+technical Analysis & Its Relevance

Technical Analysis
THE STUDY OF TECHNICAL ANALYSIS AND

ITS RELEVANCE
Submitted in partial fulfillment of the

Requirements for MBA Degree of
Bangalore University
Submitted By
SANTHOSH HEGDE
Registration Number:
04XQCM6077
Under the Guidance Of:

Prof. B.V. Rudramurthy
M.P.BIRLA INSTITUTE OF MANAGEMENT
Associate Bharatiya Vidya Bhavan

Race Course Road, Bangalore-560 001
1
M. P. BIRLA INSTITUTE OF MANAGEMENT
Technical Analysis
DECLARATION
I am Santhosh Hegde, the student of M.P.Birla Institute of

Management hereby declaring that the project titled “The technical analysis and its
relevance” is an original work carried out by me as a partial fulfillment for the
requirement of MBA DEGREE OF Bangalore University. This project has not been
previously submitted for award of any degree or diploma of Bangalore University of
any other University.
Place:
Date: Santhosh Hegde
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Technical Analysis
GUIDE’S CERTIFICATE
This is to certify that the Research Report entitled “TECHNICAL ANALYSIS AND
ITS RELEVANCE”, done by SANTHOSH HEGDE bearing Registration No.04
XQCM 6077 is a bonafide work done carried under my guidance during the academic
year 2005-06 in a partial fulfillment of the requirement for the award of MBA degree by
Bangalore University. To the best of my knowledge this report has not formed the basis
for the award of any other degree.
Place: Bangalore Prof. B. V. Rudramurthy
Date :
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Technical Analysis
PRINCIPAL’S CERTIFICATE
This is to certify that this dissertation entitled "Technical analysis and its
relevance” is the result of research project work carried out by
Mr.Santhosh Hegde under the guidance and supervision of Prof. B, V
Rudramurthy, M.P. Birla Institute of Management, Bangalore.
Place: Bangalore (Dr. Nagesh S Mallavalli)
Date: Principal
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Technical Analysis
ACKNOWLEDGEMENT
I would like to express my indebtedness to Prof. B.V. Rudramurthy,
Project guide, M.P.Birla Institute of Management., for his valuable guidance in
completing this project work.
I extend my sincere thanks to Dr. T. V. N. Rao, Professor of
Finance, for his significant advice and suggestions at every stage of the project.
I wish to express my heartful thanks to Smitha for her fruitful
suggestions and constant encouragement throughout this project work.
Further, I would like to thank all my lovely friends who have directly
and indirectly helped me in this project work.
Place:
Date: Santhosh Hegde
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Technical Analysis
CONTENTS
Sl. No. Content Page No.
1 INTRODUCTION 1
2 LITERATIVE REVIEW 11
3 RESEARCH METHODOLOGY 18
4 PROBLEM STATEMENT 18
5 OBJECTIVES OF THE STUDY 18
6 DATA ANALYSIS 26
7 CHARTS 50
8 ANALYSIS OF RESULTS 74
9 RESEARCH FINIDINGS 78
10 SUMMARY 78
11 CONCLUSION 79
12 GLOSSARY 81
13 BIBLIOGRAPGY 82
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Technical Analysis
CHAPTER -1
INTRODUCTION 7
Technical Analysis
INTRODUCTION TO TECHNICAL ANALYSIS
It is important to form a view on the likely trend of the over all market, and it is helpful
to have some idea of how to go about selecting individual stocks. Naturally, all investors
would like their investments to appreciate rapidly in price, but stocks, which may satisfy
this wish, tend to accompanied by a substantially greater amount of risk then many
investors are normally willing to accept. However, it is important to understand that
investors can be very conscious when it comes to stock ownership.
Technical analysis is the use of numerical series generated by market activity,

such as price and volume, to predict future price trends. The techniques applied to any
market with a comprehensive price history.
Primarily, but not exclusively, technical analysis is conducted by studying charts of past
price movement. Many different methods and tools are used in technical analysis, but
they all rely on the assumption that price patterns and trends exist in markets, and that
they can be identified and exploited Technical analysis does not try to analyze the
financial data of a company such as cash flow, dividends and projection of future
dividends. That type of analysis is called Fundamental analysis. Nor does it claim to be
100% accurate. It attempts to give the "most likely" outcome.
Some speculators combine elements from both technical and fundamental analysis.
Technical analysis is viewed by many of its practitioners as more art than science. Many
academic studies conclude that technical analysis has little, if any, predictive power.
However, the practice has a dedicated following especially among active traders and does
have support amongst the academic community.
As an example of the debate regarding the efficacy of technical analysis, Peter Lynch, a
very well-known and successful fundamental analyst, once commented, "Charts are great
for predicting the past." On the other hand, the U.S. Federal Reserve once published a
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Technical Analysis
study saying that certain elements of technical analysis were effective in price
forecasting.
The premises of technical analysis were derived from empirical observations of financial
markets over hundreds of years. Perhaps the oldest branch of technical analysis is the use
of candlestick techniques by Japanese traders at least as early as the 18th century, and
still very popular today.
Dow Theory, a theory based on the collected writings of Dow Jones co-founder and
editor Charles Dow, inspired the increasingly widespread use and development of
technical analysis from the end of the 19th century. Modern technical analysis considers
Dow Theory its cornerstone.
New tools and theories have been produced and existing tools have been enhanced at a
rapid rate in recent decades, with an increasing emphasis on computer-assisted
techniques.
Technical analysis is not concerned with why a price is moving but rather whether it is
moving in a particular direction or in a particular chart pattern. Technical analysts believe
that profits can be made by "trend following." In other words if a particular stock price is
steadily rising (trending upward) then a technical analyst will look for opportunities to
buy this stock. Until the technical analyst is convinced this uptrend has reversed or ended,
all else equal, he will continue to own this security. Additionally, technical analysts look
for various price patterns to form on a price chart and will take positions in anticipation
of the expected move following that pattern. The various tools of technical analysis assist
the technician in determining when trends have formed, ended, etc. and when particular
patterns are unfolding.
Technical analysis may be at odds with fundamental analysis. Fundamental analysis

maintains that markets may misprice a security and, through various methods of
fundamental analysis, the "correct" price can be calculated. Profits can be made by
trading the mispriced security and then waiting for the market to recognize its "mistake"
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Technical Analysis
and reprice the security. In contrast, a technical analyst is not interested in a security's
"correct" price, only in price movement.
The beauty of technical analysis lies in its versatility. Because the principles of technical
analysis are universally applicable, each of the analysis steps above can be performed
using the same theoretical background. You don't need an economics degree to analyze a
market index chart. You don't need to be a specialist to analyze a stock chart. It does not
matter if the time frame is 2 days or 2 years. It does not matter if it is a stock, market
index or commodity. The technical principles of support, resistance, trend, trading range
and other aspects can be applied to any chart. While this may sound easy, technical
analysis is by no means easy. Success requires serious study, dedication and an open
mind.
One of the forecasting tools very popular among practitioners is technical

analysis. Technical analysis is the examination of past price movements in order to
forecast future price movements. Technical analysis is open to interpretation. Many times
two technicians will look at the same chart and paint two different scenarios or see
different patterns. Both would be able to come up with logical support to justify their
position.
In addition, even if stock prices completely followed a random walk, people would
be able to convince themselves that there are patterns having a predictive value. It has
become more and more popular, as it offered an unlimited set of tools and signals and
seemed to be an interesting method of market analysis. It has been proven that stock
prices most of the time approximately follow a random walk pattern. Psychologists have
described a number of ways in which people deal with randomness. Additionally, market
participants may be subject to herd behavior.
Technical analysis is applicable to stocks, indices, commodities, futures or any

tradable instrument where the price is influenced by the forces of supply and demand.
Price refers to any combination of the open, high, low, or close for a given security over a
specific time frame. The time frame can be based on intraday (1-minute, 5-minutes, 10-
minutes, 15-minutes, 30-minutes or hourly), daily, weekly or monthly price data and last
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Technical Analysis
a few hours or many years. In addition, some technical analysts include volume or open
interest figures with their study of price action.
Technical analysts believe that their methods will permit them to beat the market.
Economists have traditionally been skeptical of the value of technical analysis, affirming
the theory of efficient markets that holds no strategy should allow investors and traders to
make unusual returns except by taking excessive risk.
Three Beliefs of Technical Analysis
Price action in the market discounts everything
Technical analysis holds that because every possible bit of information is immediately
included in the price of a security, it is not necessary to explicitly analyze the
fundamental, economic, political, etc. factors that might influence that price. Because all
possible information is reflected in the price, only a study of the price movement is
required.
This theorem is similar to the strong and semi-strong forms of market efficiency.
Technical analysts believe that the current price fully reflects all information. Because all
information is already reflected in the price, it represents the fair value, and should form
the basis for analysis. After all, the market price reflects the sum knowledge of all
participants, including traders, investors, portfolio managers, buy-side analysts, sell-side
analysts, market strategist, technical analysts, fundamental analysts and many others. It
would be folly to disagree with the price set by such an impressive array of people with
impeccable credentials. Technical analysis utilizes the information captured by the price
to interpret what the market is saying with the purpose of forming a view on the future
Prices move in trends
Most technicians agree that prices trend. However, most technicians also acknowledge
that there are periods when prices do not trend. If prices were always random, it would be
extremely difficult to make money using technical analysis. A technician believes that it
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Technical Analysis
is possible to identify a trend, invest or trade based on the trend and make money as the
trend unfolds. Because technical analysis can be applied to many different time frames, it
is possible to spot both short-term and long-term trends.
While it cannot be shown that prices must trend, technical analysis relies on
empirical evidence and common sense to assert that prices do trend. To a technician,
markets are trending up, trending down, or trending sideways (flat). This definition of a
price trend is essentially the one put forward by Dow Theory. A person who does not
believe that prices move in trends will find little use for technical analysis. The
assumption that prices must trend is probably the most important concept in technical
analysis.
History tends to repeat itself
To a technical analyst, the human characteristics of the market might be irrational, but
they exist. Because investors' attitudes often repeat, investors' actions in the marketplace
often repeat as well. I.e., patterns of price movement will develop on a chart that a
technical analyst believes have predictive qualities.
Technical analysis is not limited to charting. Technical analysis is always primarily

concerned with price trends. Anything that can influence the price trend is of interest to a
technical analyst. As an example, many technical analysts monitor surveys of investor
enthusiasm. These surveys attempt to gauge the general attitude of the investment
community to determine whether investors are bearish or bullish. Technical analysts use
these surveys to help determine whether a trend will reverse or whether a new trend will
develop. A technical analyst will be alerted that a trend might change when these surveys
report extreme investor reactions. When surveys are overly bullish, for example, a
technical analyst will look for evidence that an uptrend will reverse. The logic being that
if most investors are bullish, then they would have already bought the market
(anticipating that the market will move higher). But because most investors are bullish
and have invested, it is safe to assume that there are few buyers remaining in the market.
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Technical Analysis
With most investors long, there are more potential sellers in the market than buyers
despite the fact that the overall attitude of investors is bullish.
Weakness of Technical Analysis
Analyst Bias
Just as with fundamental analysis, technical analysis is subjective and our personal biases
can be reflected in the analysis. It is important to be aware of these biases when analyzing
a chart. If the analyst is a perpetual bull, then a bullish bias will overshadow the analysis.
On the other hand, if the analyst is a disgruntled eternal bear, then the analysis will
probably have a bearish tilt.
Open to Interpretation
Furthering the bias argument is the fact that technical analysis is open to interpretation.
Even though there are standards, many times two technicians will look at the same chart
and paint two different scenarios or see different patterns. Both will be able to come up
with logical support and resistance levels as well as key breaks to justify their position.
While this can be frustrating, it should be pointed out that technical analysis is more like
an art than a science, somewhat like economics. Is the cup half-empty or half-full? It is in
the eye of the beholder.
Too Late
Technical analysis has been criticized for being too late. By the time the trend is
identified, a substantial portion of the move has already taken place. After such a large
move, the reward to risk ratio is not great. Lateness is a particular criticism of Dow
Theory.
Always another Level
Even after a new trend has been identified, there is always another "important" level close
at hand. Technicians have been accused of sitting on the fence and never taking an
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Technical Analysis
unqualified stance. Even if they are bullish, there is always some indicator or some level
that will qualify their opinion.
Trader's Remorse
Not all technical signals and patterns work. When you begin to study technical analysis,
you will come across an array of patterns and indicators with rules to match. For instance:
A sell signal is given when the neckline of a head and shoulders pattern is broken. Even
though this is a rule, it is not steadfast and can be subject to other factors such as volume
and momentum. In that same vein, what works for one particular stock may not work for
another. A 50-day moving average may work great to identify support and resistance for
IBM, but a 70-day moving average may work better for Yahoo. Even though many
principles of technical analysis are universal, each security will have its own
idiosyncrasies.
Lack of evidence
Although chartists assert that their techniques provide excess returns over time, this
assertion is controversial. Many academics believe that technical analysis has no
predictive power. Burton Malkiel in his book "A Random Walk Down Wall Street" (8th
edition, 2003) and Eugene Fama in "Efficient Capital Markets: A Review of Theory and
Empirical Work," May 1970 Journal of Finance summarize many early studies,
conducted from the 1950s-70s, that show that after trading costs are considered, the
returns generated by many technical strategies under perform a simple buy and hold
strategy.
Critics of technical analysis include well known fundamental analysts. Warren Buffett
has exclaimed, "I realized technical analysis didn't work when I turned the charts upside
down and didn't get a different answer" and "If past history was all there was to the game,
the richest people would be librarians."
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Technical Analysis
Inconsistencies with Other Market Hypotheses

The Efficient Market Hypothesis
The efficient market hypothesis concludes that technical analysis cannot be effective.
According to this hypothesis, all relevant information is quickly reflected in a security's
price through the actions of traders who have that information. Thus, it is impossible to
"beat the market," and technical analysis cannot work. News events and new fundamental
developments which influence prices occur randomly and are unknowable in advance.
Advocates of EMH have produced many studies that reject the efficacy of technical
analysis.
Proponents of technical analysis counter that technical analysis does not completely
contradict the efficient market hypothesis. Technicians agree with EMH in that they
believe that all available information is reflected within a security's price; that is why
technicians say a study of the price movement is necessary. Technicians argue that EMH
ignores the realities of the market place, namely that many investors base their future
expectations on past earnings, track records, etc. Because future stock prices can be
strongly influenced by investor expectations, technicians claim it only follows that past
prices can influence future prices.
Technicians point to the new field of behavioral finance. Behavioral finance essentially
says that people are not the rational participants EMH makes them out to be. Market
participants can and do act irrationally. Technicians have long held that irrational human
behavior influences stock prices and claim to have ways of predicting probable outcomes
based on this behavior.
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Technical Analysis
The Random Walk Hypothesis

The random walk hypothesis is also at odds with technical analysis and charting.
Essentially, the hypothesis claims that stock price moments either independent or
uncorrelated increments. In this model, future stock prices are not dependent on past
stock prices, so trends cannot exist and technical analysis has no basis. Again, proponents
of this theory have generated substantial research in support of the hypothesis
.
Technical analysts maintain that trends are identifiable in the market and that it is
impractical to believe that market prices move in a random fashion. To a technician, over
time prices will trend in a direction until supply equals demand. Therefore, there cannot
be any pure random price movement. As stated earlier, one of the cornerstones of
technical analysis is that prices trend. If one does not believe this concept, one will not
agree with technical analysis.
Also, with regards to EMH and Random Walk Theory, technicians claim that both
theories ignore the realities of the marketplace. To a technician, the market is neither
composed of completely rational participants as EMH assumes (participants can be
greedy, overly risky, etc. at any given time) nor is its stock price movement completely
independent of its prior movement
Proponents of Technical Analysis

To many traders, trading in the direction of the trend is the most effective means to be
profitable in financial or commodities markets. John Henry, Larry Hite, Ed Seykota
Richard Dennis, Bruce kovner, and Michael Marcus have each amassed massive fortunes
through the use of technical analysis and its concepts. George Lane, a technical analyst,
coined one of the most popular phrases on Wall Street, "The trend is your friend!"
Many non-arbitrage algorithmic trading systems rely on the idea of trend-following, as do
many hedge funds. A relatively recent trend, both in research and industrial practice, has
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been the development of increasingly sophisticated automated trading strategies. These

often rely on underlying technical analysis principles
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Technical Analysis
CHAPTER -2
LITERATURE
REVIEW
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Technical Analysis
LITERATURE REVIEW
Literature review has under taken for analyze various literature and research papers
available in the related field. Further research can be undertaken where sufficient study is
not done in particular field. Various sources of information have been used in this review
include technical analysis books, financial journals, articles and research papers.
Research papers
1. TECHNICAL ANALYSIS AND TYPICAL COGNITIVE BIASES
Piotr Zielonka, Warsaw University SGGW and Leon Kozminski Academy of
Entrepreneurship and Management, Poland
ABSTRACT
The paper describes a study carried out on a group of 24 Polish financial analysts. The
analysts responded to a questionnaire with 24 items (signals). They were asked to rate the
predictive value of different signals for the movements of stock prices. The signals were
of three types:
(a) regular technical analysis signals, representing some common psychological biases
(gambler's fallacy, ignoring the principle of regression to mean, anchoring effect and
herd behavior)
(b) technical-like signals created by the author of the research that imitated technical
signals and represented the same types of biases as real technical signals,
(c) other technical-like signals that did not represent any biases.
It turned out that the analysts tended to ascribe high predictive value to the questionnaire
items associated with psychological biases (either technical or technical-like signals). At
the same time, these items were rated very similarly by different analysts. On the other
hand, the technical-like signals not related to any biases were given very low predictive
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Technical Analysis
values by the analysts. These results suggest that popularity of technical analysis is
associated with its relation to the typical cognitive biases of humans.
METHODOLOGY
The study was carried out in Warsaw in January-February 2002. The participants were 24
financial analysts or dealers employed by banks and Polish capital market institutions.
The sample was not random. Each participant was administered a 24–item questionnaire.
There were three groups of items within the questionnaire. Each group consisted of 8
items. The first group consisted of regular technical analysis signals representing four
common psychological inclinations. Each inclination was represented by two signals.
Usually one from a pair of signals was a predictor of a stock fall (-), whereas the other
signal was a predictor of a stock rise (+).
The group consisted of technical-like signals, created by the author of the

questionnaire, that did not represent any psychological inclinations.
- Drop of chemical companies' prices,
- Horizontal, typically sinusoidal WIG index movement,
- Rising WIG index creates longer and longer horizontal shelves,
- A fan formation support line moves upward,
- Diminishing dynamics of price rise in textile branch,
- An alternate large and small daily trade volume,
- Second MACD derivative goes negative,
- WIG index creates horizontal small amplitude sinusoid curve.
The cover page of the questionnaire stated that the survey was designed to better
understand the opinions of experts on implementation of technical analysis. This remark
allowed the participants to feel more like experts whose opinion is needed for some
further research rather than merely the persons to be examined. Respondents were
assured of confidentiality.
CONCLUSION
The present research shows that many technical analysis signals represent common
psychological biases such as the gambler’s fallacy, anchoring effect or herd behavior.
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Technical Analysis
All real technical analysis signals were assigned a high predictive value by the financial
analysts who responded to the questionnaire. The “technical” signals created by the
author of the research either represented psychological biases or not. If they did, they
received high scores from respondents as good predictors the of stock market behavior. If
they did not, the respondents estimated them as bad predictors. In addition, the
respondents were in general agreement about their judgments. These results confirm both
hypotheses of this research: technical analysis signals represent some common
psychological biases and financial analysts are subject to these biases.
2. Technical Analysis in the Foreign Exchange Market: A Co-integration-

Based Approach.
Nobert Fiess, University of Strathclyde and U. K. Ronald MacDonald, University of
strathclyde, U. K.
Most technical analysis studies are concerned with the profitability of technical trading
rules and almost all of them focus exclusively on trend following patterns. In this paper
they examine a different kind of technical indicator which suggests a structural
relationship between High, Low, and Close prices of daily exchange rates. Since, for a
given exchange rate, it can be shown that these prices have different time series
properties, it is possible to explore the structural relationships between them using
multivariate co-integration methods. This methodology facilitates the construction of
dynamic structural econometric models, which are used to derive dynamic out of- sample
forecasts over different time horizons. Compared to standard benchmarks, it turns out that
these models have extremely good forecasting properties, even when allowance has been
made for transactions costs and risk premium
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Methods and Results

A. Structural Econometric Modeling
Their modeling strategy follows recent developments in the econometric literature, in
particular the work of Clements and Mizon (1991), Hendry and Mizon (1993) and
Johansen (1988), and they label it structural econometric modeling.6 Via a series of
testable restrictions and reductions, this modeling strategy transforms an initial vector
autoregressive model (VAR) in levels into a set of linear structural equations that
incorporate both long and short-run dynamics. Starting from an unrestricted VAR, the
hypothesis of co integration is formulated as a hypothesis of reduced rank of the long-run
impact matrix . The VAR is generated by the vector, which defines the
potential endogenous variables of the model.
B. Co integration and the Stochastics

. The Stochastics establish a structural relationship between the Close of today and the
Maximum and Minimum price of a moving period, measured as the highest High and the
lowest Low. Specifying a VAR with the data vector testing for co-integration between the
three variables should reveal if, when using the Stochastics, an investor is intuitively
exploiting Granger causality among the three series. Each VAR included a constant in the
cointegration space and 15 lags of each of the variables, which was sufficient to produce
random errors
CONCLUSION
The forecasting models were estimated over the first 2500 data observations, thus sparing
roughly 10% of the total sample for forecasting. Since the classic paper of Meese and
Rogoff (1983), the crucial factor in determining the worth of an exchange rate model is
how well it forecasts in an out-of-sample context relative to a random walk, using the
metric of the root mean square error (RMSE) criterion. In table 5, Their statistics are
calculated as the ratio of the RMSE of the forecasting model over the RMSE of a drift
less random walk; a value.
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Technical Analysis
3. MARKET EFFICIENCY AND THE RETURNS TO TECHNICAL ANALYSIS

Hendrik Bessembinder and Kalok Chan,Department of Finance, College of Business,
Arizona State University
Abstract
They investigate and provide interpretation for the intriguing Brock, Lakonishok, and
LeBaron (1992) finding that simple forms of technical analysis contain significant
forecast power for U.S. equity index returns. They document that the forecast ability is
partially, but not solely, attributable to return measurement errors arising from non
synchronous trading. They argue that the evidence of technical forecast power need not
be inconsistent with market efficiency. "Breakeven" one-way trading costs are computed
to be 0.39% for the full sample and 0.22% since 1975, which are small compared to
recent estimates of actual trading costs. Further, they test but fail to reject a key
restriction that most equilibrium models place on return forecast ability: that the technical
rules should not reliably identify periods of negative market risk premium.
Methodology
A. Description of the Rules.
Brock et. al. emphasize the danger of obtaining spurious empirical results if
trading rules are both discovered and tested in the same data set. They note that there is
no complete remedy for “data snooping” biases, but attempt to mitigate the problem by
using a long data series and by reporting results for all rules evaluated. To avoid
compounding the dangers of data snooping biases, they evaluate precisely the same set of
twenty six technical rules as Brock et. al. These include ten Variable Length Moving
Average (VMA) rules, ten Fixed Length Moving Average (FMA) rules, and six Trading
Range Break (TRB) rules.
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Technical Analysis
B. Measuring Returns
The results reported by Brock et al. are based on percentage changes in the DJIA,
data on which was available for a long time horizon. However, some limitations of the
Dow Jones data potentially affect the interpretation of their evidence. First, changes in
the [stock index] understate actual returns due to the omission of dividends. They do not
expect this omission to have much effect on measures of differences between mean
returns during technical buy signals and mean returns during technical sell signals, or on
tests of whether the technical rules possess forecast power. However, the omission of
dividends will introduce bias to tests of whether mean returns during periods of technical
sell signals differ significantly from zero (or any other specific benchmark).
Conclusions
Brock, et. al. (1992) demonstrate that a set of relatively simple technical trading rules
possess statistically significant forecast power for changes in the Dow Jones Industrial
Average over a long sample period. They extend their analysis to ascertain whether this
evidence can be reconciled with market efficiency.
4.The use of fundamental and technical analyses by foreign exchange

dealers: Hong Kong evidence.
David Mole, Department of economics and finance, City university of Hong Kong.
Abstract
This article reports the results of a questionnaire survey conducted in February 1995 on
the use by foreign exchange dealers in Hong Kong of fundamental and technical analyses
to form the forecasts of exchange rate movements. Findings of this study reveal that >
85% of respondents rely on both fundamental and technical analysis for predicting future
price at different time horizons. At shorter horizons, there exists a skew towards reliance
on technical analysis as opposed to fundamental analysis, but the skew becomes steadily
reversed as the length of horizon considered is extended.
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Technical Analysis
METHODOLOGY
To prepare the survey, they concluded dealers at the Hong Kong monetary Authority and
most of the major banks. After consultation, they designed a questionnaire investigating
the following.
1. The usefulness of fundamental and technical analysis is forecasting trends and
turning points.
2. Dealers give personal importance to fundamental and technical analyses over
seven forecasting horizons.
3. Dealers views of the complimentarily of fundamental and technical analyses in
exchange rate forecasting.
4. The usefulness of central bank intervention in influencing exchange rates over the
horizons of intraday, intra-month and month.
The Hong Kong Forex Association with its membership list as of September 1994
provided them. A total of 153 fully completed questionnaires were returned. A response
rate of 19%. Most respondents firms are active participants in the market, with over 60%
in number having a daily average turnover greater than US $ 100 million.
Conclusion:
At all the time horizons, a very high proportion of respondents place some weight on both
fundamental and technical analysis when forming views. Dealers perceive value in using
both fundamental and technical analyses to predict both trends. Technical analysis is
considered only slightly more useful than fundamental analysis.
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Technical Analysis
CHAPTER -3
RESEARCH
METHODOLOGY
26
Technical Analysis
PROBLEM STATEMENT
The above study is undertaken to compare the selected technical analysis tools available
for forecasting. The study tries to capture the contradicting views of different tools used
in technical analysis. This study is aims to exploration of the topic “TECHNICAL
ANALYSIS AND ITS RELEVANCE”.
OBJECTIVES OF THE STUDY:
1. To find out the accuracy of technical analysis in individual stock price prediction.
2. To introduce a structured approach to market analysis that will helps to perform a
quick top to bottom assessment of the market, to decide which actions are
appropriate
SCOPE OF THE STUDY:

Technical analysis of market data has long been a pervasive activity in both security and
future markets. Technical analyst believe that price and volume data provide indicators of
future price movements, and that by examining these data, information may be extracted
on the fundamentals driving returns. If markets are efficient in the sense that the current
price impounds all information then such activity is clearly pointless. But if the process
by which prices adjust to information is not immediate, then the market statistics may
impound information that is not yet incorporated in to the current market price.
Technical analysis is very useful because it provides tools that allow investors to identify
the signs that new information is being priced into a stock before news is released. Stocks
that trade abnormally often do so because of significant new information, both positive
and negative. In this way, technical analysis helps to reveal fundamental changes in the
company before the broader market is aware of it.
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Technical Analysis
In spite of a long list of publications showing that market movement is random or at least
very difficult to predict, a lot of effort has been made in forecasting future stock prices In
this dissertation, the market data is investigate to find out the future stock price
movements. The charts we will keep will become increasingly valuable to the traders as
the charts history builds up. In this connection I hope this study is resourceful to the
technical analysts. This study is useful for those who are risk avers and those who wants
to protect themselves from the risk arising from the unexpected market movements and
also this study focuses on the effectiveness of the hedged portfolio and also tests that
effectiveness
DATA:
The data collected for the research purpose are secondary data. Index prices were
collected through National Stock Exchange website and through prowess website. The
data employed in this study comprises of one year observations on the NIFTY stock
index Closing price. Daily data are preferred in this study. The choice of daily closing
price is realistic and helpful to calculate and testing the results in technical analysis.
DATABASE:
The data relating to the study is taken from PROWESS database.

The data regarding index share price was also taken from website:
www.nseindia.com.
The supplementary sources of data:
Technical analysis of stock trends, 8th Edition, Robert D. Edwards, John Magee.
Technical analysis of stock trends by Martin Pring.
Financial journals, dailies like capital market, dalal street, and Economic times are
also used.
28
Technical Analysis
SAMPLE SIZE:
The one year nifty index has taken for testing the relevance of technical analysis.
STATISTICAL TOOLS USED:
1. Day Moving Average.

2. Relative strength index.
3. Rate of change method.
4. The Momentum.
Day Moving Average

Day Moving averages are one of the most popular and easy to use tools available to the
technical analyst. They smooth a data series and make it easier to spot trends, something
that is especially helpful in volatile markets. They also form the building blocks for many
other technical indicators and overlays.
The two most popular types of moving averages are the daily Moving Average(SMA)
and the Exponential moving Average (EMA). In this study day moving average has
taken.
For example: a 5-day simple moving average is calculated by adding the closing prices
for the last 5 days and dividing the total by 5.
The calculation is repeated for each price bar on the chart. The averages are then joined
to form a smooth curving line - the moving average line. Continuing our example, if the
next closing price in the average is 15, then this new period would be added and the
oldest day, which is 10, would be dropped. The new 5-day simple moving average would
be calculated as follows:
29
Technical Analysis
averaging process then moves on to the next day where the 10-day SMA for day 12 is
calculated by adding the prices of day 3 through day 12 and dividing by 10.
HOW ARE MOVING AVERAGES USED

The primary purpose of moving averages is to "smooth" data so that trends are more
discernable. They are used to construct market indicators and to assist in interpretation of
price charts.
Moving average crossovers can also be used as signals to buy and sell. This is normally
done in two ways: (1) by watching for price to cross whatever moving average you may
be using, or (2) running two moving averages of the same price or index, one faster than
the other, and buying or selling when the faster average crosses the slower.
The weakness of moving average buy and sell systems is that they will most likely
become unprofitable when the stock or index begins moving sideways in a narrow
trading range. Under these circumstances price never moves above or below the average
far enough to become profitable.
I don't recommend pure moving average systems for timing purposes, but, in spite of
their weaknesses, if you are trying to develop your own system of timing, the use of
moving averages is a good place to start looking.
Rate of Change (ROC)
The Rate of Change (ROC) indicator is a very simple yet effective oscillator that
measures the percent change in price from one period to the next. The ROC calculation
compares the current price with the price n periods ago.
30
Technical Analysis
ROC = ((Today’s Close-Close n periods ago) / (Close n periods ago)) * 100
The plot forms an oscillator that fluctuates above and below the zero line as the Rate of
Change moves from positive to negative. The oscillator can be used as any other
momentum oscillator by looking for higher lows, lower highs, positive and negative
divergences, and crosses above and below zero for signals.
ROC can be plotted using different periods such as 10 days or 30 days by changing the
value. The longer the time span used, the greater the fluctuation in the indicator (in terms
of both magnitude and duration).
Rate of Change (ROC) vs the "Momentum" Indicator
There is another popular indicator called "Momentum" that is almost identical to the Rate
of Change indicator. The only difference is that the Rate of Change indicator adds 100 to
the ROC's value. Momentum also uses 100 as its center line instead of zero like the
ROC. Because both indicators give identical signals, StockCharts.com has choosen to
only implement the Rate of Change version. People that are used to using the
Momentum indicator can simply replace that with the ROC indicator on their charts.
Relative Strength Index (RSI)
The Relative Strength Index (RSI) is an extremely useful and popular momentum
oscillator. The RSI compares the magnitude of a stock's recent gains to the magnitude of
its recent losses and turns that information into a number that ranges from 0 to 100. It
takes a single parameter, the number of time periods to use in the calculation.
Calculation:
RSI = 100 – 100 / (1+RS)
Average gain = (Total gains / n)
Average loss = (Total loss / n)
31
Technical Analysis
Relative Strength = Average gain / Average loss
Relative Strength Index = 100 – 100 / ( 1+ RS )
N = number of RSI periods.
To simplify the formula, the RSI has been broken down into its basic components which
are the Average Gain, the Average Loss, the First RS, and the subsequent Smoothed
RS's.
For a 20 -period RSI, the Average Gain equals the sum total all gains divided by 20. Even
if there are only 5 gains (losses), the total of those 5 gains (losses) is divided by the total
number of RSI periods in the calculation (20 in this case). The Average Loss is computed
in a similar manner.
Calculation of the First RS value is straightforward: divide the Average Gain by the
Average Loss. All subsequent RS calculations use the previous period's Average Gain
and Average Loss for smoothing purposes. See the "Smoothed RS" formula above for
details. The table below illustrates the formula in action.
Closing Relative
Date price Gain loss Avg.gain Avg.loss Strenght RSI
31-Dec-03 1879.75
1-Jan-04 1912.25 32.5
2-Jan-04 1946.05 33.8
5-Jan-04 1955 8.95
6-Jan-04 1926.7 28.3
7-Jan-04 1916.75 9.95
8-Jan-04 1968.55 51.8 0
9-Jan-04 1971.9 3.35 0
12-Jan-04 1945.6 26.3
13-Jan-04 1963.6 18 0
14-Jan-04 1982.15 18.55 0
15-Jan-04 1944.45 37.7
16-Jan-04 1900.65 43.8
19-Jan-04 1935.35 34.7 0
20-Jan-04 1893.25 42.1
21-Jan-04 1824.6 68.65
22-Jan-04 1770.5 54.1
32
Technical Analysis
23-Jan-04 1847.55 77.05 0

27-Jan-04 1904.7 57.15 0
28-Jan-04 1863.1 41.6 16.7925 17.625 0.952765957 48.7906
29-Jan-04 1843.6 19.5 16.7925 18.6 0.902822581 47.4465
30-Jan-04 1809.75 33.85 15.1675 20.2925 0.747443637 42.7735
3-Feb-04 1769 40.75 13.4775 22.33 0.603560233 37.6388
4-Feb-04 1822.2 53.2 0 15.69 22.33 0.702642185 41.2678
5-Feb-04 1804.5 17.7 15.69 21.8 0.719724771 41.8512
6-Feb-04 1833.65 29.15 0 17.1475 21.3025 0.80495247 44.5969
9-Feb-04 1880.7 47.05 0 16.91 21.3025 0.793803544 44.2525
10-Feb-04 1880.75 0.05 0 16.745 21.3025 0.786057974 44.0108
11-Feb-04 1891.5 10.75 0 17.2825 19.9875 0.864665416 46.3711
12-Feb-04 1885.3 6.2 16.3825 20.2975 0.807119103 44.6633
13-Feb-04 1913.6 28.3 0 16.87 20.2975 0.83113684 45.3891
16-Feb-04 1913.55 0.05 16.87 18.415 0.916101005 47.8107
17-Feb-04 1920.1 6.55 0 17.1975 16.225 1.059938367 51.4549
18-Feb-04 1916.45 3.65 15.4625 16.4075 0.942404388 48.5174
19-Feb-04 1858.3 58.15 15.4625 17.21 0.898460198 47.3257
20-Feb-04 1852.65 5.65 15.4625 14.06 1.099751067 52.3753
23-Feb-04 1808.2 44.45 15.4625 13.5775 1.138832628 53.2455
24-Feb-04 1821.35 13.15 0 12.2675 13.5775 0.903516848 47.4657
25-Feb-04 1786.8 34.55 9.41 15.305 0.614831754 38.074
26-Feb-04 1765.8 21 9.41 14.275 0.659194396 39.7298
27-Feb-04 1800.3 34.5 0 11.135 13.3 0.837218045 45.5699
The momentum
The momentum is certainly the easiest one to compute. The momentum is the difference
between today's price and the one of n days before.
With:
Pt today's price.
Pt-n the price at the date t-n
The momentum is:
MOt = Pt - Pt-n
33
Technical Analysis
The most often used are 5, 10, 20, 25 and 28 days. Here 20 days momentum is used to
find out the short term appliance of the momentum.
LIMITATIONS OF THE RESEARCH
Sample is restricted only to NIFTY.

The research is subject to a time span of three months.
Results arrived at, are generalized for the entire sample.
34
Technical Analysis
CHAPTER – 4
ANALYIS OF DATA
AND
INTERPRETATION
35
Technical Analysis
20 DAYS DAY MOVING AVERAGE FOR NIFTY INDEX PRICE 2005
Closing 20 days
Date price DMA
31-Dec-04 2059.85
3-Jan-05 2080
4-Jan-05 2100.55
5-Jan-05 1990.15
6-Jan-05 1984.25
7-Jan-05 1992.55
10-Jan-05 1974.8
11-Jan-05 1947.35
12-Jan-05 1900.85
13-Jan-05 1916.95
14-Jan-05 1922.85
17-Jan-05 1902.45
18-Jan-05 1925.35
19-Jan-05 1922.35
20-Jan-05 1900.05
24-Jan-05 1902.9
25-Jan-05 1894.4
27-Jan-05 1929
28-Jan-05 1950.85
31-Jan-05 2006.35 1960.1925
1-Feb-05 2045.25 1959.4625
2-Feb-05 2045.5 1957.7375
3-Feb-05 2052.35 1955.3275
4-Feb-05 2060.8 1958.86
7-Feb-05 2049.85 1962.14
8-Feb-05 2043.6 1964.6925
9-Feb-05 2055.2 1968.7125
10-Feb-05 2049.85 1973.8375
11-Feb-05 2063.35 1981.9625
14-Feb-05 2083.05 1990.2675
15-Feb-05 2081.2 1998.185
16-Feb-05 2059.45 2006.035
17-Feb-05 2045.85 2012.06
18-Feb-05 2048.85 2018.385
21-Feb-05 2039.9 2025.3775
22-Feb-05 2036.6 2032.0625
23-Feb-05 2051.35 2039.91
24-Feb-05 2052.4 2046.08
25-Feb-05 2051.2 2051.0975
28-Feb-05 2047.7 2053.165
1-Mar-05 2073.8 2054.5925
2-Mar-05 2080.55 2056.345
36
Technical Analysis
3-Mar-05 2093.35 2058.395

4-Mar-05 2129.1 2061.81
7-Mar-05 2143.05 2066.47
8-Mar-05 2154 2071.99
9-Mar-05 2141.35 2076.2975
10-Mar-05 2145.75 2081.0925
11-Mar-05 2148.7 2085.36
14-Mar-05 2140.9 2088.2525
15-Mar-05 2122 2090.2925
16-Mar-05 2121.1 2093.375
17-Mar-05 2090.45 2095.605
18-Mar-05 2077.2 2097.0225
21-Mar-05 2089.35 2099.495
22-Mar-05 2056.5 2100.49
23-Mar-05 2019.85 2098.915
24-Mar-05 2007.35 2096.6625
28-Mar-05 2015.25 2094.865
29-Mar-05 1971.55 2091.0575
30-Mar-05 1971.15 2085.925
31-Mar-05 1994.5 2081.6225
1-Apr-05 2024.25 2078.1675
4-Apr-05 2054.9 2074.4575
5-Apr-05 2043.7 2069.49
6-Apr-05 2051.3 2064.355
7-Apr-05 2048.05 2059.69
8-Apr-05 2024.8 2053.6425
11-Apr-05 2001.85 2046.3
12-Apr-05 2002.75 2039.3925
13-Apr-05 2018.1 2034.1975
15-Apr-05 1952.75 2025.78
18-Apr-05 1914.85 2017
19-Apr-05 1902.8 2008.28
20-Apr-05 1902.9 1998.9575
21-Apr-05 1911.4 1991.7025
22-Apr-05 1950 1988.21
25-Apr-05 1952.4 1985.4625
26-Apr-05 1951.8 1982.29
27-Apr-05 1930.35 1980.23
28-Apr-05 1921.05 1977.725
29-Apr-05 1896.3 1972.815
2-May-05 1898.15 1966.51
3-May-05 1911 1959.315
4-May-05 1920.15 1953.1375
5-May-05 1942.05 1947.675
6-May-05 1947.3 1942.6375
9-May-05 1978.05 1940.3
10-May-05 1989.1 1939.6625
11-May-05 1975.05 1938.2775
37
Technical Analysis
12-May-05 1981.95 1936.47

13-May-05 1978.9 1937.7775
16-May-05 1989.7 1941.52
17-May-05 1984.75 1945.6175
18-May-05 1964.65 1948.705
19-May-05 1983.15 1952.2925
20-May-05 1975.95 1953.59
23-May-05 1991.7 1955.555
24-May-05 2009.55 1958.4425
25-May-05 2019 1962.875
26-May-05 2025.65 1968.105
27-May-05 2069.5 1976.765
30-May-05 2064.85 1985.1
31-May-05 2066.55 1992.8775
1-Jun-05 2081.2 2000.93
2-Jun-05 2062.55 2006.955
3-Jun-05 2061.35 2012.6575
4-Jun-05 2087 2018.105
6-Jun-05 2087.4 2023.02
7-Jun-05 2084.35 2028.485
8-Jun-05 2094.05 2034.09
9-Jun-05 2097.55 2040.0225
10-Jun-05 2086.3 2044.8525
13-Jun-05 2081.7 2049.7
14-Jun-05 2098.7 2056.4025
15-Jun-05 2110.35 2062.7625
16-Jun-05 2114.55 2069.6925
17-Jun-05 2103.9 2075.3025
20-Jun-05 2124.65 2081.0575
21-Jun-05 2140.15 2087.115
22-Jun-05 2167.35 2094.2
23-Jun-05 2174.05 2099.4275
24-Jun-05 2162.95 2104.3325
27-Jun-05 2188.15 2110.4125
28-Jun-05 2165.9 2114.6475
29-Jun-05 2162 2119.62
30-Jun-05 2189.45 2126.025
1-Jul-05 2198.9 2131.62
4-Jul-05 2211.4 2137.82
5-Jul-05 2205.1 2143.8575
6-Jul-05 2211.3 2149.72
7-Jul-05 2171.25 2153.405
8-Jul-05 2179.05 2158.0425
11-Jul-05 2195.55 2163.735
12-Jul-05 2191.7 2168.385
13-Jul-05 2200.05 2172.87
14-Jul-05 2178.6 2176.0725
15-Jul-05 2181.85 2179.97
38
Technical Analysis
18-Jul-05 2212.95 2184.385

19-Jul-05 2227.2 2188.7375
20-Jul-05 2236.9 2192.215
21-Jul-05 2221.2 2194.5725
22-Jul-05 2223.15 2197.5825
25-Jul-05 2266.65 2201.5075
26-Jul-05 2279.8 2207.2025
27-Jul-05 2292.85 2213.745
29-Jul-05 2280.85 2218.315
1-Aug-05 2294.25 2223.0825
2-Aug-05 2319.75 2228.5
3-Aug-05 2345.2 2235.505
4-Aug-05 2352.05 2242.5425
5-Aug-05 2355.95 2251.7775
8-Aug-05 2320.05 2258.8275
9-Aug-05 2303.1 2264.205
10-Aug-05 2322.05 2270.7225
11-Aug-05 2355.5 2278.495
12-Aug-05 2356.9 2287.41
16-Aug-05 2356.85 2296.16
17-Aug-05 2357.5 2303.3875
18-Aug-05 2380.7 2311.0625
19-Aug-05 2378.45 2318.14
22-Aug-05 2355.75 2324.8675
23-Aug-05 2320.35 2329.7275
24-Aug-05 2300.45 2331.4175
25-Aug-05 2320.7 2333.4625
26-Aug-05 2340.2 2335.83
29-Aug-05 2312.6 2337.4175
30-Aug-05 2337.75 2339.5925
31-Aug-05 2355 2341.355
1-Sep-05 2382.9 2343.24
2-Sep-05 2396.1 2345.4425
5-Sep-05 2414.95 2348.3925
6-Sep-05 2417 2353.24
8-Sep-05 2429 2359.535
9-Sep-05 2441.9 2365.5275
12-Sep-05 2455.85 2370.545
13-Sep-05 2477.1 2376.555
14-Sep-05 2476 2382.5125
15-Sep-05 2492.75 2389.275
16-Sep-05 2519.05 2396.1925
19-Sep-05 2550.45 2404.7925
20-Sep-05 2546.6 2414.335
21-Sep-05 2504.9 2423.5625
22-Sep-05 2465.85 2431.8325
23-Sep-05 2453.05 2438.45
26-Sep-05 2477.85 2445.3325
39
Technical Analysis
27-Sep-05 2549.85 2457.195

28-Sep-05 2559.85 2468.3
29-Sep-05 2589.45 2480.0225
30-Sep-05 2567.75 2489.265
3-Oct-05 2597.2 2499.32
4-Oct-05 2629.6 2510.0525
5-Oct-05 2636.6 2521.0325
6-Oct-05 2571.3 2528.1475
7-Oct-05 2547.55 2533.43
10-Oct-05 2561 2538.6875
11-Oct-05 2533.7 2541.5175
13-Oct-05 2529.05 2544.17
14-Oct-05 2478 2543.4325
17-Oct-05 2459.5 2540.455
18-Oct-05 2452.5 2535.5575
19-Oct-05 2394.95 2527.975
20-Oct-05 2363.55 2520.9075
21-Oct-05 2384.05 2516.8175
24-Oct-05 2388.4 2513.585
25-Oct-05 2390.85 2509.235
26-Oct-05 2401.1 2501.7975
27-Oct-05 2338.6 2490.735
28-Oct-05 2307.45 2476.635
31-Oct-05 2314.2 2463.9575
1-Nov-05 2366.8 2452.4375
2-Nov-05 2367.75 2439.345
7-Nov-05 2411.6 2428.095
8-Nov-05 2460 2422.53
9-Nov-05 2475.7 2418.9375
10-Nov-05 2480.85 2414.93
11-Nov-05 2500.85 2413.2875
14-Nov-05 2534.4 2413.555
16-Nov-05 2559.45 2417.6275
17-Nov-05 2558.45 2422.575
18-Nov-05 2595.15 2429.7075
21-Nov-05 2591.75 2439.5475
22-Nov-05 2567.05 2449.7225
23-Nov-05 2563.1 2458.675
24-Nov-05 2608.7 2469.69
25-Nov-05 2633.75 2481.835
26-Nov-05 2664.7 2495.015
28-Nov-05 2682.65 2512.2175
29-Nov-05 2679.9 2530.84
30-Nov-05 2647.1 2547.485
1-Dec-05 2641.95 2561.2425
2-Dec-05 2691.5 2577.43
5-Dec-05 2654.35 2589.5675
6-Dec-05 2647.35 2598.935
40
Technical Analysis
7-Dec-05 2662.3 2608.265

8-Dec-05 2673.5 2617.8975
9-Dec-05 2698 2627.755
12-Dec-05 2756.4 2638.855
13-Dec-05 2764.65 2649.115
14-Dec-05 2788.3 2660.6075
15-Dec-05 2763.35 2669.0175
16-Dec-05 2766.5 2677.755
19-Dec-05 2803.45 2689.575
20-Dec-05 2815.2 2702.18
21-Dec-05 2799.45 2711.7175
22-Dec-05 2818.65 2720.9625
23-Dec-05 2799.7 2727.7125
26-Dec-05 2741.8 2730.67
27-Dec-05 2725.7 2732.96
28-Dec-05 2780 2739.605
29-Dec-05 2792.75 2747.145
30-Dec-05 2812.75 2753.2075
41
Technical Analysis
MOMENTUM FOR NIFTY INDEX 2005
Closing
Date price Momentum
31-Dec-04 2059.85
3-Jan-05 2080
4-Jan-05 2100.55
5-Jan-05 1990.15
6-Jan-05 1984.25
7-Jan-05 1992.55
10-Jan-05 1974.8
11-Jan-05 1947.35
12-Jan-05 1900.85
13-Jan-05 1916.95
14-Jan-05 1922.85
17-Jan-05 1902.45
18-Jan-05 1925.35
19-Jan-05 1922.35
20-Jan-05 1900.05
24-Jan-05 1902.9
25-Jan-05 1894.4
27-Jan-05 1929
28-Jan-05 1950.85
31-Jan-05 2006.35
1-Feb-05 2045.25 -14.6
2-Feb-05 2045.5 -34.5
3-Feb-05 2052.35 -48.2
4-Feb-05 2060.8 70.65
7-Feb-05 2049.85 65.6
8-Feb-05 2043.6 51.05
9-Feb-05 2055.2 80.4
10-Feb-05 2049.85 102.5
11-Feb-05 2063.35 162.5
14-Feb-05 2083.05 166.1
15-Feb-05 2081.2 158.35
16-Feb-05 2059.45 157
17-Feb-05 2045.85 120.5
18-Feb-05 2048.85 126.5
21-Feb-05 2039.9 139.85
22-Feb-05 2036.6 133.7
23-Feb-05 2051.35 156.95
24-Feb-05 2052.4 123.4
25-Feb-05 2051.2 100.35
28-Feb-05 2047.7 41.35
1-Mar-05 2073.8 28.55
2-Mar-05 2080.55 35.05
3-Mar-05 2093.35 41
42
Technical Analysis
4-Mar-05 2129.1 68.3

7-Mar-05 2143.05 93.2
8-Mar-05 2154 110.4
9-Mar-05 2141.35 86.15
10-Mar-05 2145.75 95.9
11-Mar-05 2148.7 85.35
14-Mar-05 2140.9 57.85
15-Mar-05 2122 40.8
16-Mar-05 2121.1 61.65
17-Mar-05 2090.45 44.6
18-Mar-05 2077.2 28.35
21-Mar-05 2089.35 49.45
22-Mar-05 2056.5 19.9
23-Mar-05 2019.85 -31.5
24-Mar-05 2007.35 -45.05
28-Mar-05 2015.25 -35.95
29-Mar-05 1971.55 -76.15
30-Mar-05 1971.15 -102.65
31-Mar-05 1994.5 -86.05
1-Apr-05 2024.25 -69.1
4-Apr-05 2054.9 -74.2
5-Apr-05 2043.7 -99.35
6-Apr-05 2051.3 -102.7
7-Apr-05 2048.05 -93.3
8-Apr-05 2024.8 -120.95
11-Apr-05 2001.85 -146.85
12-Apr-05 2002.75 -138.15
13-Apr-05 2018.1 -103.9
15-Apr-05 1952.75 -168.35
18-Apr-05 1914.85 -175.6
19-Apr-05 1902.8 -174.4
20-Apr-05 1902.9 -186.45
21-Apr-05 1911.4 -145.1
22-Apr-05 1950 -69.85
25-Apr-05 1952.4 -54.95
26-Apr-05 1951.8 -63.45
27-Apr-05 1930.35 -41.2
28-Apr-05 1921.05 -50.1
29-Apr-05 1896.3 -98.2
2-May-05 1898.15 -126.1
3-May-05 1911 -143.9
4-May-05 1920.15 -123.55
5-May-05 1942.05 -109.25
6-May-05 1947.3 -100.75
9-May-05 1978.05 -46.75
10-May-05 1989.1 -12.75
11-May-05 1975.05 -27.7
12-May-05 1981.95 -36.15
43
Technical Analysis
13-May-05 1978.9 26.15

16-May-05 1989.7 74.85
17-May-05 1984.75 81.95
18-May-05 1964.65 61.75
19-May-05 1983.15 71.75
20-May-05 1975.95 25.95
23-May-05 1991.7 39.3
24-May-05 2009.55 57.75
25-May-05 2019 88.65
26-May-05 2025.65 104.6
27-May-05 2069.5 173.2
30-May-05 2064.85 166.7
31-May-05 2066.55 155.55
1-Jun-05 2081.2 161.05
2-Jun-05 2062.55 120.5
3-Jun-05 2061.35 114.05
4-Jun-05 2087 108.95
6-Jun-05 2087.4 98.3
7-Jun-05 2084.35 109.3
8-Jun-05 2094.05 112.1
9-Jun-05 2097.55 118.65
10-Jun-05 2086.3 96.6
13-Jun-05 2081.7 96.95
14-Jun-05 2098.7 134.05
15-Jun-05 2110.35 127.2
16-Jun-05 2114.55 138.6
17-Jun-05 2103.9 112.2
20-Jun-05 2124.65 115.1
21-Jun-05 2140.15 121.15
22-Jun-05 2167.35 141.7
23-Jun-05 2174.05 104.55
24-Jun-05 2162.95 98.1
27-Jun-05 2188.15 121.6
28-Jun-05 2165.9 84.7
29-Jun-05 2162 99.45
30-Jun-05 2189.45 128.1
1-Jul-05 2198.9 111.9
4-Jul-05 2211.4 124
5-Jul-05 2205.1 120.75
6-Jul-05 2211.3 117.25
7-Jul-05 2171.25 73.7
8-Jul-05 2179.05 92.75
11-Jul-05 2195.55 113.85
12-Jul-05 2191.7 93
13-Jul-05 2200.05 89.7
14-Jul-05 2178.6 64.05
15-Jul-05 2181.85 77.95
18-Jul-05 2212.95 88.3
44
Technical Analysis
19-Jul-05 2227.2 87.05

20-Jul-05 2236.9 69.55
21-Jul-05 2221.2 47.15
22-Jul-05 2223.15 60.2
25-Jul-05 2266.65 78.5
26-Jul-05 2279.8 113.9
27-Jul-05 2292.85 130.85
29-Jul-05 2280.85 91.4
1-Aug-05 2294.25 95.35
2-Aug-05 2319.75 108.35
3-Aug-05 2345.2 140.1
4-Aug-05 2352.05 140.75
5-Aug-05 2355.95 184.7
8-Aug-05 2320.05 141
9-Aug-05 2303.1 107.55
10-Aug-05 2322.05 130.35
11-Aug-05 2355.5 155.45
12-Aug-05 2356.9 178.3
16-Aug-05 2356.85 175
17-Aug-05 2357.5 144.55
18-Aug-05 2380.7 153.5
19-Aug-05 2378.45 141.55
22-Aug-05 2355.75 134.55
23-Aug-05 2320.35 97.2
24-Aug-05 2300.45 33.8
25-Aug-05 2320.7 40.9
26-Aug-05 2340.2 47.35
29-Aug-05 2312.6 31.75
30-Aug-05 2337.75 43.5
31-Aug-05 2355 35.25
1-Sep-05 2382.9 37.7
2-Sep-05 2396.1 44.05
5-Sep-05 2414.95 59
6-Sep-05 2417 96.95
8-Sep-05 2429 125.9
9-Sep-05 2441.9 119.85
12-Sep-05 2455.85 100.35
13-Sep-05 2477.1 120.2
14-Sep-05 2476 119.15
15-Sep-05 2492.75 135.25
16-Sep-05 2519.05 138.35
19-Sep-05 2550.45 172
20-Sep-05 2546.6 190.85
21-Sep-05 2504.9 184.55
22-Sep-05 2465.85 165.4
23-Sep-05 2453.05 132.35
26-Sep-05 2477.85 137.65
27-Sep-05 2549.85 237.25
45
Technical Analysis
28-Sep-05 2559.85 222.1

29-Sep-05 2589.45 234.45
30-Sep-05 2567.75 184.85
3-Oct-05 2597.2 201.1
4-Oct-05 2629.6 214.65
5-Oct-05 2636.6 219.6
6-Oct-05 2571.3 142.3
7-Oct-05 2547.55 105.65
10-Oct-05 2561 105.15
11-Oct-05 2533.7 56.6
13-Oct-05 2529.05 53.05
14-Oct-05 2478 -14.75
17-Oct-05 2459.5 -59.55
18-Oct-05 2452.5 -97.95
19-Oct-05 2394.95 -151.65
20-Oct-05 2363.55 -141.35
21-Oct-05 2384.05 -81.8
24-Oct-05 2388.4 -64.65
25-Oct-05 2390.85 -87
26-Oct-05 2401.1 -148.75
27-Oct-05 2338.6 -221.25
28-Oct-05 2307.45 -282
31-Oct-05 2314.2 -253.55
1-Nov-05 2366.8 -230.4
2-Nov-05 2367.75 -261.85
7-Nov-05 2411.6 -225
8-Nov-05 2460 -111.3
9-Nov-05 2475.7 -71.85
10-Nov-05 2480.85 -80.15
11-Nov-05 2500.85 -32.85
14-Nov-05 2534.4 5.35
16-Nov-05 2559.45 81.45
17-Nov-05 2558.45 98.95
18-Nov-05 2595.15 142.65
21-Nov-05 2591.75 196.8
22-Nov-05 2567.05 203.5
23-Nov-05 2563.1 179.05
24-Nov-05 2608.7 220.3
25-Nov-05 2633.75 242.9
26-Nov-05 2664.7 263.6
28-Nov-05 2682.65 344.05
29-Nov-05 2679.9 372.45
30-Nov-05 2647.1 332.9
1-Dec-05 2641.95 275.15
2-Dec-05 2691.5 323.75
5-Dec-05 2654.35 242.75
6-Dec-05 2647.35 187.35
7-Dec-05 2662.3 186.6
46
Technical Analysis
8-Dec-05 2673.5 192.65

9-Dec-05 2698 197.15
12-Dec-05 2756.4 222
13-Dec-05 2764.65 205.2
14-Dec-05 2788.3 229.85
15-Dec-05 2763.35 168.2
16-Dec-05 2766.5 174.75
19-Dec-05 2803.45 236.4
20-Dec-05 2815.2 252.1
21-Dec-05 2799.45 190.75
22-Dec-05 2818.65 184.9
23-Dec-05 2799.7 135
26-Dec-05 2741.8 59.15
27-Dec-05 2725.7 45.8
28-Dec-05 2780 132.9
29-Dec-05 2792.75 150.8
30-Dec-05 2812.75 121.25
47
Technical Analysis
CALCULATION OF RATE OF CHANGE FOR NIFTY INDEX 2005
Closing ROC 1st ROC 2nd

Date price Method Method
31-Dec-04 2059.85
3-Jan-05 2080
4-Jan-05 2100.55
5-Jan-05 1990.15
6-Jan-05 1984.25
7-Jan-05 1992.55
10-Jan-05 1974.8
11-Jan-05 1947.35
12-Jan-05 1900.85
13-Jan-05 1916.95
14-Jan-05 1922.85
17-Jan-05 1902.45
18-Jan-05 1925.35
19-Jan-05 1922.35
20-Jan-05 1900.05
24-Jan-05 1902.9
25-Jan-05 1894.4
27-Jan-05 1929
28-Jan-05 1950.85
31-Jan-05 2006.35
1-Feb-05 2045.25 99.29121053 -0.708789475
2-Feb-05 2045.5 98.34134615 -1.658653846
3-Feb-05 2052.35 97.70536288 -2.294637119
4-Feb-05 2060.8 103.5499837 3.54998367
7-Feb-05 2049.85 103.306035 3.306035026
8-Feb-05 2043.6 102.5620436 2.562043612
9-Feb-05 2055.2 104.0712984 4.071298359
10-Feb-05 2049.85 105.2635633 5.263563304
11-Feb-05 2063.35 108.5488071 8.548807113
14-Feb-05 2083.05 108.6648061 8.664806072
15-Feb-05 2081.2 108.2351718 8.23517175
16-Feb-05 2059.45 108.2525165 8.252516492
17-Feb-05 2045.85 106.2586023 6.258602332
18-Feb-05 2048.85 106.5804874 6.580487424
21-Feb-05 2039.9 107.3603326 7.360332623
22-Feb-05 2036.6 107.026118 7.02611803
23-Feb-05 2051.35 108.2849451 8.284945101
24-Feb-05 2052.4 106.3970969 6.397096941
25-Feb-05 2051.2 105.1439116 5.143911628
28-Feb-05 2047.7 102.0609565 2.060956463
1-Mar-05 2073.8 101.3959174 1.39591737
2-Mar-05 2080.55 101.7135175 1.713517477
48
Technical Analysis
3-Mar-05 2093.35 101.9977099 1.997709942

4-Mar-05 2129.1 103.3142469 3.314246894
7-Mar-05 2143.05 104.5466741 4.546674147
8-Mar-05 2154 105.4022314 5.402231356
9-Mar-05 2141.35 104.1918062 4.19180615
10-Mar-05 2145.75 104.6783911 4.678391102
11-Mar-05 2148.7 104.1364771 4.136477088
14-Mar-05 2140.9 102.7771777 2.777177696
15-Mar-05 2122 101.9604075 1.960407457
16-Mar-05 2121.1 102.9935177 2.993517687
17-Mar-05 2090.45 102.180023 2.180022973
18-Mar-05 2077.2 101.3837031 1.383703053
21-Mar-05 2089.35 102.4241384 2.424138438
22-Mar-05 2056.5 100.9771187 0.977118727
23-Mar-05 2019.85 98.46442587 -1.535574134
24-Mar-05 2007.35 97.80500877 -2.19499123
28-Mar-05 2015.25 98.24736739 -1.752632605
29-Mar-05 1971.55 96.28119353 -3.718806466
30-Mar-05 1971.15 95.05014948 -4.949850516
31-Mar-05 1994.5 95.8640744 -4.135925597
1-Apr-05 2024.25 96.69907087 -3.300929133
4-Apr-05 2054.9 96.51495937 -3.485040627
5-Apr-05 2043.7 95.3640839 -4.635916101
6-Apr-05 2051.3 95.23212628 -4.767873723
7-Apr-05 2048.05 95.64293553 -4.357064469
8-Apr-05 2024.8 94.36327624 -5.636723756
11-Apr-05 2001.85 93.16563504 -6.834364965
12-Apr-05 2002.75 93.54710636 -6.452893643
13-Apr-05 2018.1 95.10367578 -4.896324222
15-Apr-05 1952.75 92.06308048 -7.936919523
18-Apr-05 1914.85 91.59989476 -8.40010524
19-Apr-05 1902.8 91.60408242 -8.395917581
20-Apr-05 1902.9 91.07617202 -8.923827985
21-Apr-05 1911.4 92.94432288 -7.055677121
22-Apr-05 1950 96.54182241 -3.458177587
25-Apr-05 1952.4 97.26256009 -2.737439908
26-Apr-05 1951.8 96.85150726 -3.148492743
27-Apr-05 1930.35 97.91027364 -2.089726357
28-Apr-05 1921.05 97.4583365 -2.541663496
29-Apr-05 1896.3 95.07646027 -4.923539734
2-May-05 1898.15 93.7705323 -6.229467704
3-May-05 1911 92.99722614 -7.002773858
4-May-05 1920.15 93.95459216 -6.045407839
5-May-05 1942.05 94.6741091 -5.325890898
6-May-05 1947.3 95.08068651 -4.919313493
9-May-05 1978.05 97.69112999 -2.308870012
10-May-05 1989.1 99.36308914 -0.636910857
11-May-05 1975.05 98.61690176 -1.38309824
49
Technical Analysis
12-May-05 1981.95 98.20871116 -1.791288836

13-May-05 1978.9 101.3391371 1.339137114
16-May-05 1989.7 103.9089224 3.90892237
17-May-05 1984.75 104.306811 4.306811015
18-May-05 1964.65 103.245047 3.245047033
19-May-05 1983.15 103.753793 3.753793031
20-May-05 1975.95 101.3307692 1.330769231
23-May-05 1991.7 102.0129072 2.012907191
24-May-05 2009.55 102.9588073 2.958807255
25-May-05 2019 104.5924314 4.592431424
26-May-05 2025.65 105.444939 5.444938966
27-May-05 2069.5 109.1335759 9.133575911
30-May-05 2064.85 108.7822353 8.782235334
31-May-05 2066.55 108.1397174 8.139717425
1-Jun-05 2081.2 108.3873656 8.38736557
2-Jun-05 2062.55 106.2047836 6.204783605
3-Jun-05 2061.35 105.8568274 5.856827402
4-Jun-05 2087 105.5079497 5.507949748
6-Jun-05 2087.4 104.9419335 4.941933538
7-Jun-05 2084.35 105.5340371 5.534037113
8-Jun-05 2094.05 105.6560458 5.656045813
9-Jun-05 2097.55 105.9957552 5.995755218
10-Jun-05 2086.3 104.8550033 4.855003267
13-Jun-05 2081.7 104.8847462 4.88474619
14-Jun-05 2098.7 106.8230983 6.823098262
15-Jun-05 2110.35 106.4140383 6.414038272
16-Jun-05 2114.55 107.0143475 7.014347529
17-Jun-05 2103.9 105.6333785 5.633378521
20-Jun-05 2124.65 105.7276505 5.727650469
21-Jun-05 2140.15 106.0004953 6.000495295
22-Jun-05 2167.35 106.9952855 6.995285464
23-Jun-05 2174.05 105.0519449 5.051944914
24-Jun-05 2162.95 104.7509504 4.750950432
27-Jun-05 2188.15 105.8842031 5.88420314
28-Jun-05 2165.9 104.0697674 4.069767442
29-Jun-05 2162 104.8217013 4.821701292
30-Jun-05 2189.45 106.2143741 6.214374075
1-Jul-05 2198.9 105.3617633 5.361763297
4-Jul-05 2211.4 105.9404043 5.940404331
5-Jul-05 2205.1 105.7931729 5.793172932
6-Jul-05 2211.3 105.5991977 5.599197727
7-Jul-05 2171.25 103.513623 3.513623036
8-Jul-05 2179.05 104.4456694 4.445669367
11-Jul-05 2195.55 105.4690878 5.469087765
12-Jul-05 2191.7 104.4313146 4.431314623
13-Jul-05 2200.05 104.2504798 4.250479778
14-Jul-05 2178.6 103.0290133 3.029013265
15-Jul-05 2181.85 103.705024 3.705024003
50
Technical Analysis
18-Jul-05 2212.95 104.1559786 4.155978632

19-Jul-05 2227.2 104.0674719 4.067471906
20-Jul-05 2236.9 103.2089879 3.208987935
21-Jul-05 2221.2 102.1687634 2.168763368
22-Jul-05 2223.15 102.7832359 2.783235858
25-Jul-05 2266.65 103.5875054 3.587505427
26-Jul-05 2279.8 105.2587839 5.258783877
27-Jul-05 2292.85 106.0522664 6.05226642
29-Jul-05 2280.85 104.1745644 4.174564388
1-Aug-05 2294.25 104.336259 4.336259039
2-Aug-05 2319.75 104.8996111 4.899611106
3-Aug-05 2345.2 106.3534534 6.353453358
4-Aug-05 2352.05 106.3650341 6.365034143
5-Aug-05 2355.95 108.5066206 8.50662061
8-Aug-05 2320.05 106.4707097 6.470709713
9-Aug-05 2303.1 104.8985448 4.898544784
10-Aug-05 2322.05 105.9474381 5.947438062
11-Aug-05 2355.5 107.0657485 7.065748506
12-Aug-05 2356.9 108.184155 8.184154962
16-Aug-05 2356.85 108.0207164 8.020716365
17-Aug-05 2357.5 106.5320048 6.53200479
18-Aug-05 2380.7 106.8920618 6.892061782
19-Aug-05 2378.45 106.3279539 6.327953865
22-Aug-05 2355.75 106.0575365 6.057536467
23-Aug-05 2320.35 104.3721746 4.372174617
24-Aug-05 2300.45 101.4911874 1.491187435
25-Aug-05 2320.7 101.794017 1.794017019
26-Aug-05 2340.2 102.0651155 2.065115468
29-Aug-05 2312.6 101.3920249 1.392024903
30-Aug-05 2337.75 101.8960445 1.896044459
31-Aug-05 2355 101.5195603 1.519560297
1-Sep-05 2382.9 101.6075388 1.607538803
2-Sep-05 2396.1 101.8728343 1.872834336
5-Sep-05 2414.95 102.5042976 2.504297629
6-Sep-05 2417 104.1787893 4.17878925
8-Sep-05 2429 105.4665451 5.466545091
9-Sep-05 2441.9 105.1613876 5.161387567
12-Sep-05 2455.85 104.260242 4.260241987
13-Sep-05 2477.1 105.0999194 5.099919386
14-Sep-05 2476 105.0554766 5.05547659
15-Sep-05 2492.75 105.7370095 5.737009544
16-Sep-05 2519.05 105.811316 5.811315999
19-Sep-05 2550.45 107.2316004 7.231600412
20-Sep-05 2546.6 108.1014539 8.101453889
21-Sep-05 2504.9 107.9535415 7.953541492
22-Sep-05 2465.85 107.1898976 7.189897629
23-Sep-05 2453.05 105.7030206 5.70302064
26-Sep-05 2477.85 105.8819759 5.881975899
51
Technical Analysis
27-Sep-05 2549.85 110.2590158 10.25901583

28-Sep-05 2559.85 109.5005882 9.500588172
29-Sep-05 2589.45 109.955414 9.955414013
30-Sep-05 2567.75 107.7573545 7.757354484
3-Oct-05 2597.2 108.392805 8.392804975
4-Oct-05 2629.6 108.8883828 8.888382782
5-Oct-05 2636.6 109.0856434 9.08564336
6-Oct-05 2571.3 105.8583779 5.858377933
7-Oct-05 2547.55 104.326549 4.326548999
10-Oct-05 2561 104.2816133 4.281613291
11-Oct-05 2533.7 102.28493 2.284929958
13-Oct-05 2529.05 102.1425687 2.142568659
14-Oct-05 2478 99.40828402 -0.591715976
17-Oct-05 2459.5 97.63601358 -2.363986423
18-Oct-05 2452.5 96.15950126 -3.840498736
19-Oct-05 2394.95 94.04500118 -5.954998822
20-Oct-05 2363.55 94.35706016 -5.642939838
21-Oct-05 2384.05 96.68268548 -3.317314516
24-Oct-05 2388.4 97.36450541 -2.635494588
25-Oct-05 2390.85 96.48889158 -3.511108421
26-Oct-05 2401.1 94.16632351 -5.833676491
27-Oct-05 2338.6 91.35691544 -8.643084556
28-Oct-05 2307.45 89.10965649 -10.89034351
31-Oct-05 2314.2 90.12559634 -9.874403661
1-Nov-05 2366.8 91.12890805 -8.871091945
2-Nov-05 2367.75 90.04221174 -9.957788257
7-Nov-05 2411.6 91.46628233 -8.533717667
8-Nov-05 2460 95.67145024 -4.328549761
9-Nov-05 2475.7 97.17964319 -2.820356813
10-Nov-05 2480.85 96.87036314 -3.129636861
11-Nov-05 2500.85 98.70347713 -1.296522872
14-Nov-05 2534.4 100.2115419 0.211541883
16-Nov-05 2559.45 103.2869249 3.286924939
17-Nov-05 2558.45 104.0231754 4.023175442
18-Nov-05 2595.15 105.8165138 5.816513761
21-Nov-05 2591.75 108.2172905 8.217290549
22-Nov-05 2567.05 108.60993 8.609929978
23-Nov-05 2563.1 107.5103291 7.510329062
24-Nov-05 2608.7 109.2237481 9.223748116
25-Nov-05 2633.75 110.1595667 10.15956668
26-Nov-05 2664.7 110.9783016 10.97830161
28-Nov-05 2682.65 114.7117934 14.71179338
29-Nov-05 2679.9 116.1411948 16.14119483
30-Nov-05 2647.1 114.3851007 14.38510068
1-Dec-05 2641.95 111.6254014 11.62540139
2-Dec-05 2691.5 113.6733186 13.67331855
5-Dec-05 2654.35 110.0659313 10.06593133
6-Dec-05 2647.35 107.6158537 7.615853659
52
Technical Analysis
7-Dec-05 2662.3 107.5372622 7.537262188

8-Dec-05 2673.5 107.7654836 7.765483604
9-Dec-05 2698 107.8833197 7.883319671
12-Dec-05 2756.4 108.7594697 8.759469697
13-Dec-05 2764.65 108.0173475 8.017347477
14-Dec-05 2788.3 108.9839551 8.983955129
15-Dec-05 2763.35 106.4813209 6.481320926
16-Dec-05 2766.5 106.7425485 6.742548471
19-Dec-05 2803.45 109.2090142 9.209014238
20-Dec-05 2815.2 109.8357458 9.835745777
21-Dec-05 2799.45 107.3120711 7.312071147
22-Dec-05 2818.65 107.0204082 7.020408163
23-Dec-05 2799.7 105.0662363 5.066236349
26-Dec-05 2741.8 102.2049093 2.204909325
27-Dec-05 2725.7 101.709019 1.709018993
28-Dec-05 2780 105.0205886 5.020588569
29-Dec-05 2792.75 105.7079051 5.707905146
30-Dec-05 2812.75 104.5049229 4.504922905
53
Technical Analysis
CALCULATION OF RELATIVE STRENGHT INDEX FOR NIFTY INDEX 2005
Closing Average Average Relative

Date price Gain Loss gain loss Strength RSI
31-Dec-04 2,059.85
3-Jan-05 2,080.00 20.15
4-Jan-05 2,100.55 20.55
5-Jan-05 1,990.15 (110.40) 110.40
6-Jan-05 1,984.25 (5.90) 5.90
7-Jan-05 1,992.55 8.30
10-Jan-05 1,974.80 (17.75) 17.75
11-Jan-05 1,947.35 (27.45) 27.45
12-Jan-05 1,900.85 (46.50) 46.50
13-Jan-05 1,916.95 16.10
14-Jan-05 1,922.85 5.90
17-Jan-05 1,902.45 (20.40) 20.40
18-Jan-05 1,925.35 22.90
19-Jan-05 1,922.35 (3.00) 3.00
20-Jan-05 1,900.05 (22.30) 22.30
24-Jan-05 1,902.90 2.85
25-Jan-05 1,894.40 (8.50) 8.50
27-Jan-05 1,929.00 34.60
28-Jan-05 1,950.85 21.85
31-Jan-05 2,006.35 55.50 10.44 13.11 0.80 44.32
1-Feb-05 2,045.25 38.90 12.38 13.11 0.94 48.57
2-Feb-05 2,045.50 0.25 11.39 13.11 0.87 46.48
3-Feb-05 2,052.35 6.85 10.70 13.11 0.82 44.94
4-Feb-05 2,060.80 8.45 11.12 7.59 1.47 59.44
7-Feb-05 2,049.85 (10.95) 10.95 11.12 7.84 1.42 58.65
8-Feb-05 2,043.60 (6.25) 6.25 10.71 8.16 1.31 56.77
9-Feb-05 2,055.20 11.60 11.29 7.27 1.55 60.83
10-Feb-05 2,049.85 (5.35) 5.35 11.29 6.16 1.83 64.68
11-Feb-05 2,063.35 13.50 11.96 3.84 3.12 75.71
14-Feb-05 2,083.05 19.70 12.14 3.84 3.16 75.99
15-Feb-05 2,081.20 (1.85) 1.85 11.85 3.93 3.01 75.09
16-Feb-05 2,059.45 (21.75) 21.75 11.85 4.00 2.96 74.77
17-Feb-05 2,045.85 (13.60) 13.60 10.70 4.68 2.29 69.59
18-Feb-05 2,048.85 3.00 10.85 4.53 2.40 70.56
21-Feb-05 2,039.90 (8.95) 8.95 10.85 3.86 2.81 73.76
22-Feb-05 2,036.60 (3.30) 3.30 10.71 4.03 2.66 72.68
23-Feb-05 2,051.35 14.75 11.45 3.60 3.18 76.08
24-Feb-05 2,052.40 1.05 9.77 3.60 2.71 73.07
25-Feb-05 2,051.20 (1.20) 1.20 8.68 3.66 2.37 70.33
28-Feb-05 2,047.70 (3.50) 3.50 5.90 3.84 1.54 60.62
1-Mar-05 2,073.80 26.10 5.26 3.84 1.37 57.85
2-Mar-05 2,080.55 6.75 5.59 3.84 1.46 59.30
54
Technical Analysis
3-Mar-05 2,093.35 12.80 5.89 3.84 1.53 60.55

4-Mar-05 2,129.10 35.75 7.25 3.84 1.89 65.40
7-Mar-05 2,143.05 13.95 7.95 3.29 2.42 70.74
8-Mar-05 2,154.00 10.95 8.50 2.98 2.86 74.06
9-Mar-05 2,141.35 (12.65) 12.65 7.92 3.61 2.19 68.69
10-Mar-05 2,145.75 4.40 8.14 3.34 2.44 70.89
11-Mar-05 2,148.70 2.95 7.61 3.34 2.28 69.49
14-Mar-05 2,140.90 (7.80) 7.80 6.62 3.73 1.78 63.97
15-Mar-05 2,122.00 (18.90) 18.90 6.62 4.58 1.45 59.10
16-Mar-05 2,121.10 (0.90) 0.90 6.62 3.54 1.87 65.17
17-Mar-05 2,090.45 (30.65) 30.65 6.62 4.39 1.51 60.12
18-Mar-05 2,077.20 (13.25) 13.25 6.47 5.06 1.28 56.15
21-Mar-05 2,089.35 12.15 7.08 4.61 1.54 60.58
22-Mar-05 2,056.50 (32.85) 32.85 7.08 6.09 1.16 53.78
23-Mar-05 2,019.85 (36.65) 36.65 6.34 7.92 0.80 44.48
24-Mar-05 2,007.35 (12.50) 12.50 6.29 8.54 0.74 42.41
28-Mar-05 2,015.25 7.90 6.69 8.48 0.79 44.07
29-Mar-05 1,971.55 (43.70) 43.70 6.69 10.49 0.64 38.92
30-Mar-05 1,971.15 (0.40) 0.40 5.38 10.51 0.51 33.85
31-Mar-05 1,994.50 23.35 6.21 10.51 0.59 37.14
1-Apr-05 2,024.25 29.75 7.06 10.51 0.67 40.17
4-Apr-05 2,054.90 30.65 6.80 10.51 0.65 39.29
5-Apr-05 2,043.70 (11.20) 11.20 6.11 11.07 0.55 35.54
6-Apr-05 2,051.30 7.60 5.94 11.07 0.54 34.91
7-Apr-05 2,048.05 (3.25) 3.25 5.94 10.60 0.56 35.90
8-Apr-05 2,024.80 (23.25) 23.25 5.72 11.77 0.49 32.70
11-Apr-05 2,001.85 (22.95) 22.95 5.57 12.91 0.43 30.14
12-Apr-05 2,002.75 0.90 5.62 12.52 0.45 30.96
13-Apr-05 2,018.10 15.35 6.38 11.58 0.55 35.54
15-Apr-05 1,952.75 (65.35) 65.35 6.38 14.80 0.43 30.13
18-Apr-05 1,914.85 (37.90) 37.90 6.38 15.16 0.42 29.62
19-Apr-05 1,902.80 (12.05) 12.05 6.38 15.10 0.42 29.71
20-Apr-05 1,902.90 0.10 5.78 15.10 0.38 27.68
21-Apr-05 1,911.40 8.50 6.21 13.46 0.46 31.55
22-Apr-05 1,950.00 38.60 8.14 11.63 0.70 41.16
25-Apr-05 1,952.40 2.40 8.26 11.00 0.75 42.87
26-Apr-05 1,951.80 (0.60) 0.60 7.86 11.03 0.71 41.60
27-Apr-05 1,930.35 (21.45) 21.45 7.86 9.92 0.79 44.21
28-Apr-05 1,921.05 (9.30) 9.30 7.86 10.37 0.76 43.13
29-Apr-05 1,896.30 (24.75) 24.75 6.69 11.60 0.58 36.58
2-May-05 1,898.15 1.85 5.30 11.60 0.46 31.35
3-May-05 1,911.00 12.85 4.41 11.60 0.38 27.53
4-May-05 1,920.15 9.15 4.87 11.04 0.44 30.58
5-May-05 1,942.05 21.90 5.58 11.04 0.51 33.57
6-May-05 1,947.30 5.25 5.84 10.88 0.54 34.94
9-May-05 1,978.05 30.75 7.38 9.72 0.76 43.16
10-May-05 1,989.10 11.05 7.93 8.57 0.93 48.07
11-May-05 1,975.05 (14.05) 14.05 7.89 9.27 0.85 45.96
55
Technical Analysis
12-May-05 1,981.95 6.90 7.47 9.27 0.81 44.60

13-May-05 1,978.90 (3.05) 3.05 7.47 6.16 1.21 54.80
16-May-05 1,989.70 10.80 8.01 4.26 1.88 65.25
17-May-05 1,984.75 (4.95) 4.95 8.01 3.91 2.05 67.20
18-May-05 1,964.65 (20.10) 20.10 8.00 4.91 1.63 61.96
19-May-05 1,983.15 18.50 8.50 4.91 1.73 63.37
20-May-05 1,975.95 (7.20) 7.20 6.57 5.27 1.25 55.48
23-May-05 1,991.70 15.75 7.24 5.27 1.37 57.85
24-May-05 2,009.55 17.85 8.13 5.24 1.55 60.80
25-May-05 2,019.00 9.45 8.60 4.17 2.06 67.35
26-May-05 2,025.65 6.65 8.94 3.71 2.41 70.69
27-May-05 2,069.50 43.85 11.13 2.47 4.51 81.85
30-May-05 2,064.85 (4.65) 4.65 11.04 2.70 4.09 80.34
31-May-05 2,066.55 1.70 10.48 2.70 3.88 79.51
1-Jun-05 2,081.20 14.65 10.75 2.70 3.98 79.93
2-Jun-05 2,062.55 (18.65) 18.65 9.66 3.63 2.66 72.67
3-Jun-05 2,061.35 (1.20) 1.20 9.39 3.69 2.54 71.79
4-Jun-05 2,087.00 25.65 9.14 3.69 2.48 71.23
6-Jun-05 2,087.40 0.40 8.61 3.69 2.33 69.98
7-Jun-05 2,084.35 (3.05) 3.05 8.61 3.14 2.74 73.26
8-Jun-05 2,094.05 9.70 8.75 3.14 2.78 73.57
9-Jun-05 2,097.55 3.50 8.92 2.99 2.98 74.90
10-Jun-05 2,086.30 (11.25) 11.25 8.38 3.55 2.36 70.23
13-Jun-05 2,081.70 (4.60) 4.60 8.38 3.54 2.37 70.34
14-Jun-05 2,098.70 17.00 9.23 2.53 3.65 78.49
15-Jun-05 2,110.35 11.65 8.89 2.53 3.51 77.85
16-Jun-05 2,114.55 4.20 9.10 2.17 4.19 80.75
17-Jun-05 2,103.90 (10.65) 10.65 8.31 2.70 3.08 75.47
20-Jun-05 2,124.65 20.75 8.46 2.70 3.13 75.78
21-Jun-05 2,140.15 15.50 8.76 2.70 3.24 76.42
22-Jun-05 2,167.35 27.20 9.79 2.70 3.62 78.36
23-Jun-05 2,174.05 6.70 7.93 2.70 2.93 74.58
24-Jun-05 2,162.95 (11.10) 11.10 7.93 3.03 2.62 72.39
27-Jun-05 2,188.15 25.20 9.11 3.03 3.01 75.06
28-Jun-05 2,165.90 (22.25) 22.25 8.37 4.14 2.02 66.93
29-Jun-05 2,162.00 (3.90) 3.90 8.37 3.40 2.46 71.12
30-Jun-05 2,189.45 27.45 9.75 3.34 2.92 74.47
1-Jul-05 2,198.90 9.45 8.94 3.34 2.68 72.79
4-Jul-05 2,211.40 12.50 9.54 3.34 2.86 74.07
5-Jul-05 2,205.10 (6.30) 6.30 9.54 3.50 2.72 73.15
6-Jul-05 2,211.30 6.20 9.37 3.50 2.67 72.78
7-Jul-05 2,171.25 (40.05) 40.05 9.19 5.51 1.67 62.54
8-Jul-05 2,179.05 7.80 9.58 4.94 1.94 65.97
11-Jul-05 2,195.55 16.50 10.41 4.71 2.21 68.83
12-Jul-05 2,191.70 (3.85) 3.85 9.56 4.91 1.95 66.08
13-Jul-05 2,200.05 8.35 9.39 4.91 1.91 65.69
14-Jul-05 2,178.60 (21.45) 21.45 9.18 5.98 1.54 60.56
15-Jul-05 2,181.85 3.25 9.34 5.45 1.72 63.18
56
Technical Analysis
18-Jul-05 2,212.95 31.10 9.86 5.45 1.81 64.42

19-Jul-05 2,227.20 14.25 9.80 5.45 1.80 64.28
20-Jul-05 2,236.90 9.70 8.92 5.45 1.64 62.10
21-Jul-05 2,221.20 (15.70) 15.70 8.59 6.23 1.38 57.96
22-Jul-05 2,223.15 1.95 8.69 5.68 1.53 60.48
25-Jul-05 2,266.65 43.50 9.60 5.68 1.69 62.85
26-Jul-05 2,279.80 13.15 10.26 4.56 2.25 69.21
27-Jul-05 2,292.85 13.05 10.91 4.37 2.50 71.41
29-Jul-05 2,280.85 (12.00) 12.00 9.54 4.97 1.92 65.75
1-Aug-05 2,294.25 13.40 9.74 4.97 1.96 66.21
2-Aug-05 2,319.75 25.50 10.39 4.97 2.09 67.64
3-Aug-05 2,345.20 25.45 11.66 4.65 2.51 71.47
4-Aug-05 2,352.05 6.85 11.69 4.65 2.51 71.53
5-Aug-05 2,355.95 3.90 11.89 2.65 4.48 81.77
8-Aug-05 2,320.05 (35.90) 35.90 11.50 4.45 2.59 72.11
9-Aug-05 2,303.10 (16.95) 16.95 10.67 5.29 2.02 66.84
10-Aug-05 2,322.05 18.95 11.62 5.10 2.28 69.49
11-Aug-05 2,355.50 33.45 12.87 5.10 2.52 71.62
12-Aug-05 2,356.90 1.40 12.94 4.03 3.21 76.27
16-Aug-05 2,356.85 (0.05) 0.05 12.78 4.03 3.17 76.03
17-Aug-05 2,357.50 0.65 11.26 4.03 2.79 73.64
18-Aug-05 2,380.70 23.20 11.71 4.03 2.90 74.39
19-Aug-05 2,378.45 (2.25) 2.25 11.22 4.14 2.71 73.03
22-Aug-05 2,355.75 (22.70) 22.70 11.22 4.49 2.50 71.41
23-Aug-05 2,320.35 (35.40) 35.40 11.12 6.26 1.78 63.98
24-Aug-05 2,300.45 (19.90) 19.90 8.95 7.26 1.23 55.21
25-Aug-05 2,320.70 20.25 9.30 7.26 1.28 56.17
26-Aug-05 2,340.20 19.50 9.63 7.26 1.33 57.01
29-Aug-05 2,312.60 (27.60) 27.60 9.63 8.04 1.20 54.49
30-Aug-05 2,337.75 25.15 10.21 8.04 1.27 55.96
31-Aug-05 2,355.00 17.25 9.80 8.04 1.22 54.94
1-Sep-05 2,382.90 27.90 9.92 8.04 1.23 55.25
2-Sep-05 2,396.10 13.20 10.24 8.04 1.27 56.03
5-Sep-05 2,414.95 18.85 10.99 8.04 1.37 57.75
6-Sep-05 2,417.00 2.05 11.09 6.24 1.78 63.98
8-Sep-05 2,429.00 12.00 11.69 5.40 2.17 68.42
9-Sep-05 2,441.90 12.90 11.39 5.40 2.11 67.85
12-Sep-05 2,455.85 13.95 10.41 5.40 1.93 65.87
13-Sep-05 2,477.10 21.25 11.41 5.40 2.11 67.89
14-Sep-05 2,476.00 (1.10) 1.10 11.41 5.45 2.09 67.68
15-Sep-05 2,492.75 16.75 12.21 5.45 2.24 69.15
16-Sep-05 2,519.05 26.30 12.37 5.45 2.27 69.42
19-Sep-05 2,550.45 31.40 13.94 5.33 2.61 72.31
20-Sep-05 2,546.60 (3.85) 3.85 13.94 4.39 3.17 76.03
21-Sep-05 2,504.90 (41.70) 41.70 13.94 4.71 2.96 74.75
22-Sep-05 2,465.85 (39.05) 39.05 13.94 5.66 2.46 71.10
23-Sep-05 2,453.05 (12.80) 12.80 12.92 6.30 2.05 67.21
26-Sep-05 2,477.85 24.80 13.19 6.30 2.09 67.65
57
Technical Analysis
27-Sep-05 2,549.85 72.00 16.79 4.92 3.41 77.32

28-Sep-05 2,559.85 10.00 16.03 4.92 3.25 76.50
29-Sep-05 2,589.45 29.60 16.65 4.92 3.38 77.17
30-Sep-05 2,567.75 (21.70) 21.70 15.25 6.01 2.54 71.73
3-Oct-05 2,597.20 29.45 16.07 6.01 2.67 72.77
4-Oct-05 2,629.60 32.40 16.74 6.01 2.79 73.59
5-Oct-05 2,636.60 7.00 16.99 6.01 2.83 73.87
6-Oct-05 2,571.30 (65.30) 65.30 16.39 9.27 1.77 63.86
7-Oct-05 2,547.55 (23.75) 23.75 15.75 10.46 1.50 60.08
10-Oct-05 2,561.00 13.45 15.72 10.46 1.50 60.04
11-Oct-05 2,533.70 (27.30) 27.30 14.66 11.83 1.24 55.34
13-Oct-05 2,529.05 (4.65) 4.65 14.66 12.00 1.22 54.97
14-Oct-05 2,478.00 (51.05) 51.05 13.82 14.56 0.95 48.70
17-Oct-05 2,459.50 (18.50) 18.50 12.50 15.48 0.81 44.68
18-Oct-05 2,452.50 (7.00) 7.00 10.94 15.83 0.69 40.85
19-Oct-05 2,394.95 (57.55) 57.55 10.94 18.52 0.59 37.13
20-Oct-05 2,363.55 (31.40) 31.40 10.94 18.00 0.61 37.79
21-Oct-05 2,384.05 20.50 11.96 16.05 0.75 42.70
24-Oct-05 2,388.40 4.35 12.18 15.41 0.79 44.14
25-Oct-05 2,390.85 2.45 11.06 15.41 0.72 41.78
26-Oct-05 2,401.10 10.25 7.97 15.41 0.52 34.10
27-Oct-05 2,338.60 (62.50) 62.50 7.47 18.54 0.40 28.73
28-Oct-05 2,307.45 (31.15) 31.15 5.99 20.09 0.30 22.97
31-Oct-05 2,314.20 6.75 6.33 19.01 0.33 24.98
1-Nov-05 2,366.80 52.60 7.49 19.01 0.39 28.26
2-Nov-05 2,367.75 0.95 5.91 19.01 0.31 23.73
7-Nov-05 2,411.60 43.85 7.76 19.01 0.41 28.98
8-Nov-05 2,460.00 48.40 10.18 15.74 0.65 39.27
9-Nov-05 2,475.70 15.70 10.96 14.56 0.75 42.96
10-Nov-05 2,480.85 5.15 10.55 14.56 0.72 42.02
11-Nov-05 2,500.85 20.00 11.55 13.19 0.88 46.68
14-Nov-05 2,534.40 33.55 13.23 12.96 1.02 50.51
16-Nov-05 2,559.45 25.05 14.48 10.41 1.39 58.18
17-Nov-05 2,558.45 (1.00) 1.00 14.48 9.53 1.52 60.30
18-Nov-05 2,595.15 36.70 16.31 9.18 1.78 63.99
21-Nov-05 2,591.75 (3.40) 3.40 16.31 6.47 2.52 71.59
22-Nov-05 2,567.05 (24.70) 24.70 16.31 6.14 2.66 72.66
23-Nov-05 2,563.10 (3.95) 3.95 15.29 6.34 2.41 70.70
24-Nov-05 2,608.70 45.60 17.35 6.34 2.74 73.25
25-Nov-05 2,633.75 25.05 18.48 6.34 2.92 74.47
26-Nov-05 2,664.70 30.95 19.52 6.34 3.08 75.49
28-Nov-05 2,682.65 17.95 20.41 3.21 6.36 86.41
29-Nov-05 2,679.90 (2.75) 2.75 20.41 1.79 11.40 91.94
30-Nov-05 2,647.10 (32.80) 32.80 20.08 3.43 5.85 85.41
1-Dec-05 2,641.95 (5.15) 5.15 17.45 3.69 4.73 82.55
2-Dec-05 2,691.50 49.55 19.88 3.69 5.39 84.35
5-Dec-05 2,654.35 (37.15) 37.15 17.68 5.55 3.19 76.13
6-Dec-05 2,647.35 (7.00) 7.00 15.26 5.90 2.59 72.14
58
Technical Analysis
7-Dec-05 2,662.30 14.95 15.23 5.90 2.58 72.09

8-Dec-05 2,673.50 11.20 15.53 5.90 2.63 72.48
9-Dec-05 2,698.00 24.50 15.75 5.90 2.67 72.77
12-Dec-05 2,756.40 58.40 17.00 5.90 2.88 74.25
13-Dec-05 2,764.65 8.25 16.16 5.90 2.74 73.27
14-Dec-05 2,788.30 23.65 17.34 5.85 2.97 74.79
15-Dec-05 2,763.35 (24.95) 24.95 15.50 7.09 2.19 68.61
16-Dec-05 2,766.50 3.15 15.66 6.92 2.26 69.35
19-Dec-05 2,803.45 36.95 17.51 5.69 3.08 75.48
20-Dec-05 2,815.20 11.75 18.10 5.49 3.30 76.72
21-Dec-05 2,799.45 (15.75) 15.75 15.82 6.28 2.52 71.59
22-Dec-05 2,818.65 19.20 15.52 6.28 2.47 71.20
23-Dec-05 2,799.70 (18.95) 18.95 13.98 7.23 1.93 65.92
26-Dec-05 2,741.80 (57.90) 57.90 13.08 10.12 1.29 56.37
27-Dec-05 2,725.70 (16.10) 16.10 13.08 10.79 1.21 54.80
28-Dec-05 2,780.00 54.30 15.79 9.15 1.73 63.32
29-Dec-05 2,792.75 12.75 16.43 8.89 1.85 64.89
30-Dec-05 2,812.75 20.00 14.95 8.89 1.68 62.71
59
Technical Analysis
The entire monthly vice charts formed for Nifty index closing price 2005
DMA of JAN 2005 nifty index
2150
2100
2050
PRICE
2000 closing price

1950 DMA
1900
1850
1800
05
5
00
00
00
00
20
/2
/2
/2
/2
3/
10
17
24
31
1/
1/
1/
1/
1/
PERIOD
DMA IN FEBRUARY
2120
2100
2080
2060
2040
PRICE
2020 ACTUAL CLOSING

2000 20 DAYS DMA
1980
1960
1940
1920
1900
05
05
5
00
00
20
20
/2
/2
1/
8/
15
22
2/
2/
2/
2/
PERIOD
60
Technical Analysis
DMA OF MARCH
2200
2150
2100
ACTUAL CLOSING
PRICE
2050 PRICE
2000 DMA
1950
1900
1850
3/1/2005
3/8/2005
3/15/2005
3/22/2005
3/29/2005
PERIOD
DMA OF APRIL
2150
2100
2050
PRICE
2000 ACTUAL CLOSING

1950 DMA
1900
1850
1800
5
5
5
00
00
00
00
00
/2
/2
/2
2
2
1/
8/
15
22
29
4/
4/
4/
4/
4/
PERIOD
61
Technical Analysis
DMA OF MAY
2150
2100
2050
PRICE
2000 ACTUAL CLISING

1950 DMA
1900
1850
1800
5/2/2005
5/9/2005
5/16/2005
5/23/2005
5/30/2005
PERIOD
DMA OF JUNE
2250
2200
2150
PRICE
2100 ACTUAL CLOSING

2050 DMA
2000
1950
1900
6/1/2005
6/8/2005
6/15/2005
6/22/2005
6/29/2005
PEROID
62
Technical Analysis
DMA OF JULY
2350
2300
2250
PRICE
ACTUAL CLOSING
2200
DMA
2150
2100
2050
7/1/2005
7/8/2005
7/15/2005
7/22/2005
PERIOD 7/29/2005
DMA OF AUG
2450
2400
2350
PRICE
ACTUAL CLOSING
2300
DMA
2250
2200
2150
8/1/2005
8/8/2005
8/15/2005
8/22/2005
8/29/2005
PERIOD
63
Technical Analysis
DMA OF SEPT
2650
2600
2550
2500
PRICE
2450 ACTUAL CLOSING

2400 DMA
2350
2300
2250
2200
5
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
9/
9/
9/
9/
9/
PERIOD
DMA OF OCT
2700
2600
2500
PRICE
ACTTUAL CLOSING
2400
DMA
2300
2200
2100
10/10/2005
10/17/2005
10/24/2005
10/31/2005
10/3/2005
PERIOD
64
Technical Analysis
DMA OF NOV
2800
2700
2600
PRICE
ACTUAL CLOSING
2500
DMA
2400
2300
2200
11/1/2005
11/8/2005
11/15/2005
11/22/2005
PERIOD 11/29/2005
DMA OF DEC
2900
2850
2800
2750
PRICE
2700 ACTUAL CLOSING

2650 DMA
2600
2550
2500
2450
12/1/2005
12/8/2005
12/15/2005
12/22/2005
12/29/2005
PERIOD
65
Technical Analysis
MOMENTUM OF JAN
2500
2000
1500
PRICE
MOMENTUM
1000 CLOSING
500
0
05
5
5
04
00
00
00
20
20
/2
/2
/2
7/
1/
14
21
28
1/
/3
1/
1/
1/
12
PERIOD
MOMENTUM OF FEB
2300
2250
2200
2150
PRICE
2100 MOMENTUM OF FEB

2050 CLOSING
2000
1950
1900
1850
2/1/2005
2/8/2005
2/15/2005
2/22/2005
PERIOD
66
Technical Analysis
MOMENTUM OF MARCH
2500
2000
1500
PRICE
MOMENTUM
CLOSING
1000
500
5
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
3/
3/
3/
3/
3/
PERIOD
MOMENTUM OF APRIL
2500
2000
1500
PRICE
MOMENTUM
CLOSING
1000
500
0
5
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
29
22
4/
4/
4/
4/
4/
PERIOD
67
Technical Analysis
MOENTUM OF MAY
2500
2000
1500
PRICE
MOMENTUM
CLOSING
1000
500
0
5
5
05
05
00
00
00
20
20
/2
/2
/2
2/
9/
16
23
30
5/
5/
5/
5/
5/
PERIOD
MOMENTUM OF JUNE
2400
2350
2300
2250
2200
PRICE
MOMENTUM
2150
CLOSING
2100
2050
2000
1950
1900
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
6/
6/
6/
6/
6/
PERIOD
68
Technical Analysis
MOMENTUM OF JULY
2450
2400
2350
2300
PRICE
MOMENTUM
2250
CLOSING
2200
2150
2100
2050
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
7/
7/
7/
7/
7/
PERIOD
MOMENTUM OF AUG
2600
2550
2500
2450
PRICE
2400 MOMENTUM
2350 CLOSING
2300
2250
2200
2150
8/1/2005
8/8/2005
8/15/2005
8/22/2005
8/29/2005
PERIOD
69
Technical Analysis
MOMENTUM OF SEPT
2900
2800
2700
2600
PRICE
MOMENTUM
2500
CLOSING
2400
2300
2200
2100
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
9/
9/
9/
9/
9/
PERIOD
MOMENTUM OF OCT
3500
3000
2500
PRICE
2000 MOMENTUM
1500 CLOSING
1000
500
0
5
05
05
05
05
00
20
20
20
20
/2
0/
7/
4/
1/
/3
/1
/1
/2
/3
10
10
10
10
10
PERIOD
70
Technical Analysis
MOMENTUM OF NOV
3500
3000
2500
PRICE
2000 MOMENTUM
1500 CLOSING
1000
500
0
5
05
05
05
00
00
20
20
20
/2
/2
5/
2/
9/
/1
/8
/1
/2
/2
11
11
11
11
11
PERIOD
MOMENTUM OF DEC
3200
3100
3000
2900
PRICE
MOMENTUM
2800
CLOSING
2700
2600
2500
2400
5
05
05
05
00
00
20
20
20
/2
/2
5/
9/
2/
/1
/8
/1
/2
/2
12
12
12
12
12
PERIOD
71
Technical Analysis
RSI of jan for Nifty 2005
80
70
60
50
PRICE
40 Series1
30
20
10
0
05
5
04
00
00
00
20
20
/2
/2
/2
7/
1/
14
21
28
1/
/3
1/
1/
1/
12
PERIOD
RSI OF FEB
90
80
70
60
PRICE
50
Series1
40
30
20
10
0
5
5
05
05
00
00
20
20
/2
/2
1/
8/
15
22
2/
2/
2/
2/
PERIOD
72
Technical Analysis
RSI OF MARCH
80
70
60
50
PRICE
40 Series1
30
20
10
0
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
3/
3/
3/
3/
3/
PERIOD
RSI OF APRIL
50
45
40
35
30
PRICE
25 Series1
20
15
10
5
0
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
4/
4/
4/
4/
4/
PERIOD
73
Technical Analysis
RSI OF MAY
90
80
70
60
PRICE
50
Series1
40
30
20
10
0
5
5
05
05
00
00
00
20
20
/2
/2
/2
2/
9/
16
23
30
5/
5/
5/
5/
5/
PERIOD
RSI OF JUNE
80
78
76
74
72
PRICE
70
Series1
68
66
64
62
60
58
5
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
6/
6/
6/
6/
6/
PERIOD
74
Technical Analysis
RSI OF JULY
80
70
60
50
PRICE
40 Series1
30
20
10
0
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
7/
7/
7/
7/
7/
PERIOD
RSI OF AUG
90
80
70
60
PRICE
50
Series1
40
30
20
10
0
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
8/
8/
8/
8/
8/
PERIOD
75
Technical Analysis
RSI OF SEPT
100
90
80
70
60
PRICE
50 Series1
40
30
20
10
0
5
5
05
05
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
9/
9/
9/
9/
PERIOD 9/
RSI OF OCT
80
70
60
50
PRICE
40 Series1
30
20
10
0
5
05
05
05
05
00
20
20
20
20
/2
1/
0/
7/
4/
/3
/2
/3
/1
/1
10
10
10
10
10
PERIOD
76
Technical Analysis
RSI OF NOV
100
90
80
70
60
PRICE
50 Series1
40
30
20
10
0
05
05
05
5
5
00
00
20
20
20
/2
/2
9/
5/
2/
/1
/8
/1
/2
/2
11
11
11
11
11
PERIOD
RSI OF DEC
90
80
70
60
PRICE
50
Series1
40
30
20
10
0
05
05
05
5
5
00
00
20
20
20
/2
/2
5/
2/
9/
/1
/8
/1
/2
/2
12
12
12
12
12
PERIOD
77
Technical Analysis
ROC OF JAN
8
6
4
2
PRICE
0
Series1
05
5
-2
00
00
00
00
20
/2
/2
/2
/2
3/
10
17
24
31
-4
1/
1/
1/
1/
1/
-6
-8
-10
PERIOD
ROC OF FEB
10
4
PRICE
Series1
2
0
05
05
5
00
00
-2
20
20
/2
/2
1/
8/
15
22
2/
2/
2/
2/
-4
PERIOD
78
Technical Analysis
ROC OF MARCH
2
PRICE
0 Series1
05
05
5
00
00
00
20
20
-2
/2
/2
/2
1/
8/
15
22
29
3/
3/
3/
3/
3/
-4
-6
PERIOD
ROC OF APRIL
0
-1
05
05
5
00
00
00
20
20
/2
/2
/2
1/
8/
-2
15
22
29
4/
4/
4/
4/
4/
-3
-4
PRICE
-5 Series1
-6
-7
-8
-9
-10
PERIOD
79
Technical Analysis
ROC OF MAY
10
8
6
4
PRICE
2
Series1
0
05
05
-2 5
5
00
00
00
20
20
/2
/2
/2
2/
9/
16
23
30
-4
5/
5/
5/
5/
5/
-6
-8
PERIOD
ROC OF JUNE
8
7
6
5
PRICE
4 Series1
3
2
1
0
05
05
5
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
6/
6/
6/
6/
6/
PERIOD
80
Technical Analysis
ROC OF JULY
5
PRICE
4
Series1
3
0
05
05
5
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
7/
7/
7/
7/
7/
PERIOD
ROC OF AUG
10
9
8
7
6
PRICE
5 Series1
4
3
2
1
0
05
05
5
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
8/
8/
8/
8/
8/
PERIOD
81
Technical Analysis
ROC OF SEPT.
12
10
8
PRICE
6 Series1
0
05
05
5
00
00
00
20
20
/2
/2
/2
1/
8/
15
22
29
9/
9/
9/
9/
9/
PERIOD
ROC OF OCT
15
10
5
PRICE
0 Series1
05
05
05
05
5
00
20
20
20
20
/2
0/
7/
4/
1/
-5
/3
/1
/1
/2
/3
10
10
10
10
10
-10
-15
PERIOD
82
Technical Analysis
ROC OF NOV
20
15
10
5
PRICE
Series1
0 05
05
05
5
5
00
00
-5
20
20
20
/2
/2
5/
2/
9/
/1
/8
/1
/2
/2
11
11
11
11
11
-10
-15
PERIOD
ROC OF DEC
14
12
10
PRICE
8
Series1
6
4
2
0
5
05
05
05
00
00
20
20
20
/2
/2
5/
2/
9/
/1
/8
/1
/2
/2
12
12
12
12
12
PERIOD
83
Technical Analysis
CHARTS SIGNALS GIVEN BY DIFFERENT TOOLS IN THE YEAR 2005
MONTHS DMA ROC MOMENTUM RSI

January Sell Sell Sell Sell
February Buy Buy Sell Sell
March Sell Sell Sell Sell
April Sell Buy Sell Buy
May Sell Buy Buy Buy
June Buy Sell Buy Sell
July Buy Sell Buy Sell
August Buy Sell Buy Sell
September Buy Sell Buy Sell
October Sell Buy Sell Buy
November Sell Buy Buy Buy
December Buy Sell Sell Sell
TOTAL BUY
SIGNAL 6 5 6 4
TOTAL SELL
SIGNAL 6 7 6 8
INTERPRETATION OF DAY MOVING AVERAGE
A Daily Moving Average is an indicator that shows the average value of a

security's price over a period of time. When calculating a daily moving average, a
mathematical analysis of the security's average value over a predetermined time period is
made. As the security's price changes, its average price moves up or down.
It is evident from the plotted graphs that trends in a stock prices can be very volatile. One
technique for dealing with volatile stock price is day moving average. It is constructed by
totaling a set of data and dividing the sum by the number of observation. Here in this
study 20 day moving average is constructed for the Nifty index price of 2005. The actual
closing price and the calculated DMA are plotted in the same graph monthly vice basis. A
rising DMA indicates market strength and a declining one denotes weakness. Changes in
the price trend are identified by the price itself crossing its day moving average.
84
Technical Analysis
The most popular method of interpreting a daily moving average is to compare the
relationship between a daily moving average of the security's closing price and the
security's closing price itself. A sell signal is generated when the security's price falls
below its daily moving average and a buy signal is generated when the security's price
rises above its moving average. This type of daily moving average trading system is not
intended to get in at the exact bottom and out at the exact top. Rather, it is designed to
keep in line with the security's price trend by buying shortly after the security's price
bottoms and selling shortly after it tops.
The critical element in a daily moving average is the number of time periods used in
calculating the average. When using hindsight, we can always find a moving average
that would have been profitable. The key is to find a moving average that will be
consistently profitable. Here I used 20-day moving average to find out the significance of
moving average in short term trading.
A change from a rising trend to declining price is signaled when the price moves
below its day moving average. A bullish signal is given when the price goes above the
DMA. The technicians gets the sell signal at the point where declining DMA crossover
the price line. Traders will buy the share at the point where rising trend crosses the actual
price line. The buy and sell signals generated by seeing the related graph in this study.
Day moving average exhibited sell signal in January, March, April, May, October and
November in the year 2005 (Nifty Index). It has given buy signals in the months of
February, June, July, August, September and the December.
RATE OF CHANGE
The Rate of Change indicator (ROC) is a way of showing how rapidly the price of a
particular share (or other financial instrument) is moving. The theory is that if a price is
rising (or falling) very quickly there will soon come a time when it is thought to be
85
Technical Analysis
overbought (or oversold). When this occurs the price may still continue to rise (or fall),
but not as rapidly as it was before.
This oscillator always has a value between 0 and 10. And is calculated from the average
of all price rises in a given period divided by the average of all price falls in the same
period. Again the choice of period is arbitrary and dependent on your position in the
markets.
The major use of this oscillator is to identify the overbought and oversold zones. To
identify the overbought zone, look at the historic high values on the ROC chart for the
scrip that is been studied. If one finds that the current value is in the peak of the historic
high values, the scrip can be said to have entered the overbought zone. On the same
count, if the ROC touches the historic low values, the scrip can be said to have entered
the oversold zone. The Rate of change indicator is not necessarily same with the other
indicators. It has given 7 time sell signal and only 5 time buy signal for the nifty index
price 2005. This is because of different parameters are used for construction ROC.
Relative Strength Index
A popular method of analyzing the RSI is to look for a divergence in which the market
index is making a new high, but the RSI is failing to surpass its previous high. This
divergence would be an indication of an impending reversal. When the RSI then turns
down and falls below its most recent trough, it is said to have completed a failure swing.
The failure swing would be considered a confirmation of an impending reversal.
If the RSI goes above 70 the shares are overbought, and you should consider selling at
that price level. If the RSI goes below 30 the shares are oversold, and you should be
looking for buying opportunities. The neutral position of this oscillator is at 50; if it rises
above 50, the instrument is becoming overbought, if it falls below it is becoming
oversold. Critical levels exist at 75 and 25. An ROC above or below these levels indicates
the instrument is overbought or oversold. It has given 5 times buy signals and 7 times sell
signals in year.
86
Technical Analysis
The Momentum
The Momentum indicator measures the amount that a security's price has changed over a
given time span.
Interpretation:
The interpretation of the Momentum indicator is identical to the interpretation of the

Price ROC. Both indicators display the rate-of-change of a security's price. However, the
Price ROC indicator displays the rate-of-change as a percentage whereas the Momentum
indicator displays the rate-of-change as a ratio.
There are basically two ways to use the Momentum indicator: You can use the
Momentum indicator as a trend-following oscillator similar to the MACD. Buy when the
indicator bottoms and turns up and sell when the indicator peaks and turns down(this is
the method I prefer in this study).
If the Momentum indicator reaches extremely high or low values (relative to its
historical values), you should assume a continuation of the current trend. For example, if
the Momentum indicator reaches extremely high values and then turns down, you should
assume prices will probably go still higher. In either case, only trade after prices confirm
the signal generated by the indicator (e.g., if prices peak and turn down, wait for prices to
begin to fall before selling).
We can also use the Momentum indicator as a leading indicator. This method assumes
that market tops are typically identified by a rapid price increase (when everyone expects
prices to go higher) and that market bottoms typically end with rapid price declines
(when everyone wants to get out). As a market peaks, the Momentum indicator will climb
sharply and then fall off- diverging from the continued upward or sideways movement of
the price. Similarly, at a market bottom, Momentum will drop sharply and then begin to
climb well ahead of prices. Both of these situations result in divergences between the
indicator and prices. It has given both buy and sell signals 6 times each in year.
87
Technical Analysis
CHAPTER – 5
SUMMARY
AND
CONCLUSION
88
Technical Analysis
Summary
In this study, I have made 48 predictions in year. All tools are tested monthly vice for the
nifty index closing price 2005. The price movement plotted on the graph for calculated
data made the predictions. Relevance of the share price are tested by comparing the
actual price and signals of the graphs. Totally 26 predictions of the graphs were able to
make right decision and helped to investors to profitable trade. 24 predictions of the
graphs were false. They did not fetch the profit to the traders. Therefore, we can say
technical analysis is worked here to the extent of 54%.
FINDINGS
Technical analysis is worked to the extent of 54% in this study

Not all the tools used here will gives the same result for the same period.
Day moving average is the most appropriate tool to predict the stock price
movement.
Relative strength index and the Rate of change methods are not proved as reliable
from this study.
WHICH IS BETTER?
The result of this study shows that day moving average is the best tool to pick up the
stock. The day moving average prediction in the year 2005 for nifty index price is more
efficient compare to other tools. 9 out of 12 time the day moving average has given right
prediction. The traders who invested in the share according to the day moving average
trend were able to make maximum profit.
The Momentum also proven to be satisfactory to the traders in case of nifty index price
2005. It has given 7 times right prediction out of 12. Other tools which I have used in this
study are Relative strength index and Rate of change method. Both were given only 5
89
Technical Analysis
times right prediction. The investors who made their investment according to these
predictions have occurred a loss. It may not be 100% true, because the tools and the
software used in the chart here are not very advanced one as traders use in their analysis.
However, the day moving average is the one tool which is very simple to construct the
graph and more reliable to the regular traders.
Which technical analysis tool we use will depend on your trading and investing style and
preferences. The day moving average obviously has a lag, but the other tools which are
used here also be prone to quicker breaks. Some traders prefer to use Relative Strength
Index for shorter time periods to capture changes quicker. Some investors prefer simple
moving averages over long time periods to identify long-term trend changes. In addition,
much will depend on the individual security in question. The technical chart type and
length of time will depend greatly on the individual security and how it has reacted in the
past.
The initial thought for some is that greater sensitivity and quicker signals are bound to be
beneficial. This is not always true and brings up a great dilemma for the technical analyst:
the trade off between sensitivity and reliability. The more sensitive an indicator is, the
more signals that will be given. These signals may prove timely, but with increased
sensitivity comes an increase in false signals. The less sensitive an indicator is, the fewer
signals that will be given. However, less sensitivity leads to fewer and more reliable
signals. Sometimes these signals can be late as well.
CONCLUSION
Technical analysis can offer great insight, but if used improperly, they can also produce
false signals. While trend lines have become a very popular aspect of technical analysis,
they are merely one tool for establishing, analyzing, and confirming a trend. Trend lines
should not be the final arbiter, but should serve merely as a warning that a change in
trend may be very useful.
The price set by the market reflects the sum knowledge of all participants, and we
are not dealing with lightweights here. These participants have considered (discounted)
90
Technical Analysis
everything under the sun and settled on a price to buy or sell. These are the forces of
supply and demand at work. By examining price action to determine which force is
prevailing, technical analysis focuses directly on the bottom line: What is the price?
Where has it been? Where is it going?
Even though there are some universal principles and rules that can be applied, it
must be remembered that technical analysis is more an art form than a science. As an art
form, it is subject to interpretation. However, it is also flexible in its approach and each
investor should use only that which suits his or her style. Developing a style takes time,
effort and dedication, but the rewards can be significant
91
Technical Analysis
GLOSSARY
The Random Walk Hypothesis: the hypothesis claims that stock price moments either
independent or uncorrelated increments.
The Efficient Market Hypothesis: all relevant information is quickly reflects in a

security's price through the actions of traders who have that information.
The Rate of Change: The Rate of Change indicator (ROC) is a way of showing how
rapidly the price of a particular share (or other financial instrument) is moving.
The GARP strategy: is a combination of both value and growth investing
Market-based valuation: valuing a stock is not only to estimate its fair value, but also to
determine its potential price range, taking into account market behavior aspects.
Momentum: The Momentum indicator measures the amount that a security's price has
changed over a given time span.
Moving Average: is an indicator that shows the average value of a security's price over a
period of time.
Projected Relative Value - Relative Value using Projected P/E.
Reward: Total Return OR Projected Average Return (PAR).
Value investing: the strategy of selecting stocks that trade for less than their intrinsic
value.
92
Technical Analysis
BIBLIOGRAPHY
TEXT BOOKS:
1. Technical analysis of stock trends, 8th Edition,

Robert D. Edwards, John Magee.
2. Technical analysis of stock trends by Martin Pring.
ARTICLES:
1. MARKET EFFICIENCY AND THE RETURNS TO TECHNICAL ANALYSIS

(Article published in December 1997)
Hendrik Bessembinder and Kalok Chan,Department of Finance, College of Business,
Arizona State University.
2. The use of fundamental and technical analyses by foreign exchange

dealers: Hong Kong evidence.
Journal of international money and finance, 1998.
David Mole, Department of economics and finance, City university of Hong Kong.
3. Technical Analysis in the Foreign Exchange Market: A Co-integration-

Based Approach (Article in Multinational finance journal, 1999).
Nobert Fiess, University of Strathclyde and U. K. Ronald MacDonald, University of strathclyde,
4. TECHNICAL ANALYSIS AND TYPICAL COGNITIVE BIASES

(article in journal of finance 2001)
Piotr Zielonka, Warsaw University SGGW and Leon Kozminski Academy of Entrepreneurship and
Management, Poland.
93
Technical Analysis
Websites:
1. www.nseindia.com
2. www.google.com
3. www.investopedia.com.
4. The Journal of Finance
5. www.valuepro.net.
6. www.myiris.com.
7. www.Valuenotes.com.
94

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Technical Analysis

THE STUDY OF TECHNICAL ANALYSIS AND

Submitted in partial fulfillment of the

Under the Guidance Of:

M.P.BIRLA INSTITUTE OF MANAGEMENT

Associate Bharatiya Vidya Bhavan

I am Santhosh Hegde, the student of M.P.Birla Institute of

Date: Santhosh Hegde

Place: Bangalore Prof. B. V. Rudramurthy

Place: Bangalore (Dr. Nagesh S Mallavalli)

I would like to express my indebtedness to Prof. B.V. Rudramurthy,

Project guide, M.P.Birla Institute of Management., for his valuable guidance in

completing this project work.

I extend my sincere thanks to Dr. T. V. N. Rao, Professor of

I wish to express my heartful thanks to Smitha for her fruitful

suggestions and constant encouragement throughout this project work.

and indirectly helped me in this project work.

Sl. No. Content Page No.

5 OBJECTIVES OF THE STUDY 18

INTRODUCTION TO TECHNICAL ANALYSIS

Technical analysis is the use of numerical series generated by market activity,

Technical analysis may be at odds with fundamental analysis. Fundamental analysis

One of the forecasting tools very popular among practitioners is technical

Technical analysis is applicable to stocks, indices, commodities, futures or any

Three Beliefs of Technical Analysis

Price action in the market discounts everything

History tends to repeat itself

Technical analysis is not limited to charting. Technical analysis is always primarily

Weakness of Technical Analysis

Always another Level

Inconsistencies with Other Market Hypotheses

The Random Walk Hypothesis

Proponents of Technical Analysis

been the development of increasingly sophisticated automated trading strategies. These

The group consisted of technical-like signals, created by the author of the

2. Technical Analysis in the Foreign Exchange Market: A Co-integration-

Methods and Results

B. Co integration and the Stochastics

3. MARKET EFFICIENCY AND THE RETURNS TO TECHNICAL ANALYSIS

4.The use of fundamental and technical analyses by foreign exchange

OBJECTIVES OF THE STUDY:

SCOPE OF THE STUDY:

 The data relating to the study is taken from PROWESS database.

The supplementary sources of data:

STATISTICAL TOOLS USED:

1. Day Moving Average.

Day Moving Average

HOW ARE MOVING AVERAGES USED

Rate of Change (ROC)

ROC = ((Today’s Close-Close n periods ago) / (Close n periods ago)) * 100

Rate of Change (ROC) vs the "Momentum" Indicator

Relative Strength Index (RSI)

RSI = 100 – 100 / (1+RS)

Average gain = (Total gains / n)

Average loss = (Total loss / n)

Relative Strength = Average gain / Average loss

Relative Strength Index = 100 – 100 / ( 1+ RS )

N = number of RSI periods.

23-Jan-04 1847.55 77.05 0

The momentum is:

LIMITATIONS OF THE RESEARCH

 Sample is restricted only to NIFTY.

The data relating to the study is taken from PROWESS database.

Sample is restricted only to NIFTY.

Technical analysis is worked to the extent of 54% in this study