STUDY ON

MARKET DYNAMISM AND FEW INDICATORS OF TECHNICAL ANALYSIS

Name: Divya Vootkuru

Roll Number: 121441 Batch XX, 2012-2014

Project Submitted in partial fulfilment for the award of Post Graduate Diploma in Management VIGNANA JYOTHI INSTITUTE OF MANAGEMENT
BACHUPALLY, HYDERABAD ANDHRA PRADESH INDIA

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DECLARATION

I hereby declare that this project titled MARKET DYNAMISM AND FEW

INDICATORS OF TECHNICAL ANALYSIS submitted by me is a bonafide work done

by me and it is not submitted to any institution or university for the award of any degree/diploma certificate published any time before.

Name of the Student V. Divya

Signature of the Student

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CERTIFICATE
This is to certify that the Project Report titled MARKET DYNAMISM AND FEW INDICATORS OF TECHNICAL ANALYSIS being submitted to Vignana Jyothi Institute of Management is a bonified work done by V.Divya bearing roll. No 121441, under my guidance.

Date:

Signature of the Guide Name:

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ACKNOWLEDGEMENTS

Success of a project like MARKET DYNAMISM AND FEW INDICATORS OF TECHNICAL ANALYSIS is never a result of one mans effort, it springs out of multiple or combined efforts, assistance and guidance. Now when I have acquired substantial knowledge about the subject and successfully accomplished the project.
I express my thanks to Mr. Kamal Gosh Ray, Director of Vignana Jyothi Institute of Management, Hyderabad for extending his support.

I would like to thank, Mr. Sanjay Aggarwal (company guide, manager) for his cooperation, willingness to share his knowledge and making me work on such a crucial and informative project. I would also like to thank Mrs.Sushma Kaaza (Faculty guide) for providing me an opportunity to work under her expert guidance and finally Vignana Jyothi Institute of Management for providing me such a corporate exposure to enhance my knowledge, skills and gain experience. I appreciate their faith, support and expect the same in future course of my project.

V. Divya (121441) VIGNANA JYOTI INSTITUTE OF MANAGEMENT HYDERABAD

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EXECUTIVE SUMMARY

India is second fastest growing major economy in the world, with a GDP growth rate of 4.8%. It has emerged as the world's fastest growing wealth creator, thanks to a buoyant stock market and higher earnings The name stock market which when comes into the mind, everyone has different opinion. One feels it is risky to invest in stock market, others may perceive that it is game of gambling. Many of the investors may feel its great opportunity to make profit in the stock market. The opinion differs from person to person, investor to investors. But the recent trend in the stock regarding its volatility which leads to the depression and also losses for many investors. If when the investors ask him about why did the stock market behaved in this way; the factor may be many. One has to develop a birds view over the stock market and analyse every factor with tools and technique so that he/she may not go wrong in the investment decision. One of the tools may be technical analysis which helps to study the market action, primarily through the use of charts, for the purpose of forecasting future price trends. The movement of the scrip price and its behaviour can be explained in a more illustrative form by using the technical analysis. It provides better insight and also to take decision on the investment. It considers only the actual price behaviour of the market or instrument. The project deals with a brief introduction to stock market & technical analysis how to invest in stock market as the investors are more concerned of return and they want to be far from risk, technical analysis is very helpful in deciding as when to buy & sell a particular stock.

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CONTENTS
1 Introduction 1.1 1.2 1.3 1.4 1.5 2 Introduction Literature Review. Objectives. Limitations Methodology 01 02 03 03 04

Company Profile 2.1 2.2 2.3 Process. Alliance Partners. People. 05 07 09 11

3 4

Steps in Project.. Fundamental Analysis 4.1 Price Fields..

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Technical Analysis 5.1 5.2 5.3 5.4 Assumptions Advantages. Disadvantages. Indicators.. 14 15 16 17

Difference between Technical and Fundamental Analysis 6.1 6.2 Differences.. Can they Co-Exist 18 19

Trends 7.1 Types. 20

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7.2 7.3 8 9

Trend lines Importance of Trend

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Swing Analysis. Support & Resistance 9.1 Importance

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Moving averages 10.1 10.2 10.3 10.4 Types SMA. EMA. Uses. 28 29 29 30 31

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Empirical Analysis Calculation 12.1 12.2 12.3 12.4 12.5 12.6 12.7 CNX Nifty Index ITC.. ONGC. CIPLA. Hdfc Bank. Dr Reddys. Coal India..

32 45 49 53 58 63 67 79 81

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Observations Conclusions.

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Bibliography

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CHAPTER-1 INTRODUCTION
Technical Analysis is a study of the stock market considering factors related to the supply and demand of stocks. Technical analysis is a method of evaluating securities by analysing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a securities intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity. 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. The study on technical analysis of selected companies based on Stratified sampling technique is significant as it helps in understanding the intrinsic value of shares and to know whether the shares are undervalued or overvalued or correctly priced. It becomes essential to know the performance of the company so that the investment will be duly giving returns and ensure safety of the investment. Further it helps in understanding the price behaviour of the shares, the signals given by them and the major turning points of the market price. The Technical analysis concentrates on plotting the price movements of stock, drawing inferences from the price movements in the market. It is an approach by prediction of future prices through the forces like supply and demand. It is very much useful for a speculator who aims at profit margins.

LITERATURE REVIEW
Cooter (1962) found that the stock prices move at random when studied at one week interval. The data for his study was weekend prices of forty five stocks from New York stock exchange. He tested randomness of share by means of a mean square successive difference test. He concluded that there was not one random walk model. He concluded that the share price trends could be predicted when studied at fourteen-week interval. But in total the stock prices followed a random walk at weekly intervals.

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Eugene F.Fama (1965) has answered the questions to what extend can the past history of a common stock price can be used to make meaningful predictions concerning the future prices of the stock? The theory of random walk on stock prices is studied with two hypotheses. They are i) Successive price changes are independent and ii) The price changes conform to some probability distribution. The data for this study consists of daily prices for each of the thirty stocks of the Dow Jones industrial average. This study concludes that there is strong and voluminous evidence in favour of random walk theory. Ramaswami.K (1996) assessed the relationship among book values, earnings, dividend and market price of share, impact of bonus issues, impact of security scam on equity return .to that end, the author used daily share price of 30 companies included in the construction of BSE sensitive index, daily data of BSESI and NYSE composite index, annual data on BV per share market price per share, EPS and DPS and data on bonus issue made ,during the period of study, the researcher used correlation ,regression and frequency distribution for interpreting data. Sharma and Robert E. Kennedy (1977) tested the applicability of random walk hypothesis to the stock market in developing country namely India and compare this to that of stock markets in developed countries namely USA, and England. For this purpose the price behaviour of Bombay stock exchange is statistically examined both for randomness and independence .The test the random walk hypothesis. The test covers 132 monthly observations for each stock market index of common stock listed in Bombay exchange for eleven years from 1968-1973.The study indicates that price dependence while statistically significant, is comparably small in the developing countries. Based on the test, it is evident that the Bombay stock exchange stock obeys a random walk and is equivalent to developed countries stock exchange. Fernando Fernandez Rodriguez, Simon Sosvilla Rivero, Julian Andrada Felix (1999) assessed whether some simple forms of technical analysis can predict stock price movement in the Madrid stock exchange, covering thirty-one-year period from Jan 1966 Oct 1997.the results provide strong support for profitability of those technical trading rules. By making use of bootstrap techniques the author shows the returns obtained from these trading rules are not consistent with several null models frequently used in finance.
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C. L. Osler (2001) provides a microstructural explanation for the success of two familiar predictions from technical analysis: (1) Trends tend to be reversed at predictable support and resistance levels, and (2) Trends gain momentum once predictable support and resistance levels are crossed. The explanation is based on a close examination of stop-loss and take-profit orders at a large foreign exchange dealing bank. Take-profit orders tend to reflect price trends, and stop-loss orders tend to intensify trends. The requested execution rates of these orders are strongly clustered at round numbers, which are often used as support and resistance levels. Significantly, there are marked differences between the clustering patterns of stop-loss and take-profit orders, and between the patterns of stop-loss buy and stop-loss sell orders. These differences explain the success of the two predictions.

1.1 OBJECTIVES:
Observing which moving average has a better efficiency compared with other. To understand trends and patterns in share price movements using Simple Moving Average. To understand the trend and swing variations for different individual stocks as well as CNX Nifty index values. To make a study on Technical Analysis on selected stocks and interpret on whether to buy or sell them Moving average efficiency is done by comparing the trend with the stop loss and carry conditions based on the daily intraday price movements. To find out which equity share is preferable for the investors i.e., when to buy & when to sell a particular stock.

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1.2 Limitations
At high volatile conditions swing analysis of technical analysis cannot be determined with a greater efficiency. This analysis mainly works for the CNX Nifty index compared to other stocks because there can have a more volatility in the stocks.

The study on technical analysis was conducted by taking only selected energy companies scrips. The study is confined only for 3 years and hence the study cannot be used for a period before and after. The study is for a limited period; hence the behaviour pattern may serve limited purpose.

METHODOLOGY:
The study aims at analysing the price movements of selected companys scrips. As the study describes the existing facts and figures given in the financial statement and the price movements of the selected companies, the research design followed is descriptive and analytical in nature. For Technical Analysis, the daily share price movements of the selected companies in NSE were absorbed for the 4 years i.e. 01-April- 2010 to 31-March-2013. The closing prices of share prices were taken and the future price movement was analysed using various tools. For the purpose of comparing different stocks closing prices of the companies in NSE and the closing value of NIFTY were taken. Data were collected from trading of equity market in NSE, various books, journals, magazines and websites. All the listed companies in the National Stock Exchange constitute the population for the study. 6 companies which are actively traded in NSE were taken on Stratified sampling basis for the study. The selected companies are NSE Nifty Index Oil and Natural Gas Corporation (ONGC) ITC CIPLA Hdfc Bank Dr Reddys Coal India

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CHAPTER-2 COMPANY PROFILE

FinVisdom is proud to be our partner in making our wealth grows. We are a professional, process oriented and well-regulated company that successfully merges its collective vision and wisdom in finance to exponentially create value for your investment needs. Our central philosophy revolves around aligning our goals to your investment goals, thus creating a symphony of prosperity-based initiatives and wealth practices. FinVisdom is a client centric boutique financial services firm with an open architecture. At FinVisdom, we have the innate capability to manage every aspect of our financial world. FinVisdom strives to be a one-stop destination for all products and services in the financial
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sphere. We have created a network of closely knitted partners and alliances to deliver on our commitments.

2.1 PROCESS
FinVisdom processes are conceptualized to complement our client-focused approach. Our Advisory Services are guided by your goals, expectations, risk appetite and needs. Our Financial Tool accounts for specific inputs to arrive at a comprehensive financial plan. PRIME, the Financial Tool developed by our team, is a core part of all product offerings at FinVisdom. It is designed to collect relevant information and deliver appropriate solutions. Broadly, this process involves 5 stages. A pictorial representation of the process is as below:

PLANNING This foundation stage requires collection of relevant data which is processed by our customized software to arrive at a detailed analysis. This is aimed at creating a comprehensive Plan to meet clients requirements especially clients who avail our Family Office and Trust & Estate Planning Services. The plan throws up key observations which are then used to draw a detailed plan of execution. This being the most critical stage in the management and advisory of clients financial assets, the graph below helps understand the same:

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RESOURCE ALLOCATION To ensure our promise of success, we allocate appropriate resources with well-defined roles and responsibilities. These finVisdomers are well-qualified with proven delivery track record and are accountable for the successful execution of the agreed plan. IMPLEMENTATION This stage involves interaction with different partners. In some cases, execution is a continuous process and is achieved through a detailed plan designed towards this objective. The finVisdomer assigned to your relationship will be your single point of contact and will work with you on delivery of objectives as per the plan defined. MONITOR This is a litmus test to determine the efficiency of the detailed plan designed for the clients. For one-time projects, a detailed result-oriented report is submitted to you highlighting all the achievements. Periodic reports are provided in cases where the execution is a continuous process. The interval is defined by the client. The success of the plan is measured through the achievement of definitive objectives against the goals defined at the planning stage taking into account the environment and market conditions. ENGAGEMENT A regular interaction with the client helps the team at finVisdom to report the progress of the project, achievement of goals and re-planning. Our team will be in constant touch with you to update you on the progress and seek your feedback. Course corrections are initiated if warranted, with your consent.

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2.2 ALLIANCE PARTNERS

FinVisdom understands the need to collaborate with various intermediaries to be a preferred financial advisor to its clients while offering the entire gamut of financial services under one roof. In this pursuit, we have formed strong alliances with select institutions which share our client-centric approach and have a strong track record of delivering quality to clients. In our endeavour to ensure our clients enjoy the finVisdom advantage, we operate on an open architecture platform. Hence, we also evaluate all other market players to select those who meet our client expectations most effectively.

INVESTMENT & BROKING SERVICES

Kotak Securities Ltd.- The Kotak Mahindra Group is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. Since the inception of the erstwhile Kotak Mahindra Finance Limited in 1985, it has been a steady and confident journey leading to growth and success. Kotak Securities Ltd (KSL) is a 100 % subsidiary of Kotak Mahindra Group, is one of the oldest and largest stock brokers in the Industry. It has a large network that spans over 400 cities with 1200 outlets. One of the primary goals of KSL through its network is to simplify stock market investments for its clients and in the process create long term value for them. KSL offer all clients quality research, quick trade execution, and superior customer service.

CORPORATE STRUCTURING AND ADVISORY SERVICES

Sekhar & Co.-sekhar & co is a reputed Chartered Accountancy Firm of Hyderabad, It is operational for over 25 years and its clients' testimony best defines its track record. Clients can avail a range of services from it like Tax Filing, Corporate and Non-corporate Statutory Audits, Corporate Structuring, Company Law related, Tax Consultancy, etc. Sekhar & Co. would be able to advise client on all regulatory aspects of his financial dealings.

OFFSHORE INVESTMENT ADVISORY SERVICES

Neuvo Asia Advisors Pte Ltd- Through its business associates in South East Asia Neuvo Asia provide a comprehensive range of Global investment products across asset class and geographies to its Clients. It also provide access to growth capital and asset financing to Asian companies in select sectors its current focus is on companies in Energy, Shipping & Logistics, Real Estate & Infrastructure, Telecom Media & Technology.
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PHILANTHROPY ADVISORY SERVICES

GiveIndia- GiveIndia today is a leading online philanthropy marketplace that has institutionalized philanthropy. Since inception, we have channeled over 250,000 donations totaling over Rs.100 Cr to more than 200 NGOs all over India, impacting over a million lives. It is also responsible for conceptualizing the Standard Chartered Mumbai Marathon and the Joy of Giving Week. GiveIndia has built expertise in assisting HNIs manage their philanthropy activities starting from planning stage to implementation to reporting its usage for the desired cause.

Trust and Estate Planning Services

IL&FS Trust Company Ltd. Incorporated in 1995, IL&FS Trust Company Ltd. , is a subsidiary of IL&FS. ITCL is the countrys largest service provider in this space with total Assets Under Trusteeship aggregating to INR 2,50,000 Crs. ITCL has proven expertise and experience in Private Family Trusts with arms length relationship from Private Banking and other support services viz, Banking, DEMAT, Broking etc, allowing unbiased execution of clients mandates. ITCL offers its services to both Resident Indians and Non-Resident Indians. The open architecture provides flexibility to structure the trusts as per clients requirements.

2.3 PEOPLE
finVisdom is upheld by passionate people who are high on energy and constantly endeavouring to serve its clientele. Everyone associated with finVisdom, comes on board with relevant experience and proven track record. Integrity, ethics and morale underlie finVisdom philosophy and is not compromised at any cost.

The Advisory Board* at finVisdom comprises of Sanjay Agarwala

Sanjay brings with him 10 years of experience in the financial world. He has worked with institutions like 3rd Agenda, ICICI Bank, ABN AMRO Bank and ING Private Banking. Before joining finVisdom, Sanjay was heading ING Private Banking for Andhra Pradesh. Sanjay started his career at an early stage and has hands on experience in Retail, Trading, IT and Finance Industry. An entrepreneur at heart, he's now pursuing his dream after spending 12 years in the corporate world.
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Health and Wealth (Finances) are the two most important aspects of life for every individual. We at finVisdom have developed a robust platform to help you manage one of these facets i.e. Wealth. Financial world has been expanding, thus, delivering new and more complicated instruments and solutions. Managing ones finance has become a very complex affair. Clients today are looking for expert advice to help them manage their financial kingdom. At finVisdom, we not only take care of this requirement but also understand our responsibilities. We are aware that a client is handing over his hard earned wealth to us for management. Hence, take up this duty with utmost honesty and ethically. FinVisdom is able to address all the financial requirements of its clients through a range of financial products and services. We have developed an indigenous financial planning tool that helps us arrive at a comprehensive financial plan to achieve their financial objectives.

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CHAPTER-3 PROCESS
Technical analysis is taken into consideration to observe the trends that are taking place in the market on different stocks as well as on the nifty index. Technical analysis will have good results when an investor invests money based on this analysis on any of the stocks. The main reason behind to say that technical analysis is working good is that it have a conditions of both long and short where by this two we can have a better buy and sell conditions, but for fundamental analysis we will have only a long call. Let us take an example that at the end of the year 2007 i.e., Dec 2007 to Jan 2008, the people who invested in this period are still in losses because the stock value is higher and till now the price has not reached there. This is mainly done for fundamental analysis if technical analysis is done and invested money on stocks according to this it would have been better and the results would have been better for the investors. The main problem with the fundamental analysis is it takes more time to recover compared to technical analysis. In the technical analysis we have many indicators but to observe a trend and swing its better to go with swing analysis and moving averages. Swing analysis is used to capture and square of the positions where there is a buy call and sell call. Swing and moving averages have a direct relationship to capture a position, here in this different moving averages are been calculated like 14-day, 11-day, 9-day, 7-day, 5-day, and 3day and made and comparison with closing prices of that particular day. If the moving closing breaches moving average higher long, if it breaches shorter we can observe short. To square off a position and to observe the swing I have taken cut of 2%, 2.5%, 3% etc., based on the moving average values. To square off a position it was decided manually so we made a move to moving averages and its intelligent enough to observe the intraday positions and the point where it breaches. Considering intraday positions is very important because many stocks are volatile and there is a chance of losing money. Here, all the different day moving averages are taken into consideration and intraday prices are taken into consideration and drawn positions to observe the carry and no position point price movements. Here finally we observed that the returns that we calculate are good for 14-day moving average compared to others by calculating the probability percentage for carry and no positions.

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CHAPTER-4 FUNDAMENTAL ANALYSIS

Fundamental analysis is the examination of the underlying forces that affect the wellbeing of the economy, industry groups, and companies. As with most analysis, the goal is to derive a forecast and profit from future price movements. At the company

level, fundamental analysis may involve examination of financial data, management, business concept and competition. At the industry level, there might be an examination of supply and demand forces for the products offered. For the national economy, fundamental analysis might focus on economic data to assess the present and future growth of the economy. To forecast future stock prices, fundamental analysis combines economic, industry, and company analysis to derive a stock's current fair value and forecast future value. If fair value is not equal to the current stock price, fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value. Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient. By believing that prices do not accurately reflect all available information, fundamental analysts look to capitalize on perceived price discrepancies. If we were all totally logical and could separate our emotions from our investment decisions, then, fundamental analysis the determination of price based on future earnings, would work magnificently. And since we would all have the same completely logical expectations, prices would only change when quarterly reports or relevant news was released. Investors would seek "overlooked" fundamental data in an effort to find undervalued securities. The hotly debated "efficient market theory" states that security prices represent everything that is known about the security at a given moment. This theory concludes that it is impossible to forecast prices, since prices already reflect everything that is currently known about the security.

4.1 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 analysing 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. 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. Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:

To conduct a company stock valuation and predict its probable price evolution, To make a projection on its business performance, To evaluate its management and make internal business decisions, To calculate its credit risk.

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CHAPTER-5 TECHNICAL ANALYSIS

Technical analysis is a method of evaluating securities by analysing 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.

5.1 ASSUMPTIONS
The field of technical analysis is based on three assumptions: The market discounts everything. Price moves in trends.

The Market Discounts everything

A major criticism of technical analysis is that it only considers price movement, ignoring the fundamental factors of the company. However, technical analysis assumes that, at any given time, a stock's price reflects everything that has or could affect the company - including fundamental factors. Technical analysts believe that the company's fundamentals, along with broader economic factors and market psychology, are all priced into the stock, removing the need to actually consider these factors separately. This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market.

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Price Moves in Trends

In technical analysis, price movements are believed to follow trends. This means that after a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. Most technical trading strategies are based on this assumption.

5.2 ADVANTAGES
1. Technical analysis focuses on price movement.
The primary focus of technical analysis is on the movement of prices. Charts show how prices are moving (or not moving), when prices are trending, and the strength of those trends. Volume, oscillators and momentum give a clearer picture of market action. And this information can be obtained at a glance. Unlike fundamentalists, technicians do not use economic reports that analyse the demand for a cure

2. Trends are easily found.

Taking a look at a moving average line quickly displays a price that is trending or stuck in a range. Whether it is up, down, or sideways, a chart can quickly display a currency that is exhibiting a trend. Trends are critical to technicians because a currency is likely to continue moving in the direction of the trend. Charts show them clearly and quickly.

3. Patterns are easily identified.

One of the basic tenets of market action is that it repeats itself in clear, unmistakable patterns. Using charts helps the trader to find patterns and predict price movements based on these patterns. Like star constellations, patterns can be complex and complicated. Head-andshoulders patterns, rounding tops and bottoms, ascending and descending triangles, and double and triple tops are proven patterns that many currency prices will follow. Hence, they have strong predictive powers. They can be impossible to detect without using a chart.

4. Charting is quick and inexpensive.

Computers have relieved us from the burden of performing complex mathematical operations. The Internet has a wealth of different technical indicators available that can help the trader to make more profitable and more reliable trades. Many brokers offer these types of technical indicators to their clients as part of their package. Technical analysis is less time
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consuming and less costly than fundamental analysis. It can be performed in less than five minutes and the services are very often offered for free or at a nominal cost.

5. Charts provide a wealth of information.

Charts and indicators can provide a huge amount of information in only a few moments. Trends are easily found. Support and resistance levels are quickly identified. Momentum, volatility, and trading patterns appear quickly and easily. There are more than fifty kinds of indicators and they each provide information on different aspect of how a currency is moving. This information is critical to technicians to make sound and profitable trades. Charts tell a story about the personality and price movement of a currency. The story can be complex with many different plots and twists or quite simple with only a few characters and single narrative. Charts are the same way. They can provide only the most basic information on a trend or support and resistance.

5.3 DISADVANTAGES
1. At their heart, all technical indicators - no matter how complex - are based on price, which always reflects what has already happened in the market. Thus, technical analysis is reactive not truly predictive of what will happen. 2. Today's markets are much more chaotic and choppy compared to previous decades. This is because of hedge funds and computerized ultra-stockstackup.com" title short term trading short term trading activity. The result is more false signals and ill-formed patterns from technical analysis techniques. 3. The bulk of technical traders still rely on a handful of indicators first created in the 1970's. This result in their overuse and, thus, the markets adjust and render them less effective. 4. The majority of technical traders attempt to do trend-following. While trend following techniques can make big money over time, they have a low accuracy rate and a high draw down (most trades are losses and its not uncommon to be down 50-60% at some point). Most traders cannot handle this psychologically. They end up overriding stockstackup.com" title="Trading Signals">Trading Signals and/or switching between systems. 5. Classical trading chart patterns can be found in graphs of non-market related activities, including temperature charts. Also, chart patterns can appear and disappear depending on the
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scaling of the chart. This strongly suggests that chart patterns are a trick of the human eye and have no predictive value

5.5 INDICATORS
Indicators are calculations based on the price and the volume of a security that measure such things as money flow, trends, volatility and momentum. Indicators are used as a secondary measure to the actual price movements and add additional information to the analysis of securities. Indicators are used in two main ways: to confirm price movement and the quality of chart patterns, and to form buy and sell signals. Types 1. Swing Analysis 2. EMA 3. SME 4. Accumulation/ distribution 5. Average directional index 6. Commodity channel index 7. Stochastic Oscillator 8. MACD 9. Momentum 10. Money flow index 11. On balances volume 12. RSI 13. Relative Vigor index

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CHAPTER-6 DIFFERENCE BETWEEN TECHNICAL ANALYSIS AND FUNDAMENTAL ANALYSIS

Technical analysis and fundamental analysis are the two main schools of thought in the financial markets. As we've mentioned, technical analysis looks at the price movement of a security and uses this data to predict its future price movements. Fundamental analysis, on the other hand, looks at economic factors, known as fundamentals. Technical analysis is working good and it have both long and short calls, but fundamental analysis will have only a long call. Fundamental analysis takes more time compared to technical analysis. Technical analysis is more risky when compared to fundamental analysis but more the risk, the more the returns. Technical analysis aim for the absolute returns, whatever be the returns but the healthy mix of both fundamental and technical analysis plays good returns.

6.1 DIFFERENCES 1. Charts vs. Financial Statements

At the most basic level, a technical analyst approaches a security from the charts, while a fundamental analyst starts with the financial statements. By looking at the balance sheet, cash flow statement and income statement, a fundamental analyst tries to determine a company's value. In financial terms, an analyst attempts to measure a company's intrinsic value. In this approach, investment decisions are fairly easy to make - if the price of a stock trades below its intrinsic value, it's a good investment.

Time Horizon
Fundamental analysis takes a relatively long-term approach to analysing the market compared to technical analysis. While technical analysis can be used on a timeframe of weeks, days or even minutes, fundamental analysis often looks at data over a number of years. The different timeframes that these two approaches use is a result of the nature of the investing style to which they each adhere. It can take a long time for a company's value to be reflected in the market, so when a fundamental analyst estimates intrinsic value, a gain is not realized until the stock's market price rises to its "correct" value. This type of investing is called value investing and assumes that the short-term market is wrong, but that the price of a particular stock will correct itself over the long run. This "long run" can represent a timeframe of as long as several
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years, in some cases. Furthermore, the numbers that a fundamentalist analyses are only released over longer periods of time. Financial statements are filed quarterly and changes in earnings per share don't emerge on a daily basis like price and volume information.

Trading Versus Investing

Not only is technical analysis more short term in nature that fundamental analysis, but the goals of a purchase (or sale) of a stock are usually different for each approach. In general, technical analysis is used for a trade, whereas fundamental analysis is used to make an investment. Investors buy assets they believe can increase in value, while traders buy assets they believe they can sell to somebody else at a greater price. The line between a trade and an investment can be blurry, but it does characterize a difference between the two schools.

6.2 Can They Co-Exist?

Although technical analysis and fundamental analysis are seen by many as polar opposites - the oil and water of investing - many market participants have experienced great success by combining the two. For example, some fundamental analysts use technical analysis techniques to figure out the best time to enter into an undervalued security. Oftentimes, this situation occurs when the security is severely oversold. By timing entry into a security, the gains on the investment can be greatly improved. Fundamental analysis holds good some time to invest in stocks compared to technical analysis. So its better to have a healthy mix of both technical analysis and fundamental analysis. Fundamental and technical analysis has two parameters like standardization and customization. Customization has no set of rules where there a probability to buy but not sure but depends on 5 parameters like Assume Presume Projidics Biousness Standardisation doesnt have any set of rules but it is like rule based process where the investor will buy the stocks which are related to quantitative analysis.

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CHAPTER-7 TREND
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.

It isn't hard to see that the trend in figure 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.

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, we can 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.

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Above chart is an example of an uptrend. Point 2 in the chart is the first high, which is determined after the 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.

7.1 TYPES OF TREND

There are three types of trend:

Uptrends Downtrends 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 we want to get really technical, we 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
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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 and intermediate trends.

When analysing trends, it is important that the chart is constructed to best reflect the type of trend being analysed. 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 analysing 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 onemonth trend is not as significant as a five-year trend.

7.2 TRENDLINES
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. Above chart shows, 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 will begin moving upwards again. Similarly, a downward trend
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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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Above chart illustrates 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.

7.3 THE IMPORTANCE OF TREND

It is important to be able to understand and identify trends so that we 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.

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CHAPTER-8 SWING ANALYSIS

Swing analysis is a speculative activity in financial markets where a tradable asset is held for between one to several days in an effort to profit from price changes or 'swings'. A swing trading position is typically held longer than a day trading position, but shorter than buy and hold investment strategies that can be held for months or years. Profits can be sought by either buying an asset or short selling. Using a set of mathematically based objective rules for buying and selling is a common method for swing traders to eliminate the subjectivity, emotional aspects, and labour-intensive analysis of swing trading. The trading rules can be used to create a trading algorithm or "trading system" using technical analysis or fundamental analysis to give buy and sell signals. Simpler rule-based trading approaches include Alexander Elder's strategy, which measures the behaviour of an instrument's price trend using three different moving averages of closing prices. The instrument is only traded long when the three averages are aligned in an upward direction, and only traded Short when the three averages are moving downward. Trading algorithms/systems may lose their profit potential when they obtain enough of a mass following to curtail their effectiveness: "Now it's an arms race. Everyone is building more sophisticated algorithms, and the more competition exists, the smaller the profits," observes Andrew Lo, the Director of the Laboratory for Financial Engineering, for the Massachusetts Institute of Technology. Identifying when to enter and when to exit a trade is the primary challenge for all swing trading strategies. However, swing traders do not need perfect timingto buy at the very bottom and sell at the very top of price oscillationsto make a profit. Small consistent earnings that involve strict money management rules can compound returns over time. It is generally understood that mathematical models and algorithms do not work for every instrument or market situation. Risks in swing trading are commensurate with market speculation in general. Risk of loss in swing trading typically increases in a trading range, or sideways price movement, as compared to a bull market or bear market that is clearly moving in a specific direction.

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CHAPTER-9 SUPPORT AND RESISTANCE

SUPPORT
A support level is a price level where the price tends to find support as it is going down. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely to continue dropping until it finds another support level.

RESISTANCE
A resistance level is the opposite of a support level. It is where the price tends to find resistance as it is going up. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely that it will continue rising until it finds another resistance level.

Identifying support and resistance levels

Support and resistance levels can be identified by trend lines (technical analysis). Some traders believe in using pivot point calculations. The more often a support/resistance level is "tested" (touched and bounced off by price), the more significance given to that specific level. If a price breaks past a support level, that support level often becomes a new resistance level. The opposite is true as well, if price breaks a resistance level, it will often find support at that level in the future. Technical analysts talk about the on-going 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). When judging entry and exit investment timing using support or resistance levels it is important to choose a chart based on a price interval period that aligns with your trading strategy timeframe. Short term traders tend to use charts based on interval periods, such as 1 minute (i.e. the price of the security is plotted on the chart every 1 minute), with longer term traders using price charts based on hourly, daily, weekly or monthly interval periods. Typically traders use shorter term interval charts when making a final decisions on when to invest, such as the following example based on 1 week of historical data with price plotted every 15 minutes. In
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this example the early signs that the stock was coming out of a downtrend was when it started to form support at $30.48 and then started to form higher highs and higher lows signalling a change from negative to positive trending.

9.1 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. For example, if a trader identifies an important level of resistance that has been tested several times but never broken, he or she may decide to take profits as the security moves toward this point because it is unlikely that it will move past this level. 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 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 a price moved above the resistance levels of an upward trending channel, the trend has accelerated, but not reversed. This means that the price appreciation is expected to be faster than it was in the channel.

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CHAPTER-10 MOVING AVERAGES

Moving averages are one of the oldest and most popular technical analysis tools. It is a method of technical analysis which is used to identify long term, medium term or short term trends by smoothing out the way price movements are graphically represented. A moving average is the average price of a security at a given time. 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. The Moving Average Technical Indicator shows the mean instrument price value for a certain period of time. When one calculates the moving average, one averages out the instrument price for this time period. As the price changes, its moving average either increases, or decreases. 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 day-to-day fluctuations are removed, traders are better able to identify the true trend and increase the probability that it will work in their favour. Moving averages are normally expressed by way of the number of previous days data which is used to calculate the moving average. As with most technical analysis tools, moving averages can be used for most financial instruments including stocks and shares, currencies, bonds etc. Moving averages "smooth out" market rate fluctuations that often occur with each reporting period in a price chart. The more frequent the rate updates - that is, the more often the price chart displays an updated rate - the greater the potential for market noise. For traders dealing in a fast-moving market that is "ranging" or "whipsawing" up and down, the potential for false signals is a constant concern.

10.1 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 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.

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The four most common types of moving averages are Simple moving average Linear moving average Exponential moving average Smoothed moving average

10.2 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, to calculate a 14-day moving average of Nifty Index: First, we would add Nifty Indexes closing prices for the most recent 14 days. Next, we would divide that sum by 14; this would give us the average price of Nifty Index over the preceding 14 days. We can plot this average price on the chart. SMA = (summation of closing prices up to n)/n SMA = SUM (CLOSE, N)/N Where: n=the number of time periods in the moving average

10.3 EXPONENTIAL MOVING AVERAGE

An exponential moving average is similar to a simple moving average, but whereas a simple moving average removes the oldest prices as new prices become available, an exponential moving average calculates the average of all historical ranges, starting at the point we specify. For instance, when you add a new exponential moving average overlay to a price chart, we assign the number of reporting periods to include in the calculation. Let's assume we specify for the last 14 prices to be included. This first calculation will be exactly the same as a simple moving average also based on 14 reporting periods, but when the next price becomes available, the new calculation will retain the original 14 prices, plus the new price, to arrive at the average. This means there are now 15 reporting periods in the exponential moving average calculation while the simple moving average will always be based on just the most recent 14 rates.
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Today's Exponential Moving Average= (current day's closing price x Exponent) + (previous day's EMA x (1-Exponent)).

10.4 USES
Moving averages cover a specific period of time: 10, 20, 50, 100 or 200 days. They appear as a simple line that rises or falls with the general direction of the price. In a common technique of technical analysis, short- and long-term moving averages are superimposed over a price chart. A short-term moving average crossing over a long-term moving average may indicate a new price trend, or a change in direction. Many traders use this crossover as a buy or sell signal.

10.5 DECIDING ON WHICH MOVING AVERAGE TO USE

To determine which moving average is best for us, we must first understand our needs. If our main objective is to reduce the noise of consistently fluctuating prices in order to determine an overall market direction, then a simple moving average of the last 20 or so rates may provide the level of detail we require. If we want our moving average to place more emphasis on the latest rates, a weighted average is more appropriate. Keeping in mind however, that because weighted moving averages are affected more by the latest prices, the shape of the average line could be distorted potentially resulting in the generation of false signals. When working with weighted moving averages, we must be prepared for a greater degree of volatility.

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EMPERICAL ANALYSIS
Below stocks are used to observe the changes in price and to know the swing analysis with the help of moving averages. The main objective to take the index is that volatility in index values are less compared to other stocks. This analysis helps to understand which moving average works better and to know when an investment can be made. Stocks volatility depends on many factors which relates to stocks but nifty index volatility depends only on few factors like economy driven and political driven factors. Based on the risk appetite and based on volatility and investment can be made on any of the stocks.

CNX NIFTY INDEX ITC ONGC CIPLA HDFC BANK DR REDDYS COAL INDIA

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CHAPTER-12 12.1 CNX NIFTY INDEX

MOVING AVERAGES
Date
01-01-2013 02-01-2013 03-01-2013 04-01-2013 07-01-2013 08-01-2013 09-01-2013 10-01-2013 11-01-2013 14-01-2013 15-01-2013 16-01-2013 17-01-2013 18-01-2013 21-01-2013 22-01-2013 23-01-2013 24-01-2013 25-01-2013 28-01-2013 29-01-2013 30-01-2013 31-01-2013 01-02-2013 04-02-2013 05-02-2013

Close 5950.85 5993.25 6009.5 6016.15 5988.4 6001.7 5971.5 5968.65 5951.3 6024.05 6056.6 6001.85 6039.2 6064.4 6082.3 6048.5 6054.3 6019.35 6074.65 6074.8 6049.9 6055.75 6034.75 5998.9 5987.25 5956.9

14 DMA

11 DMA

7 DMA

5 DMA

3 DMA

5984.53 6006.30 5991.63 6001.80 5990.19 5992.74 5986.74 5988.82 5993.81 5998.45 6002.63 6002.67 6012.06 6016.01 6019.21 6019.44 6025.60 6030.82 6036.42 6042.64 6048.60 6046.80 6041.85 6038.64 6007.62 6013.63 6019.10 6023.88 6028.23 6037.86 6049.09 6051.44 6051.36 6054.35 6050.69 6043.68 6032.28 5994.60 5996.52 6001.88 6015.15 6031.39 6045.27 6049.59 6044.27 6054.67 6059.76 6057.69 6053.89 6051.93 6044.01 6039.43 6022.61 5997.45 5989.28 5976.31 5983.44 5994.42 6000.49 6014.60 6037.22 6048.87 6047.25 6057.74 6053.77 6055.82 6054.32 6054.60 6054.89 6057.97 6042.82 6025.31 6006.71 6004.68 6002.08 5987.20 5980.62 5963.82 5981.33 6010.65 6027.50 6032.55 6035.15 6061.97 6065.07 6061.70 6040.72 6049.43 6056.27 6066.45 6060.15 6046.80 6029.80 6006.97 5981.02

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06-02-2013 07-02-2013 08-02-2013 11-02-2013 12-02-2013 13-02-2013 14-02-2013 15-02-2013 18-02-2013 19-02-2013 20-02-2013 21-02-2013 22-02-2013 25-02-2013 26-02-2013 27-02-2013 28-02-2013 01-03-2013 04-03-2013 05-03-2013 06-03-2013 07-03-2013 08-03-2013 11-03-2013 12-03-2013 13-03-2013 14-03-2013 15-03-2013 18-03-2013 19-03-2013 20-03-2013 21-03-2013 22-03-2013 41 | P a g e

5959.2 5938.8 5903.5 5897.85 5922.5 5932.95 5896.95 5887.4 5898.2 5939.7 5943.05 5852.25 5850.3 5854.75 5761.35 5796.9 5693.05 5719.7 5698.5 5784.25 5818.6 5863.3 5945.7 5942.35 5914.1 5851.2 5908.95 5872.6 5835.25 5745.95 5694.4 5658.75 5651.35

6032.93 6023.95 6011.18 6000.42 5991.01 5984.84 5972.14 5958.76 5947.92 5939.63 5933.08 5922.61 5912.83 5905.53 5891.40 5881.26 5866.23 5853.50 5837.50 5826.88 5821.29 5819.56 5822.96 5823.15 5821.08 5821.00 5825.19 5826.47 5831.75 5828.11 5828.20 5823.85 5820.48

6024.16 6013.66 6003.13 5987.05 5973.21 5962.58 5948.14 5934.75 5925.59 5921.27 5920.01 5910.29 5902.24 5897.81 5885.40 5873.98 5852.17 5836.06 5818.89 5808.53 5797.52 5790.27 5798.76 5807.13 5812.53 5820.70 5830.88 5847.20 5857.71 5862.02 5853.85 5839.32 5820.05

6006.09 5990.22 5968.47 5948.91 5938.00 5930.24 5921.68 5911.42 5905.62 5910.79 5917.25 5907.21 5895.41 5889.38 5871.37 5856.90 5821.66 5789.76 5767.79 5758.36 5753.19 5767.76 5789.01 5824.63 5852.40 5874.21 5892.03 5899.74 5895.74 5867.20 5831.78 5795.30 5766.75

5987.40 5968.21 5949.13 5931.25 5924.37 5919.12 5910.75 5907.53 5907.60 5911.04 5913.06 5904.12 5896.70 5888.01 5852.34 5823.11 5791.27 5765.15 5733.90 5738.48 5742.82 5776.87 5822.07 5870.84 5896.81 5903.33 5912.46 5897.84 5876.42 5842.79 5811.43 5761.39 5717.14

5967.78 5951.63 5933.83 5913.38 5907.95 5917.77 5917.47 5905.77 5894.18 5908.43 5926.98 5911.67 5881.87 5852.43 5822.13 5804.33 5750.43 5736.55 5703.75 5734.15 5767.12 5822.05 5875.87 5917.12 5934.05 5902.55 5891.42 5877.58 5872.27 5817.93 5758.53 5699.70 5668.17

25-03-2013 26-03-2013 28-03-2013 01-04-2013 02-04-2013 03-04-2013 04-04-2013 05-04-2013 08-04-2013 09-04-2013 10-04-2013 11-04-2013 12-04-2013 15-04-2013 16-04-2013 17-04-2013 18-04-2013 22-04-2013 23-04-2013 25-04-2013 26-04-2013 29-04-2013 30-04-2013 02-05-2013 03-05-2013 06-May-13 07-May-13 08-May-13 09-May-13 10-May-13 11-May-13 13-May-13 14-May-13 15-May-13 42 | P a g e

5633.85 5641.6 5682.55 5704.4 5748.1 5672.9 5574.75 5553.25 5542.95 5495.1 5558.7 5594 5528.55 5568.4 5688.95 5688.7 5783.1 5834.4 5836.9 5916.3 5871.45 5904.1 5930.2 5999.35 5944 5971.05 6043.55 6069.3
6050.15 6094.75 6107.25 5980.45 5995.4 6146.75

5809.74 5797.10 5784.19 5766.95 5753.08 5735.85 5716.10 5690.69 5667.15 5642.85 5629.48 5622.30 5613.00 5607.08 5611.01 5614.38 5621.56 5630.85 5637.19 5654.58 5675.77 5700.83 5728.49 5764.51 5792.03 5818.96 5855.75 5891.53 5917.33 5946.33 5969.48 5979.91 5991.24 6007.70

5791.70 5764.36 5743.31 5729.97 5715.35 5697.19 5673.51 5655.99 5642.22 5627.35 5618.92 5615.30 5605.02 5594.65 5593.24 5587.84 5597.86 5621.46 5647.25 5681.19 5715.40 5746.80 5777.37 5820.17 5854.31 5879.96 5912.22 5938.24 5957.85 5981.29 5998.65 6008.56 6016.86 6036.55

5727.45 5694.45 5672.64 5666.70 5674.37 5676.39 5665.45 5653.94 5639.84 5613.06 5592.25 5570.24 5549.61 5548.71 5568.09 5588.91 5630.06 5669.44 5704.14 5759.54 5802.83 5833.56 5868.06 5898.96 5914.61 5933.78 5951.96 5980.22 6001.09 6024.59 6040.01 6045.21 6048.69 6063.44

5676.86 5655.99 5653.62 5662.75 5682.10 5689.91 5676.54 5650.68 5618.39 5567.79 5544.95 5548.80 5543.86 5548.95 5587.72 5613.72 5651.54 5712.71 5766.41 5811.88 5848.43 5872.63 5891.79 5924.28 5929.82 5949.74 5977.63 6005.45 6015.61 6045.76 6073.00 6060.38 6045.60 6064.92

5647.98 5642.27 5652.67 5676.18 5711.68 5708.47 5665.25 5600.30 5556.98 5530.43 5532.25 5549.27 5560.42 5563.65 5595.30 5648.68 5720.25 5768.73 5818.13 5862.53 5874.88 5897.28 5901.92 5944.55 5957.85 5971.47 5986.20 6027.97 6054.33 6071.40 6084.05 6060.82 6027.70 6040.87

16-May-13 17-May-13 20-May-13 21-May-13 22-May-13 23-May-13 24-May-13 27-May-13 28-May-13 29-May-13 30-May-13 31-May-13 03-Jun-13 04-Jun-13 05-Jun-13 06-Jun-13 07-Jun-13 10-Jun-13 11-Jun-13 12-Jun-13 13-Jun-13

6169.9 6187.3 6156.9 6114 6094.5 5967.85 5983.55 6083.15 6111.75 6104.3 6124.05 5985.95 5939.3

6029.01 6049.24 6065.44 6073.63 6084.38 6084.15 6079.86 6080.85 6085.25 6085.93 6087.13 6087.53 6083.52 6067.28 6049.71 6030.71 6011.01 5994.15 5972.31 5957.48 5937.16

6052.05 6074.17 6091.06 6097.47 6099.76 6092.28 6082.17 6079.98 6091.91 6101.81 6099.75 6083.03 6060.48 6038.90 6021.61 6005.87 5997.98 5988.38 5961.62 5929.66 5892.83

6077.81 6097.40 6106.28 6107.24 6123.54 6119.60 6096.29 6083.89 6073.10 6065.59 6067.02 6051.51 6047.44 6038.28 6015.52 5988.33 5956.43 5921.28 5893.11 5867.53 5836.05

6079.95 6095.96 6131.25 6154.97 6144.52 6104.11 6063.36 6048.61 6048.16 6050.12 6081.36 6081.84 6053.07 6014.61 5978.52 5937.99 5917.00 5904.74 5878.61 5845.88 5801.42

6104.02 6167.98 6171.37 6152.73 6121.80 6058.78 6015.30 6011.52 6059.48 6099.73 6113.37 6071.43 6016.43 5948.23 5927.53 5921.57 5908.75 5893.47 5849.27 5809.00 5749.37

5919.5 5923.9 5921.4 5881 5878 5788.8 5760.2 5699.1

14-MVA
14 day moving average is calculated by taking the closing values of first day and averaging it with 14 14-mva= (Average (closing value on 01-01-2013: closing value on 18-01-2013))

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44 | P a g e

1000 0

2000

3000

4000

5000

6000

7000

1000

2000

3000

4000

5000

6000

7000

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03-Jan-11 24-Feb-11 21-Apr-11 14-Jun-11 04-Aug-11 29-Sep-11 25-Nov-11 17-Jan-12 12-Mar-12 04-May-12 26-Jun-12 17-Aug-12 11-Oct-12 06-Dec-12 29-Jan-13 21-Mar-13 17-May-13 0 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 Low High Open 14 DMA 1000 2000 3000 4000 5000 03-Jan-11 24-Feb-11 21-Apr-11 14-Jun-11 04-Aug-11 29-Sep-11 25-Nov-11 17-Jan-12 12-Mar-12 04-May-12 26-Jun-12 17-Aug-12 11-Oct-12 06-Dec-12 29-Jan-13 21-Mar-13 17-May-13 6000 7000 Close 14 DMA

RETURN CALCULATIONS

14-DAY

11-DAY RETURN

7-DAY RETURN

5-DAY RETURN

3-DAY RETURN

Date 01-Jan-13 02-Jan-13 03-Jan-13 04-Jan-13 07-Jan-13 08-Jan-13 09-Jan-13 10-Jan-13 11-Jan-13 14-Jan-13 15-Jan-13 16-Jan-13 17-Jan-13 18-Jan-13 21-Jan-13 22-Jan-13 23-Jan-13 24-Jan-13 25-Jan-13 28-Jan-13 29-Jan-13 30-Jan-13 31-Jan-13 01-Feb-13 04-Feb-13 05-Feb-13 06-Feb-13 07-Feb-13
46 | P a g e

Close 5950.85 5993.25 6009.5 6016.15 5988.4 6001.7 5971.5 5968.65 5951.3 6024.05 6056.6 6001.85 6039.2 6064.4 6082.3 6048.5 6054.3 6019.35 6074.65 6074.8 6049.9 6055.75 6034.75 5998.9 5987.25 5956.9 5959.2 5938.8

RETURN

-0.21% 0.77% -0.12% 0.12% -0.20% 1.05% -0.40% 0.37% -0.90% -2.09% -2.60% 0.23% 0.00% 0.52% -0.65% 0.51% -0.23% -1.09% -0.27% 0.49% 0.00% 0.00% 0.65% 0.03% 0.21% -0.27% -1.45% -1.87% -1.59% -2.33% -3.56% -3.94% 0.47% -0.40% -0.31% -2.08% -0.47% 0.20% -2.07% -0.89% -1.96% -1.68% -0.68% -1.02% -0.94% -0.57% -1.35% -2.75% -1.61% 0.48% -0.17% -0.86% -2.48% -0.49% -0.18% -2.67% -0.02% 0.80% -0.40% 0.38% -1.63% -1.69% -0.98% -0.01% -0.49% -0.56% -0.42% -1.15% -2.23% 0.97% -0.01% -0.62% -1.82% -1.87% -0.33% -0.76% -2.80% -0.36% 0.32% -0.10% 0.67% -0.74% -0.74% -0.91% -0.85% 0.24% 0.42% -0.39% -0.52% -0.10% -0.57% -1.18% 0.02% -0.40% -1.01% -0.83% 0.92% -0.85% -0.81% -1.48%

08-Feb-13 11-Feb-13 12-Feb-13 13-Feb-13 14-Feb-13 15-Feb-13 18-Feb-13 19-Feb-13 20-Feb-13 21-Feb-13 22-Feb-13 25-Feb-13 26-Feb-13 27-Feb-13 28-Feb-13 01-Mar-13 04-Mar-13 05-Mar-13 06-Mar-13 07-Mar-13 08-Mar-13 11-Mar-13 12-Mar-13 13-Mar-13 14-Mar-13 15-Mar-13 18-Mar-13 19-Mar-13 20-Mar-13 21-Mar-13 22-Mar-13 25-Mar-13 26-Mar-13
47 | P a g e

5903.5 5897.85 5922.5 5932.95 5896.95 5887.4 5898.2 5939.7 5943.05 5852.25 5850.3 5854.75 5761.35 5796.9 5693.05 5719.7 5698.5 5784.25 5818.6 5863.3 5945.7 5942.35 5914.1 5851.2 5908.95 5872.6 5835.25 5745.95 5694.4 5658.75 5651.35 5633.85 5641.6

2.10% -2.34% -0.95% 0.00% 1.62% 2.96% 0.92% -1.18% -0.13% 0.25% 0.27% 0.65% 1.95% 0.75% 0.02% 0.77% -1.33% -2.30% 0.00% -0.06% -0.90% -0.33% 0.22% -0.51% 0.50% 0.31% -1.65% 0.00% 0.00% 0.00% 1.14% -0.79% 0.16%

0.43% -2.32% -2.43% 0.53% -0.20% -1.11% 0.91% 0.57% -2.77% 0.33% 1.57% -1.47% -1.32% -6.81% -7.34% -8.73% -5.53% -3.85% -1.82% -0.30% 2.00% -1.48% -1.21% -1.01% -0.86% -0.68% 6.17% -3.35% -5.85% -5.28% -4.05% -4.78% -4.90%

-0.18% -2.60% -2.15% -0.30% -0.22% -2.31% 1.41% 0.75% -2.90% -0.15% 1.22% -1.47% -0.58% -5.13% -5.18% -6.32% -2.93% 0.49% -1.13% 0.80% 0.39% -2.08% -1.02% -0.40% -0.24% -0.23% 5.88% -3.51% -5.44% -4.41% -2.74% -2.89% -1.37%

-1.38% -1.75% 1.21% -0.99% -0.47% -1.92% 0.99% 0.02% -3.26% -0.04% -0.77% -0.51% 0.36% -4.23% -4.26% -2.87% 0.36% -0.92% -1.69% 0.63% 0.85% -1.61% -0.76% -0.30% -0.14% 0.20% 5.67% -3.04% -4.66% -3.29% -1.71% -0.63% 0.07%

-0.40% -0.85% 0.56% -1.26% -1.13% -0.86% 0.11% -0.16% -1.51% 0.32% -0.08% -1.96% -2.09% -3.00% -1.86% 0.70% -0.71% -0.89% -0.65% -0.03% 0.97% -1.61% -0.67% -0.36% -0.15% -0.02% 5.71% -2.34% -2.98% -0.49% 0.06% -0.30% 0.01%

28-Mar-13 01-Apr-13 02-Apr-13 03-Apr-13 04-Apr-13 05-Apr-13 08-Apr-13 09-Apr-13 10-Apr-13 11-Apr-13 12-Apr-13 15-Apr-13 16-Apr-13 17-Apr-13 18-Apr-13 22-Apr-13 23-Apr-13 25-Apr-13 26-Apr-13 29-Apr-13 30-Apr-13 02-May-13 03-May-13 06-May-13 07-May-13 08-May-13
09-May-13 10-May-13 11-May-13 13-May-13 14-May-13 15-May-13 16-May-13 17-May-13 48 | P a g e

5682.55 5704.4 5748.1 5672.9 5574.75 5553.25 5542.95 5495.1 5558.7 5594 5528.55 5568.4 5688.95 5688.7 5783.1 5834.4 5836.9 5916.3 5871.45 5904.1 5930.2 5999.35 5944 5971.05 6043.55 6069.3
6050.15 6094.75 6107.25 5980.45 5995.4 6146.75 6169.9 6187.3

-0.19% 1.56% 0.74% -0.08% 2.82% 1.15% 1.32% -1.04% -0.88% -0.77% 0.99% -2.85% 0.00% 0.00% -0.09% 0.93% 0.00% 4.79% -0.08% 0.33% 1.54% -0.91% -0.41% -0.42% -0.05% 0.34% -0.59% 1.78% 3.43% -0.69% -2.38% 1.84% 2.60% -1.92%

1.64% 1.21% 0.92% 1.86% -0.07% -3.21% -2.04% -1.49% -0.47% 0.81% -0.41% -0.30% -4.18% -3.97% -3.12% 1.19% -3.16% -0.94% -3.44% -5.99% -0.58% -4.38% -2.26% -3.17% 1.12% -2.08% 0.13% 1.00% -6.03% -0.69% -3.97% -6.59% -1.82% -1.93%

1.73% -4.31% -0.16% 2.11% 0.40% -1.88% -0.86% 0.40% 0.26% 0.27% -0.55% -0.41% -3.94% -2.65% -1.36% 0.10% -4.08% -1.65% -3.60% -5.38% -1.09% -1.87% -0.48% 0.66% 1.78% -2.79% 0.10% 1.08% -5.39% 0.18% -2.70% -4.84% -0.72% -0.59%

-1.01% -4.06% 0.21% 1.47% 1.17% -1.17% -0.68% 0.32% 0.30% -0.05% -0.70% -0.02% -3.34% -1.96% 0.46% 3.44% -4.37% -1.09% -2.41% -2.19% 0.42% -0.97% -0.03% 0.38% 1.87% -2.80% 0.23% -1.42% -4.57% 1.19% -2.51% -2.02% 0.38% -0.07%

-0.95% -2.10% 0.03% 0.39% 1.17% -1.17% -0.65% -0.24% 0.56% 0.21% -0.42% 0.37% -2.00% 1.18% -0.56% -0.84% -3.27% -1.23% -1.04% 0.95% 0.98% -0.62% -0.20% 0.10% -0.33% -1.65% -0.20% -0.49% -3.73% -0.14% -1.10% 1.23% -0.97% 0.25%

20-May-13 21-May-13 22-May-13 23-May-13 24-May-13 27-May-13 28-May-13 29-May-13 30-May-13 31-May-13 03-06-2013

6156.9 6114 6094.5 5967.85 5983.55 6083.15 6111.75 6104.3 6124.05 5985.95 5939.3

-1.61% 0.42% 0.00% 0.00% 0.71% 1.20% 1.24% 0.28% -0.71% -0.74% -0.78% 2.14% 0.16% -1.06% 2.45% -0.40% 0.11% -0.25% -0.89%

-2.02% 2.34% -1.02% -3.26% -1.43% -1.26% -0.22% -4.16% -5.56% -5.89% -2.92% -3.35% -1.99% -1.10% 0.65% -0.80% 1.52% -0.71% -4.60%

1.70% 1.28% -1.80% -3.36% -0.89% -0.57% 0.86% -2.72% -3.90% -4.12% -1.21% -1.30% 0.75% -0.50% 0.46% -1.44% 1.50% -0.20% -3.58%

1.30% 1.12% -1.31% -2.85% -0.38% 0.29% 1.82% -1.95% -3.22% -2.20% -0.40% 0.09% 0.08% -0.58% 0.73% -1.20% 1.78% 0.34% -2.77%

1.70% 1.34% -0.96% -1.19% 0.14% 0.94% 2.07% -1.12% -1.79% 0.47% -0.59% -0.01% -0.09% -0.42% -0.20% -0.78% -0.32% 1.14% -1.46%

04-Jun-13 05-Jun-13 06-Jun-13 07-Jun-13 10-Jun-13 11-Jun-13 12-Jun-13 13-Jun-13

5919.5 5923.9 5921.4 5881 5878 5788.8 5760.2 5699.1

14-Day Return Calculations

49 | P a g e

-0.06 0.02 0.04 0.06 0.08 0.01 0.02 0.03 0.04 0 0

-0.04

-0.02

-0.04

-0.03

-0.02

-0.01

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Sl/Nonp: 244

Sl/Nonp: 135

Op/Carry: 373

Op/Carry: 479

11-Day Return Calculations

Total return percentage for 11-day is: 120.65%

Total return percentage for 14-day is: 135.75%

11-Day returns

14-Day returns

03-Jan-11 24-Feb-11 21-Apr-11 14-Jun-11 04-Aug-11 29-Sep-11 25-Nov-11 17-Jan-12 12-Mar-12 04-May-12 26-Jun-12 17-Aug-12 11-Oct-12 06-Dec-12 29-Jan-13 21-Mar-13 17-May-13

03-Jan-11 24-Feb-11 21-Apr-11 14-Jun-11 04-Aug-11 29-Sep-11 25-Nov-11 17-Jan-12 12-Mar-12 04-May-12 26-Jun-12 17-Aug-12 11-Oct-12 06-Dec-12 29-Jan-13 21-Mar-13 17-May-13

11-Day returns

14-Day returns

7-Day Return Calculations

7-Day returns
0.08 0.06 0.04 0.02 0 -0.02 -0.04 -0.06 -0.08 -0.1 -0.12 03-Jan-11 22-Feb-11 15-Apr-11 06-Jun-11 25-Jul-11 15-Sep-11 08-Nov-11 29-Dec-11 16-Feb-12 10-Apr-12 29-May-12 17-Jul-12 06-Sep-12 29-Oct-12 19-Dec-12 07-Feb-13 01-Apr-13 22-May-13 7-Day returns

Total return percentage for 7-day is: -505.19% Op/Carry: 292 Sl/Nonp: 330

5-Day Return Calculations

5-Day returns
0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 -0.02 -0.04 -0.06 03-Jan-11 22-Feb-11 15-Apr-11 06-Jun-11 25-Jul-11 15-Sep-11 08-Nov-11 29-Dec-11 16-Feb-12 10-Apr-12 29-May-12 17-Jul-12 06-Sep-12 29-Oct-12 19-Dec-12 07-Feb-13 01-Apr-13 22-May-13 5-Day returns

Total return percentage for 5-day is: 93.02% Op/Carry: 291 Sl/Nonp: 332
51 | P a g e

3-Day Return Calculations

3-Day returns
0.08 0.06 0.04 0.02 3-Day returns 0 -0.02 -0.04 -0.06 03-Jan-11 22-Feb-11 15-Apr-11 06-Jun-11 25-Jul-11 15-Sep-11 08-Nov-11 29-Dec-11 16-Feb-12 10-Apr-12 29-May-12 17-Jul-12 06-Sep-12 29-Oct-12 19-Dec-12 07-Feb-13 01-Apr-13 22-May-13

Total return percentage for 3-day is: 30.82% Op/Carry: 71 Sl/Nonp: 554

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12.2 ITC MOVING AVERAGES

The following is the daily chart of ITC starting from first week of 01-Jan 2013 till 1st week of June 2013. The price has decreased from Rupee value 359.95 to 298.9. In a time span of nearly more than three years price decrease by rupee value -152.20, which is a decrease in the initial price. The price has gone through various trends in this time span. This company has nt been a good investment propositions in past three years. In the 1st week of May 2011 the ADX reflects a less trend and the price started to toll down. The market moved lower. An ideal investor should have kept his/her stops wide enough to avoid getting shaken out of a false reaction. If possible, move stops to breakeven. This was not the time to consider short positions. The uptrend continued till the 1st week of February 2013. The market moved lower then after. Ideal investor should have maintained logical stops for short positions. Any open long positions should be closed. After an upswing, the market is now undergoing a reaction. Such moves should trade using overbought/oversold indicators. Here, the returns are good for 14-day moving average compared to other and when it is compared with the index values it is less. CNX Nifty Index has a better positive returns compared to the other stock values.

14 DAY MOVING AVERAGE

14-DMA
400 350 300 250 200 150 100 50 0 1/3/2011 1/3/2012 1/3/2013 400 350 300 250 200 150 100 50 0 CLOSE PRICE 14 DMA

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50

100

150

200

250

300

350

400

0 1/3/2011 3/3/2011 5/3/2011 7/3/2011 9/3/2011 11/3/2011 1/3/2012 3/3/2012 5/3/2012 7/3/2012 9/3/2012 11/3/2012 1/3/2013 3/3/2013

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5/3/2013
7/3/2013

RETURN CALCULATIONS 14-DAY RETURN

14-Day Returns
0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 -0.08

1/3/2012

1/3/2013

14-Day Returns

Total return percentage of 14-day moving average is 109.11% OP/CARRY=414 SL/NONP=199

11-DAY RETURN

11-day returns
0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 -0.08

1/3/2012

1/3/2013

11-day returns

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Total return percentage of 11-day moving average is 108.03% OP/CARRY=386 SL/NONP=231

7-DAY RETURN

7-day returns
0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 -0.08 -0.1

1/3/2012

1/3/2013 7-day returns

Total return percentage of 7-day moving average is -460.21% OP/CARRY=307 SL/NONP=314

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5-DAY RETURN

5 day Returns
0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 -0.08 1/3/2012 1/3/2013

5 day Returns

Total return percentage of 5-day moving average is -283.06% OP/CARRY=224 SL/NONP=398

3-DAY RETURN

3-day returns
0.04 0.03 0.02 0.01 0 1/3/2011 -0.01 -0.02 -0.03 -0.04 -0.05

1/3/2012

1/3/2013

3-day returns

Total return percentage of 3-day moving average is -4.66% OP/CARRY=58 SL/NONP=566

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12.3 ONGC MOVING AVERAGES

The following is the weekly chart of ONGC starting from 1st week of 01-Jan 2013 till 1st week of June 2013. The price has increased from Rupee value 308.2 to 309.1. In a time span of nearly more than three years price down by rupee value 14.1, which is nearly 20% decrease in the initial price. The price has gone through various trends in this time span. This blue chip company has not been a good investment propositions in past three years. From the 2nd week of January 2013 till the 2nd week of February 2013 the ADX reflects a strong trend. It is in this period when it does not reach its lifetime high. Then in June 2013 the trend started to weaken and price consolidated. The price moved sideways but gradually decreased. In May 2013 after an upswing, the market is now undergoing a reaction. Such moves should trade using overbought/oversold indicators (1) this reaction may be followed by another up move. We may consider buying above the 2 period high. (2) The reaction may be the beginning of a downtrend. We should carefully examine chart patterns and other indicators before coming to a conclusion.

14-DAY Moving Average

400 350 300 250 200 150 100 50 0 1/3/2011 400 350 300 250 200 150 100 50 0 1/3/2012 1/3/2013 CLOSE PRICE 14 DMA

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350 340 330 320 310 300 290 280 270 Open High Low Close

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RETURN CALCULATIONS 14-DAY Return calculations

14-day returns
0.08 0.06 0.04 0.02 14-day returns 0 1/3/2011 3/3/2011 5/3/2011 7/3/2011 9/3/2011 1/3/2012 3/3/2012 5/3/2012 7/3/2012 9/3/2012 1/3/2013 3/3/2013 5/3/2013 11/3/2011 -0.02 -0.04 -0.06 11/3/2012 7/3/2013

Total return percentage of 14-day moving average: 134.72% Op/carry: 375 Sl/nonp: 219

11-Day Return calculations

11-day returns
0.08 0.06 0.04 0.02 11-day returns 0 1/3/2011 -0.02 -0.04 -0.06 1/3/2012 1/3/2013

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Total return percentage of 11-day moving average: 151.43% Op/carry: 362 Sl/nonp: 255

7-Day Return Calculations

7-day returns
0.08 0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 -0.08 -0.1 1/3/2012 1/3/2013 7-day returns

Total return percentage of 7-day moving average: -510.75% Op/carry: 301 Sl/nonp: 321

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5-Day Return Calculations

5-Day returns
0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 1/3/2012 1/3/2013 5-Day returns

Total return percentage of 5-day moving average: 134.72% Op/carry: 375 Sl/nonp: 239

3-Day Return Calculations

3-day returns
0.08 0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 1/3/2012 1/3/2013 3-day returns

Total return percentage of 3-day moving average: 37.14% Op/carry: 71 Sl/nonp: 554

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12.4 CIPLA MOVING AVERAGES

The following is the weekly chart of CIPLA LTD starting from first week of Jan 2013 till last week of June 2013. The price of Rupee value is same from 372.5 to 372.5. In a time span of nearly more than three years there is no change in price. The price has gone through various trends in this time span. This company has been a good investment propositions in past three years. In the first week of jan 2013 the ADX reflects a strong trend and the price started to toll up. The market moved higher. An ideal investor should have kept his/her stops wide enough to avoid getting shaken out of a false reaction. If possible, move stops to breakeven. This was not the time to consider short positions. The uptrend continued till the 1st week of February 2013 where it reached its life time high of 415.61. The price after reaching the lifetime high started to consolidate and the trend weakened as reflected through ADX in the chart. The market moved lower. Ideal investor should have maintained logical stops for short positions. Any open long positions should be closed. After an upswing, the market is now undergoing a reaction. Such moves should trade using overbought/oversold indicators (1) this reaction may be followed by another up move. You may consider buying above the 2 period high. (2) This reaction may be the beginning of a downtrend.

14-MVA
14 day moving average is calculated by taking the closing values of first day and averaging it with 14 14-mva= (Average (closing value on 01-01-2013: closing value on 18-01-2013))

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14-DMA
500.0 450.0 400.0 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0 1/3/2011

Close 14 DMA

1/3/2012

1/3/2013

440 420 400 380 360 340 320 Open High Low Close

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RETURN CALCULATIONS
14-DAY RETURN CALCUALTION CHART

14-Day returns
0.08 0.06 0.04 0.02 14-Day returns 0 1/3/2011 -0.02 -0.04 -0.06 1/3/2012 1/3/2013

Total percentage of returns for 14-day moving average=24.27% OP/CARRY=74 SL/NONP=26 11-DAY RETURN CALCUALTION CHART

11-Day returns
0.08 0.06 0.04 0.02 11-Day returns 0 1/3/2011 -0.02 -0.04 -0.06 1/3/2012 1/3/2013

Total percentage of returns for 11-day moving average=-156.10%

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OP/CARRY=67 SL/NONP=36 7-DAY RETURN CALCUALTION CHART

7-Day returns
0.08 0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 -0.08 -0.1 -0.12 1/3/2012 1/3/2013 7-Day returns

Total percentage of returns for 7-day moving average= -112.02% OP/CARRY=53 SL/NONP=54 5-DAY RETURN CALCUALTION CHART

5-Day returns
0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 1/3/2012 1/3/2013 5-Day returns

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Total percentage of returns for 5-day moving average= -79.12% OP/CARRY=40 SL/NONP=69

3-DAY RETURN CALCUALTION CHART

3-Day returns
0.08 0.06 0.04 0.02 3-Day returns 0 1/3/2011 -0.02 -0.04 -0.06 1/3/2012 1/3/2013

Total percentage of returns for 3-day moving average=-33.10% OP/CARRY=16 SL/NONP=95

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12.5 HDFC BANK

MOVING AVERAGE CALCULATIONS
The following is the daily chart of HDFC BANK starting from 01 January 2011 to 2st week July 2013. The price has decreased from Rupee value 2390.5 to 667.75. In a time span from first week of Jan 2011 to 2nd week of July 2011 of nearly 7 months price has been decreased by 75% which is nearly 2013.75 rupee value. The price has gone through various trends in this time span. This company has not been a good investment proposition but there were few trading opportunities available. A weak trend is prevailing now as a strong trend is indicated by ADX in the chart. There is a downward trend. The price broke the support line with significant value. The price moved downward. The market moved lower. If an investor would have invested in this period there would have got a great loss. Ideal investor should have kept his/her stops wide enough to avoid getting shaken out of a false reaction. If possible, move stops to breakeven. This was not the time to consider long positions. The downward arrow in the chart signals selling when the distribution exceeds accumulation reflecting the bears being more active than the bulls. The trend is still in weak positions around 667.75 points. The price failed to break its resistance level. It tried to reach its previous high but falls short and the bearish forces made the price to move down. The price moved sideways making most of investor to stay away from investing into it. There are only few long positions revert back to reach the previous high but on a due to sudden spurt of event or news the market opened next week with extreme selling and the bearish forces made price fall from 2519.7 to 505.95 . Here not only the moving averages but also the returns got changed by much percentage. The change in the value of returns on the day of July 2011 is very high around 80%. There were couple of trading opportunities available reflected in the chart indicated by Stochastic and RSI on the basis of oversold overbought indication.

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14-DAY MOVING AVERAGE

3000 2500 2000 1500 1000 500 0 3000 2500 2000 1500 7CLOSE PRICE 1000 500 0 14 DMA

3-Mar-12

3-Nov-11

3-Jan-11

3-Jan-12

3-Mar-11

3-Jan-13

3-May-11

3-May-12

3-Mar-13

3-Jul-11

3-Jul-12

3-Nov-12

3-Sep-11

3-Sep-12

3000 2500 2000 1500 % Ret in Positive 1000 500 0 7CLOSE PRICE

69 | P a g e

3-May-13

RETURN CALCULATIONS 14-DAY RETURN CALCULATIONS

14-day % Return
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 -0.1

14-Day % Return

Total return percentage for 14-day moving average: 194.46% Op/carry: 425 Sl/nonp: 189

11-DAY RETURN CALCULATIONS

11-day % Return
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 -0.1

11-Day % Return

3-Jan-11

3-Jan-12

3-Mar-11

3-Mar-12

3-Jan-13

3-Mar-13

3-Sep-12

3-Jul-11

3-Jul-12

3-Nov-11

3-May-11

3-May-12

3-Nov-12

3-Sep-11

Total return percentage for 11-day moving average: 195.49%

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3-May-13

3-Jul-13

Op/carry: 385 Sl/nonp: 232

7-DAY RETURN CALCULATIONS

7-Day % Return
1.5 1 0.5 0 -0.5 -1 -1.5 -2 -2.5 -3 -3.5 -4

3-Mar-11

3-Mar-12

3-Mar-13

3-Jan-11

3-Jan-12

3-Jul-12

3-Nov-11

3-Nov-12

3-Sep-11

3-Sep-12

3-Jan-13

3-Jul-11

3-May-11

3-May-12

3-May-13

3-Jul-13

7-Day % Return

Total return percentage for 7-day moving average: -1533.67% Op/carry: 306 Sl/nonp: 316

5-DAY RETURN CALCULATIONS

5-day % Return
1 0.8 0.6 0.4 0.2 0 5-Day % Return

3-Jan-11

3-Jan-12

3-Jul-12

3-Mar-11

3-Mar-12

3-Jan-13

3-Mar-13

3-Jul-11

3-Nov-11

3-May-11

3-May-12

3-Nov-12

3-Sep-11

3-Sep-12

-0.2 -0.4 -0.6 -0.8 -1

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3-May-13

3-Jul-13

Total return percentage for 5-day moving average: 56.56% Op/carry: 219 Sl/nonp: 405

3-DAY RETURN CALCULATIONS

3-day % Return
1 0.5 0 3-Jan-11 3-Jan-12 3-Mar-11 3-Mar-12 3-Jan-13 3-Mar-13 3-Jul-11 3-Jul-12 3-Nov-11 3-May-11 3-May-12 3-Nov-12 3-Sep-11 3-Sep-12 3-May-13 3-Jul-13 3-Day % Return -0.5 -1 -1.5

Total return percentage for 11-day moving average: -30.41% Op/carry: 88 Sl/nonp: 537

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12.6 DR REDDYS MOVING AVERAGE

The following is the weekly chart of DR.REDDYS starting from last week of Jan 2011 till 1st week of july 2013. The price has increased from Rupee value 1670.5 to 2,238.85. In a time span of nearly more than three years price increased by rupee value 568.35. The price has gone through various trends in this time span. This stock has been very impressive and been a good investment proposition. With initial weak trend as reflected by ADX in the chart the market moved upways. From the 1st week of april 2013, the trend strengthened as reflected by ADX in the chart. The previous resistance became the new support. The market gained momentum and the trend strengthen. The uptrend is still continuing till 2nd week of july 2013. Long positions should have been closed if price trades below two period low. This may have also be an opportunity to go short, if chart patterns support a short sell. The price consolidated and the market moved sideways. The price has not changed much from the starting day of January 2011. The change in price variations is of small amount and there is no much longer long positions. Not only moving averages there is a change of returns which look good only for 14-day moving averages compared to other moving averages. The market then began to move sideways with some trading opportunities available on the basis of oversold overbought indicator like Stochastic and RSI.

14-MVA
14 day moving average is calculated by taking the closing values of first day and averaging it with 14

14-MVA
2500 2000 1500 1000 500 0 1/3/2011 1/3/2012 1/3/2013 2500 2000 1500 1000 500 0 CLOSE PRICE 14 DMA

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2500 2000 1500 1000 500 0

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RETURN CALCULATIONS
14-DAY RETURN CALCUALTION CHART

14-Day % Return
0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 11-Day % Return 1/3/2012 1/3/2013

Total percentage of returns for 14-day moving average= 82.97% OP/CARRY=392 SL/NONP=222

11-DAY RETURN CALCUALTION CHART

11-Day % Return
0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 11-Day % Return 1/3/2012 1/3/2013

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Total percentage of returns for 11-day moving average= 75.12% OP/CARRY=359 SL/NONP=258

7-DAY RETURN CALCUALTION CHART

7-Day % Return
0.06 0.04 0.02 0 1/3/2011 -0.02 -0.04 -0.06 -0.08 -0.1 1/3/2012 1/3/2013

7-Day % Return

Total percentage of returns for 7-day moving average= -384.40% OP/CARRY=187 SL/NONP=437

5-DAY RETURN CALCUALTION CHART

5-Day % Return
0.06 0.04 0.02 5-Day % Return 0 1/3/2011 -0.02 -0.04 1/3/2012 1/3/2013

Total percentage of returns for 5-day moving average= 36.81%

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OP/CARRY=187 SL/NONP=437 3-DAY RETURN CALCUALTION CHART

3-Day % Return
0.05 0.04 0.03 0.02 0.01 0 1/3/2011 -0.01 -0.02 -0.03 -0.04

3-Day % Return 1/3/2012 1/3/2013

Total percentage of returns for 3-day moving average= 33.89% OP/CARRY=72 SL/NONP=553

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12.7 COAL INDIA MOVING AVERAGES 14-DAY MVA

14-DMA
450 400 350 300 250 200 150 100 50 0 12/31/2010 12/31/2011 12/31/2012 450 400 350 300 250 200 150 100 50 0 Close 14 DMA

450 400 350 300 250 200 150 100 50 0 12/31/2010 12/31/2011 12/31/2012 Open High Low Close

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RETURN CALCULATIONS 14-DAY RETURN

14-day % Return
0.1 0.08 0.06 0.04 0.02 0 12/31/2010 -0.02 -0.04 -0.06 12/31/2011 12/31/2012 % Ret in Positive

Total percentage of returns for 14-day moving average= 108.08% OP/CARRY=399 SL/NONP=216

11-DAY RETURN

11-day % Return
0.1 0.08 0.06 0.04 0.02 0 12/31/2010 -0.02 -0.04 -0.06 12/31/2011 12/31/2012 % Ret in Positive

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Total percentage of returns for 11-day moving average= 108.37% OP/CARRY=373 SL/NONP=245

7-DAY RETURN

7-day % Return
0.1 0.05 0 12/31/2010 -0.05 -0.1 -0.15

12/31/2011

12/31/2012

% Ret in Positive

Total percentage of returns for 7-day moving average= -513.95% OP/CARRY=308 SL/NONP=315

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5-DAY RETURN

5-day % Return
0.1 0.08 0.06 0.04 0.02 0 2/28/2011 4/30/2011 6/30/2011 8/31/2011 2/29/2012 4/30/2012 6/30/2012 8/31/2012 2/28/2013 4/30/2013 12/31/2010 10/31/2011 12/31/2011 10/31/2012 -0.02 -0.04 -0.06 12/31/2012 6/30/2013 % Ret in Positive

Total percentage of returns for 5-day moving average= 75.79% OP/CARRY=235 SL/NONP=390

3-DAY RETURN

3-day % Return
0.1 0.08 0.06 0.04 0.02 0 2/28/2011 4/30/2011 6/30/2011 8/31/2011 2/29/2012 4/30/2012 6/30/2012 8/31/2012 2/28/2013 4/30/2013 12/31/2010 10/31/2011 12/31/2011 10/31/2012 -0.02 -0.04 -0.06 -0.08 12/31/2012 6/30/2013 % Ret in Positive

Total percentage of returns for 11-day moving average= 34.52% OP/CARRY=92 SL/NONP=534
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CHAPTER-13 OBSERVATIONS Trend Stocks Conditions Stop Loss

14-day 11-day 46 47 48 51 47 42 43 44 48 48 50 52 54 54 58 70 69 65 60 64 54 56 59 58 64 57 60 63 61 63 50 51 53 55 53 30 34 42 49 47 137.75 120.65 -505.19 93.02 30.82 109.11 108.03 -460.21 -283.06 -4.66 134.72 151.43 -510.75 134.72 37.14 108.08 108.37 -513.95 75.79 34.92 479 373 292 291 71 414 386 307 224 58 375 362 301 375 71 399 373 308 235 92 135 244 330 332 554 199 231 314 398 566 239 255 321 239 554 216 245 315 390 534

Long Short Return (%) Open

CNX nifty Index

7-day 5-day 3-day 14-day 11-day

ITC

7-day 5-day 3-day 14-day 11-day

ONGC

7-day 5-day 3-day 14-day 11-day

Coal India

7-day 5-day 3-day

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Trend Stocks Buy

14-day 11-day 7-day 43 47 44 46 47 65 64 64 65 62 43 47 44 46 47

Conditions Return Open Stop Loss

135.38 120.65 -505.19 135.38 30.82 194.46 195.49 -1533.67 56.56 -30.41 82.97 75.12 -384.40 36.81 33.89 412 373 292 412 71 425 385 306 219 88 392 359 271 187 72 202 244 330 202 554 189 232 316 405 537 222 258 351 437 553

Sell
57 56 63 63 64 35 39 43 44 49 57 56 63 63 64

Cipla

5-day 3-day 14-day 11-day 7-day

HDFC Bank

5-day 3-day 14-day 11-day 7-day

Dr Reddys

5-day 3-day

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CHAPTER-14 CONCLUSIONS
We can observe from above inferences that technical analysis can have both long and short call which is used to determine the conditions like when to have a buy and sell in the investments. Technical analysis holds a lower duration of time but risk is higher in technical analysis compared to fundamental analysis. Return calculations are calculated for all the moving averages like 3-day, 5-day, 7-day, 11-day, and 14-day. Technical analysis aiming for absolute returns compared to fundamental analysis. Fundamental analysis holds good some time to invest in stocks compared to technical analysis. So its better to have a healthy mix of both technical analysis and fundamental analysis. When we observe Risk Reward Ratio for both nifty index as well as individual stocks it changes based on different parameters. For Nifty risk reward ratio changes less when compared to other individual stocks. If an investment is made on nifty index it can have an opportunity to make lot more money or loose lot more money. Considering an example like Ranbaxy and OAKART where the stocks have a great volatility that 30% of their stock prices have been reduced in US by Food and Drug Association. Nifty volatility is seen for quantity easing 3 will be reversed results in lesser liquidity impact on all emerging markets hence market globally corrected. Recent times China overnight went upto 27% lack of liquidity. Hence, globally corrected china in highly hitted, where there is no money in ATM. This results in an impact on stocks. If these things happen stock may go down by 90%. From the observations of both the return as well as moving average calculations we can observe that 14-day daily moving average works better compared to other moving averages because, return values are more positive for 14-day. Carry and stop loss conditions are made by comparing moving average with high and low price values of that particular day.

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CHAPTER-15 BIBLIOGRAPHY
Barber, Brad M., Terrance Odean (2000). Trading is hazardous to your wealth: The common stock investment performance of individual investors. Journal of Finance, 55, p 773- 806. Bessembinder, H., K. Chan (1995). The profitability of technical trading rules in the Asian stock markets. Pacific- Basin Finance Journal, 3, p 257-284. Brock, W., J. Lakonishok, B. LeBaron (1992). Simple technical trading rules and the stochastic properties of stock returns. Journal of Finance, 47, p 1731-1764.

Neely, C. J., Weller, P. (1998). Technical training rules in the EMS. Journal of International Money and Finance 18, p 429-458. Osler, C.L. (2000).Support for Resistance: Technical Analysis and Intraday Exchange Rates, Federal Reserve Bank of New York Economic Policy Review 6 , p 53-65.A http://www.nseindia.com/live_market/dynaContent/live_watch/get_quote/GetQuote.jsp? symbol=CIPLA&illiquid=0 http://www.moneycontrol.com/technicals/movingavg/viewsecind.php http://www.tradersedgeindia.com/swing_trading_picks_newsletter.html http://academia.edu/1650768/TECHNICAL_ANALYSIS_OF_EQUITY_SHARES_PR OJECT_REPORT

http://www.precisiontradingsystems.com/what%20is%20a%20moving_average.html.

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