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A PROJECT REPORT ON

TECHNICAL ANALYSIS OF INDIAN TELECOM SECTOR


With Reference To

BHUBANESWAR STOCK EXCHANGE LIMITED, BHUBANESWAR


SUMMER INTERNSHIP PROJECT REPORT SUBMITTED TO BPUT FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENTS OF MASTER OF BUSINESS ADMINISTRATION DEGREE

Submitted by:

DIPAK RANJAN BASANTRAY REGD.NO. 1006206004 (SESSION 2010-12)


Under The Guidance of
External Guide:
BIPIN BIHARI DUTTA (Asst. Manager) BHUBANESWAR STOCK EXCHANGE (BHSE)

Internal Guide:
PROF.DEBENDRA KUMAR OJHA ABIT-JRD TATA INSTITUTE OF MANAGEMENT

ABITJRD TATA INSTITUTE OF MANAGEMENT


SECTOR-1, CDA, CUTTACK
Recognised to AICTE, New Delhi
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Affiliated to BPUT, Odisha

I hereby declare that the project report entitled TECHNICAL ANALYSIS OF INDIAN TELECOM SECTOR is submitted by me for partial fulfilment of the requirements of the degree of MBA, as a course curriculum under BPUT, is an authentic record of study carried out by me under professional guidance and supervision.

Due acknowledges and references have been made where ever necessary. This project report is a result of my original work and except some conceptual aspects, technical charts and some images as prescribed, no portion of the said report has been copied or duplicated nor has any project report similar to this one ever been submitted to any of the university or any other organization of this sort.

Date: Place: (DIPAK RANJAN BASANTRAY)

Certificate From Internal Guide

This is to certify that the project work entitled Technical Analysis of Indian

Telecom Sector is an original piece of work done by Dipak Ranjan Basantray (Regd.No1006206004), student of ABIT-JRD TATA INSTITUTE OF MANAGEMENT, under my guidance and supervision for the partial fulfillment of the requirement for the degree in M.B.A under BPUT. To the best of my knowledge and belief, the thesis embodies the work of the candidate himself and has been duly completed. Simultaneously, the thesis fulfills the requirements of the rules and regulations related to the Dissertation of the institute and I am assured that the project is up to the standard both in respect to the contents and language for being referred to the examiner.

Prof. Debendra Kumar Ojha (Sr.Faculty, MBA) ABIT-JRD TATA INSTITUTE OF MANAGEMENT
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Certificate from the h.o.d.

This is to certify that the project work entitled Technical Analysis of Indian

Telecom Sector is an original piece of work done by Dipak Ranjan Basantray Regd.No1006206004), student of ABIT-JRD TATA INSTITUTE OF MANAGEMENT, under my guidance and supervision for the partial fulfillment of the requirement for the degree in M.B.A under BPUT. To the best of my knowledge and belief, the thesis embodies the work of the candidate himself and has been duly completed. Simultaneously, the thesis fulfills the requirements of the rules and regulations related to the Dissertation of the institute and I am assured that the project is up to the standard both in respect to the contents and language for being referred to the examiner.

Prof. Joysingh Mishra (H.O.D, MBA) ABIT-JRD TATA INSTITUTE OF MANAGEMENT

The money which is earned is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle, people like to use savings in order to get return on it in the future. This is called Investment. One needs to invest to: earn return on his idle resources generate a specified sum of money for a specific goal in life make a provision for an uncertain future

As per return is concerned Stock Market is treated as the best place to earn higher returns as compared to other means of investment. A huge number of companies are listed there to facilitate effective mobilization and utilization of savings. In todays world companies become known or considered big when they are listed on reputed Stock Exchanges namely NSE (NIFTY) & BSE (SENSEX) for India, DOWJONES for USA, HANGSENG for Hong Kong, NIKKEI for Japan, RTS for Russia, etc. Once the company is listed everything a company does / doesnt is reacted upon by the public and the prices of the share of the respective company fluctuate. Now the company would always want a true picture of the company to be represented by share price, they wouldnt mind if its overvalued but it hurts when the stocks get undervalued. But this uncertainty of the price gives people a chance to make money both in long term & short term. Long term investment is mainly based upon studying fundamentals of the company and its growth potential. But the real piece of magic lies in making money by trading shares either Intraday or holding for a short term. If one wants to make money in this way, he / she need to know the technical side of the stock i.e. charts, trends etc. Its not hard to guess how fascinating it is and so it has been decided to unlock the mystery as far as possible in these two months of time. This field is very difficult to be taught in classroom
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perhaps beyond scope. One has to see to believe, understand and implement it and that was my main objective after all to find out the answers of following questions: 1. Where will NIFTY/SENSEX go from here? 2. Which stock will rise today and which ones will fall? 3. Should I hold it or square off my positions? 4. Why is hedging required / how is it done?

To find the answer of the above questions and many more it has been chosen to do summer internship in the field of Technical Analysis. Hope the project report will serve the necessity of the needy students, investors and research scholars to find out strategic implications of technical analysis at the time of taking investment decisions and will guide them to unlock the market-sutra to sustain in the financial market.

I would like to express my gratitude to all those who gave me the possibility to complete this thesis. I would like to thank my college authorities and my H.O.D. Prof. Joysingh Mishra first for providing me the opportunity to work with one of the most prestigious organization. I express my hearty thanks to Mr. Bipin Datta(Asst. Manager), Bhubaneswar Stock Exchange Ltd., Bhubaneswar, my company guide who gave and confirmed this permission and encouraged me to go ahead with my thesis. I am deeply indebted to my faculty guide Mr. Debendra Kumar Ojha(Sr. Faculty, Finance), whose help, stimulating suggestions and encouragements helped me in all the times of research and for writing the thesis. I also want to thank other faculty member and my parents who always stood beside me and encouraged me to complete my project work. My friends who have supported me in my research work, I want to thank them for all their help, support, interest and valuable hints. Especially, I would like to give my hearty thanks to my parents, their love and blessings enabled me to complete this work.

Date:

Place: (DIPAK RANJAN BASANTRAY) 8

Executive Summery Objective of the Study Scope of the Study Limitations of the Study Introduction to the Project Company Overview Research Theory Methodology Data Analysis & Interpretation Findings Suggestions &Conclusion Bibliography & References

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INTRODUCTON
WHATS THIS EQUITY ANALYSIS? Professional investor will make more money & less loss than, who let their heart rule. Their head eliminate all emotions for decision making. Be ruthless & calculating, you are out to make money. Decision should be based on actual movement of share price measured both in money & percentage term & nothing else. Greed must be avoided patience may be a virtue, but impatience can frequently be profitable.

In Equity Analysis anticipated growth, calculations are based on considered FACTS & not on HOPE. Equity analysis is basically a combination of two independent analyses, namely fundamental analysis & Technical analysis. The subject of Equity analysis, i.e. the attempt to determine future share price movement & its reliability by references to historical data is a vast one, covering many aspect from the calculating various FINANCIAL RATIOS, plotting of CHARTS to extremely sophisticated indicators.

A general investor can apply the principles by using the simplest of tools: pocket calculator, pencil, ruler, chart paper & your cautious mind, watchful attention. It should be pointed out that, this equity analysis does not discuss how to buy & sell shares, but does discuss a method which enables the investor to arrive at buying & selling decision. The financial analysts always need yardsticks to evaluate the efficiency & performances of any business unit at the time of investment. Fundamental analysis is useful in long term investment decision. In Fundamental analysis a company s goodwill, its performances, liquidity, leverage, turnover, profitability & financial health was checked & analysis with the help of ratio analysis for the purpose of long term successful investment.

Technical analysis refers to the study of market generated data like prices & volume to determine the future direction of prices movements.

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Technical analysis mainly seeks to predict the short term price travels. The focus of technical analysis is mainly on the internal market data, i.e. prices & volume data. It appeals mainly to short term traders. It is the oldest approach to equity investment dating back to the late 19th century.

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

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EQUITY ANALYSIS

ENVIRONMENT & ECONOMICAL ANALYSIS FUNDAMENTAL ANALYSIS TECHNICAL ANALYSIS


TECHNICAL ANALYSIS: Technical analysis refers to the study of market generated data like prices & volume to determine the future direction of prices movements.

Technical analysis mainly seeks to predict the short term price travels. It is important criteria for selecting the company to invest. It also provides the base for decision-making in investment. The one of the most frequently used yardstick to check & analyze underlying price progress. For that matter a verity of tools was consider.

This Technical analysis is helpful to general investor in many ways. It provides important & vital information regarding the current price position of the company.

Technical analysis involves the use of various methods for charting, calculating & interpreting graph & chart to assess the performances & status of the price. It is the tool of financial analysis, which not only studies but also reflecting the numerical & graphical relationship between the important financial factors.

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The focus of technical analysis is mainly on the internal market data, i.e. prices & volume data. It appeals mainly to short term traders. It is the oldest approach to equity investment dating back to the late 19th century.

It uses charts and computer programs to study the stocks trading volume and price movements in the hope of identifying a trend. In fact the decision made on the basis of technical analysis is done only after inferring a trend and judging the future movement of the stock on the basis of the trend. Technical Analysis assumes that the market is efficient and the price has already taken into consideration the other factors related to the company and the industry. It is because of this assumption that many think technical analysis is a tool, which is effective for short-term investing.

History of Technical Analysis: Technical Analysis as a tool of investment for the average investor thrived in the late nineteenth century when Charles Dow, then editor of the Wall Street Journal, proposed the Dow theory. He recognized that the movement is caused by the action/reaction of the people dealing in stocks rather than the news in itself.

Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity. Just as there are many investment styles on the fundamental side, there are also many different types of technical traders. Some rely on chart patterns; others use technical indicators and oscillators, and most use some combination of the two. In any case, technical analysts' exclusive use of historical price and volume data is what separates them from their fundamental counterparts. Unlike fundamental analysts, technical analysts don't care whether a stock is undervalued the only thing that matters is a security's past trading data and what information this data can provide about where the Security might move in the future.

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

Drawbacks / limitations of technical analysis: 1. Technical analysis does not able to explain the rezones behind the employment or selection of specific tool of Technical analysis. 2. The technical analysis failed to signal an uptrend or downtrend in time. 3. The technical analysis must be a self defeating proposition. As more & more people use, employ it the value of such analysis trends to reduce.

Why we use TECHNICAL ANALYSIS? 1. Technical analysis provides information on the best entry and exit points for a trade. 2. On a chart, the trader can see where momentum is rising, a trend is forming, a price is dipping or other events are developing that show the best entry point and time for the most profitable trade. With the constant movement of various currencies against each other in the Forex market, most traders will focus on using technical indicators to find and place their trades.

IS TECHNICAL ANALYSIS DIFFICULT? 1. Technical analysis is not difficult, but it requires studying different types of charts such as the hourly or daily charts, knowing which technical indicators to use and how to use them.
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2. Computers and the Internet have made this process much easier. Most brokers provide basic charts and technical indicators for free or at a very low cost. 3. One way to avoid getting frustrated by all the lines, colors, and graphics is to focus on using only a few indicators that will provide you with the information needed. Try not to clutter your chart with too much information.

The future can be found in the past If prices are based on investor expectations, then knowing what a security should sell for (i.e., fundamental analysis) becomes less important than knowing what other investors expect it to sell for. That's not to say that knowing what a security should sell for isn't important--it is. But there is usually a fairly strong consensus of a stock's future earnings that the average investor cannot disprove.

Technical analysis is the process of analyzing a security's historical prices in an effort to determine probable future prices. This is done by comparing current price action (i.e., current expectations) with comparable historical price action to predict a reasonable outcome. The devout technician might define this process as the fact that history repeats itself while others would suffice to say that we should learn from the past.

Usually the following tools & instruments are used to do the technical analysis: Price Fields Technical analysis is based almost entirely on the analysis of price and volume. The fields which define a security's price and volume are explained below.

Open - This is the price of the first trade for the period (e.g., the first trade of the day). When analyzing daily data, the Open is especially important as it is the consensus price after all interested parties were able to "sleep on it."
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High - This is the highest price that the security traded during the period. It is the point at which there were more sellers than buyers (i.e., there are always sellers willing to sell at higher prices, but the High represents the highest price buyers were willing to pay). Low - This is the lowest price that the security traded during the period. It is the point at which there were more buyers than sellers (i.e., there are always buyers willing to buy at lower prices, but the Low represents the lowest price sellers were willing to accept). Close - This is the last price that the security traded during the period. Due to its availability, the Close is the most often used price for analysis. The relationship between the Open (the first price) and the Close (the last price) are considered significant by most technicians. This relationship is emphasized in candlestick charts. Volume - This is the number of shares (or contracts) that were traded during the period. The relationship between prices and volume (e.g., increasing prices accompanied with increasing volume) is important. Open Interest - This is the total number of outstanding contracts (i.e., those that have not been exercised, closed, or expired) of a future or option. Open interest is often used as an indicator. Bid - This is the price a market maker is willing to pay for a security (i.e., the price you will receive if you sell). Ask - This is the price a market maker is willing to accept (i.e., the price you will pay to buy the security).

Price Styles Price in a chart can be displayed in four styles: 1. Bar Chart. 2. Line Chart. 3. Candlestick Chart. 4. Point and Figure Charts
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1) Bar Charts :

The highs and lows of a foreign currency are plotted in a diagram and the points are joined with vertical lines (bars). A small horizontal tick to the left denotes the opening level while a small horizontal tick to the right represents the closing price of each interval.

2) Line Chart. It gives the detailed information about every aspect. The exchange rates for each time period are plotted in a diagram and the points are joined. Prices on the y-axis, time on the x-axis. The line chart chooses for example the closing price of consecutive time periods, but can also work with daily, official fixings.

The relatively easy handling of line charts is a great advantage. Line charts do not show price movements within a time period. This can be a problem because important information for exchange rate analysis can be lost. This problem was remedied with the development of bar charts that represent a more sophisticated form of line chart.

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3) Candlestick Chart. A candlestick is black if the closing price is lower than the opening price. A candlestick is white if the closing price is higher than the opening price.

In the 1600s, the Japanese developed a method of technical analysis to analyze the price of rice contracts. This technique is called candlestick charting. Steven Nison is credited with popularizing candlestick charting and has become recognized as the leading expert on their interpretation. Candlestick charts display the open, high, low, and closing prices in a format similar to a modern-day bar chart, but in a manner that extenuates the relationship between the opening and closing prices. Candlestick charts are simply a new way of looking at prices, they don't involve any calculations. Because candlesticks display the relationship between the open, high, low, and closing prices, they cannot be displayed on securities that only have closing prices, nor were they intended to be displayed on securities that lack opening prices.

The interpretation of candlestick charts is based primarily on patterns. The most popular patterns are explained below.

Bullish Patterns 1) Long white (empty) line. This is a bullish line. It occurs when prices open near the low and close significantly higher near the period's high.

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2) Hammer. This is a bullish line if it occurs after a significant downtrend. If the line occurs after a significant up-trend, it is called a Hanging Man. A Hammer is identified by a small real body (i.e., a small range between the open and closing prices) and a long lower shadow (i.e., the low is significantly lower than the open, high, and lose). The body can be empty or filled-in. 3) Piercing line. This is a bullish pattern and the opposite of a dark cloud cover. The first line is a long black line and the second line is a long white line. The second line opens lower than the first line's low, but it closes more than halfway above the first line's real body. 4) Bullish engulfing lines. This pattern is strongly bullish if it occurs after a significant downtrend (i.e., it acts as a reversal pattern). It occurs when a small bearish (filled-in) line is engulfed by a large bullish (empty) line. 5) Morning star. This is a bullish pattern signifying a potential bottom. The "star" indicates a possible reversal and the bullish (empty) line confirms this. The star can be empty or filled-in. 6) Bullish doji star. A "star" indicates a reversal and a doji indicates indecision. Thus, this pattern usually indicates a reversal following an indecisive period. You should wait for a confirmation (e.g., as in the morning star, above) before trading a doji star. The first line can be empty or filled in.

Bearish Patterns

1) Long black (filled-in) line. This is a bearish line. It occurs when prices open near the high and close significantly lower near the period's low. 2) Hanging Man. These lines are bearish if they occur after a significant uptrend. If this pattern occurs after a significant downtrend, it is called a Hammer. They are identified by small real bodies (i.e., a small range between the open and closing prices) and a long lower shadow (i.e., the low was significantly lower than the open, high, and close). The bodies can be empty or filled-in. 3) Dark cloud cover. This is a bearish pattern. The pattern is more significant if the second line's body is below the center of the previous line's body (as illustrated). 4) Bearish engulfing lines. This pattern is strongly bearish if it occurs after a significant uptrend (i.e., it acts as a reversal pattern). It occurs when a small bullish (empty) line is engulfed by a large bearish (filled-in) line. Evening star. This is a bearish pattern signifying a potential top. The "star" indicates a possible reversal and the bearish (filled-in) line confirms this. The star can be empty or filled in.
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5) Doji star. A star indicates a reversal and a doji indicates indecision. Thus, this pattern usually indicates a reversal following an indecisive period. You should wait for a confirmation (e.g., as in the evening star illustration) before trading a doji star. 6) Shooting star. This pattern suggests a minor reversal when it appears after a rally. The star's body must appear near the low price and the line should have a long upper shadow.

Reversal Patterns 1) Long-legged doji. This line often signifies a turning point. It occurs when the open and close are the same, and the range between the high and low is relatively large. 2) Dragon-fly doji. This line also signifies a turning point. It occurs when the open and close are the same, and the low is significantly lower than the open, high, and closing prices. 3) Gravestone doji. This line also signifies a turning point. It occurs when the open, close, and low are the same, and the high is significantly higher than the open, low, and closing prices. 4) Star. Stars indicate reversals. A star is a line with a small real body that occurs after a line with a much larger real body, where the real bodies do not overlap. The shadows may overlap. 5) Doji star. A star indicates a reversal and a doji indicates indecision. Thus, this pattern usually indicates a reversal following an indecisive period. You should wait for a confirmation (e.g., as in the evening star illustration) before trading a doji star.

Neutral Patterns 1) Spinning tops. These are neutral lines. They occur when the distance between the high and low, and the distance between the open and close, are relatively small. 2) Doji. This line implies indecision. The security opened and closed at the same price. These lines can appear in several different patterns. Double doji lines (two adjacent doji lines) imply that a forceful move will follow a breakout from the current indecision. 3) Harami ("pregnant" in English). This pattern indicates a decrease in momentum. It occurs when a line with a small body falls within the area of a larger body. In this example, a bullish (empty) line with a long body is followed by a weak bearish (filledin) line. This implies a decrease in the bullish momentum.

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4) Harami cross. This pattern also indicates a decrease in momentum. The pattern is similar to a harami, except the second line is a doji (signifying indecision).

Example

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

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

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

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Isnt it hard to see that the trend is up. However, it's not always this easy to see a trend:

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

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

TYPE OF TREND There are three types of trend: 1. Uptrend 2. Downtrend 3. Sideways/Horizontal Trends As the names imply, when each successive peak and trough is higher, it's referred to as an upward trend. If the peaks and troughs are getting lower, it's a downtrend. When there is little movement up or down in the peaks and troughs, it's a sideways or horizontal trend. If you want to get really technical, you might even say that a sideways trend is actually not a trend on its own, but a lack of a well-defined trend in either direction. In any case, the market can really only trend in these three ways: up, down or nowhere. Trend Lengths Along with these three trend directions, there are three trend classifications. A trend of any direction can be classified as a long-term trend, intermediate trend or a short-term trend. In terms of the stock market, a major trend is generally categorized as one lasting longer than a year. An intermediate trend is considered to last between one and three months and a near-term trend is anything less than a month. A long-term trend is composed of several intermediate trends, which often move against the direction of the major trend. If the major trend is upward and there is a downward correction in price movement followed by a continuation of the uptrend, the correction is considered to be an intermediate trend. The short-term trends are components of both major

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and intermediate trends. Take a look a Figure 4 to get a sense of how these three trend lengths might look.

When analyzing trends, it is important that the chart is constructed to best reflect the type of trend being analyzed. To help identify long-term trends, weekly charts or daily charts spanning a five-year period are used by chartists to get a better idea of the long-term trend. Daily data charts are best used when analyzing both intermediate and short-term trends. It is also important to remember that the longer the trend, the more important it is; for example, a one-month trend is not as significant as a five-year trend. Trend Lines A trend line is a simple charting technique that adds a line to a chart to represent the trend in the market or a stock. Drawing a trend line is as simple as drawing a straight line that follows a general trend. These lines are used to clearly show the trend and are also used in the identification of trend reversals. An upward trend line is drawn at the lows of an upward trend. This line represents the support the stock has every time it moves from a high to a low. Notice how the price is propped up by this support. This type of trend line helps traders to anticipate the point at which a stock's price
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will begin moving upwards again. Similarly, a downward trend line is drawn at the highs of the downward trend. This line represents the resistance level that a stock faces every time the price moves from a low to a high.

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

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A descending channel on a stock chart; the upper trend line has been placed on the highs and the lower trend line is on the lows. The price has bounced off of these lines several times, and has remained range-bound for several months. As long as the price does not fall below the lower line or move beyond the upper resistance, the range-bound downtrend is expected to continue. The Importance Of Trend It is important to be able to understand and identify trends so that you can trade with rather than against them. Two important sayings in technical analysis are "the trend is your friend" and "don't buck the trend," illustrating how important trend analysis is for technical traders

IMPORTANCE OF VOLUME : What Is Volume? Volume is simply the number of shares or contracts that trade over a given period of time, usually a day. The higher the volume, the more active the security. To determine the movement of the volume (up or down), chartists look at the volume bars that can usually be found at the bottom of any chart. Volume bars illustrate how many shares have traded per period and show trends in the same way that prices do.

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Why Volume Is Important? Volume is an important aspect of technical analysis because it is used to confirm trends and chart patterns. Any price movement up or down with relatively high volume is seen as a stronger, more relevant move than a similar move with weak volume. Say, for example, that a stock jumps 5% in one trading day after being in a long downtrend. Is this a sign of a trend reversal? This is where volume helps traders. If volume is high during the day relative to the average daily volume, it is a sign that the reversal is probably for real. On the other hand, if the volume is below average, there may not be enough conviction to support a true trend reversal. Volume should move with the trend. If prices are moving in an upward trend, volume should increase (and vice versa). If the previous relationship between volume and price movements starts to deteriorate, it is usually a sign of weakness in the trend. For example, if the stock is in an uptrend but the up trading days are marked with lower volume, it is a sign that the trend is starting to lose its legs and may soon end. When volume tells a different story, it is a case of divergence, which refers to a contradiction between two different indicators. The simplest example of divergence is a clear upward trend on declining volume. Volume And Chart Patterns The other use of volume is to confirm chart patterns. Patterns such as head and shoulders, triangles, flags and other price patterns can be confirmed with volume, a process which we'll describe in more detail later in this tutorial. In most chart patterns, there are several pivotal points that are vital to what the chart is able to convey to chartists. Basically, if the volume is not there to confirm the pivotal moments of a chart pattern, the quality of the signal formed by the pattern is weakened.

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Volume Precedes Price Another important idea in technical analysis is that price is preceded by volume. Volume is closely monitored by technicians and chartists to form ideas on upcoming trend reversals. If volume is starting to decrease in an uptrend, it is usually a sign that the upward run is about to end. Now that we have a better understanding of some of the important factors of technical analysis, we can move on to charts, which help to identify trading opportunities in prices movements.

CHART PATTERNS : A chart pattern is a distinct formation on a stock chart that creates a trading signal, or a sign of future price movements. Chartists use these patterns to identify current trends and trend reversals and to trigger buy and sell signals. In the first section of this tutorial, we talked about the three assumptions of technical analysis, the third of which was that in technical analysis, history repeats itself. The theory behind chart patterns is based on this assumption. The idea is that certain patterns are seen many times, and that these patterns signal a certain high probability move in a stock. Based on the historic trend of a chart pattern setting up a certain price movement, chartists look for these Patterns to identify trading opportunities. While there are general ideas and components to every chart pattern, there is no chart pattern that will tell you with 100% certainty where a security is headed. This creates some leeway and debate as to what a good pattern looks like, and is a major reason why charting is often seen as more of an art than a science. There are two types of patterns within this area of technical analysis, reversal and continuation. A reversal pattern signals that a prior trend will reverse upon completion of the pattern. A continuation pattern, on the other hand, signals that a trend will continue once the pattern is complete. These patterns can be found over charts of any timeframe. In this section, we will review some of the more popular chart patterns.

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1.Head And Shoulders This is one of the most popular and reliable chart patterns in technical analysis. Head and shoulders is a reversal chart pattern that when formed, signals that the security is likely to move against the previous trend. As you can see, there are two versions of the head and shoulders chart pattern. Head and shoulders top (shown on the left) is a chart pattern that is formed at the high of an upward movement and signals that the upward trend is about to end. Head and shoulders bottom, also known as inverse head and shoulders (shown on the right) is the lesser known of the two, but is used to signal a reversal in a downtrend.

Head and shoulders top is shown on the left. Head and shoulders bottom, or inverse head and shoulders, is on the right. Both of these head and shoulders patterns are similar in that there are four main parts: two shoulders, a head and a neckline. Also, each individual head and shoulder is comprised of a high and a low. For example, in the head and shoulders top image shown on the left side, the left shoulder is made up of a high followed by a low. In this pattern, the neckline is a level of support or resistance. Remember that an upward trend is a period of successive rising highs and rising lows. The head and shoulders chart pattern, therefore, illustrates a weakening in a trend by showing the deterioration in the successive movements of the highs and lows.

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2.Cup And Handle A cup and handle chart is a bullish continuation pattern in which the upward trend has paused but will continue in an upward direction once the pattern is confirmed.

The price pattern forms what looks like a cup, which is preceded by an upward trend. The handle follows the cup formation and is formed by a generally downward/sideways movement in the security's price. Once the price movement pushes above the resistance lines formed in the handle, the upward trend can continue. 3.Double Tops And Bottoms This chart pattern is another well-known pattern that signals a trend reversal - it is considered to be one of the most reliable and is commonly used. These patterns are formed after a sustained trend and signal to chartists that the trend is about to reverse. The pattern is created when a price movement tests support or resistance levels twice and is unable to break through. This pattern is often used to signal intermediate and long-term trend reversals.

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A double top pattern is shown on the left, while a double bottom pattern is shown on the right.In the case of the double top pattern, the price movement has twice tried to move above a certain price level. After two unsuccessful attempts at pushing the price higher, the trend reverses and the price heads lower. In the case of a double bottom (shown on the right), the price movement has tried to go lower twice, but has found support each time. After the second bounce off of the support, the security enters a new trend And heads upward. 4.Triangles Triangles are some of the most well-known chart patterns used in technical analysis. The three types of triangles, which vary in construct and implication, are the symmetrical triangle, ascending and descending triangle. These chart patterns are considered to last anywhere from a couple of weeks to several months.

The symmetrical is a pattern in which two trend lines converge toward each other. This pattern is neutral in that a breakout to the upside or downside is a confirmation of a trend in that
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direction. In an ascending triangle, the upper trend line is flat, while the bottom trend line is upward sloping. This is generally thought of as a bullish pattern in which chartists look for an upside breakout. In a descending triangle, the lower trend line is flat and the upper trend line is descending. This is generally seen as a bearish pattern where chartists look for a downside breakout.

5. Flag And Pennants These two short-term chart patterns are continuation patterns that are formed when there is a sharp price movement followed by a generally sideways price movement. This pattern is then completed upon another sharp price movement in the same direction as the move that started the trend. The patterns are generally thought to last from one to three weeks.

There is little difference between a pennant and a flag. The main difference between these price movements can be seen in the middle section of the chart pattern. In a pennant, the middle section is characterized by converging trend lines, much like what is seen in a symmetrical triangle. The middle section on the flag pattern, on the other hand, shows a channel pattern, with no convergence between the trend lines. In both cases, the trend is expected to continue when the price moves above the upper trend line

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6. Wedge The wedge chart pattern can be either a continuation or reversal pattern. It is similar to a symmetrical triangle except that the wedge pattern slants in an upward or downward direction, while the symmetrical triangle generally shows a sideways movement. The other difference is that wedges tend to form over longer periods, usually between three and six months.

The fact that wedges are classified as both continuation and reversal patterns can make reading signals confusing. However, at the most basic level, a falling wedge is bullish and a rising wedge is bearish. We have a falling wedge in which two trend lines are converging in a downward direction. If the price was to rise above the upper trend line, it would form a continuation pattern, while a move below the lower trend line would signal a reversal pattern 7. Triple Tops And Bottoms Triple tops and triple bottoms are another type of reversal chart pattern in chart analysis. These are not as prevalent in charts as head and shoulders and double tops and bottoms, but they act in a similar fashion. These two chart patterns are formed when the price movement tests a level of support or resistance three times and is unable to break through; this signals a reversal of the prior trend.

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Confusion can form with triple tops and bottoms during the formation of the pattern because they can look similar to other chart patterns. After the first two support/resistance tests are formed in the price movement, the pattern will look like a double top or bottom, which could lead a chartist to enter a reversal position too soon. 8. Rounding Bottom A rounding bottom, also referred to as a saucer bottom, is a long-term reversal pattern that signals a shift from a downward trend to an upward trend. This pattern is traditionally thought to last anywhere from several Months to several years.

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A Rounding bottom chart pattern looks similar to a cup and handle pattern but without the handle. The long-term nature of this pattern and the lack of a confirmation trigger, such as the handle in the cup and handle, make it a difficult pattern.

SUPPORT AND RESISTANCE: Once you understand the concept of a trend, the next major concept is that of support and resistance. You'll often hear technical analysts talk about the ongoing battle between the bulls and the bears, or the struggle between buyers (demand) and sellers (supply). This is revealed by the prices a security seldom moves above (resistance) or below (support).

Support is the price level through which a stock or market seldom falls (illustrated by the blue arrows). Resistance, on the other hand, is the price level that a stock or market seldom surpasses (illustrated by the Red Arrows). These support and resistance levels are seen as important in terms of market psychology and supply and demand. Support and resistance levels are the levels at which a lot of traders are willing to buy the stock (in the case of a support) or sell it (in the case of resistance). When these trend lines are broken, the supply and demand and the psychology behind the stock's movements is thought to have shifted, in which case new levels of support and resistance likely be established.
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Round Numbers and Support and Resistance: One type of universal support and resistance that tends to be seen across a large number of securities is round numbers. Round numbers like 10, 20, 35, 50, 100 and 1,000 tend be important in support and resistance levels because they often represent the major psychological turning points at which many traders will make buy or sell decisions. Buyers will often purchase large amounts of stock once the price starts to fall toward a major round number such as $50, which makes it more difficult for shares to fall below the level. On the other hand, sellers start to sell off a stock as it moves toward a round number peak, making it difficult to move past this upper level as well. It is the increased buying and selling pressure at these levels that makes them important points of support and resistance and, in many cases, major psychological points as well. Role Reversal Once a resistance or support level is broken, its role is reversed. If the price falls below a support level, that level will become resistance. If the price rises above a resistance level, it will often become support. As the price moves past a level of support or resistance, it is thought that supply and demand has shifted, causing the breached level to reverse its role. For a true reversal to occur, however, it is important that the price make a strong move through either the support or resistance.

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For example, as you can see, the dotted line is shown as a level of resistance that has prevented the price from heading higher on two previous occasions (Points 1 and 2). However, once the resistance is broken, it becomes a level of support (shown by Points 3 and 4) by propping up the price and preventing it from heading lower again. Many traders who begin using technical analysis find this concept hard to believe and don't realize that this phenomenon occurs rather frequently, even with some of the most well-known companies. For example, this phenomenon is evident on the Wal-Mart Stores Inc. (WMT) chart between 2003 and 2006. Notice how the role of the $51 level changes from a strong level of support to a level of resistance.

In almost every case, a stock will have both a level of support and a level of resistance and will trade in this range as it bounces between these levels. The Importance of Support and Resistance Support and resistance analysis is an important part of trends because it can be used to make trading decisions and identify when a trend is reversing. Support and resistance levels both test and confirm trends and need to be monitored by anyone who uses technical analysis. As long as the price of the share remains between these levels
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of support and resistance, the trend is likely to continue. It is important to note, however, that a break beyond a level of support or resistance does not always have to be a reversal. For example, if prices moved above the resistance levels of an upward trending channel, the trend have accelerated, not reversed. This means that the price appreciation is expected to be faster than it was in the channel. Being aware of these important support and resistance points should affect the way that you trade a stock. Traders should avoid placing orders at these major points, as the area around them is usually marked by a lot of volatility. If you feel confident about making a trade near a support or resistance level, it is important that you follow this simple rule: do not place orders directly at the support or resistance level. This is because in many cases, the price never actually reaches the whole number, but flirts with it instead. So if you're bullish on a stock that is moving toward an important support level, do not place the trade at the support level. Instead, place it above the support level, but within a few points. On the other hand, if you are placing stops or short selling, set up your trade price at or below the level of support. MOVING AVERAGES : Most chart patterns show a lot of variation in price movement. This can make it difficult for traders to get an idea of a security's overall trend. One simple method traders use to combat this is to apply moving averages. A moving average is the average price of a security over a set amount of time. By plotting a security's average price, the price movement is smoothed out. Once the dayto-day fluctuations are removed, traders are better able to identify the true trend and increase the probability that it will work in their favor. Types Of Moving Averages:There are a number of different types of moving averages that vary in the way they are calculated, but how each average is interpreted remains the same. The calculations only differ in
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regards to the weighting that they place on the price data, shifting from equal weighting of each price point to more weight being placed on recent data. The three most common types of moving averages are simple, linear and exponential. 1. Simple Moving Average (SMA)

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

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

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2. Linear Weighted Average This moving average indicator is the least common out of the three and is used to address the problem of the equal weighting. The linear weighted moving average is calculated by taking the sum of all the closing prices over a certain time period and multiplying them by the position of the data point and then dividing by the sum of the number of periods. For example, in a five-day linear weighted average, today's closing price is multiplied by five; yesterday's by four and so on until the first day in the period range is reached. These numbers are then added together and divided by the sum of the multipliers. 3. Exponential Moving Average (EMA) This moving average calculation uses a smoothing factor to place a higher weight on recent data points and is regarded as much more efficient than the linear weighted average. Having an understanding of the calculation is not generally required for most traders because most charting packages do the calculation for you. The most important thing to remember about the exponential moving average is that it is more responsive to new information relative to the simple moving average. This responsiveness is one of the key factors of why this is the moving average of choice among many technical traders. A 15-period EMA raises and falls faster than a 15-period SMA. This slight difference doesnt seem like much, but it is an important factor to be aware of since it can affect returns.

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

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

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

If the periods used in the calculation are relatively short, for example 15 and 35, this could signal a short-term trend reversal. On the other hand, when two averages with relatively long time frames cross over (50 and 200, for example), this is used to suggest a long-term shift in trend. Another major way moving averages are used is to identify support and resistance levels. It is not uncommon to see a stock that has been falling stop its decline and reverse direction once it hits the support of a major moving average. A move through a major moving average is often used as a signal by technical traders that the trend is reversing. For example, if the price breaks through the 200-day moving average in a downward direction, it is a signal that the uptrend is reversing.
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Moving averages are a powerful tool for analyzing the trend in a security. They provide useful support and resistance points and are very easy to use. The most common time frames that are used when creating moving averages are the 200-day, 100-day, 50-day, 20-day and 10-day. The 200-day average is thought to be a good measure of a trading year, a 100-day average of a half a year, a 50-day average of a quarter of a year, a 20-day average of a month And 10 day average of two weeks. Moving averages help technical traders smooth out some of the noise that is found in dayto-day price movements, giving traders a clearer view of the price trend. So far we have been focused on price movement, through charts and averages. In the next section, we'll look at some other techniques used to confirm price movement and patterns.

TECHNICAL INDICATORS ACCUMULATION/DISTRIBUTION Overview The Accumulation/Distribution is a momentum indicator that associates changes in price and volume. The indicator is based on the premise that the more volume that accompanies a price move, the more significant the price move.
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Interpretation The Accumulation/Distribution is really a variation of the more popular On Balance Volume indicator. Both of these indicators attempt to confirm changes in prices by comparing the volume associated with prices. When the Accumulation/Distribution moves up, it shows that the security is being accumulated, as most of the volume is associated with upward price movement. When the indicator moves down, it shows that the security is being distributed, as most of the volume is associated with downward price movement. Divergences between the Accumulation/Distribution and the security's price imply a change is imminent. When a divergence does occur, prices usually change to confirm the Accumulation/Distribution. For example, if the indicator is moving up and the security's price is going down, prices will probably reverse.

BOLLINGER BANDS Overview Bollinger Bands are similar to moving average envelopes. The difference between Bollinger Bands and envelopes is envelopes are plotted at a fixed percentage above and below a moving average, whereas Bollinger Bands are plotted at standard deviation levels above and below a moving average. Since standard deviation is a measure of volatility, the bands are self-adjusting: widening during volatile markets and contracting during calmer periods. Bollinger Bands were created by John Bollinger. Interpretation Bollinger Bands are usually displayed on top of security prices, but they can be displayed on an indicator. These comments refer to bands displayed on prices. As with moving average envelopes, the basic interpretation of Bollinger Bands is that prices tend to stay within the upper- and lower-band. The distinctive characteristic of Bollinger Bands is that the spacing between the bands varies based on the volatility of the prices. During periods of extreme price changes (i.e., high volatility), the bands widen to become more forgiving. During periods of stagnant pricing (i.e., low volatility), the bands narrow to contain prices. Following are characteristics of Bollinger Bands.
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Sharp price changes tend to occur after the bands tighten, as volatility lessens. When prices move outside the bands, a continuation of the current trend is implied.

Bottoms and tops made outside the bands followed by bottoms and tops made inside the bands call for reversals in the trend. A move that originates at one band tends to go all the way to the other band. This observation is useful when projecting price targets.

ENVELOPES (TRADING BANDS) Overview An envelope is comprised of two moving averages. One moving average is shifted upward and the second moving average is shifted downward. Interpretation Envelopes define the upper and lower boundaries of a security's normal trading range. A sell signal is generated when the security reaches the upper band whereas a buy signal is generated at the lower band. The optimum percentage shift depends on the volatility of the security--the more volatile, the larger the percentage. The logic behind envelopes is that overzealous buyers and sellers push the price to the extremes (i.e., the upper and lower bands), at which point the prices often stabilize by moving to more realistic levels. This is similar to the interpretation of Bollinger Bands.

MACD Overview The MACD ("Moving Average Convergence/Divergence") is a trend following momentum indicator that shows the relationship between two moving averages of prices. The MACD was developed by Gerald Appel, publisher of Systems and Forecasts. The MACD is the difference between a 26-day and 12-day exponential moving average. A 9-day exponential moving average, called the "signal" (or "trigger") line is plotted on top of the MACD to show buy/sell opportunities. (Appel specifies exponential moving averages as percentages. Thus, he refers to these three moving averages as 7.5%, 15%, and 20% respectively.)
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Interpretation The MACD proves most effective in wide-swinging trading markets. There are three popular ways to use the MACD: crossovers, overbought/oversold conditions, and divergences.

Crossovers The basic MACD trading rule is to sell when the MACD falls below its signal line. Similarly, a buy signal occurs when the MACD rises above its signal line. It is also popular to buy/sell when the MACD goes above/below zero.

Overbought/Oversold Conditions The MACD is also useful as an overbought/oversold indicator. When the shorter moving average pulls away dramatically from the longer moving average (i.e., the MACD rises), it is likely that the security price is overextending and will soon return to more realistic levels. MACD overbought and oversold conditions exist vary from security to security.

Divergences A indication that an end to the current trend may be near occurs when the MACD diverges from the security. A bearish divergence occurs when the MACD is making new lows while prices fail to reach new lows. A bullish divergence occurs when the MACD is making new highs while prices fail to reach new highs. Both of these divergences are most significant when they occur at relatively overbought/oversold levels.

PRICE OF RATE-OF-CHANGE Overview The Price Rate-of-Change (ROC) indicator, which is also referred to as simply Momentum, is a pure momentum 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. The plot forms an oscillator that fluctuates above and below the zero line as the Rate-of-Change moves
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from positive to negative. As a momentum oscillator, ROC signals include centerline crossovers, divergences and overbought-oversold readings. Divergences fail to foreshadow reversals more often than not so this article will forgo a discussion on divergences. Even though centerline crossovers are prone to whipsaw, especially short-term, these crossovers can be used to identify the overall trend. Identifying overbought or oversold extremes comes natural to the Rate-ofChange oscillator. ROC = [(Close - Close n periods ago) / (Close n periods ago)] * 100

Interpretation The Price of Rate-of-Change indicator is momentum in its purest form. It measures the percentage increase or decrease in price over a given period of time. Think of its as the rise (price change) over the run (time). In general, prices are rising as long as the Rate-of-Change remains positive. Conversely, prices are falling when the Rate-of-Change is negative. ROC expands into positive territory as an advance accelerates. ROC dives deeper into negative territory as a decline accelerates. There is no upward boundary on the Rate-of-Change. The sky is the limit for an advance. There is, however, a downside limit. Securities can only decline 100%, which would be to zero. Even with these lopsided boundaries, Rate-of-Change produces identifiable extremes that signal overbought and oversold conditions.

WILDER RELATIVE STRENGTH INDEX Overview Developed J. Welles Wilder, the Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. RSI oscillates between zero and 100. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30. Signals can also be generated by looking for divergences, failure swings and center line crossovers. RSI can also be used to identify the general trend. RSI = 100 - (100/ 1+RS) RS = Average gain/ Average loss
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Interpretation When Wilder introduced the RSI, he recommended using a 14-day RSI. Since then, the 9-day and 25-day RSIs have also gained popularity. Because you can vary the number of time periods in the RSI calculation, I suggest that you experiment to find the period that works best for you. (The fewer days used to calculate the RSI, the more volatile the indicator.) The RSI is a price-following oscillator that ranges between 0 and 100. A popular method of analyzing the RSI is to look for a divergence in which the security is making a new high, but the RSI is failing to surpass its previous high. This divergence is 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." ON BALANCE VOLUME Overview On Balance Volume ("OBV") is a momentum indicator that relates volume to price change. On Balance Volume was developed by Joe Granville

Interpretation On Balance Volume is a running total of volume. It shows if volume is flowing into or out of a security. When the security closes higher than the previous close, all of the day's volume is considered up-volume. When the security closes lower than the previous close, all of the day's volume is considered down-volume.

PRICE OSCILLATOR Overview The Price Oscillator displays the difference between two moving averages of a securitys price. The difference between the moving averages can be expressed in either points or percentages. The Price Oscillator is almost identical to the MACD, except that the Price Oscillator can use any two user-specified moving averages. (The MACD always uses 12- and 26-day moving averages, and always expresses the difference in points.)
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Interpretation Moving average analysis typically generates buy signals when a short-term moving average (or the securities price) rises above a longer-term moving average. Conversely, sell signals are generated when a shorter-term moving average (or the securitys price) falls below a longer-term moving average. The Price Oscillator illustrates the cyclical and often profitable signals generated by these one- or two-moving-average systems.

VOLUME Overview Volume is simply the number of shares (or contracts) traded during a specified time frame (e.g., hour, day, week, month, etc). The analysis of volume is a basic yet very important element of technical analysis. Volume provides clues as to the intensity of a given price move.

Interpretation Low volume levels are characteristic of the indecisive expectations that typically occur during consolidation periods (i.e., periods where prices move sideways in a trading range). Low volume also often occurs during the indecisive period during market bottoms. High volume levels are characteristic of market tops when there is a strong consensus that prices will move higher. High volume levels are also very common at the beginning of new trends (i.e., when prices break out of a trading range). Just before market bottoms, volume will often increase due to panic-driven selling.

Volume can help determine the health of an existing trend. A healthy up-trend should have higher volume on the upward legs of the trend, and lower volume on the downward (corrective) legs. A healthy downtrend usually has higher volume on the downward legs of the trend and lower volume on the upward (corrective) legs.

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VOLUME OSCILLATOR Overview The Volume Oscillator displays the difference between two moving averages of a security's volume. The difference between the moving averages can be expressed in either points or percentages.

Interpretation We can use the difference between two moving averages of volume to determine if the overall volume trend is increasing or decreasing. When the Volume Oscillator rises above zero, it signifies that the shorter-term volume moving average has risen above the longerterm volume moving average, and thus, that the short-term volume trend is higher (i.e., more volume) than the longer-term volume trend. There are many ways to interpret changes in volume trends. One common belief is that rising prices coupled with increased volume, and falling prices coupled with decreased volume, is bullish. Conversely, if volume increases when prices fall, and volume decreases when prices rise, the market is showing signs of underlying weakness. The theory behind this is straight forward. Rising prices coupled with increased volume signifies increased upside participation (more buyers) that should lead to a continued move. Conversely, falling prices coupled with increased volume (more sellers) signifies decreased upside participation.

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OBJECTIVE OF THE STUDY


The objectives of the study are stated as under: 1. To learn when to buy, sell and hold the securities. A sample of five is taken for this purpose. 2. To analyze the recent pattern of price movement and help investor to make profits. 3. To know the method of calculating the various technical indicators and to interpret it. 4. To understand the repetitive trends which reappear in the course of time. 5. To analyze the pattern of price movement and its relation with volume traded, determining the proper timing of investment.

SCOPE OF THE STUDY


1. The research is based upon the price of five telecom companies i.e. Bharti Airtel, Idea Cellular, Reliance Communication Ltd., Tale Communication Ltd. And Tata Tele services. 2. The research is based upon oscillators, tool for technical analysis and involves the calculation of three oscillators that are SMA, ROC, Wilder RSI. 3. The research data includes the monthly closing prices quoted on Bombay Stock Exchange. 4. SMA has been calculated by taking 12 period (Item). 5. ROC has been calculated by taking 12 period (Item). 6. Wilder RSI has been calculated by taking 12 period (Item).

LIMITATION OF THE STUDY

Technical analysis is usually undertaken after taking historical data of of share price of company of longer period, only three year data has been taken. The market price of shares also get effected by happening on the political and economic factors or fundamentals of the company i.e. changes in an intrinsic value of the shared , hence all the deviations cannot be contributed to the market sentiments.
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Oscillators are only a tool for technical analysis and cannot be used without considering other tools. There are several oscillators but only the major one were selected to interpreting the market trends.

The trends may not other scams.

hold true circumstances involving profit taking, short selling or any

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COMPANY OVERVIEW
Introduction to Bhubaneswar Stock Exchange (BHSE) Initial step was taken by the Department of Industry, Govt. of Orissa and Industrial Promotion & Investment Corporation of Orissa Ltd. (IPICOL) in the early eighties to set up a Stock Exchange in the State of Orissa. Subsequently, Bhubaneswar Stock Exchange was incorporated on 17th April,1989 as a Public Company, limited by guarantee with an object to facilitate, assist, regulate and control the business of dealing in stocks, shares and like securities in the State of Orissa. Ministry of Finance, Govt. of India granted recognition to the Stock Exchange on 5th June,1989 under the provisions of the Securities Contracts (Regulation) Act,1956 for an initial period of five years. Thereafter, the recognition of the Stock Exchange is being renewed from time to time by Securities and Exchange Board of India (SEBI). On being recognized during 1989, Bhubaneswar Stock Exchange admitted 161 memberbrokers in the first phase and commenced its trading operation on 2nd January, 1991. To impart greater liquidity in both shares and debentures and to increase the volume of business, the Exchange has expanded its membership strength during the year 1995 by admitting 75 more member-brokers. However, the status of the Stock Exchange was converted from a Company limited by guarantee, to a Company limited by shares during the year 2005 pursuant to The Bhubaneswar Stock Exchange (Corporatization and Demutualization) Scheme, 2005 approved by SEBI. MANAGEMENT The affairs of the Stock Exchange are managed by the Board of Directors. The Board of Directors of the Stock Exchange comprises of 8 (Eight) Directors of which 2 are Trading Member Directors, 2 are Public Interest Directors, 3 are Shareholder Directors and a Chief Executive Director. However, the Board of Directors of the Stock Exchange is under supersession by SEBI w.e.f. 3rd January,2003. Shri J.P. Verma, IPS (Retd.) was appointed by SEBI as Administrator of the Stock Exchange to discharge the powers and duties of the Board of Directors. He continued to act as the Administrator of the Stock Exchange upto 30th September,2006. Thereafter, SEBI, while extending the period of supersession of Board of Directors of the Exchange, has designated Shri Vivekananda Pattanayak, IAS (Retd.) as the Administrator of Bhubaneswar Stock Exchange to discharge the
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powers and duties of its Board of Directors with effect from 1st October, 2006. Accordingly, Shri Pattanayak, IAS (Retd.) has taken over as the Administrator of Bhubaneswar Stock Exchange w.e.f. 3rd October,2006 to discharge the powers and duties of the Board of Directors of the Stock Exchange. The Stock Exchange, while recording the valuable service rendered by Shri J.P. Verma, IPS (Retd.) during his tenure as the Administrator, welcomes Shri Vivekananda Pattanayak, IAS (Retd.) as its Administrator. The Board of Directors/Administrator of the Stock Exchange is, at present, assisted by 11 qualified officials.

AUTOMATION The entire trading and settlement operation was computerized since inception. However, the Exchange switched over to Screen Based Trading with effect from 20th May,1997 through which the member-brokers conducted trading on line thereby bringing to an end to the old tradition of open out-cry system of trading.

SETTLEMENT SYSTEM The Settlement system of the Exchange is carried out on Daily Rolling Basis (T+1) as per the SEBI Guidelines issued from time to time. Pay-in/pay-out, in terms of Settlement Calendar, is affected well in time through the Centralized Banking System of the Stock Exchange. Canara Bank has established a Branch to facilitate the pay-in/pay-out operation as well as the banking transactions of the Stock Exchange and its trading members.

CLEARING HOUSE Bhubaneswar Stock Exchange has its own Clearing House. The transactions entered among the trading members of the Exchange are settled by delivery and payment obligations through the Clearing House of the Stock Exchange in accordance with the prescribed settlement program under a Centralized Delivery and Payment System.

55

INTER-CONNECTIVITY Bhubaneswar Stock Exchange has played an instrumental role, among others, in mooting the idea of establishing of an Inter-connected Market System (ICMS). This effort was resulted in establishing Inter-connected Stock Exchange of India of Ltd. to provide a nationwide equity market through the trading members of participating Stock Exchanges. It has also facilitated the trading members of participating Stock Exchanges including Bhubaneswar Stock Exchange, to trade on the National Stock Exchange segment.

LISTED STOCKS Despite introduction of SEBI Delisting Guidelines, 2003, Bhubaneswar Stock Exchange continued to have listing of securities of several companies having aggregate paid-up capital of around Rs.2, 200 crores. PRIMARY MARKET Bhubaneswar Stock Exchange has been playing an active role for the growth of primary market activities with the support of its trading members. The Stock Exchange ensures promotional steps for participation of investing public at a large scale, in the public offers of several companies.

CUSTOMERS PROTECTION FUND Investors protection is the cornerstone of a vibrant market. Bhubaneswar Stock Exchange has established a Statutory Fund namely, Bhubaneswar Stock Exchange Customers Protection Fund with an object to protect the customers from the risk of defaulting trading members. At present, as per the Rules of the said Fund, a customer is entitled to be indemnified to a maximum of Rs.25, 000/-towards his claim against a defaulter trading member of the Stock Exchange.

INVESTORS SERVICE CELL Bhubaneswar Stock Exchange has an Investors Service Cell which also ensures protection of the investors. It promptly attends the complaints of various nature lodged by the investors against companies as well as the trading members of the Stock Exchange and plays an important role in a
56

friendly approach to redress the investors grievances. The Investors Service Cell undertakes due care to build up confidence of the common investors on the capital market.

LIBRARY Bhubaneswar Stock Exchange has a good library. It has a list of several books and guidelines relating to capital market. It also subscribes Periodicals and Financial News Dailies for readers. In addition to this, prime magazines for new issues, annual reports of several listed companies are available with it. The library of the Stock Exchange is, thus playing a promotional role for enrichment of knowledge of the staff, trading members, investors and research scholars at large. The Stock Exchange with the support of its library also helps the management students to prepare their project reports.

EMPLOYMENT Bhubaneswar Stock Exchange has also been instrumental in generating various nature of employment, both directly and indirectly, in the State of Orissa. As a result, apart from direct employment for its own purpose, it has created opportunity for generation of a number of indirect appointments in various capacities such as sub-brokers, authorized assistants, authorized representatives and other staff in the stock-broking firms.

FUTURE UNDERTAKINGS Bhubaneswar Stock Exchange has undertaken a number of measures to activate business in securities and to spread the message of goodwill among the investing public. Such measures are: To provide Depository Service so that the trading in securities and supporting depository operation connected to it shall be carried out under an umbrella. To upgrade the infrastructural facilities to facilitate expansion of trading activities. To host Training Program for trading member as well as employees of the Stock Exchange. To introduce, provide and conduct a Course for imparting education on Indian Stock Market to the aspirants. To construct a modern hi-tech building of the Stock Exchange.

57

ORGANIZATION STRUCTURE The affairs of the BHSE are managed by a Board of Directors consisting 8 Directors from the following categories: 1. 2. 3. 4. 2 (Two) Trading Member Directors 2 (Two) Public Interest Directors 3 (Three) Shareholder Directors 1 (One) Director in the capacity of Chief Executive Officer

CEO Shri Debraj Biswal

Public Interest Directors

Trading Member Directors

Shareholder Directors

. Shri Vivekananda Pattanayak

Smt. Asha Manjari Mishra

Shri B.K. Mohapatra

Shri Bibekananda Mohanty

Shri Shankar Lal Agrawalla

Shri Deelip Kumar Choudhury

Shri K.N. Ravindra

58

KEY PERSONNEL

MANAGERS
GADADHAR MISHRA PRADEEP MUDULI TAPAN RANJAN PATNAIK

SECRETARY
CHINMAYA DASH

ASST. MANAGERS
BIPIN BIHARI DUTTA BIBHU PRASAD CHHOTRAYA ABHAYA KUMAR MISHRA

SR. EXECUTIVES
PRAYABRATA RAJGURU MAMATA PATTNAIK CHINMAYA MISHRA KAILASH CHANDRA SATAPATHY

TRADING MEMBERS The trading membership strength of Bhubaneswar Stock Exchange is 196 at present against the sanctioned strength of 350.

Corporatization & Demutualization of Bhubaneswar Stock Exchange Pursuant to Incorporation of new provisions by way of amendment to the Securities Contracts (Regulation) Act,1956 by the Govt. of India during the year 2004 requiring all the Stock Exchanges in the country to be corporatized and demutualised, Bhubaneswar Stock Exchange, under a
59

Scheme of Corporatization and Demutualization approved and notified by Securities and Exchange Board of India (SEBI) on 15th September,2005, was registered afresh as a Company having share capital under the Companies Act, 1956 on revocation of license issued previously to it u/s 25 of the said Act and got itself corporatized. In this exercise, in terms of provisions of BHSE (Corporatization & Demutualization) Scheme,2005, 18,61,980 equity shares of Re.1/- each of Bhubaneswar Stock Exchange were issued to 100 interested applicant trading members.

As regards the compliance of the part of demutualization, the statutory requirement was that the Stock Exchange had to ensure, at least 51% of its share capital should be held by the public other than the shareholders having trading rights in the Stock Exchange in the manner prescribed under Securities Contract (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognized Stock Exchanges) Regulations, 2006. In pursuance to this,. Bhubaneswar Stock Exchange complied with the requirement by issuing 39,37,000 equity shares of Re.1/- each on 12th September,2007 to 44 applicants including the corporate bodies on obtaining prior approval from SEBI. SHAREHOLDING The present paid-up capital of Bhubaneswar Stock Exchange (BHSE) is Rs.57,98,980/- as against the authorized capital of Rs.1,00,00,000/- arising out of issue of 57,98,980 equity shares of Re.1/-each. In that 100 trading members of BHSE are holding 20,51,980 equity shares of Re.1/each while 44 persons including the corporate bodies other than trading member shareholders are holding 37,47,000 equity shares of Re.1/-Business Operation BHSE had been witnessing a good amount of volume of trading on its floor till the year 2000. However, with the expansion of nationwide trading terminals by major Stock Exchanges such as National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to all most all cities of the country, the business of local Stock Exchanges was shifted to NSE and BSE. To overcome such situation, BHSE along with other Regional Stock Exchanges (RSEs) in the country promoted a Stock Exchange namely, Interconnected Stock Exchange of India Ltd. (ISE) which was set up at Navi Mumbai to provide a nationwide stock market to the member-brokers of all participating RSEs as well as to the investing public of the respective States. Presently, the member-brokers of BHSE are conducting business on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) segments through ISE Securities
60

& Services Ltd. (ISS), subsidiary of ISE. Present daily average turnover of member-brokers of BHSE on the NSE and BSE segment is Rs.5 crores.

FUTURE UNDERTAKINGS FOR EXPANSION OF BUSINESS BHSE has also decided to become a Participant of Central Depository Services Ltd. (CDSL) for providing depository services to its member-brokers as well as to the investing public in the State of Orissa.

SMX Commodity Power Exchange Activation of subsidiary business.

SUBSIDIARY (Bhubaneswar Shares and Securities Ltd.)

BHSE has a wholly owned subsidiary company, namely, Bhubaneswar Shares and Securities Ltd. (BSSL) which has acquired membership of Bombay Stock Exchange Ltd. to provide its nation-wide stock market to the member-brokers of BHSE as well as to the investing public in the State of Orissa.

61

RESEARCH METHODOLOGY & DESIGN


TYPE OF STUDY The research has been based on secondary data analysis. The study has been exploratory as it aims at examining the secondary data for analyzing the previous researches that have been done in the area of technical and fundamental analysis of stocks. The knowledge thus gained from this preliminary study forms the basis for the further detailed Descriptive research. In the exploratory study, the various technical indicators that are important for analyzing stock were actually identified and important ones short listed.

SAMPLE DESIGN The sample of the stocks for the purpose of collecting secondary data has been selected on the basis of Random Sampling. The stocks are chosen in an unbiased manner and each stock is chosen independent of the other stocks chosen.

SAMPLE SIZE The sample size for the number of stocks is taken as 10 for technical analysis and 4 for fundamental analysis of stocks as fundamental analysis is very exhaustive and requires detailed study.

62

Bharti Airtel Limited BSE-53245 NSE-BHARTIARTL

Bharti Airtel Limited commonly known as Airtel, is an Indian telecommunications company that operates in 20 countries across South Asia, Africa and the Channel Islands. It operates a GSM network in all countries, providing 2G or 3G services depending upon the country of operation. Airtel is the fifth largest telecom operator in the worldwith about 230.8 million subscribers across 19 countries at the end of June 2011. It is the largest cellular service provider in India, with over 171.85 million subscribers as of August 2011. Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom.

Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services. It offers its telecom services under the Airtel brand and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve this Cisco Gold Certification. To earn Gold Certification, Bharti Airtel had to meet rigorous standards for networking competency, service, support and customer satisfaction set forth by Cisco. The company also provides land-line telephone services and broadband Internet access (DSL) in over 96 cities in India. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.

It is known for being the first mobile phone company in the world to outsource everything except marketing and sales and finance. Its network (base stations, microwave links, etc.) are maintained by Ericsson, Nokia Siemens Network and Huawei, business support by IBM and transmission towers by another company (Bharti Infratel Ltd. in India). Ericsson agreed for the first time, to be paid by the minute for installation and maintenance of their equipment rather than being paid up front. This enabled the company to provide pan-India phone call rates of Rs.
63

1/minute (U$0.02/minute). Call rates have come down much further. During the last financial year [200910], Bharti has roped in a strategic partner Alcatel-Lucent to manage the network infrastructure for the Telemedia Business.

Shareholding Pattern Category 31st March 2011 30th June 2011 64.77 61.37 3.40 24.23 17.34 6.89 11.00 100

Promoter & Promoter Group 64.78 Indian Foreign Public Shareholding Institutions Non-Institutions ADR's/GDR's & Others TOTAL 61.38 3.40 24.22 15.44 8.78 11.00 100

Market related data as on 30/09/2011 Market Capitalization Face Value 52 week high 52 week low Market Price 149,394.83 (Crore) 5.00 447.85 303.40 378.00

BHARTIARTL.BO(LineClose)
1000.00 900.00 800.00 700.00 600.00 500.00 400.00 300.00 200.00 100.00 -

Close

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

64

Thousands

BHARTIARTL.BO(LineClose) 6000 5000 4000 3000 2000 1000 0

Volume

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

Simple Moving Average(SMA)


850.69 750.69 650.69 550.69 450.69 350.69 250.69 1 3 5

Range:

SMA

21

11

13

15

17

19

23

25

27

29

31

33

35

37

39

Interpretation: Here the SMA is used along with the price of the scrip. The SMA at point 12 i.e. on 03/2009 it penetrates the price from upward which indicates the further rise of SMA and gives buy signal. At point 15 i.e. on 06/2009 the rising SMA downward penetration indicates the possibility of a further fall. At point 40 i.e. on 07/2011 the rising SMA from downward penetration indicates the possibility of a further fall. Hence sell signal is generated.

Price Rate-Of-Change Indicator


850.69 750.69 650.69 550.69 450.69 350.69 250.69 1 3 5 7 9 11 13 15 17 19 21 23

Close:

Price ROC 46.094415 26.094415 6.0944147 -13.90559 -33.90559 -53.90559 -73.90559

25

27

29

31

33

35

37

39

65

41

41

Interpretation: During the whole period the ROC value is around -70 to +50. The scrips ROC reaches the lowest value of -68 which indicates an oversold region and a rise in the value can be anticipated. Likewise the ROC value reaches the highest of +50 which is in the overbought region, thus a fall in the scrip's price can be anticipated.

Wilder RSI Indicator


850.69 750.69 650.69 550.69 450.69 350.69 250.69 1 3 5 7 9 11 13 15 17 19 21 23

Range:

Wilder RSI 56.153832 51.153832 46.153832 41.153832 36.153832 31.153832 26.153832 21.153832

25

27

29

31

33

35

37

39

Interpretation: Here the RSI of the scrip touches a minimum low of 25.08 on 10/2009 and a maximum of 53.39 0n 07/2011, which can be the perfect time for investors to buy and sell the scrip respectively. Here whenever the RSI goes above 50 it may indicate a downturn, thus its time to sell the scrip. And whenever it goes below 25 there may be uptrend, so its time to pick up the scrip.

66

41

Idea Cellular BSE-532822 NSE-IDEA Idea Cellular, usually referred to as Idea, is a wireless telephony company operating in all the 22 telecom circles in India based in Mumbai. Idea is the 3rd largest mobile services operator in India, in revenue terms, and recorded a subscriber base of over 98.4 mn as of 31st August 2011.

In 2000, Tata Cellular was a company providing mobile services in Andhra Pradesh. When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two entities was a reality. Thus Birla-Tata-AT&T, popularly known as Batata, was born and was later branded as !dea.

Then Idea set sights on RPGs operations in Madhya Pradesh which was successfully acquired, helping Batata have a million subscribers, and the licence to be the fourth operator in Delhi was clinched.

In 2004, Idea (the company had by then been rechristened) bought over the Escorts groups Escotel gaining Haryana, Uttar Pradesh (West) and Kerala and licences for three more UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million Indians were on the companys network. In 2005, AT&T sold its investment in Idea, and the year after Tatas also bid good bye to pursue an independent telecom business. And Idea was left only with one promoter, the AV Birla group. Rs 2,700 crore adding Punjab and Karnataka circles. Modis joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a 14.99% stake in Idea. Just around then, Ideas subsidiary, Aditya Birla Telecom sold a 20% stake to US-based Providence Equity Partners for over Rs 2,000 crore.

67

Shareholding Pattern

Category

31st March 2011 30th June 2011 46.03 46.03 0.00 53.97 18.12 35.85 0.00 100

Promoter & Promoter Group 46.04 Indian Foreign Public Shareholding Institutions Non-Institutions ADR's/GDR's & Others TOTAL 46.04 0.00 53.96 17.81 36.15 0.00 100

Market related data as on 30/09/2011 Market Capitalization Face Value 52 week high 52 week low Market Price 32,005.09 (Crore) 10.00 103.70 52.05 98.50

IDEA.BO(LineClose)
120.00 100.00 80.00 60.00 40.00 20.00 -

Close

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

68

IDEA.BO(LineClose) 16 14 12 10 8 6 4 2 0

Volume

Millions

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

Simple Moving Average(SMA)


101.93 91.93 81.93 71.93 61.93 51.93 41.93 1 3 5 7 9 11 13 15 17 19 21 23

Range:

SMA

25

27

29

31

33

35

37

39

Interpretation: Here the SMA is used along with the price of the scrip. The SMA at point 13 i.e. on 04/2009 it penetrates the price from upward which indicates the further rise of SMA and gives buy signal. At point 18 i.e. on 09/2009 the rising SMA downward penetration indicates the possibility of a further fall. At point 35 i.e. on 02/2011 it penetrates the price from upward which indicates the further rise of SMA and gives buy signal. Hence buying signal is generated.

Price Rate-Of-Change Indicator


101.93 91.93 81.93 71.93 61.93 51.93 41.93 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Close:

Price ROC 30.931951 10.931951 -9.068049 -29.06805 -49.06805

33

35

37

39

69

41

41

Interpretation: The ROC chart of the scrip indicates that the ROC value during the entire period ranges between -45 to +45. The lowest ROC being -44.76 and the highest being 41.39 this clearly represents the oversold and overbought regions of the scrip. From this the investor can anticipate the rise or fall in scrip price.

Wilder RSI Indicator


101.93 91.93 81.93 71.93 61.93 51.93 41.93 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Range:

Wilder RSI 64.259566 54.259566 44.259566 34.259566 24.259566 14.259566

33

35

37

39

Interpretation: The RSI chart of this scrip shows that the RSI value hovers between 15 to 70 over the period of time. On 08/2011 it reaches a high of 66.18 and on 03/2009 it downs to a low of 18.49 indicating the best time to sell and buy the scrip respectively. However presently it is in a very good position to hold the scrip for the investors.

70

41

Reliance Communications Limited BSE-532712 NSE-RCOM Reliance Communications Limited (commonly called RCOM) is an Indian broadband and telecommunications company headquartered in Navi Mumbai, India. It is the 16th largest operator in the world with more than 136 million subscribers. RCOM, founded by Dhirubhai H Ambani (19322002), is the flagship company of the Reliance Group. The company has five segments: Wireless segment includes wireless operations of the company; broadband segment includes broadband operations of the company; Global segment include national long distance and international long distance operations of the company and the wholesale operations of its subsidiaries; Investment segment includes investment activities of the Group companies, and Other segment is consists of the customer care activities and direct-to-home (DTH) activities. Shareholding Pattern

Category

31st March 2011 30th June 2011 67.86 67.86 0.00 31.55 17.32 14.22 0.59 100

Promoter & Promoter Group 67.86 Indian Foreign Public Shareholding Institutions Non-Institutions ADR's/GDR's & Others TOTAL 67.86 0.00 31.52 17.21 14.31 0.62 100

71

Market related data as on 30/09/2011 Market Capitalization Face Value 52 week high 52 week low Market Price 17,183.02 (Crore) 5.00 186.40 70.30 71.75

RCOM.BO(LineClose) 700.00
600.00 500.00 400.00 300.00 200.00 100.00 -

Close

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

RCOM.BO(LineClose) 18 16 14 12 10 8 6 4 2 0

Volume

Millions

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

Simple Moving Average(SMA)


564.92 464.92 364.92 264.92 164.92 64.92 1

Range:

SMA

11

13

15

17

19

21

23

25

27

29

31

33

35

37

72

39

41

Interpretation: Here the SMA is used along with the price of the scrip. The SMA at point 13 i.e. on 04/2009 it penetrates the price from upward which indicates the further rise of SMA and gives buy signal. At point 18 i.e. on 09/2009 the rising SMA downward penetration indicates the possibility of a further fall. Hence sell signal is generated.

Price Rate-Of-Change Indicator


564.92 464.92 364.92 264.92 164.92 64.92 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Close:

Price ROC 3.7562258 -6.243774 -16.24377 -26.24377 -36.24377 -46.24377 -56.24377 -66.24377

33

35

37

39

Interpretation: The ROC chart of the scrip indicates that the ROC value during the entire period ranges between -65to +10. The lowest ROC being -62.65 and the highest being +9.16 this clearly represents the oversold and overbought regions of the scrip. From this the investor can anticipate the rise or fall in scrip price.

Wilder RSI Indicator


564.92 464.92 364.92 264.92 164.92 64.92 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Range:

41 Wilder RSI 39.702506 34.702506 29.702506 24.702506 19.702506 14.702506 41

33

35

37

Interpretation: The RSI chart of this scrip shows that the RSI value hovers between 30 to 35 over the period of time. On 10/2010 it reaches a maximum of 38.08 and on 03/2009 it reaches minimum of 17.48 indicating the best time to sell and buy the scrip respectively. However presently it is in a very good position to sell the scrip for the investors.
73

39

Tata Communications Limited BSE-500483 NSE-TATACOM Tata Communications Limited (formerly VSNL), is a telecommunications company located in Mumbai. They own a submarine cable network, a Tier-1 IP network, and also rent data center and colocation space.They operate India's largest data center in Pune. Tata Communications acquired Teleglobe, a company based in Canada, and Dishnet, an Indian company, and is the largest shareholder in South African operator Neotel Tata Communications currently has a cable network of more than 235,000 kilometers. It was founded as VSNL (Videsh Sanchaar Nigam Limited) in 1986. On 13 February 2008 VSNL, formerly owned by the government, was taken over by the Tata Group and renamed Tata Communications Ltd. Shareholding Pattern Category 31st March 2011 30th June 2011 76.15 76.15 0.00 16.93 13.22 3.72 6.91 100

Promoter & Promoter Group 76.15 Indian Foreign Public Shareholding Institutions Non-Institutions ADR's/GDR's & Others TOTAL 76.15 0.00 16.85 13.48 3.37 7.00 100

Market related data as on 30/09/2011 Market Capitalization Face Value 52 week high 52 week low Market Price 5,296.73 (Crore) 10.00 323.80 166.65 186.35
74

TATACOMM.BO(LineClose)
600.00 500.00 400.00 300.00 200.00 100.00 -

Close

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

Thousands

TATACOMM.BO(LineClose) 350 300 250 200 150 100 50 0

Volume

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

Simple Moving Average(SMA)


528.86 478.86 428.86 378.86 328.86 278.86 228.86 178.86 1 3 5 7 9 11

Range:

SMA

13

15

17

19

21

23

25

27

29

31

33

35

37

39

Interpretation: Here the SMA is used along with the price of the scrip. The SMA at point 11 i.e. on 02/2009 it penetrates the price from upward which indicates the further rise of SMA and gives buy signal. At point 18 i.e. on 09/2009 the rising SMA downward penetration indicates the possibility of a further fall. Hence sell signal is generated.
75

41

Price Rate-Of-Change Indicator


528.86 478.86 428.86 378.86 328.86 278.86 228.86 178.86 1 3 5 7 9 11 13

Close:

Price ROC 25.574077 5.5740774 -14.42592 -34.42592 -54.42592

15

17

19

21

23

25

27

29

31

33

35

37

39

Interpretation: The ROC chart of the scrip indicates that the ROC value during the entire period ranges between -55 to +30. The highest ROC being +27.30 and the lowest being -50.53 this clearly represents the overbought and oversold regions of the scrip. From this the investor can anticipate the fall or rise in scrip price.

Wilder RSI Indicator


528.86 478.86 428.86 378.86 328.86 278.86 228.86 178.86 1 3 5 7 9 11 13

Range:

41 Wilder RSI 52.417688 47.417688 42.417688 37.417688 32.417688 27.417688 41

15

17

19

21

23

25

27

29

31

33

35

37

Interpretation: Here the RSI of the scrip touches a maximum of 53.15 0n 04/2009 and a minimum low of 31.66 on 05/2010 which can be the perfect time for investors to sell and buy the scrip respectively.

76

39

Tata Teleservices (Maharastra) Limited BSE-532371 NSE-TTML Tata Teleservices Limited (TTSL) is a subsidiary of the Tata Group headquartered in Mumbai, an Indian conglomerate. It operates under the brand name Tata Indicom in various telecom circles of India. In Nov 2008, Japanese telecom giant NTT Docomo picked up a 26 per cent equity stake in Tata Teleservices for about Rs 13,070 crore ($2.7 billion) or an enterprise value of Rs 50,269 crore ($10.38 billion). In Feb 2008, TTSL announced that it would provide CDMA mobile services targeted towards the youth, in association with the Virgin Group on a Franchisee model basis. Tata Teleservices Provides mobile services under 4 Brand names:

Tata Indicom (CDMA Mobile operator) Tata DoCoMo (GSM Mobile operator) Virgin Mobile (CDMA Mobile operator) Virgin Mobile (GSM Mobile operator) T24 Mobile (GSM Mobile Operator)

Shareholding Pattern Category 31st March 2011 30th June 2011 77.72 65.61 12.12 22.28 1.82 20.46 0.00 100

Promoter & Promoter Group 77.72 Indian Foreign Public Shareholding Institutions Non-Institutions ADR's/GDR's & Others TOTAL 65.61 12.12 22.28 1.68 20.60 0.00 100

77

Market related data as on 30/09/2011 Market Capitalization Face Value 52 week high 52 week low Market Price 3,329.58 (Crore) 10.00 24.00 13.70 17.05

TTML.BO(LineClose)
40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 -

Close

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

TTML.BO(LineClose) 8000 7000 6000 5000 4000 3000 2000 1000 0

Volume

Thousands

Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11

Simple Moving Average(SMA)


33.00 28.00 23.00 18.00 13.00 1 3

Range:

SMA

11

13

15

17

19

21

23

25

27

29

31

33

35

37

39

78

41

Interpretation: Here the SMA is used along with the price of the scrip. The SMA at point 12 i.e. on 03/2009 it penetrates the price from upward which indicates the further rise of SMA and gives buy signal. At point 19 i.e. on 10/2009 the rising SMA downward penetration indicates the possibility of a further fall. Hence sell signal is generated.

Price Rate-Of-Change Indicator


33.00 28.00 23.00 18.00 13.00 1 3 5 7 9 11 13 15 17

Close:

Price ROC 102.87943 52.879433 2.8794326 -47.12057

19

21

23

25

27

29

31

33

35

37

39

Interpretation: The ROC chart of the scrip indicates that the ROC value during the entire period ranges between -45 to +100. The highest ROC being +96.67 and the lowest being -40.27 this

clearly represents the overbought and oversold regions of the scrip. From this the investor can anticipate the fall or rise in scrip price.

Wilder RSI Indicator


33.00 28.00 23.00 18.00 13.00 1 3 5 7 9

Range:

41 Wilder RSI 54.428182 49.428182 44.428182 39.428182 34.428182 29.428182 24.428182 41

13

11

15

17

19

21

23

25

27

29

31

33

35

37

Interpretation: Here the RSI of the scrip touches a minimum low of 28.48 on 2/2011 and a maximum of 51.90 0n 09/2009, which can be the perfect time for investors to buy and sell the scrip respectively. Here whenever the RSI goes above 45 it may indicate a downturn, thus its time to sell the scrip. And whenever it goes below 35 there may be uptrend, so its time to pick up the scrip.
79

39

FINDINGS
Bharti Airtel : Presently the SMA of Bharti Airtel shows a normal movement indicating a
stable in the price of the scrip. The ROC however around 3 which indicates a normal movement of the scrip and the RSI is at 45 anticipating further fall. Thus the investors should wait till it downs below 25.

Idea Cellular: Presently the SMA of Idea Cellular shows an upward movement indicating a
further rise in the price of the scrip. The ROC however around 32 which indicates an upward movement of the scrip and the RSI is at 64 anticipating further rise. So its the right time to hold this scrip.

Reliance

Communication: Presently the SMA of Reliance Communication shows flat

movement. The ROC is at -51 anticipating a further fall and the RSI is at 31. So its a time to hold this scrip.

Tata

Communication: Presently the SMA of Tata Communication shows a downward

movement indicating a further fall in the price of the scrip. The ROC ranged at -39 and the RSI is at 33. So its not the right time to hold this scrip.

Tata Teleservice: Presently the SMA of Tata Teleservice shows a downward movement and
further fall in the price of the scrip. The ROC is at -22 and the RSI is at 41 anticipating a flat movement. So its not the right time to hold this scrip.

80

CONCLUSION & SUGGESTIONS


Conclusion: The analysis of the calculation and interpretations made one can conclude that most of the time the technical analysis gives true results however RSI and ROC gives more accurate result but SMA is also able to interpreted the market trends most of the time. Technical analysis works best on currency markets, intermediate on futures markets, and worst on stock markets. Chart patterns work better on stock markets than currency markets. Nonlinear methods work best overall. Technical analysis doesn't work as well as it used to. Technical analysis is 90 per cent psychological and 10 per cent logical, it does give signals of market trends in future.

81

Suggestions: Bharti Airtel : Presently the SMA of Bharti Airtel shows a normal movement indicating a stable in the price of the scrip. The ROC however around 3 which indicates a normal movement of the scrip and the RSI is at 45 anticipating further fall. Thus the investors should wait till it downs below 25. Idea Cellular: Presently the SMA of Idea Cellular shows an upward movement indicating a further rise in the price of the scrip. The ROC however around 32 which indicates an upward movement of the scrip and the RSI is at 64 anticipating further rise. So its the right time to hold this scrip. Reliance Communication: Presently the SMA of Reliance Communication shows flat movement. The ROC is at -51 anticipating a further fall and the RSI is at 31. So its a time to hold this scrip. Tata Communication: Presently the SMA of Tata Communication shows a downward movement indicating a further fall in the price of the scrip. The ROC ranged at -39 and the RSI is at 33. So its not the right time to hold this scrip. Tata Teleservice: Presently the SMA of Tata Teleservice shows a downward movement and further fall in the price of the scrip. The ROC is at -22 and the RSI is at 41 anticipating a flat movement. So its not the right time to hold this scrip.

82

BIBLIOGRAPHY & REFERENCES

Books:
o Security Analysis and Portfolio Management P. Pandian Vikash o Security Analysis and Portfolio Management, Mohapatra, Mishra & Das, HPH o Investment Analysis and Portfolio Management P. Chandra TMH

o Value investing and Behavioural Finance, Parikh, TMH

Web References: o www.moneycontrol.com o www.googlefinance.com o www.yahoofinance.com o www.technicalanalysis.com o www.nseindia.com o www.bseindia.com

83

MONTHLY PRICE FLUCTUATION & CALCULATIONS OF SMA, ROC, RSI INDICATORS OF AIRTEL:
Date Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Open 832.05 898.80 888.00 722.00 788.80 830.00 787.00 675.00 675.00 719.70 627.00 625.00 625.80 749.30 921.00 800.35 410.55 429.00 435.00 285.00 302.00 330.00 305.50 281.60 315.00 297.50 263.00 263.00 307.10 328.50 366.00 329.50 355.50 358.40 323.00 331.60 356.00 379.00 High 950.00 919.90 888.00 861.00 886.30 839.75 806.00 740.15 756.50 725.00 678.40 637.00 759.60 990.00 921.00 864.00 439.00 453.00 467.00 325.45 348.80 349.80 323.80 321.00 325.30 300.00 288.20 325.00 335.60 376.50 368.80 362.70 359.50 364.90 344.80 364.00 390.00 400.10 Low 777.10 798.00 717.20 688.00 777.10 700.00 484.00 575.95 630.00 576.00 607.00 544.00 594.30 738.70 741.00 404.25 360.10 395.10 290.30 229.50 300.00 304.65 269.65 280.00 292.00 254.15 254.00 262.00 307.10 328.50 319.00 304.00 322.15 312.00 304.25 309.00 345.50 345.25 Close 898.80 876.45 721.65 799.15 837.20 785.05 649.00 671.05 715.10 633.85 636.65 625.80 749.30 819.65 802.10 410.55 424.70 418.55 292.15 299.70 328.80 306.50 279.25 311.90 298.40 262.30 263.25 306.90 327.15 365.90 325.70 360.40 358.40 318.55 331.10 357.05 378.80 374.15 84 Volume 1170200 1474100 1393900 1703000 2874200 2996800 2026500 1854700 1342200 1556200 764700 1626300 830600 1851700 1568700 903500 1297900 1162800 4904700 2243000 1656600 911900 1646800 1055800 786100 1107500 1337600 1515800 637400 715200 608600 930600 378200 268300 540400 356100 367200 966300 SMA Price ROC Wilder RSI

758.73 732.52 707.45 710.22 712.27 708.76 671.31 648.88 623.63 581.33 547.92 517.13 485.20 438.20 387.42 337.05 322.23 306.08 294.92 298.42 305.04 304.73 310.12 318.03 318.70 321.97 331.44 343.00 349.72

-16.63 -6.48 11.15 -48.63 -49.27 -46.68 -54.98 -55.34 -54.02 -51.64 -56.14 -50.16 -60.18 -68.00 -67.18 -25.25 -22.97 -12.58 11.48 20.25 9.00 3.93 18.57 14.48 26.94 42.64

28.74 40.23 45.68 44.57 28.05 29.09 28.89 25.08 25.72 28.29 27.49 26.50 29.81 29.22 27.61 27.73 33.02 35.41 39.89 36.99 41.03 40.87 37.58 39.26 42.73 45.57 45.05

Jun 11 Jul 11 Aug 11 Sep 11

376.00 396.00 443.00 414.00

404.90 439.20 444.70 417.00

368.25 317.00 377.55 361.00

395.25 437.00 404.20 378.10

462500 856800 385200 239700

356.53 363.64 371.49 373.26

50.14 42.39 23.55 3.33

48.00 53.39 49.03 45.79

MONTHLY PRICE FLUCTUATION & CALCULATIONS OF SMA, ROC, RSI INDICATORS OF IDEA:
Date Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Open 103.70 105.45 109.30 94.20 89.00 82.45 76.90 45.00 47.90 53.80 47.10 45.10 50.50 58.25 84.25 71.55 79.80 80.70 75.75 51.75 51.30 58.20 57.80 61.10 66.00 61.00 50.65 59.20 71.10 71.75 74.00 67.75 High 112.50 114.00 112.00 97.60 93.45 87.70 78.40 53.40 58.40 54.90 52.50 53.35 64.80 86.25 91.80 82.80 84.80 83.20 76.40 54.70 61.50 62.65 61.85 69.10 69.10 65.70 59.90 71.10 75.40 80.00 75.90 76.30 Low 96.55 100.00 92.65 74.00 79.50 66.50 34.00 39.90 37.10 41.20 43.10 42.00 48.20 55.85 70.60 63.30 72.25 74.50 51.55 47.80 51.30 57.50 44.51 59.20 60.55 48.50 48.50 55.00 67.15 70.65 64.20 66.00 Close 105.45 109.00 92.80 88.70 82.60 77.00 43.45 46.90 52.75 47.30 46.90 50.25 58.25 82.85 71.30 79.30 81.10 75.25 51.75 51.10 58.00 57.80 61.10 65.65 61.15 50.50 59.75 70.55 71.95 74.15 67.45 72.25 85 Volume 9042600 13204800 6878000 7784100 4922000 5413200 6233300 4397800 3550100 3808300 4413100 4823500 5990000 14046400 13147600 7705200 4877200 5444100 10642300 7849200 6274400 1964600 2017500 3528600 4762600 8871400 6630000 10284700 5124200 6006800 4790500 5012300 SMA Price ROC Wilder RSI

74.60 68.74 62.87 59.41 58.83 57.70 57.93 61.69 64.53 64.43 64.81 65.92 66.67 66.96 65.24 64.22 61.34 59.21 58.74 60.76 63.06 64.01 65.45

-44.76 -23.99 -23.17 -10.60 -1.82 -2.27 19.10 8.96 9.95 22.20 30.28 30.65 4.98 -39.05 -16.20 -11.03 -11.28 -1.46 30.34 41.39

18.49 25.31 41.68 37.48 41.91 42.90 40.45 32.35 32.15 36.57 36.49 38.75 41.87 39.69 34.99 41.55 48.20 49.02 50.37 46.30 49.49

Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11

72.45 69.80 70.05 57.55 67.50 69.50 68.75 80.50 95.00 100.50

73.00 72.70 72.70 68.40 80.90 69.50 80.70 95.40 101.75 103.70

65.80 65.10 52.05 56.80 63.00 62.10 67.00 75.90 89.70 93.15

69.10 69.95 57.50 67.75 69.00 68.55 79.70 94.30 100.00 98.20

3746800 2982400 6120600 3171800 4058700 1513800 5455600 13198700 10380200 5431500

66.25 66.68 66.32 68.04 68.97 68.77 69.54 71.56 74.81 77.41

19.14 21.02 -5.89 3.20 12.84 35.74 33.39 33.66 38.99 32.43

47.47 48.10 40.43 47.89 48.74 48.43 56.03 63.67 66.18 64.64

MONTHLY PRICE FLUCTUATION & CALCULATIONS OF SMA, ROC, RSI INDICATORS OF RCOM:
Date Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Open 512.00 585.00 579.00 442.00 482.40 393.90 340.00 230.00 196.75 230.00 167.90 152.35 176.00 255.00 308.40 290.85 281.05 261.25 313.10 172.40 173.00 173.00 168.55 158.35 170.95 163.80 High 598.80 610.10 581.75 541.40 482.40 413.40 356.20 262.00 255.00 265.70 183.80 187.90 240.80 347.40 362.00 301.75 293.25 321.00 319.85 183.35 190.00 193.80 172.40 173.95 181.45 166.45 Low 482.25 527.00 433.25 380.00 382.50 261.35 147.30 179.05 184.00 154.60 150.00 131.10 172.50 211.85 282.55 231.05 245.00 260.05 175.00 161.10 168.40 172.55 154.00 156.65 163.15 131.50 Close 575.55 577.10 440.05 496.00 396.00 333.10 221.60 198.00 227.05 170.85 155.10 175.95 214.95 305.50 289.90 277.00 260.20 308.70 175.20 172.10 172.45 186.50 156.60 171.95 164.00 144.30 Volume 4953900 4962000 4213700 7058400 7827200 4759400 9066500 10434700 10458000 13067700 8464400 9360300 12227700 11850800 10369900 8148400 6199000 7908300 13702800 8440100 5362500 5765900 2700600 2960800 2563100 5053100 86 SMA Price ROC Wilder RSI

363.53 321.49 281.37 258.86 239.81 229.20 223.59 227.45 238.52 233.34 233.46 235.20 236.25 230.42 217.06 204.47 191.20

-62.65 -47.06 -34.12 -44.15 -34.29 -7.33 -20.94 -13.08 -24.05 9.16 0.97 -2.27 -23.70 -52.77

17.48 22.41 32.60 31.81 31.13 30.22 36.12 28.81 28.66 28.70 30.61 28.82 31.08 30.53 29.15

Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11

145.00 197.40 180.00 157.00 170.15 181.10 132.00 147.40 124.05 87.05 110.40 100.50 89.10 96.60 102.75 81.90

207.80 197.40 181.40 176.75 188.00 186.40 146.30 150.00 125.05 111.75 113.85 101.60 97.70 108.70 103.90 93.30

138.00 177.30 155.00 156.50 166.20 123.00 119.50 121.05 85.00 84.25 98.25 79.40 86.25 89.25 71.65 70.90

198.50 178.55 155.85 168.05 180.25 131.20 145.50 122.30 85.75 107.80 100.60 89.80 96.00 101.45 79.50 71.40

16544500 5965800 3461000 4728000 4918500 5262800 6534200 4957000 12388000 13146100 5782400 5643100 6836200 7409600 8500100 11074400

185.03 172.02 170.08 169.68 170.46 164.93 163.82 158.85 151.03 147.38 137.59 128.71 122.73 116.07 105.99 100.01

-31.53 -35.54 -40.10 -45.56 2.88 -23.77 -15.63 -34.42 -45.24 -37.31 -38.66 -37.77 -51.64 -43.18 -48.99 -57.51

37.65 35.92 33.98 36.01 38.08 33.34 35.88 33.61 30.33 34.54 33.81 32.68 34.06 35.33 32.58 31.58

MONTHLY PRICE FLUCTUATION & CALCULATIONS OF SMA, ROC, RSI INDICATORS OF TATACOM:
Date Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Open 514.00 506.00 510.00 377.90 441.10 412.00 480.00 505.00 396.00 503.10 449.80 404.00 527.65 564.00 479.80 476.50 504.90 504.00 489.95 395.00 High 585.00 520.90 514.45 479.70 473.60 484.00 522.00 550.00 521.10 549.95 460.00 542.00 594.90 651.00 561.90 519.70 535.95 516.30 498.50 399.00 Low 461.20 476.00 338.00 332.00 391.00 377.10 320.00 380.50 368.90 412.05 382.00 387.00 510.55 464.00 441.00 450.00 460.10 470.00 387.00 336.20 Close 499.15 509.30 373.20 450.40 415.00 468.20 487.05 394.00 500.85 453.50 403.55 516.20 547.75 472.45 475.10 504.90 502.70 484.50 392.30 380.90 Volume 121100 69500 57500 70500 49200 94300 103900 114900 61400 39600 30700 56000 51500 64300 293700 89600 89300 72500 64700 63300 87 SMA Price ROC Wilder RSI

455.07 445.51 446.20 463.65 465.86 471.87 475.54 477.10 486.15 475.30 468.04

9.74 -7.24 27.30 12.10 21.13 3.48 -19.45 -3.32

51.15 53.15 48.04 48.23 50.46 50.29 48.76 41.77 40.97

Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11

380.05 339.70 323.90 285.00 283.90 269.90 235.00 262.90 274.50 338.70 309.05 311.80 273.00 256.90 230.80 212.45 239.00 238.60 214.00 199.00 225.85 204.00

400.00 377.80 338.00 304.70 293.90 274.80 265.05 294.80 347.60 354.30 342.25 323.40 278.45 270.00 239.85 254.00 263.75 242.10 233.40 234.75 227.35 213.75

335.00 307.00 280.00 273.20 268.40 233.55 230.25 256.00 271.00 303.30 304.25 251.00 235.00 227.00 192.65 204.75 236.00 199.70 182.15 196.10 185.30 185.50

336.05 319.60 282.55 280.40 270.95 245.80 262.15 270.50 332.40 308.35 306.30 272.05 255.60 233.20 211.40 238.90 236.95 214.60 197.10 222.50 202.90 186.20

75300 144100 54000 63100 32900 32800 75200 83300 168700 35100 49200 28600 21400 23400 42100 145400 60600 20300 60500 78000 42400 22500

461.29 441.63 415.11 395.90 375.49 349.58 325.52 304.12 298.13 290.88 287.90 283.15 280.45 275.73 269.78 269.09 266.57 260.98 247.45 238.86 228.52 219.94

-32.90 -29.53 -29.98 -45.68 -50.53 -47.97 -44.82 -46.43 -33.88 -36.36 -21.92 -28.58 -23.94 -27.03 -25.18 -14.80 -12.55 -12.69 -24.81 -17.74 -38.96 -39.61

37.89 36.78 34.31 34.16 33.48 31.66 34.20 35.54 44.64 42.12 41.90 38.26 36.59 34.37 32.29 37.50 37.28 34.71 32.78 38.22 35.78 33.78

MONTHLY PRICE FLUCTUATION & CALCULATIONS OF SMA, ROC, RSI INDICATORS OF TATATELE:
Date Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Open 28.50 35.80 31.70 24.10 24.40 26.30 21.90 13.80 19.70 22.00 22.60 23.45 23.20 24.25 High 37.85 38.25 31.90 26.60 29.75 28.45 22.20 20.94 21.95 24.25 23.65 25.00 29.00 34.40 Low 27.15 31.05 24.00 21.70 24.25 20.05 12.50 13.72 19.30 21.00 22.05 18.70 22.60 22.95 Close 35.80 31.45 24.15 24.90 26.45 21.70 13.50 19.61 21.75 22.70 23.55 22.80 24.00 32.90 Volume 6987500 5871500 3175700 2547300 3611900 2448700 1752500 4816600 1324800 1508400 1566500 2164900 784500 1445300 88 SMA Price ROC Wilder RSI

24.20 22.98 22.11 22.10 22.90

-32.96 4.61

32.76 34.83 47.85

Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11

33.50 35.90 35.25 33.90 36.10 26.55 25.80 27.00 25.15 23.85 23.85 23.00 19.60 22.10 22.75 22.50 22.20 22.90 19.55 19.45 17.10 14.75 17.25 18.45 15.55 19.40 22.40 18.95

41.80 37.85 37.00 37.05 36.95 28.60 28.50 30.80 26.20 25.70 25.20 23.35 23.40 23.35 25.00 24.00 25.65 23.95 20.95 20.30 17.45 17.50 21.40 18.85 19.45 23.50 22.50 19.80

32.35 30.05 32.05 32.50 26.30 24.35 25.70 24.40 22.75 23.10 22.95 18.65 19.20 21.10 22.25 21.95 22.20 18.05 18.10 17.10 13.90 14.45 16.95 14.50 14.85 18.60 16.10 16.70

35.90 34.55 33.70 36.10 26.55 25.70 26.75 25.35 23.20 23.65 23.25 19.65 22.30 22.50 22.40 22.05 22.50 19.45 19.35 17.20 14.75 17.10 18.45 15.60 19.25 22.10 18.75 17.10

4630300 2530700 1405400 1990700 1287400 746900 748700 1444700 531200 756400 666000 547800 1031900 980800 1410700 717700 1320400 665100 360100 581500 685400 706600 1467400 425700 1232400 1375500 661200 484400

23.84 25.13 27.15 28.80 29.28 29.58 29.90 30.15 30.07 29.15 27.88 26.39 25.25 23.89 23.48 23.11 22.69 22.10 21.71 21.07 20.22 19.96 19.58 18.89 18.57 18.58 18.20 17.97

48.65 38.76 27.41 66.36 96.67 31.06 22.99 11.67 -1.49 3.73 -3.13 -40.27 -37.88 -34.88 -33.53 -38.92 -15.25 -24.32 -27.66 -32.15 -36.42 -27.70 -20.65 -20.61 -13.68 -1.78 -16.29 -22.45

51.42 49.75 48.66 51.90 40.75 39.92 41.53 39.97 37.61 38.44 37.95 33.72 39.16 39.57 39.42 38.88 40.04 35.13 34.98 31.73 28.45 35.44 39.16 34.57 43.78 49.80 43.79 41.12

89

90