-Dec-09 2657.1 2515.575
13-Nov-09 2498.391 2307.514 21-Dec-09 2667.029 2518.821
16-Nov-09 2503.023 2312.987 22-Dec-09 2666.003 2531.357
17-Nov-09 2510.291 2320.399 23-Dec-09 2611.239 2593.441
18-Nov-09 2512.498 2328.967 24-Dec-09 2609.007 2591.528
19-Nov-09 2515.949 2336.676 29-Dec-09 2602.917 2588.663
20-Nov-09 2522.503 2345.027 30-Dec-09 2596.166 2586.874
23-Nov-09 2522.104 2355.351

Graph No.20: Bollinger Bands Indicator.
INTERPRETATION
A price movement originates from one band tend to move the other band.
When a movement originates from upper band, the prices were declining. This is the
right time for the investor for making selling decision. When a movement originates
from the lower band the prices were rising at this point investor can make buying
decision

3. FINDINGS
 It has been noticed that there is a wide fluctuation in the overall financial
performance.
 The company’s strength shows a positive sign when compared to its
competitors.
 Book Value per share and EPS shows a steady increase in the year2008-09,
which led in favor of the company.
 Price earnings ratio of the company has been decreased when compared with
2007-08
RSI - RSI values above 80 can be considered to denote over bought conditions
and below 20 can be considered to be oversold condition. When the RSI values has
crossed the 20 line from below to above and is rising a buying opportunity is
indicated. When it has crossed 80 line from above to below and is falling a selling
signal is indicated.
STOCHASTICS - The values of %K line crosses over the %D line, after the
%D line has turned down, gives a selling signal. The values of %K line crosses over
the %D line ,after the %D line has turned up, gives a buying signal.
WILLIAM %R- The %R scale ranges from 0 to -100, with readings from 0 to
-20 considered overbought, and readings from -80 to -100 considered oversold. The
actual decision should be made only after the %R crosses below and above -50
respectively.
SMA - A moving average represents the underlying trend in the share price
movement. The curved line joining these moving averages represents the trend line.
When the price of the share intersects and moves above and below the trend line it
may be taken as the first sign of trend reversal.

MACD - In MACD buy ad sell signals are generated by crossover of the

average line and the MACD line. When the lines are below the zero line , if the
MACD line crosses the average line from below to above , it indicated a buying
opportunity. When the lines are above zero line, closing of MACD line from above to
below the average line signal a selling opportunity.
BOLLINGER BANDS - A price movement originates from one band tend to

move the other band. When a movement originates from upper band, the prices were
declining. This is the right time for the investor for making selling decision.
When a movement originates from the lower band the prices were rising at this point
investor can make buying decision

CONCLUSION:
 The financial performance of the company over five years is good.
 Historical prices have an impact on future share prices. So past trend can be
used for predicting the trend of the future prices
 Technical Analysis indicators can give a fair idea about future price
movements in stock market. It is easy for anybody to do Technical Analysis
because of the easy availability of information. But it is necessary to use more
that 10- 15 indicators for reaching a conclusion regarding the share price
movement.
 All the technical analysis indicators cannot give an accurate decision. Only
few indicators like MACD and STOCHASTIC indicators can give accurate
decisions.
 Infosys Technology’s performance is constantly increasing year by year.

SUGGESTIONS:
 The influence of macro-economic, industry and company- specific factors on
the volatility of securities has to be analyzed.
 The frequency and medium of information dissemination is also believed to

have significant influence on the volatility of securities and hence the
problems related to generation, process and dissemination of information as
also to be considered.
 One should keep out of slow trading markets or watch until you get a definite
indication of change in trend.
 To become a perfect trader one must know that some stocks sometimes are
declining while others are advancing and they are called cross currents. Only
by study of these individual stock and the different groups, one can determine
which stock is supposed to decline at the time when another stock is going to
advance.
 In case a trader entering in a new industries, first he has to select stock to buy
in new industries after making a careful study of their prospects and charts of
the stock that he intend to trade in, and if they are part of a group then he want
to study that group and pick up the individual stock to buy that shows
indication of leading the group.
 A single indictor is not enough for arriving at a selling or buying decision. A
combination of Technical Analysis indicators is required for more accurate
decisions.
 Even though Technical Analysis itself is enough for making decisions in stock
market, simultaneous usage of both Fundamental and Technical Analysis will
reduce errors in forecasting future Prices.

Fundamental and Technical Analysis: Executive Summary

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Fundamental and Technical Analysis

JSS Academy of Technical Education, Bangalore. Page 1

Indicators used to assess fundamentals of the company include ratios like

Therefore, with the help of the company’s financial statements, fundamental

Also, to understand whether technical analysis (study of Price, Volume, Open

Hence, this study helps to take an investment decision on Infosys Technology

JSS Academy of Technical Education, Bangalore. Page 2

Some key characteristics of the sample 394 firms are:

 On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in

JSS Academy of Technical Education, Bangalore. Page 3

 In terms of various areas of growth, 84% firms have expressed interest in

WHY DOES ONE NEED A BROKER?

As per SEBI (Securities and Exchange Board of India.) regulations, only

JSS Academy of Technical Education, Bangalore. Page 4

The financials and investment industry is a highly competitive in nature with

The main players in the brokerage industry are

JSS Academy of Technical Education, Bangalore. Page 5

A group of professionals formed a company on October 18, 19995 called Probity

2.2NATURE OF THE BUSINESS CARRIED

JSS Academy of Technical Education, Bangalore. Page 6

exchanges. It is engaged in the businesses of Equities broking, Wealth Advisory

JSS Academy of Technical Education, Bangalore. Page 7

India Infoline Securities Pvt Ltd:

A SEBI authorized Portfolio Manager; it offers Portfolio Management

India Infoline Commodities Pvt Ltd:

India Infoline Distribution Co Ltd (IILD)

India Infoline.com Distribution Co Ltd is a 100% subsidiary of India Infoline

JSS Academy of Technical Education, Bangalore. Page 8

India Infoline Insurance Services Ltd:

India Infoline Insurance Services Ltd is also a 100% subsidiary of India

India Infoline Investment Services Ltd:

India Infoline Investment Service Ltd is also a 100% subsidiary of India

India Infoline Insurance Brokers Ltd:

Money Tree Consultancy Services:

MTCS Is a group company of India Infoline Ltd., focusing distribution on

JSS Academy of Technical Education, Bangalore. Page 9

2.3 VISION STATEMENT OF THE COMPANY:

Shareholders General public

Growth at above industry rate Corporate governance

Cutting edge technology Skill development by investments in

 Superior original research

 Cutting edge technology

1. Superior original research:

 Well organized database and well honed skill base

 Demonstrated ability to spot trends, winners ahead of market

 Well net worked in Indian Corporate world

 Over 200 CEO interviews in a year

 Over 300 company/ plant visits

JSS Academy of Technical Education, Bangalore. Page 10

2. Cutting edge technology:

 A revolutionary way to trade online

 Incredible speed of order execution

 Real time intraday charts

 Highly advanced data compression and management

2.4 PRODUCTS AND SERVICES PROFILE

Indiainfoline is a one-stop financial services shop, most respected for quality

Indiainfoline provided the prospect of researched investing to its clients, which

Our Portfolio Management Service is a product wherein an equity investment

JSS Academy of Technical Education, Bangalore. Page 11

Indiainfoline’s extension into commodities trading reconciles its strategic

During the year under review, Indiainfoline acquired a 75% stake in

 Get expert advice that suits your needs