A

PROJECT REPORT
ON

A STUDY ON TECHNICAL ANALYSIS OF SELECTED STOCKS WITH
REFERENCE TO MULTIRAY FINANCIAL SERVICES A BUSINESS
PARTNER TO RELIGARE


This project report is submitted to the Visveswaraiah Technological University in
partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by
Student Name: REENA SALUNKE
REG. NO.: 1CR08MBA88
Under the guidance of


EXTERNAL GUIDE INTERNAL GUIDE
Prof Mr. Saravana Krishnan V Prof Mrs.Sangeetha Abburu
Financial Consultant Lecturer
Company: Multiray Financial Services CMR Institute of Technology
Bangalore. Bangalore.



SUBMITTED TO
VISVESWARAIAH TECHNOLOGICAL UNIVERSITY
BELGAUM



CMR INSTITUTE OF TECHNOLOGY
#132, AECS Layout, IT Park Road,
BANGALORE - 560 037

March 2010







ii


C.M.R. INSTITUTE OF TECHNOLOGY
132, AECS Layout, IT Park Road
Bangalore 560037

Department of Management Studies

Certificate


Certified that the project work entitled A Study On Technical Analysis Of Selected Stocks
With Reference To Multiray Financial Services A Business Partner To Religare is a
bonafide work carried out by Reena Salunke in partial fulfillment for the award of degree of
Master of Business Administration of the Visveswaraiah Technological University, Belgaum
in the year 2010. It is certified that all corrections/suggestions indicated for internal
assessment have been incorporated in the report deposited in the department library. The
project report has been approved as it satisfies the academic requirements in respect of
project work prescribed for the award of Master of Business Administration Degree.









Signature of the Guide Signature of the HOD Signature of the Director





Name of Student: REENA SALUNKE.

University Seat Number: 1CR08MBA88

External Viva

Name of Examiners Signature with Date



1.

2.








iii

DECLARATION



I, REENA SALUNKE, fourth semester, student of the MBA Dept. in C.M.R. Institute Of
Technology, do hereby declare that this project report entitled A Study On Technical
Analyis Of Selected Stocks, at Multiray Financial Services A Business Partner To Religare,
has been submitted by me in partial fulfillment of the requirement, for the award of the
degree of MASTER OF BUSINESS ADMINISTRATION by the Visveswariah Technology
University, Belgaum, Karnataka.

The project is an independent work and has not been submitted to any other university for the
award of any degree or diploma.







Place: Bangalore. Signature


Date:
Name: REENA SALUNKE

Reg.No: 1CR08MBA88


























iv


ACKNOWLEDGEMENT




I wish to pledge and reward my deep sense of gratitude for all those who have made this
project come alive.

I am gratefully indebted to my internal faculty guide Prof. Mrs. Sangeetha Abburu at CMR
Institute of Technology, for encouraging me and for her constant support throughout the
course of the project and helping me complete it successfully.

A special note of gratitude goes to my external guide Prof.Mr.Saravana Krishnan V for
providing me an opportunity to work in this corporate exposure and for his support and
guidance in this endeavor.

I would like to express my heart-felt gratitude to DR. COLONEL (RETD) MUKESH
KUMAR.V, B.A, MBA, MCA, Ph.D, and Director of PG Studies at CMRIT for his
valuable suggestions and moral support throughout the course of my project.

I wish to thank my sister for all that she has done, to help me work on my project. I finally
thank my entire family and friends for their constant support and guidance.











REENA SALUNKE


















v
TABLE OF CONTENTS

Serial
No.
Contents Page
No
1 PART-A

Chapter I
Introduction
1.1. Industry profile
1.2. Company profile
1.2.1. Background and inception of the company
1.2.2. Nature of the business carried
1.2.3. Vision, mission and quality policy
1.2.4. Product/service profile
1.2.5. Area of operation
1.2.6. Ownership pattern
1.2.7. Competitors information
1.2.8. Infrastructural facilities
1.2.9. Achievements and awards
1.2.10. Work flow model
1.2.11. Future growth and prospects
1.2.12. Functional analysis



1
2
7
7
10
11
13
14
16
17
18

2 Chapter II

Mc Kinseys 7S framework


23
3 Chapter III

SWOT analysis


30
4 Chapter IV

Analysis of Financial statements



33
5 Chapter V

Learning experience



35





vi

6

Part B

Chapter VI

General Introduction

6.1. Statement of the problem
6.2. Need for the study
6.3. Objectives of the study
6.4. Scope of the study
6.5. Methodology
6.5.1. Research method
6.5.2. Sample size
6.5.3. Sampling technique
6.5.4. Data collection method
6.5.5. Analysis techniques
7. Limitations of the study









40
41
41
41
42
42
42
42
42
42
42

7 Chapter VII

Analysis and interpretation of data



44
8 Chapter VIII

Findings, suggestions, recommendations and
conclusions



75
9 Appendices 81
10 Annexure 87
11 Bibliography




















vii




LIST OF TABLES


SL NO




CONTENTS



PAGE NO



1.1


RELIGARE REGIONAL AND
INTERNATIONAL OFFICES


13


1.2


SHAREHOLDING PATTERN


14


4.1


PEER GROUP COMPARISON

31


7.1


INDEX OF SYMBOLS


49





LIST OF FIGURES


SL NO



CONTENTS



PAGE NO



1.1


CLOVER PHILOSOPHY OF RELIGARE


8


1.2


GROUP STRUCTURE OF RELIGARE


8


1.3

RELIGARES SERVICES PROFILE

11

1.4


COMPETITORS OF RELIGARE


14


2.1


MC KINSEYS 7 S FRAME WORK


23


2.2


ORGANISATIONAL STRUCTURE



24







viii



LIST OF GRAPHS



SL NO



CONTENTS



PAGE NO



6.1


BOLLINGER BANDS


45


6.2


ADX


45


6.3


MACD


47

6.4


RSI


48





LIST OF CHARTS


SL NO



CONTENTS



PAGE NO



7.1


PANTALOON RETAIL


50


7.2


CAIRN INDIA


51


7.3


JK LAKSHMI CEMENT

53

7.4


JK LAKSHMI VOLUME CHART

54


7.5



JINDAL STEEL AND POWER



55


7.6


JINDAL STEEL AND POWER LONG
TERM PRICE CHART


56






ix

7.7


HINDUSTAN UNILEVER


57


7.8


THINKSOFT GLOBAL


58


7.9

ABAN OFFSHORE

59

7.10

KIRI DYES AND CHEM


61

7.11

KIRI DYES- SALES AND PROFITS

62

7.12

AUSTRAL COKE AND PRO

63

7.13

HAVELLS INDIA

64

7.14

HAVELLS INDIA- SALES AND PROFITS

65

7.15

GRASIM INDUSTRIES


66

7.16

GRASIM- SALES AND PROFITS


66

7.17

UTTAM GALVA

67


7.18


UTTAM GALVA- SALES AND PROFITS

68

7.19

MAYTAS INFRA

69

7.20

MAYTAS INFRA- SALES AND PROFITS


70

7.21

KALPATARU POWER

71

7.22

KALPATARU POWER SALES AND
PROFITS

71

7.23

SUZLON ENERGY


73

7.24

SUZLON ENERGY SALES AND
PROFITS

74







x

List of Abbreviations used


SL NO


ABBREVIATION


EXPANSION


1


ADX


AVERAGE DIRECTIONAL INDEX


2

BSE

BOMBAY STOCK EXCHANGE


3

EMA

EXPONENETIAL MOVING AVERAGE


4

ISO

INTERNATIONAL STANDARDS
ORGANISATION

5

MACD

MOVING AVERAGE CONVERGENCE
DIVERGENCE

6

NSE

NATIONAL STOCK EXCHANGE

7

P/E

PRICE EARNINGS RATIO

8



REL



RELIGARE ENTERPRISES LIMITTED


9

RSI


RELATIVE STRENGTH INDEX



10



RSL

RELIGARE SECURITIES LIMITED


















xi






















































xii



EXECUTIVE SUMMARY


The financial services industry today is rapidly expanding as the level of awareness
regarding investment is gradually increasing in the general public. This industry provides a
wide range of services to customers and these services are broadly categorized as financial
services. The industry comprises of banks, credit card companies, insurance companies, and
consumer finance companies, accounting firms, stock brokerages, investment funds, real
estate agencies and some financial institutions.
The major reason behind the growth in this industry is the spurting growth in the
Indian economy. Investing in stocks has become a popular option despite the fact that most
investors do not have enough knowledge regarding the stock market. The knowledge of
technical analysis can help such small-time investors to take wise trading decisions. Buying
or selling stocks is not an easy task if you want to make money doing it. Millions of
investors have lost money in the past trying to guess stock price movements.
In order to consistently make money in the stock market, investors have to be
right over 70 percentage of the time. This success ratio is extremely difficult without the
guidance of a successful, reliable and robust stock selection method or algorithm that has
been tested and has worked over many years. One such method is technical analysis.
Technical analysts seek to identify price patterns and trends in financial markets
and attempt to exploit those patterns. While technicians use various methods and tools, the
study of price charts is primary. Technical analysts extensively use indicators, which are
used to determine whether an asset is trending, and if it is, its price direction. Technicians
also look for relationships between prices, volume and, in the case of futures, open interest.
Examples include the relative strength index, and MACD. Some technical analysts use
subjective judgment to decide which pattern a particular instrument reflects at a given time,
and what the interpretation of that pattern should be. Some technical analysts also employ a
strictly mechanical or systematic approach to pattern identification and interpretation.
The need for the study is that the knowledge of technical analysis can help
small-time investors to take wise trading decisions. Also fundamental analysis is not enough
and hence it needs to be combined with technical tools. Day traders use 1 minute and 5
minute stock charts to make quick buy and sell decisions. Stock chart analysis can be
applied equally to individual stocks and major indices.





xiii
The objective of this study to know how technical analysis tools help us to
know trend patterns shown by stock prices to enable us to take better trading or investment
decisions. This study can also help us to know whether technical analysis is really useful in
analyzing stocks. It can help create awareness about the benefits of technical analysis
among the general investing public.
The scope of this study covers several aspects like identification of the trends
and stock patterns, prediction of future price trends, identification of buy and sells signals
for day traders, short term analysis of stocks, long term analysis of performance of a stock,
comparative analysis of different stocks and study of impact of market news on stock prices.
The data has been collected from numerous websites. The entire data used for this study is
secondary data.
For the purpose of the study, certain stocks have been selected. Although there
are many indicators only the most popular indicators like MACD, ADX, RSI, and
BOLLINGER BANDS have been used because using all indicators would be beyond the
scope of the study. A general explanation of these indicators has been giving prior to the
analysis and interpretation. The stock charts have been analyzed using each indicator and a
final conclusion has been arrived at.
However this study had certain limitations as well. The past performance is not
indicative for future results since stock prices fluctuate depending upon the new piece of
information entering the market. This study was conducted for a short span of time which
limits the scope of this study. The other limiting factor is that only a few stocks have been
selected out of a pool of a million stocks. Hence this study cannot be considered as
exhaustive.
The study has shown that not all technical indicators simultaneously give the
same result since different indicators have different parameters of measurement. This study
reflected that the performance of a stock is affected by many factors like economic
conditions, fundamental factors related to the company, volume of trade, popularity of the
stock, investors psychology, and general market conditions. In this study, we found that
certain stocks which performed well in the short term did not do so well in the long term
and vice-versa. This means short and long term performance is not significantly correlated.
The Indian stock market is highly volatile and hence trading is always risky.
However it is not like a lottery or a gambling game where nothing can be predicted. Over
the years many stock market analysts have propounded theories to forecast future trends.
Although such forecasting may not always be accurate, it surely helps in taking trading and





xiv
investment related decisions. The future is never certain but a thorough analysis can help to
minimize the occurrence of losses. Apart from technical analysis there are still many other
factors that should be considered before investment. To do profitable trading requires a
thorough experience in both technical analysis and market mechanics. Also one needs to
combine the benefits of both technical and fundamental analysis. Finally I would like to say
that this project gave an in-depth knowledge of technical analysis which will surely help me
in my future endeavors.






1





















CHAPTER I
INTRODUCTION



























2


Chapter I
Part A

1.1. INDUSTRY PROFILE

The finance industry provides a range of services to customers and these services are broadly
categorized as financial services. The industry comprises of banks, credit card companies,
insurance companies, and consumer finance companies, accounting firms, stock brokerages,
investment funds, real estate agencies and some financial institutions.

History
The financial services industry has a long history but services like credit card, net banking,
mutual funds, online trading etc are relatively recent in origin. However the history can be
traced back to the days when banking started in India. Banking in India originated in the last
decades of the 18th century. The first banks were The General Bank of India which started in
1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in
existence in India is the State Bank of India, which originated in Calcutta in June 1806, which
almost immediately became the Bank of Bengal. This was one of the three Presidency banks,
the other two being the Bank of Bombay and the Bank of Madras, all three of which were
established under charters from the British East India Company. For many years the
Presidency banks acted as quasi-central banks, as did their successors. The three banks
merged in 1921 to form the Imperial Bank of India, which, upon India's independence,
became the State Bank of India. With the establishment of the Oriental Life Insurance
Company in Kolkata, the business of Indian life insurance started in the year 1818.The oldest
existing insurance company in India is the National Insurance Company Ltd., which was
founded in 1906.

Growth:
The growth of financial sector in India at present is nearly 8.5 percentage per year. The rise in
the growth rate suggests the growth of the economy. The major step towards opening up of
the financial market further was the nullification of the regulations restricting the growth of
the financial sector in India. The Reserve Bank of India (RBI) played a dynamic role in the
growth of the financial sector of India.






3
The growth of financial sector in India was due to the development in the following
sectors:
Growth of the banking sector in India
The banking system in India is the most extensive. The total asset value of the entire banking
sector in India is nearly US$ 270 billion. The total deposits are nearly US$ 220 billion.
Banking sector in India has been transformed completely. Presently the latest inclusions such
as Internet banking and Core banking have made banking operations more user friendly and
easy.

Growth of the Capital Market in India
The introduction of infotech systems in the National Stock Exchange (NSE) in order
to cater to the various investors in different locations
Privatization of stock exchanges
Modern technology used for rapid clearance and settlement.

Growth in the Insurance sector in India
With the opening of the market, foreign and private Indian players are keen to convert
untapped market potential into opportunities by providing tailor-made products.
The insurance market is filled up with new players which has led to the introduction of
several innovative insurance based products, value add-ons, and services.
The active part of the Insurance Regulatory and Development Authority (IRDA) as a
regulatory body has provided to the development of the sector

Current scenario:
The Indian economy is estimated to have grown by 6.7 per cent in 2008-09. According to the
latest Central Statistical Organization (CSO) data, financial services and real estate sector
rose by 9.5 per cent in the first quarter of 2009-10. The government has taken a number of
steps in recent months to revive the economy, including slashing interest rates, lowering
factory levies and more than doubling the limit on foreign investment in corporate bonds. The
financial services space is a rapidly growing one in India. The country received US$ 45
billion in foreign currency remittances from non-resident Indians in 2008, the highest in the
world.





4
As per the Securities and Exchange Board of India (SEBI), number of registered FIIs as on
January 29, 2010 was 1697 and the cumulative investments in equity since November 1992
to January 29, 2010, was US$ 72.51 billion.

Stock markets
Indias market capitalization (m-cap) touched US$ 1.04 trillion in June 2009 making
it the ninth largest in the world.
According to data from Bloomberg, Indias market cap as a percentage of worlds
market cap was 2.8 per cent on December 31, 2009.
In 2009, there were 21 IPOs that raised US$ 4.25 billion as compared to 36 IPOs in
2008 that raised US$ 3.68 billion.

Major players in the financial services industry:
This section covers the key facts about the major players (including Public, Private, and
Foreign sector) in the Indian banking industry, like HDFC Bank, Bank of Baroda, State Bank
of India, Canara Bank, Punjab National Bank, ICICI Bank, Kotak Mahindra Bank, Citibank,
Standard Chartered Bank, HSBC Bank, ABN AMRO Bank, American Express, etc.

Life Insurance Corporation of India (LIC) is the largest insurance provider in the country
(Approximately 70 percentage). The other major insurance players are Bajaj alliance, HDFC
Standard life, ICICI Prudential etc. All other insurance providers add up to the remaining 25-
30 percentage of insurance policies in the country.

Some of the major players on the Indian mutual fund scene:

ABN AMRO Mutual Fund, Benchmark Mutual Fund, Birla Mutual Fund, BOB Mutual Fund,
Canbank Mutual Fund, Chola Mutual Fund, Deutsche Mutual Fund, DSP Merrill Lynch
Mutual Fund, Escorts Mutual Fund, Fidelity Mutual Fund, Franklin Templeton Investments,
HDFC Mutual Fund, HSBC Mutual Fund, ING Vysya Mutual Fund, JM Financial Mutual
Fund, Kotak Mahindra Mutual Fund, LIC Mutual Fund, Morgan Stanley Mutual Fund,
PRINCIPAL Mutual Fund, Prudential ICICI Mutual Fund, Reliance Mutual Fund.








5
Players in the integrated financial services providers:

Indiabulls Financial Services, JM Financial Infrastructure Leasing and Financial Services
Limited (IL and FS), Aditya Birla Financial Services Group, Khandwala Integrated Financial
Services Pvt. Ltd., Religare Enterprises Limited, Karvy Group, Deutsche Bank group.

The future of the Financial Services industry in India:

India's financial services sector will enjoy generally strong growth during coming
years, driven by rising personal incomes, corporate restructuring, financial sector
liberalization and the growth of a more consumer-oriented market.
The financial services industry is very huge and expansive covering a huge range of
services. Growth in this industry essentially depends upon many factors like the economic
condition in India, the monetary and credit policies of the government, the likely demand in
the market for such services, the global economic scenario etc.
The financial market is very sensitive and gets easily affected by the global economic
conditions. However the global market is highly volatile and is just recovering from the
recent economic crisis. The future growth in the global economy will be a determinant in
deciding the trend of the financial services sector in India.


History of share trading industry

In the middle of the 13th century, Venetian bankers began to trade in government
securities. In 1351 the Venetian government outlawed spreading rumors intended to lower the
price of government funds. Bankers in Pisa, Verona, Genoa and Florence also began trading
in government securities during the 14th century.
The Amsterdam Stock Exchange (or Amsterdam Beurs) is also said to have been the
first stock exchange to introduce continuous trade in the early 17th century. The Dutch
"pioneered short selling, option trading, debt-equity swaps, merchant banking, unit trusts and
other speculative instruments, much as we know them. The origin of the NYSE can be traced
to May 17, 1792, when the Buttonwood Agreement was signed by 24 stock brokers outside
of 68 Wall Street in New York under a buttonwood tree on Wall Street. On March 8, 1817,





6
the organization drafted a constitution and renamed itself the "New York Stock and Exchange
Board". Anthony Stockholm was elected the Exchange's first president.

Origin of share trading in India

The working of stock exchanges in India started in 1875. BSE is the oldest stock
exchange in India. The history of Indian stock trading starts with 318 persons taking
membership in Native Share and Stock Brokers Association, which we now know by the
name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition
from the Government of India. National Stock Exchange comes second to BSE in terms of
popularity. BSE and NSE represent themselves as synonyms of Indian stock market. The
history of Indian stock market is almost the same as the history of BSE.
There are 23 recognized stock exchanges in India Bombay Stock Exchange,
National Stock Exchange, and Ahmedabad Stock Exchange etc.




















7
1.2. COMPANY PROFILE
1.2.1. Background and inception of the company

RELIGARE was incorporated as Vajreshwari Cosmetics Private Limited on January 30,
1984. Later it came to be known as Fortis Securities Ltd. This Company is promoted by the
promoters of Ranbaxy Laboratories Limited. The name of the Company was subsequently
changed to Religare Enterprises Private Limited pursuant to a special resolution of the
members of the Company dated January 10, 2006. The fresh certificate of incorporation
consequent to the change of name was granted to the Company on January 31, 2006, by the
Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh at Jalandhar.

Business philosophy

Clover philosophy of Religare:
Name
Religare is a Latin word that translates as 'to bind together'. This name has been chosen to
reflect the integrated nature of the financial services the company offers.
Symbol
The Religare name is paired with the symbol of a four-leaf clover. Traditionally, it is
considered good fortune to find a four-leaf clover as there is only one four-leaf clover for
every 10,000 three-leaf clovers found.
For us, each leaf of the clover has a special meaning. It is a symbol of Hope, Trust, Care, and
Good Fortune.
For the world, it is the symbol of Religare.

The first leaf of the clover represents Hope. The aspirations to succeed. The
dream of becoming. Of new possibilities. It is the beginning of every step and the
foundation on which a person reaches for the stars.

The second leaf of the clover represents Trust. The ability to place ones own
faith in another. To have a relationship as partners in a team. To accomplish a
given goal with the balance that brings satisfaction to all, not in the binding, but
in the bond that is built.

The third leaf of the clover represents Care. The secret ingredient that is the
cement in every relationship. The truth of feeling that underlines sincerity and
the triumph of diligence in every aspect. From it springs true warmth of service
and the ability to adapt to evolving environments with consideration to all.





8

The fourth and final leaf of the clover represents Good Fortune. Signifying that
rare ability to meld opportunity and planning with circumstance to generate
those often looked for remunerative moments of success.

Hope. Trust. Care. Good Fortune. All elements perfectly combine in the
emblematic and rare, four-leaf clover to visually symbolize the values that bind
together and form the core of the Religare vision.

FIGURE 1.1 CLOVER PHILOSOPHY OF RELIGARE



Group Structure:

Religare Enterprises Limited
Religare Securities Limited
Equity Broking
Online Investment Portal
Portfolio Management Services
Depository Services

Religare Commodities Limited
Commodity Broking

Religare Realty Limited
In house Real Estate Management
Company

Religare Capital Markets Limited
Corporate Broking
Institutional Broking
Derivatives Sales
Corporate Finance
Religare Finvest Limited
Lending and Distribution business

Religare Insurance Broking Limited
Life Insurance
General Insurance
Reinsurance

Religare Arts Initiative Limited
Business of Art
Gallery launched - arts-i

Religare Venture Capital Limited
Private Equity and Investment
Manager

Religare Asset Management

FIGURE 1.2 GROUP STRUCTURE OF RELIGARE

Religare Joint Ventures:






Religare in partnership with Aegon operates its Life Insurance business under a joint venture,
Aegon Religare Life Insurance company Limited





9





Religare operates its wealth management business in partnership with Macquarie
through Religare Macquarie Wealth Management Limited.








Religare Enterprises Limited and Vistaar Entertainment Ventures Private Limited launched
Indias first ever SEBI approved film fund (VRFF).









Milestones, one of Indias premier independent fund houses and Religare have come together
and through the JV have formed an entity, Milestone Religare Investment Advisors Private
Limited. The JV entity aims at making growth stage private equity investment primarily in
Education & Healthcare sectors in India.
















10

1.2.2. Nature Of The Business Carried :

REL, along with its joint venture partners, offers a range of products and services in India,
including asset management, life insurance, wealth management, equity and commodity
broking, investment banking, lending services, private equity and venture capital. Religare
has also ventured into the alternative investments sphere through its holistic arts initiative and
film fund.
1.2.3. Vision Mission And Quality Policy

Vision:

To build Religare as a globally trusted brand in the financial services domain.

Mission:

Providing complete financial care driven by the core values of diligence and
transparency.

Brand Essence:

Core brand essence is diligence and religare is driven by ethical and dynamic
processes for wealth creation.

Quality Policy :

Quality policy at Religare:

Religare Enterprises Limited is committed to be amongst the most admired and
trusted integrated financial services providers in the world.

Quality Objectives of Religare:
As per the Quality Policy, Religare will:

Build in-house processes that will ensure transparent and harmonious relationships
with its clients and investors to provide high quality of services.

Provide high quality of work life for all its employees and equip them with adequate
knowledge and skills so as to respond to customer's needs.





11

Continue to uphold the values of honesty and integrity and strive to establish
unparalleled standards in business ethics.

Use state-of-the art information technology in developing new and innovative
financial products and services to meet the changing needs of investors and clients.

Strive to keep all stake-holders (shareholders, clients, investors, employees, suppliers
and regulatory authorities) proud and satisfied.

The Quality Policy is Religares commitment to ensure high quality in everything they do at
Religare Enterprises Limited.
The search for Better never ends at Religare Enterprises Ltd.

1.2.4. Services Profile :

Religares Services profile in brief:





















FIGURE 1.3 RELIGARES SERVICES PROFILE
Financial Services, Equity and Commodity Broking, Online Investments, Loans, Personal
Financial Services, Insurance Distribution, Wealth Management, Art Fund, Film Fund,
Private Equity, Investment Banking, Institutional Broking, Life Insurance, Mutual Fund.



Arts
Initiative

Investment
Banking

Wealth
Advisory
Services

Personal
Credit

Insurance

Mutual
Fund

Commodity

Equity

REL





12
1.2.5. Area Of Operation:

Religare Enterprises Limited
Registered Office Address:-
D3, P3B, District Centre, Saket,
New Delhi, India.
Our Regional Hubs in India
Ahmedabad Chennai Kolkata
Dev Complex, 2nd floor
Opp Parimal Garden
C.G. Road
Ahmedabad -380006
No. 117, Theagaraya Road
City Tower, 4th floor
T. Nagar
Chennai -600017
Unit No. 410, North Block
4th floor, Ideal Plaza
11/1, Sarat Bose Road
Kolkata -700020
Mumbai Mumbai New Delhi
GYS Infinity, Paranjpe B Scheme
Subhash Road, Near Garware House
Vile Parle (E)
Mumbai -400 057
301/302,Viraj Tower,Gundavali
Western Express Highway
Near landmark bulding, Andheri(East)
Mumbai-400093
G - 16, Marina Arcade
Connaught Place
New Delhi -110001
Pune
Amar Calibre, C.T.S. No.911
Ground Floor, BMCC Road
Shivajinagar
Pune -411004


Our International Offices

London

New York Jakarta

Bell Court House,
11 Blomfield Street,
London, EC2M1LB .


Religare Hichens Harrison,
80 Broad Street, 5th Floor,
New York, NY 10004.
Plaza Bapindo, Citibank Tower,
12th Floor,
Jl.Jendral Sudirman Kav 54-55,
Jakarta, 12190, Indonesia


Kuala Lumpur Singapore Brazil





13

A-15-4 Northpoint
Offices,
Medan syed Putra Utara,
1 Jalan Syed Putra,
Mid Valley City,
59200, Kuala Lumpur,
Malaysia



Religare Hichens, Harrison Pte. Ltd.
37-02, UIC Building,
5 Shenton way,
Singapore 068808



Rua Lauro Muller 116,
SI.50822.290-160,
Rio de Janeiro, Brazil

Dubai Qatar


PO Box 214237
Al Hawaii Tower
Sheikh Zayed Road
Dubai UAE

1st Floor, Business Centre,
PO Box 23245,
Qatar Financial Centre,
West Bay, Doha, Qatar







TABLE 1.1 RELIGARE REGIONAL AND INTERNATIONAL OFFICES


1.2.6. Ownership pattern

RELIGARE Securities Ltd. (RSL) is a wholly owned subsidiary of Religare Financial
Services Ltd. (RFSL), a Company promoted by the late Dr. Parvinder Singh, Ex-CMD of
Ranbaxy Laboratories Ltd. The Company is a member of the National Stock Exchange (NSE)
and OTCEI.

REL is a private limited company whereas Religare Securities Limited is public limited
company.












14


SHAREHOLDING OF NON-EXECUTIVE DIRECTORS

The shareholding of Non-Executive Directors of the Company as on date is as follows:



S.
No.

Name

Number of Equity Shares Held

1.
2.
3
4
5


Mr. Malvinder MohanSingh
Mr. Shivinder Mohan Singh
Dr. Mrs. Sunita Naidoo
Mr. R.K. Shetty
Mr. Padam Bahl
TOTAL

19,187,400
19,187,400
10,128
100
50
38,385,078

TABLE 1.2 SHAREHOLDING PATTERN


1.2.7. Competitors information

Competititors of Religare:-

There are several financial securities companies playing their roles in Indian equity market.
But Religare faces competitions from these few companies.

COMPETITORS OF RELIGARE AND THEIR MARKET SHARE
3.59
15
4.6
3.7
7
9
20
65
0
10
20
30
40
50
60
70
I
C
I
C
I

D
I
R
E
C
T
S
H
A
R
E

K
H
A
N
K
O
T
A
K

S
E
C
U
R
I
T
I
E
S


I
N
D
I
A



B
U
L
L
S

5
P
A
I
S
A
M
O
T
I
L
A
L
A

O
S
W
A
L
K
A
R
V
Y
R
E
L
I
G
A
R
E
COMPANIES
M
A
R
K
E
T

S
H
A
R
E

I
N

P
E
R
C
E
N
T
A
G
E
market share in percentage


FIGURE 1.4 COMPETITORS OF RELIGARE






15

1.2.8. Infrastructure facilities


Religare has several branches spread across India in so many cities. Religare is located in
urban cities like mumbai, new delhi, ahmedabad, chennai, kolkata etc. It has a state of the art
infrastructure with all the necessary facilities and amenities that helps the people at religare to
carry on their activities conveniently. Since religare comes under the purview of the services
sector, it does not have a manufacturing unit unlike other manufacturing companies. It has
offices spread across a huge area in various cities.
The Religare office situated in Bangalore has 25 employees and it is well furnished. It
houses around 7 departments that are as follows:-
RMC risk management dept
Dealing dept
Main administrative dept
Commodity dept
PCG priority client growth dept
IT dept
Back office dept
Apart from the general infrastructure, Religare has an excellent IT infrastructure that supports
the huge demand for Religares services. Religare has a widespread client base across India
and to cater to the needs of its customers, Religare has installed highly sophisticated software
from companies like Microsoft, IBM.......

A look at Religares IT infrastructure :

With 50,000 of Religares 600,000-strong client base conducting trades on a daily basis, the
organization employs 150 staff to ensure the IT infrastructure underpinning the business can
support the demand. The infrastructure operates across a production datacenter in New Delhi.
The production datacenter currently hosts about 300 servers with the majority catering to
trading requirements so there is always a huge traffic at any given time. With demand surging
and plans to expand to 500 branches across India, Religare turned to VMware virtualization.
Religare is running about 150 virtual machines at up to 12 per physical host depending on the
hardware specifications. Religare Securities is currently implementing blade chassis housing
up to four servers each in its datacenters to increase utilization of rack space and ease





16
datacenter loads. The virtualized environment spans up to 60 machines allocated to user
acceptance testing as well as multiple virtual machines hosting application and Web servers.
1.2.9. Achievements and awards:

Religare awards and achievements

In 2009 Religare securities Ltd , a wholly owned subsidiary of Religare Enterprise won
the LIPPER-STARMINE broker award for Earnings Estimates in Midcap Research
for 2008.The award was organized by Thomson Reuters.

Religare Commodities has ISO 9001 and ISO 2001 certification.





Religare Technova has been awarded membership of the elite Microsoft Dynamics
Presidents Club 2008.

Religare Technova was also honored with the Star Emerging SI Sales Award by
Microsoft in 2008.









The prestigious Amity HR Excellence Award was awarded to Religare Technova at
the Fifth Global HR Summit 2008.



Religare Technova has been appointed ASP for Lenovo. The relationship is for a pan-
India footprint and pertains to Lenovo PCs and Laptops.



Religare Technova has been awarded the mantle of Cisco Premier Certified Partner in
India Sub-Continent.












17


Religare Technova has achieved Information Worker Solutions Competency from
Microsoft. This recognition enables the organization to use certain exclusive sales
tools and gives access to the online technical communities. It has also achieved
Database Management Solutions Competency from Microsoft.
Awards won by Religare Asset Management




Religare Ultra Short Term Fund
Institutional Plan
ICRA 5 Star Gold Award (1 year performance for year ending December 2008)
February 05, 2009, Mumbai


1.2.10. Work flow model:

Work flow model for trading mechanism
Trading mechanism
The trading on stock exchanges in India used to take place through open outcry without use
of information technology for immediate matching or recording of trades.
In order to provide efficiency, liquidity and transparency, NSE introduced a nationwide, on-
line, fully automated screen based trading system (SBTS) where a member can punch into the
computer the quantities of a security and the price at which he would like to transact, and the
transaction is executed as soon as a matching sale or buy order from a counter party is found.

Transaction process

Investor decides to trade
|
Places Buy / Sell Order with Broker
|
Order gets executed
|
Clearing of the Trade
|
Settlement of Trade





18
|
Delivery of Securities/Funds

Clearing and Settlement of Trades

National securities Clearing Corporation Ltd (NSCCL) is responsible for post trade
activities. Clearing and settlement of trades and risk management are its main functions.

1.2.11. Future growth and Prospects

Religare is already enjoying a huge success in India since it has emerged as one of the top
integrated financial service providers in India.

Growth strategies of the organization

Religare plans to expand its client base in India as well as abroad.

Expansion plans

Religare plans to extend its branches not only in India but also abroad. There already exists a
long history of mergers and acquisitions for Religare. It will continue acquiring firms that
will help Religare to add more value to their business in future.

New products

Religare provides a bouquet of services and extensively caters to the needs of their
customers. Religare is set to launch a new product called Mutual fund trading system.
Religare is also preparing to take up its new initiative of educating people about the new
product as well as other investment products of this company.


1.2.12. Functional analysis

Marketing department

Objectives:

Create a brand image
Monitor the Competition
Set the Strategy
Create New Ideas
To Focus on the Customer





19


Functions of marketing department

Development of marketing goals and strategy
Conducting marketing researches and monitoring customer needs
Sales reporting
Customer relationship management
Sales forecasting
Conducting advertising campaigns and promotional activities


Promotion Department:
Media used for promotion by Religare are as follows -
Business Magazines, Newspaper, pamphlets, leaflets, word-of-mouth.


Marketing Strategies:
Religare uses pull- marketing strategy to attract its customers.

A pull selling strategy is one that requires high spending on advertising and consumer
promotion to build up consumer demand for a product. If the strategy is successful,
consumers will ask their retailers for the product, the retailers will ask the wholesalers, and
the wholesalers will ask the producers.
Classification of employees on the basis of designation/category
Advertising managers. Advertising managers of Religare direct the companys advertising
and promotional campaigns. They work with sales staff and others to generate ideas for the
campaign, oversee a creative staff that develops the advertising etc.
Marketing managers. Marketing managers work with advertising and promotion managers to
promote the firm's or organization's products and services. Marketing managers also develop
pricing strategies, monitor trends that indicate the need for new products and services and
they oversee product development.





20
Promotions managers. Promotions managers direct promotions programs that combine
advertising with purchasing incentives (discounts, samples, gifts, rebates, coupons,
sweepstakes, and contests) to increase sales
Public relations managers. Public relations managers plan and direct public relations
programs designed to create and maintain a favorable public image for the employer or client.
Sales managers. Sales managers direct the distribution of the product or service to the
customer. They assign sales territories, set sales goals, and establish training programs for the
organizations sales representatives. Sales managers advise the sales representatives on ways
to improve their sales performance.
Qualifications and skill sets required
General skills:
Key Skills: communications skills, application of number, IT, problem solving, and
improving own learning and performance.
Occupation specific skills: customer service, selling, negotiating and influencing, analysis
and decision-making, and management skills.
Areas of knowledge: the business environment, product knowledge, and financial
awareness.
Personal skills: drive and energy, adaptability, resilience and determination, confidence,
creativity, and an ability to learn and absorb knowledge.
Back office department
Functions
account opening
Punching, verifying , processing
account closing punching, verifying , processing
processing DI slips delivery instructions slips
updating, rejecting improper applications and informing clients
preparing statement of accounts for each client





21
updating client information through PCR- profile change request- includes punching,
verifying, processing
maintaining BP- business partner details
communicating messages to BP, registration of sub-brokers done by BP coordinator
















































22

















CHAPTER II
MCKINSEYS 7S FRAMEWORK































23


2. McKINSEYS 7 S FRAMEWORK





Figure 2.1: Mc Kinseys 7 S frame work

























24

Structure:



FIGURE 2.2: ORGANISATIONAL STRUCTURE



Functions of regional product head:

Responsibilities:

Deliver MRDs(MARKET REQUIREMENTS DOCUMENT )and PRDs(PRODUCT
REQUIREMENT DOCUMENT ) with prioritized features and corresponding
justification
Work with external third parties to assess partnerships and licensing opportunities
Perform product demos to customers
Set pricing to meet revenue and profitability goals
Deliver a monthly revenue forecast
Brief and train the sales force at quarterly sales meetings






25


Functions of the Zonal head

Responsibilities:

Executing and implementing entire gamut of Sales activities for East/ West
South/North
Expansion of Business by successfully launching new product
Responsible for the profitability of the business in the zone
Business generation, expansion and sustenance.
Develop and execute retail distribution plan.
Achieve revenue, profitability, and brand equity targets.
Gather, analyze and data on consumers, competitors and brands that informs sales
planning process.

Functions of the Branch manager

Functions similar to that of zonal head but restricted to a particular branch only.

Functions of the Senior Relationship Manager

Responsibilities:

Achieve new business / customer acquisition goals and manage relationships with
existing customers, in accordance with the customer service guidelines.
Source and call on individual prospects as well as organize and conduct sales
presentations to groups, clubs, associations, companies and other organizations.
Provide sound financial advice and offering customized product solutions in
accordance to the industry regulatory requirements
Maintain customer loyalty and promote brand identity by providing excellent customer
service via regular updates and reviews on the range of financial products as well as
customers financial needs

Functions of the Relationship Manager for mutual fund

Help people get the most from their money, make the right choices and make their
money work for them.





26
Provide guidance to customers regarding their account, account details and provide
advice on various mutual fund schemes.
Assess each individual customers needs and accounts
Generating new business and clients.
Keeping customers well informed and advised at all times
Keep up to date with latest products, services and financial laws
Draw in new clients and meet sales targets


Functions of the Relationship manager for insurance

To acquire new clients and tap existing companys equity clients pitch them insurance
products.
To guide the client and advise them on their short term and long term investments.
To increase customer base through new customer acquisition methods, deepening
customer relationships.

Functions of Relationship manager for commodities :

Developing new client base for Commodity services
Maintaining a long term relationship with the Investors and generating revenue
through them.

Functions Relationship manager for internet trading:

Developing new client base for online trading
Maintaining good customer relationships
To guide the client and advise them on trading on different scrips
Keep up to date with latest products, services and financial laws
Provide guidance to customers regarding their account, account details


BOARD OF DIRECTORS
Mr. Malvinder Mohan Singh (Non - Executive Chairman)
Mr. Sunil Godhwani (CEO and Managing Director)
Mr. Shivinder Mohan Singh (Non - Executive Director)
Mr. Harpal Singh (Non - Executive Director)
Mr. Padam Bahl (Independent Director)





27
Mr. J. W. Balani (Independent Director)
Mr. Deepak Ramchand Sabnani (Independent Director)
Dr. Mrs. Sunita Naidoo (Independent Director)
Mr. R.K. Shetty (Alternate Director to Mr. J.W. Balani)
Capt G.P.S. Bhalla (Alternate Director to Mr. Deepak Ramchand Sabnani)

Skill:

The skills required in this organization include:
Superior analytical skills, strong understanding of economics and how the various domestic
markets (commodities, interest rates, equities, etc) interact, fundamental analysis skills
(accounting, stats, corporate finance), programming skills, general technical analysis skills.
Other supplementary skills are also required along with the above skill sets such as general
business analysis skills, critical thinking skills, elicitation techniques and requirements
analysis skills, communication and relationship building skills.

Style:

Top down and authoritarian

This organization uses a combination of both authoritarian, top down methods of
management. The authoritarian management style is likely to be evidenced by a rigid rules
system and an expectation of obedience to authority. Organizations now seek to make the
most of their employees skills and experiences; this means involving them in the decision
making process in real terms. The modern manager needs to actively enlist the ideas and
opinions of his or her workforce. In the Participative management Style, managers have to
invest real responsibility, and, consequently, real trust in their staff.
Strategy:

Religare Securities

With demand surging and plans to expand to 500 branches across India, Religare turned to
VMware virtualization. Religare is running about 150 virtual machines at up to 12 per
physical host depending on the hardware specifications. Religare Securities is currently
implementing blade chassis housing up to four servers each in its datacenters to increase
utilization of rack space and ease datacenter real estate, power and cooling loads. The
virtualized environment spans up to 60 machines allocated to user acceptance testing as well
as multiple virtual machines hosting application and Web servers. Religare is running





28
business-critical trading applications in their virtualized environment with no problems at all.
There has been no performance degradation despite intense application usage.

System:

Depository system at Religare

RSL provides depository services to investors as a Depository Participant with NSDL
and CDSL.
Religare customer centric account schemes have been designed keeping in mind the
investment psychology. With a competent team of skilled professionals, Religare manages
over 5,00,000 accounts and have a dedicated customer care centre, exclusively trained to
handle queries from their customers.
Religares depository service offers customers a secure, convenient, paperless and cost
effective way to keep track of the investment in shares and other instruments over a period of
time, without the hassle of handling physical documents.

Staff:

Department operations

Functions of operations staff:

Executive of operations
account opening
Punching, verifying , processing
account closing punching, verifying , processing
processing DI slips delivery instructions slips
updating, rejecting improper applications and informing clients
preparing statement of accounts for each client
updating client information through PCR- profile change request- includes punching,
verifying, processing
maintaining BP- business partner details
communicating messages to BP
registration of sub-brokers done by BP coordinator.

Mr. Narayana Swamy C
Senior executive operations (Bangalore head for operations)





29
Functions as mentioned above

Mrs. Namita Jagdev
Senior executive operations (branch)

Mr. Gunasekar
Junior executive operations

Mr.Sampath Kumar V
Junior executive operations

Mr. Bhaskar
Executive operation

Functions of junior executive operations

Need to visit bank and deposit the cheques, and have to give confirmation to clients on a
daily basis.
Intimation to clients about A/C opening and closing, clarifying documents, applications etc.

Shared value:

Religare uses a combination of values, beliefs and principles that have helped this
organization to evolve into one of the most successful financial services group.
The organization employs a set of internal and external values to develop a brand image.

Internal brand values
Integrity
Client Commitment
Bottom line focused
Balanced empowerment
Entrepreneurial spirit
Teamwork

External brand values
Diligence
Innovation
Positive Aggression
Forward Thinking

The success mantra at Religare:-
Innovation
Rigor and diligence
Ability to create and build synergistic partnerships
Build and nurture a unique value system.







30



















CHAPTER III
SWOT ANALYSIS

































31
3. SWOT ANALYSIS

Strengths:-

Competitive Strengths of Religare enterprises:-

Diversified product portfolio with individually focused management teams.
Dynamically expanding pan India presence coupled with international footprint
Client focused approach with dual mode of client connectivity
Diversified financial services platform, which facilitates cross selling of products and
services
Strong Risk Management Systems
Credit Ratings- Credit Rating Information Services of India Limited ("CRISIL"), a rating
agency in India, had recently rated the subsidiary RSL(Religare securities ltd ) with "P1"
for short term debt of Rs. 7,000 million and ICRA Limited ("ICRA") provided a rating of
"A1+" for the Subsidiary RFL(Religare Fininvest ltd ) for short term debt of Rs. 18,500
million.

Weaknesses:-

Religare is highly diversified. Diversifications can sometimes cause loss of focus on key
competencies and strategies.
The Indian market is still not yet developed in terms of talent required to supplement the
financial services sector. It may not have internationally competent workforce which is a
priority since it has already entered the global market.



TABLE 4.1 PEER GROUP COMPARISONS

As shown in the chart above, the return on net worth is relatively less as compared to that
of other competitors of this company.






32
Religare enterprises limited operates on leased premises and it may lose possession of
leased properties and related buildings and other improvements.
Negative cash flow due to increased capital expenditures.
If management fails to obtain trademark registrations for its brands, its brand building
efforts may be hampered and business could be adversely affected.

Opportunities and Threats

Opportunities

Economy is still expected to grow at a fast pace.
There are immense opportunities for growth in financial services sector.
India's emerging middle class will continue to drive demand for new goods and services.
Significant increase in awareness about investing in financial services and products.
Growing Financial Services industry's penetration and consumption.
Alert Regulatory network and swift response to changing dynamics provides great
comfort to all classes of investors.
Greater use of technology to enable best practices and processes
Increased opportunities for consolidation / acquisitions / restructuring opens out
opportunities for further expansion.

Threats

Unfavorable change in the economic conditions could severely hamper investor
sentiment.
Continued dependence and a slowdown in global liquidity flows.
Shortage of talent in the market.
Increased intensity of market competition.
Changes in interest and foreign exchange rates.
Transactions systems related risk.










33


















CHAPTER IV
ANALYSIS OF FINANCIAL STATEMENT
































34


4. SUMMARY OF LATEST ANNUAL REPORT OF THE COMPANY

Note: For ratio table and balance sheet see Appendix.

Ratio analysis

The net profit ratio is a measure of sales efficiency. The sales efficiency has decreased over
the years. Sales efficiency is the profit generating capacity which indirectly depends upon the
cost of sales. A low sales efficiency resulting into lower net profit margin can be due to
increase in the cost of sales.
The debt to equity ratio is high in 2006 and has significantly dropped in 2009. this may be
due to two reasons:(a) the firm may have reduced some part of its debt to reduce financial
risk associated with huge debt.(b)the firm may have increased the contribution of
shareholders by issuing shares in huge numbers.
The current ratio indicates the firms ability to manage its current liabilities. A higher ratio
indicates excess idle funds. The ratio has increased over the years indicating increased
investment in current assets or excess of idle funds or else corresponding decrease in current
liabilities.
The financial charges coverage ratio indicates how comfortably the firm can pay off its
debt interest charges. The ratios are very high in 2006 meaning this firm can service its debt
very well. However the ratio has sharply dropped in 2009 which may be due to drop in the
level of EBIT.
The fixed assets turnover ratio measures the efficiency of the assets use. Higher the ratio,
higher is the utilization of fixed assets for production. The company always tries to achieve
optimum utilization of all resources for production purposes. The ratio was very low initially
and did not show any significant increase in 2009.
The dividend payout ratio indicates the percentage of total earnings given away as dividend.
The ratio is nil in 2005 and 2009 as well but high in 2007 and 2008. Dividend payout ratio
depends upon the dividend policy of the company

Analysis of balance sheet
The equity share capital has remained more or less the same. There is 52.3 percentage
increase in Reserves and surplus in 2009 over the previous year. Investments increased by
270 percentage.





35



















CHAPTER V
LEARNING EXPERIENCE



























36

5. LEARNING EXPERIENCE

The process of getting permission from the company was extremely feasible and convenient
as full support and cooperation was extended and there were no hassles in getting the
permission to do the project.

The organization has helped me to understand my subject matter both conceptually and
practically.
The atmosphere was extremely cooperative. It was a great opportunity for me to be
associated with this organization. The entire term of the project was a learning experience in
the true sense because for the first time I was exposed to the competition in the market. I have
learnt that a lot more is demanded out of a novice student and that I as a student I need to
learn a lot more to be capable enough to compete in the market.

It was a great learning experience for me. It has been my pleasure that I got the opportunity to
do my project at Multiray Financial Services. Some of the few things that I got to learn are:

How to watch the stock
Facts about stock trading
Learnt about commodity trading
How technical analysis is used in practical applications
About qualities that a trader needs to develop
What successful trading requires
Different modes of trading like day trading, swing trading, and position trading.

This internship was a great learning experience. It gave me practical exposure to the stock
market and how an organization functions. I learnt that there are many challenges that one
faces within the organization. I have also learnt that successful trading takes time, patience,
discipline, proper risk management and specialized knowledge.

I have summarized my overall learning experience in the following points:
About the organization:
Professionalism is an important part of work ethic.





37
Employees are the most important asset of an organization
Managing a wide customer base is very difficult since different customers have different
needs.
To be successful within an organization is like a long journey and the employee needs to
develop the required competency.

During my project
For any new-found or recently started business, a lot of patience is required since getting
customers is very difficult. The success of a business finally boils down to customer
satisfaction
A student needs to develop multiple skills along with textbook knowledge to become
professionally competent.
I also learnt the requirements and procedure for Demat accounts.

About the market
The market is highly volatile and hence one should invest carefully.
One should not only consider technical factors but even fundamental factors while trading
or investing long term
A trader should be ready to even accept losses since one cannot always achieve profit.
Trading is a practice that requires knowledge, skill and tremendous amount of patience.
A successful trader is always well-updated and informed about the market.
Stock prices are affected by numerous factors.

Odin client is the software used for trading in both equities and commodities. A highly
sophisticated software called Spider software is used for analyzing technical charts in greater
depth. Stock market is affected by demand and supply forces. Intra-day trading closes at 3.30
whereas commodity trading closes at 11.30 pm. Equity trading is carried out on BSE, NSE
and other stock exchanges whereas commodity trading occurs on MCX and NCDX
exchanges.








38









CHAPTER VI
GENERAL INTRODUCTION
(PART B)

















39
CHAPTER VI
Part B

a. GENERAL INTRODUCTION

Technical Analysis: The Basic Assumptions:


What Is Technical Analysis?
Technical analysis is a method of evaluating securities by analyzing the statistics generated
by market activity, such as past prices and volume. Technical analysts do not attempt to
measure a security's intrinsic value, but instead use charts and other tools to
identify patterns that can suggest future activity.

The field of technical analysis is based on three assumptions:
1. The market discounts everything.
2. Price moves in trends.
3. History tends to repeat itself.


1. 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.

2. 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.

3. History Tends To Repeat Itself
Technical analysis uses chart patterns to analyze market movements and understand
trends. Although many of these charts have been used for more than 100 years, they are
still believed to be relevant because they illustrate patterns in price movements that often
repeat themselves.








40
Technical Analysis: Fundamental vs. Technical 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. Let's get into the details of
how these two approaches differ, the criticisms against technical analysis and how technical
and fundamental analysis can be used together to analyze securities.
The Differences
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. Technical traders, on the other hand, believe there is no
reason to analyze a company's fundamentals because these are all accounted for in the stock's
price. Technicians believe that all the information they need about a stock can be found in its
charts.

Time Horizon
Fundamental analysis takes a relatively long-term approach to analyzing 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.

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
of thought.

6.1. Statement of the Problem

A STUDY ON TECHNICAL ANALYSIS OF SELECTED STOCKS







41
This study involves the analysis of a few selected stocks since the analysis of all
stocks would be beyond the scope of the study. Only certain stocks have been selected.
Technical analysis involves the use of technical tools and indicators and observation of charts
to arrive at conclusions that help both speculators and investors.

6.2. Need for the study
The Indian economy is growing day by day. In fact investing in stocks has become a popular
option despite the fact most investors do not have enough knowledge regarding the stock
market. The knowledge of technical analysis can help such small-time investors to take wise
trading decisions. Also fundamental analysis is not enough and hence it needs to be combined
with technical tools. Day traders use 1 minute and 5 minute stock charts to make quick buy
and sell decisions. Stock chart analysis can be applied equally to individual stocks and major
indices. Analysts use their technical research on index charts to decide whether the current
market is a BULL MARKET or a BEAR MARKET. On individual charts, investors and
traders can learn the same thing about their favorite companies.
6.3. Objectives of the Study

To study the general performance of stocks.
To analyze the performance of different stocks using technical indicators.
To study stock prices and carry out a comparative analysis on a short term basis.
To study the stock prices and analyze them on a long term basis.
To study different technical indicators and how they help to spot buy/sell signals.
To analyze the impact of various events on stock prices.
To suggest measures that will help the small-time investors to take quick and proper
trading decisions.

6.4. Scope of the Study

Technical analysis covers the following aspects:
Identification of the trends and stock patterns
Identification of buy and sell signals for day traders.
Short term analysis of stocks.
Long term analysis of performance of a stock.
Comparative analysis of different stocks.





42
Study of impact of events on stock prices.

Although the scope of technical analysis is very expansive, the scope of this study is limited
because only certain stocks are selected. Also only specific tools have been used.

6.5. Methodology of Study
The method used for the study is exploratory research method because the stock market is
explored to select stocks in order to carry out a comparative analysis on both short term and
long term basis.
6.5.1. Research method
Universe:
The universe will include the company stocks of the entire Indian stock market.
6.5.2. Sample size:-
The sample size is consisting of 15 scrips.
6.5.3. Sampling technique:-
The sampling technique used is a convenient sampling technique.
6.5.4. Sources of data :-

The data collected for this project is secondary data. The data for this study was collected
from various websites as well as books and newspapers.

6.5.5. Analysis Techniques:

Technical analysis can be conducted using several tools and indicators like moving averages,
moving average convergence divergence (MACD), average directional index (ADX), relative
strength index (RSI) etc.
7. Limitations of the Study

The past performance is not indicative for future results since stock prices fluctuate
depending upon the new piece of information entering the market.
Limitations of Technical analysis tools- these tools are reasonably helpful but are not
perfect indicators.
This project is just a brief study of 15 stocks only. It is not exhaustive.








43















CHAPTER VII
ANALYSIS AND INTERPRETATION OF DATA

































44


ANALYSIS AND INTERPRETATION OF DATA


Explanation of Technical Indicators Used:

Bollinger bands:

Bollinger Bands are comprised of three bands which are referred to as the upper band, the
lower band, and the center band. The middle band is a simple moving average which is
normally set at 20 periods, and the upper band and lower band represent chart points that are
two standard deviations away from that moving average.
Bollinger bands are a good at indicating the volatility is in the market and how high or low
prices are relative to the recent past. The basic premise of Bollinger bands is that price should
normally fall within two standard deviations (represented by the upper and lower band) of the
mean which is the center line moving average. As this is the case, trend reversals often occur
near the upper and lower bands. The first way that traders use the Bollinger bands indicator is
to identify potential overbought and oversold places in the market. Large breakouts often
occur after periods of low volatility when the bands contract. As this is the case, traders will
often position for a trend trade on a break of the upper or lower Bollinger band after a period
of contraction or low volatility. Be careful when using this strategy as the first move is often
a fake out.
Identifying distinct trends:
Bollinger bands help to easily identify trends. The width of Bollinger band is a measure of
fluctuation. If the prices remain more or less the same (such a phase is described by terms
like ranging sideways or consolidation), the width of the band shrinks greatly resulting
into a contraction. If the width or the gap between the bands is high it indicates persistent or
intermittent fluctuations in prices. When prices constantly hug the upper band it indicates a
bullish phase and when they start touching the lower band, it means a bearish trend.















45



Example of contraction and widening:



GRAPH 6.1 BOLLINGER BANDS

Condition where contraction that is consolidation exists for a long period is never beneficial
for the day trader since he will not gain higher margins even if he decides to trade. Thus a
contacting Bollinger band is always a bad sign for the day trader.
When the Bollinger chart shows huge widening, its a sure indication of constant fluctuations.
When prices constantly hug the upper band, it is good for the investor because the trend
remains constant so there is less risk involved. But its not good for the day trader because
even he will have to buy at a higher price and so the margins would be low.

ADX



GRAPH 6.2 ADX

In the chart above, the ADX indicator is the thick black line. The green and the red lines are
the +DI and DI lines (but these are not significant). When the ADX line appears flat and is
found to be between 0 and 25 then the stock is in a trading range. It is means that the
volatility is low and prices will remain stable. Such stocks are weak and not beneficial for
traders. Now look at what happens when the indicator gets into higher territory. A strong





46
trend develops! These are the type of stocks that you want to be trading. On the right side of
the indicator panel you will see a scale from 0 to 100.Here are my guidelines for using the
scale.
ADX Indicator Scale
If ADX is between 0 and 25 then the stock is in a trading range. It is likely just chopping
around sideways. Avoid these weak, pathetic stocks!
Once ADX gets above 25 then you will begin to see the beginning of a trend. Big moves (up
or down) tend to happen when ADX is right around this number.
When the ADX indicator gets above 30 then you are staring at a stock that is in a strong
trend! You wont see very many stocks with the ADX above 50. Once it gets that high, you
start to see trends coming to an end and trading ranges developing again.
Tips
ADX can act as a filter in your scans, so that you can find stocks that are in strong trends.
Dont pay attention to the red and green lines. Watch out for the main ADX line and observe
the stock when this line approaches 50.
So what is the ADX indicator good for?
This indicator is best used for screening stocks and writing scans. By adding this indicator to
your scanning software, you can eliminate all of the stocks that are in trading ranges. You can
then set up your scan to find only those stocks that are in strong uptrend or strong
downtrends.
ADX helps to catch fluctuations in the graph
The degree of fluctuation is indicated in the ADX chart by the slight wave like pattern of the
main ADX line and also by the huge gap visible between the green and the red lines.
The ADX line is an indicator of trend strength. When the main ADX line comes closer to a
range of 40-50, the trend strength is high. When the green line hangs over the red line it is a
bullish phase and when the red line comes above the green, its a bearish phase..

ADX charts are used for understanding the degree of fluctuations in the price graph, for
identification of bullish or bearish trends and to know the strength of the trend. But it cannot
be used for marking entry/exit points.






47
Contrary to the Bollinger band chart, the ADX chart does not indicate minor fluctuations.
This means that the fluctuations that were significant for Bollinger band are not so for ADX.
Hence Bollinger bands are more sensitive than the ADX lines. Thus different technical
indicators have different ways of measuring the same fluctuation. Hence an observer has to
combine different indicators to arrive at the final conclusion.
MACD


GRAPH 6.3 MACD


The MACD is very complex and tends to combine everything into one.
When the main MACD line (red) is above the EMA line (blue) for a relatively longer period
it indicates a bullish phase and when the red line hangs below the EMA line, it indicates a
bearish phase. A simplest indication of bull/bear phase in a MACD chart is the middle 0 line.
When the prices rise, the main MACD line crosses zero line and swings above it and when
prices fall the main line cuts the zero line to move downwards.
The histogram (shown by black bars) gives a measure of fluctuations in the graph. The
height /length of the bars represent the divergence. Thus a highly fluctuating graph will have
greater divergence. It means that the strength of the trend is high. When the bars are above
the zero line, the divergence is positive whereas if the bars are below the zero line it means
the divergence is negative.
The MACD graph not only helps in identifying entry/exit or buy/sell points but also offers
additional advantages like identification of specific trend (this is done by observing the
MACD and EMA lines), identification of trend reversals (for this you need to observe the
crossovers occurring between the MACD and EMA lines) and it also helps in knowing the
level of fluctuation in prices (you need to look at the height of the histogram bars).
A wider separation or gap between the MACD and EMA lines means a steep rise/fall.

Notice buy/sell signals at distinct MACD crossovers.






48
Signals:
Entry point/ buy signal: This occurs when red line gradually rises and just crosses over the
blue line (see the graph). This means the price would not fall further and is slowly rising from
the previous low, so its time to buy otherwise the price will continue to rise.
Exit point /sell signal: The sell signal occurs when the red line gradually falls and just
crosses the blue line. This means that stock has to be sold before the price falls further.
Thus entry and exit points occur at distinct crossovers.


RSI



GRAPH 6.4 RSI


The RSI graph is the simplest to understand as it is easy to observe and interpret. RSI values
above 50 indicate bullish phase and below 50 indicates a bearish phase. Not only does RSI
help in spotting the trend but also in recognizing the entry and exit points. The buy signal
occurs when RSI crosses 30 and is about to rise whereas the sell signal(exit point )occurs
when the graph crosses the 70 reading and is just about to fall. Stocks that perform well either
show RSI values above 70 or at least above 50 for persistently long period of time.
Usually a day trader looks out for readings below 30 and above 70 to make buy/sell
decisions.
When the reading crosses 70, the condition is described as overbought and this means that
stock has outperformed crossing normal expectations. In other words the stock is being sold
at an unusually high price or has been overvalued. This happens if a new piece of information
enters the market suddenly raising the expectations of investors for the stock leading to
higher buyer demand. Traders take this opportunity to sell their stock and book profits.
Similarly when the reading crosses below 30, it is called oversold condition. Oversold
condition happens when a dip in price sends panic through investors. Since there is mass
selling, this is the time when traders want to buy as the stock is being sold at low prices.





49
Some interpret the RSI falling below 80 as a sell signal and the RSI rising above 20 as a buy
signal.

Index of symbols



TABLE 7.1 INDEX OF SYMBOLS



SHORT TERM COMPARISON OF DIFFERENT STOCKS:


NOTE: In short term comparison, we need to analyze the stock performance only for a
period ranging between 1-12 months. The objective of this study is to analyze buy/sell signals
and to understand how technical indicators help us to take trading decisions.






50


CHART 7.1 PANTALOON RETAIL

BOLLINGER BAND:
In December, a slow rise is seen whereas in the month of January the price graph is hugging
the upper Bollinger band. Since the prices are touching the upper band, it signifies a bullish
trend.
ADX:
The line slowly approaches 50 which indicate that the trend is very weak. In January, the
ADX line is somewhat flat which means that there has been no trend reversal in this month





51
and the current trend is not showing any sharp fluctuations. The green line is above the red
line and this indicates a bullish phase.
MACD:
The MACD line (red) is above the EMA line for a relatively longer period which is an
indication of a bullish phase.
RSI
For the trader, it is time to take short position that is selling the stock.
Conclusion/suggestion: It is recommended to exit from this stock as it reaches
overbought condition.



CHART 7.2 CAIRN INDIA






52
The price graph does not show any particular trend since it is rising initially and falling
thereafter.
BOLLINGER BAND:
This stock is showing huge fluctuation as indicated by widening of the band.
ADX:
The main ADX line is showing fluctuation which is an indication of distinct trend patterns. In
the latter portion of the price graph, a bearish trend is seen. Note that initially the green line is
above the red line (trigger line) indicating a bullish phase and later on the green line sweeps
below the red line indicating a bearish phase.
MACD:
Distinct buy and sell signals can be seen in the graph.
RSI:
Major portion of the graph has remained between 30 and 70 meaning this stock has not
performed very well.

Conclusion: For sellers, it would be better to hold the stock for some time and wait till it
rises. For buyers, the prices are not low enough to take position so it is not the right time
to buy.








53


CHART 7.3 JK LAKSHMI CEMENT


Although the price graph itself tells that the stock has performed well it is still necessary to
use technical tools to understand and interpret the graph.
BOLLINGER BANDS:
In the month of January the prices are constantly hugging the upper band. Towards the end
there are fluctuations and this is very well indicated by the widening of the Bollinger band.
ADX:
The green line is above the red line for most of the period meaning the phase is bullish and
the stock has performed well.





54
MACD:
The histogram bars are short meaning constancy of trend. For most of the time, the MACD is
above the blue EMA line meaning a bullish phase. A bearish phase is seen in February.
RSI:
The RSI has given strong signals to sell the stock.

Note: It is also important to consider the volume of trade while analyzing the performance of
a stock. Certain stocks may show a rising trend as above but the volume of trade may be very
low. For instance the volume of trade for JK LAKSHMI is not high enough (see Figure
below). This stock showed good performance only when the volume was high. A
trader/investor would not prefer a stock that has low volume of trade.







CHART 7.4 JK LAKSHMI VOLUME CHART

Conclusion:
This scrip is not beneficial for trading whereas for investment, long term analysis would
be required. It is better to wait and observe the future trend.
















55


CHART 7.5 JINDAL STEEL AND POWER


BOLLINGER BAND:
There is an initial phase of consolidation as indicated by contraction of Bollinger band and
later on the band widens indicating a trend reversal. The price hugs the lower band signifying
a bearish trend.
ADX:
The ADX line first indicates a consolidation followed by a trend reversal. In the latter portion
the green line hangs below the red line indicating a bearish phase.
MACD:





56
The stock has dipped considerably after mid-January.
RSI
The RSI neither peaks above 70 nor dips below 30. This is not a good sign for a day trader
since he cannot get distinct buy and sell signals.
Note
An investor cannot make a judgment simply on the basis of short term performance because
this stock performed well on a long term basis (as shown below). The long term performance
holds greater significance for a long term investor.





CHART 7.6 JINDAL STEE AND POWER LONG TERM PRICE CHART

Conclusion: This stock holds a good future for long term investors as compared to
traders.






57


CHART 7.7 HINDUSTAN UNILEVER

This stock has not performed well
BOLLINGER BAND:
There is more contraction than widening. The prices keep hugging the lower band i.e. a
bearish phase.
ADX:
The green line remains below the red line for a long time indicating a bearish phase. The
ADX line fluctuates towards the end which means a steep rise/fall has taken place (the price
graph shows a steep fall towards the end)
MACD:
The graph is well above the 0 line which means a strong bull phase.





58
RSI:
The RSI line clearly shows that the stock did not perform well as much portion remains
below 50 and later on dips below 30 and does not show any significant rise.

Conclusion: Though it did not perform well, its a popular and reliable stock. Its a
good time to enter this scrip.


An example of a good performer



CHART 7.8 THINKSOFT GLOBAL






59
This stock has not only shown good performance but also good volume. There is wide
separation between green and red ADX line meaning there has been a steep rise/fall.(in this
case a steep rise).The main ADX line is affected by volume since it indicates the strength of a
trend and volume is always a driving force behind trend strength. Therefore the ADX line is
showing a wave like pattern which means the strength of the trend is very high which was
never observed before in earlier graphs. Investing in this scrip would be more beneficial than
trading.
Conclusion: Volume is substantial. This stock holds good potential for investors. For
traders, its time to exit.



CHART 7.9 ABAN OFFSHORE





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BOLLINGER BAND:
The band shows a huge widening due to the sudden rise and fall in the stock prices as seen in
the price chart. During the rising trend prices touch the upper band and subsequently as the
prices fall they touch the lower band. If such fluctuations are to be seen in many short term
charts for this stock, then this stock can be considered favorable for trading.
ADX
The degree of fluctuation is indicated in the ADX chart by the slight wave like pattern of the
main ADX line and also by the huge gap visible between the green and the red lines.
MACD
The degree of fluctuation is shown by the height of MACD histogram bars which stand
vertically over the 0 line or the base line. The main MACD line (red) swings above and
below 0 line indicating rise and fall in prices respectively. The considerable gap between the
lines shows that the trend (whether rise or fall) is pretty strong.
RSI
Overbought/oversold conditions are seen but these conditions did not last for long.
Conclusion: Its a highly volatile scrip so its good for traders. However its not a right
time to buy/sell. So hold it.







Long term Comparison of different stocks

Companies selected for long term analysis are:

KIRI DYES AND CHEM LIMITED
AUSTRAL COKE AND PROJECTS LIMITED

Note: This analysis has been done with the objective to understand how long term
charts can be analyzed and how on the basis of this analysis a long-term investment
decision can be made.





61


CHART 7.10 KIRI DYES AND CHEM


The P/E ratio is 84.21.
Operating profit increased by 63 percentage in 2009.






62
Kiri dyes and chem
0
50
100
150
200
250
300
2005 2006 2007 2008 2009
Net Sales
Net Prof it


CHART 7.11 KIRI DYES- SALES AND PROFIT

The fundamentals are very strong and indicate a promising growth in future earnings.

The P/E ratio of this company is 84.21 which is much higher as compared to other stocks.
This means that the stock price is extremely high, which means that one cannot enter this
stock at this stage.

BOLLINGER BAND:
Prices hug the upper band for a long time consistently without reversal.
ADX:
Initially the green line hangs over the red line for a long period of time indicating bullish
trend.
Macd:
The MACD hangs above the zero line for a long time and a distinct separation between the
MACD and EMA line indicates a steep rise.
RSI
A significant overbought condition implies this stock is gaining momentum very fast.

Conclusion: The fundamentals are strong and this budding company is showing
accelerated growth. Though it may be a risky investment, the returns would definitely
be rewarding.













63




CHART 7.12 AUSTRAL COKE AND PRO

The P/E ratio is 8.04.

The companys financial performance was not appreciable. The P/E ratio is very low
indicating very low demand for the companys shares.

There are huge fluctuations in the graph which is indicated by both the Bollinger band width
as well as by the wavy pattern of main ADX line. Observe the huge separation between red
and green ADX lines indicating the strong intensity of the bearish trend. ADX indicates trend





64
strength rather than trend direction and trend strength is affected by the slope of the graph and
volume of trade. In this case it means that the stock was heavily sold towards the end due to
extreme price fall .This is also indicated in the RSI chart.

Conclusion: It is not advisable to invest in this company.

ANALYIS TO UNDERSTAND THE IMPACT OF NEWS AND EVENTS ON
STOCKS:

Note : The following analysis has been done with the objective to understand how a
particular stocks price gets impacted by market related factors like events, economic
conditions, news related to a specific company and investors psychology towards the
stock.



CHART 7.13 HAVELLS INDIA





65

A P/E ratio of 15.07.
Net profit rose by 418.75 percentage in 2009.

Havells India
0
1000
2000
3000
2005 2006 2007 2008 2009
Net Sales
Net Prof it


CHART 7.14 HAVELLS INDIA- SALES AND PROFIT


This company has strong national and international presence, a good P/E ratio and good
growth in earnings. Thus the fundamentals are strong. Sales have shown consistent growth.

The effect of global recession is clearly seen in the months towards the end of the year 2008.
In the month of December an overbought condition is seen. This is because net profit of
Havells India rose 418.75 percentages to Rs 58.93 crore in December 2009.

Conclusion: The fundamentals are strong and there are many positive points in the
favor of this company. Investment is advisable.

























66




CHART 7.15 GRASIM INDUSTRIES

P/E ratio of 11.26
Consistent growth is sales and profit.



Grasim industries
0.00
5,000.00
10,000.00
15,000.00
2005 2006 2007 2008 2009
Net Sales
Net Prof it


CHART 7.16 GRASIM- SALES AND PROFIT







67
The P/E ratio is high indicating a good potential growth in earnings. The fundamentals are
strong.
In October a sudden dip has occurred abruptly like a diversion from the usual flow of prices.
In October first week, Grasim Industries, a part of the Aditya Birla Group having interest in
the cement and textile business, announced that it will demerge its cement division to bring it
under UltraTech Cement, the company it acquired from Larsen and Toubro (L and T) in
2003. Following the news outbreak, the prices immediately dipped thus proving that the stock
market is highly efficient and processes any information very quickly.

Conclusion: Grasim industries have a long standing in our country and hence
investment would be less risky.








68
CHART 7.17 UTTAM GALVA

P/E ratio of 11.06.
19 percentage increase in reserves and 16 percentage rise in net worth in 2009
A tremendous 33 percentage increase in profit in 2009.


Uttam Galva Steel
0.00
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
2005 2006 2007 2008 2009
Net Sales
Net Prof it


CHART 7.18 UTTAM GALVA- SALES AND PROFIT

The company showed excellent financial performance for the year 2009.The P/E ratio is also
high signifying good growth in earnings for the future.

The price chart shows very little fluctuations in the beginning and there is sudden rise after
April. But a steep rise is observed close to October. This is because during this period global
steel giant Arcelor Mittal had announced that it will acquire stake in Uttam Galva and later on
it acquired 5.6 percentage stake in this company. Following the outbreak of the news, shares
of Uttam Galva were trading higher and subsequently stabilized.

Conclusion: Because of its association with Arcelor Mittal Steel, this company might
hold good potential for future. But future is always uncertain and hence one cannot
blindly invest in this stock. A better option would be to invest minimum amount.








69


CHART 7.19 MAYTAS INFRA

P/E ratio is N/A (Not applicable)
Reserves decreased by 82 percentage.
Loss of Rs 243.13 cr in 2009







70
Maytas Infra
-1000
-500
0
500
1000
1500
2000
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
Net Sales
Net Profit


CHART 7.20 MAYTAS INFRA- SALES AND PROFIT


The fundamentals are not favourable. The P/E ratio is N/A because company suffered huge
losses.
One can easily observe that this stock was not badly impacted by the recession like other
stocks. The nature of Bollinger band indicates that this stock always performed in a normal
way (the trend remaining the same for most of the time), except for a very short period in the
month January (2009). This fall was due to the infamous Satyam scam in Jan 2009. Maytas
Infra is the infrastructure firm owned by the son of disgraced former chairman of Satyam
Computer Services B. Ramalinga Raju. Maytas lost several projects in Orissa, West Bengal
and other states after Ramalinga Raju admitted to the accounting fraud in Satyam in January.
Conclusion: Conclusion: Post-satyam fraud, the company recovered and maintained
well. An infrastructure company will have huge future growth potential because Indian
economy is growing and infrastructure is a pillar of industrial growth. So, this stock is
good for investment.






71


CHART 7.21 KALPATARU POWER


Kalpataru
0
50000
100000
150000
200000
250000
300000
350000
2005 2006 2007 2008 2009
Net sales
Net prof it


CHART 7.22 KALPATARU POWER SALES AND PROFITS






72
P/E ratio of 20.42.
Huge growth in sales in 2008 and 2009.

The prices fell miserably in July 2008 because crude oil prices skyrocketed and achieved a
record peak in July 2008. Rising oil prices badly affects the market because the inflationary
pressure creates a fear in the mind of investors who subsequently restrict trading activities.
Further the clear impact of recession is seen in the end of 2008. The stock recovered after
which a steep rise in March-April led to a bullish (overbought) condition in throughout the
months between April and July. This is because the net profit was up by 10.6 percentage to
Rs 32 cr and Revenue up by 2.5 percentage to Rs. 485 cr. Kalpataru Power Transmission Ltd,
reported a hike of 10 percentage in PAT, amounting to Rs. 32 crore

Conclusion: This companys recent performance is noteworthy. The power sector holds
a promising future. Investment is advisable though it may be risky.






















73


CHART 7.23 SUZLON ENERGY

P/E ratio is N/A.
A 46 percentage decrease in operating profit.
A net loss of Rs 469 cr in 2009









74
Suzlon Energy
-2,000.00
0.00
2,000.00
4,000.00
6,000.00
8,000.00
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
Net Sales
Net Profit


CHART 7.24 SUZLON ENERGY SALES AND PROFITS

The financial performance of the company dipped in 2009.Since company suffered losses the
P/E is not applicable.
The stock has shown a gradual downfall in the pre-recession period and a huge plunge
towards the end of 2008 due to recession. The recovery was slow and just after a short period
the prices stabilized from July 2009 till the close of the year except for a downfall in mid-
October. Price of shares of wind power major Suzlon Energy plunged on news that three of
the company's promoters have offloaded stake totaling 4.5 percent of the company's equity
capital. Three of the company's promoters viz. Nidhi Tanti, Brij Tanti and Girish R. Tanti had
sold 700 million shares held by them in block deals. The other reason for the price-fall is that
Suzlon Energy reported a net loss of Rs 184.91 crore in September 2009 compared with a net
profit of Rs 16.98 crore in September 2008. Net sales fell 72.3 percentage to Rs 616.02 crore
in Q2 September 2009 over Q2 September 2008.
Conclusion: One of the Nifty companies, Suzlon already enjoys a huge demand in the
stock market. Its very popular and high-volume scrip. However the company reported
losses in 2009. Hence decision can be taken after observing its financial performance for
the next few months.














75



















CHAPTER VIII
Findings, Suggestion, Recommendations and
Conclusion




























76

SUMMARY OF FINDINGS


1. The study has shown that not all technical indicators simultaneously give the same
result since different indicators have different parameters of measurement
2. This study reflected that the performance of a stock is affected by many factors like
economic conditions, fundamental factors related to the company, volume of trade,
popularity of the stock, investors psychology, and general market conditions.
3. In this study, we found that certain stocks which performed well in the short term did
not do so well in the long term and vice-versa. This means short and long term
performance is not significantly correlated.
4. The study also revealed that one cannot simply rely on chart which shows the stock in
an upward trend. It is also necessary to focus on volume.
5. In January 2009 almost all stocks showed poor performance due to global recession.
6. The strength of a trend depends more on the volume traded rather than the rise/fall in
price.
7. A stock that shows a rising trend persistently is more preferable for a long-term
investor whereas a trader would focus on a fluctuating stock
8. Corporate actions like stock splits, dividend declaration, expansion plans always
directly affect that particular stocks price.
9. It is preferable to observe the short term (weekly, 1-month,2-months or 3-month)
charts as compared to intra-day charts to observe short term trends. Intra-day charts
do not reveal much information and are used only by experienced traders.
10. Indicators like MACD are very beneficial since they give an overall picture. Specific
indicators can be used for specific purposes.
11. When favorable news enters the market, the news seems to have already circulated
among experienced traders due to insider trading and private connections and hence
the stock price rises even before the news reaches the market.
12. When unfavorable news enters the market, the reaction comes only once the news hits
the market. This is because investors and insider traders are on a lookout for new
opportunities and hence tend to overlook negative information.









77
SUGGESTIONS




1. Indian stock market is volatile; it may give profit or loss. So while investing in stock
market carefully analyze the stocks and invest.
2. During short term trading and investment it is not necessary to focus on fundamental
factors. One can simply follow technical chart patterns. However in long term
analysis one needs to focus more on fundamental factors related to the particular scrip
or company.
3. Investment in stock market is very risky. Hence one cannot put in ones regular or
primary income in the stock market. One should preferably invest idle funds or
supplementary savings.
4. One need to have greater risk tolerance that is one should have the ability to accept
losses as well. The risk tolerance capacity will depend both on psychological and
economic factors.
5. Investors may feel to buy some stock with gut feeling. Avoid gut feeling while trading
in stock market.
6. Wait for the correct time (opportunity) to invest and to sell the stock.
7. It is not advisable to simply rely on trading tips. A thorough study is always
recommended.























78
RECOMMENDATIONS


1. It is recommended that an investor must not enter particular scrip without analyzing
the price pattern using at least three technical indicators.
2. It is strongly recommended that any trader or investor should not use any sort of
intuition while taking trading decisions.
3. One must not rely on any one technical indicator. A combination of technical
indicators is always preferred.
4. It is recommended that every trader as well investor must strictly adhere to SEBI rules
and regulations with respect to trading and investment.








































79

CONCLUSION


The Indian stock market is highly volatile and hence trading is always risky.
However it is not like a lottery or a gambling game where nothing can be predicted. Over the
years many stock market analysts have propounded theories to forecast future trends.
Although such forecasting may not always be accurate, it surely helps in taking trading and
investment related decisions. The future is never certain but a thorough analysis can help to
minimize the occurrence of losses. Apart from technical analysis there are still many other
factors that should be considered before investment. To do profitable trading requires a
thorough experience in both technical analysis and market mechanics. Also one needs to
combine the benefits of both technical and fundamental analysis. Finally I would like to say
that this project gave an in-depth knowledge of technical analysis which will surely help me
in my future endeavors.


































80




















APPENDICES































81

APPENDIX




RATIOS

Mar '
09
Mar ' 08 Mar ' 07 Mar '
06
Mar ' 05
Adjusted E P S (Rs.) -
2.09
3.08 1.83 0.89 -1.76
Reported EPS (Rs.) -
2.09
3.08 1.83 0.89 -1.76
Dividend Per Share 0.00 2.50 1.00 0.00 0.00
Net Operating Income
Per Share (Rs.)
1.64 4.19 2.39 0.91 1.11
PROFITABILITY RATIOS
Gross Profit
Margin
(PERCENT)
-30.58 85.69 94.03 98.43 63.82
Net Profit
Margin
-58.15 73.49 76.71 97.38 -159.57
Adjusted
Return On
Net Worth
-2.29 4.87 4.09 8.33 -24.11





82
(PERCENT)
LEVERAGE RATIOS
Long Term
Debt /
Equity
0.03 0.00 0.00 0.35 0.00
Total
Debt/Equity
0.03 0.15 0.01 0.35 0.00
Fixed
Assets
Turnover
Ratio
7.42 56.93 1,860.97 6.81 0.00
LIQUIDITY RATIOS
Current
Ratio
97.46 2.03 1.35 0.73 0.37
Quick
Ratio
97.38 2.01 1.35 0.73 0.37
Inventory
Turnover
Ratio
155.54 882.68 0.00 0.00 0.00
PAYOUT RATIOS





83
Dividend
payout Ratio
(Net Profit)
0.00 80.69 65.10 0.00 0.00
COVERAGE RATIOS
Adjusted Cash
Flow Time
Total Debt
507.99 3.21 0.29 4.22 0.00
Financial
Charges
Coverage Ratio
0.54 6.78 8.99 94.15 0.28
Fin. Charges
Cov.Ratio (Post
Tax)
0.25 6.82 8.45 94.15 0.28








BALANCE SHEET


Mar ' 09 Mar '
08
Mar '
07
Mar '
06
Mar '
05
SOURCES OF FUNDS





84
Owner's Fund
Equity Share Capital 76.29 76.08 64.40 50.00 0.43
Share Application
Money
1,800.16 0.00 0.00 0.00 0.00
Preference Share
Capital
25.00 0.00 0.00 0.00 0.00
Reserves and Surplus 617.19 405.24 223.89 3.65 -0.11
Loan Funds
Secured Loans 0.00 0.00 0.00 0.00 0.00
Unsecured Loans 0.00 75.40 3.50 18.85 0.00
Total 2,518.64 556.72 291.79 72.50 0.32
USES OF FUNDS
Fixed Assets
Gross Block 3.73 0.56 0.01 0.00 0.00
Less : Revaluation
Reserve
0.00 0.00 0.00 0.00 0.00
Less : Accumulated
Depreciation
0.36 0.05 0.00 0.00 0.00
Net Block 3.37 0.51 0.01 0.00 0.00
Capital Work-in- 0.01 0.07 0.00 0.00 0.00





85
progress
Investments 2,023.55 545.28 289.81 72.52 1.00
Net Current Assets
Current Assets,
Loans and
Advances
496.81 21.42 7.53 0.04 0.42
Less : Current
Liabilities and
Provisions
5.10 10.57 5.56 0.06 1.11
Total Net Current
Assets
491.71 10.86 1.97 -0.02
-
0.69
Total 2,518.64 556.72 291.79 72.50 0.31
Contingent liabilities 585.01 92.03 30.00 0.00 0.00
Number of Equity
shares outstanding
(in Lacs)
762.90 760.84 643.97 500.00 4.25


















86




















ANNEXURE





a

ANNEXURE


SCHEDULE A: NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
a) BASIS OF ACCOUNTING
The Financial Statements are prepared under the historical cost convention and on accrual
basis of accounting and comply with the Accounting Standards referred in Section 211 (3C)
of the Companies Act, 1956 of India.
b) USE OF ESTIMATES
Difference between the actual results and estimates are recognized in the period in which
results are known / materialized.
c) REVENUE RECOGNITION
(i) Income from Financial Advisory Services is accrued based on stage of completion of
assignments in accordance with terms of the relevant agreement.
(ii) Dividend from investments is accounted for as income when the right to receive dividend
is established.
(iii) Income from Interest on Fixed Deposits is recognized on accrual basis.
d) FIXED ASSETS
Fixed assets are stated at cost inclusive of incidental expenses, less accumulated depreciation.
e) LEASED ASSETS:
Assets acquired under Leases where a significant portion of the risks and rewards of the
ownership are retained by the lesser are classified as Operating Leases. The rentals and all the
other expenses of assets under operating lease are treated as revenue expenditure.
f) INTANGIBLE ASSETS:
Intangible Assets are recognized only if it is probable that the future economic benefits that
are attributable to assets will flow to the enterprise and the cost of the assts can be measured
reliably. The intangible assets are recorded at cost and are carried at cost less accumulated
depreciation.
g) DEPRECIATION
Depreciation is provided on Straight Line Method, pro-rata to the period of use, at the rates
specified in Schedule XIV of the Act or the rates based on useful lives of the assets as
estimated by the management, whichever are higher.
h) INVESTMENTS
Investments are classified into long term investments and current investments. Investments
which are intended to be held for one year or more are classified as long term investments
and investments which are intended to be held for less than one year are classified as current
investments. Long term investments are accounted at cost and current investments are valued
at cost or market / fair value, whichever is lower.
SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET
AS AT MARCH 31, 2009
AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009
63
i) FOREIGN CURRENCY TRANSACTIONS
(i) Transactions in foreign currencies are recorded at the rate of exchange in force at the time
of occurrence of the transactions.
(ii) Exchange differences arising on settlement of revenue transactions are recognized in the
Profit and Loss account.
.





b





j) EMPLOYMEE BENEFITS
(i) Provident Fund is a defined contribution scheme and the contributions as required by the
statute are charged to the Profit and Loss Account as incurred.
(ii) Gratuity Liability is a defined obligation and is wholly unfunded. The Company accounts
for liability for future gratuity benefits based on an actuarial valuation as at the balance sheet
date.
(iii) The employees of the Company are entitled to compensate absences and leave
encashment as per the policy of the Company, the liability in respect of which is provided,
based on an actuarial valuation as at the balance sheet date.
(iv) Actuarial gains and losses comprise experience adjustments and the effects of changes in
actuarial assumptions and are recognized immediately in the Profit and Loss Account as
income or expense.
(v) The undiscounted amount of short - term employee benefits expected to be paid in
exchange for services rendered by an employee is recognized during the period when the
employee renders the service.
(vi) Stock Options granted to eligible persons under the relevant Stock Option Schemes are
accounted for at intrinsic value as per the accounting treatment prescribed by the Employee
Stock Option Scheme and Employee Stock Purchase Scheme Guidelines 1999 issued by the
Securities Exchange Board of India.
k) TAXES ON INCOME
(i) Current tax is determined as the amount of tax payable in respect of taxable income for the
year.
(ii) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred
tax asset, on timing differences, being the differences between taxable incomes and
accounting income that originate in one period and are capable of reversal in one or more
subsequent periods.
(iii) Provision for taxation for the year is ascertained on the basis of assessable profits
computed in accordance with the provisions of the Income Tax Act, 1961.
l) FRINGE BENEFIT TAX
The Fringe Benefit Tax has been calculated and accounted for in accordance with the
provisions of the Income Tax Act, 1961 and the Guidance note on Accounting for Fringe
Benefit Tax issued by the Institute of Chartered Accountants of India.
m) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement are recognized when
there is a present obligation as a result of past events and it is probable that there will be an
outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes.
Contingent assets are neither recognized nor disclosed in the financial statements.
n) IMPAIRMENT OF ASSETS
An asset is impaired when the carrying amount of the asset exceeds its recoverable amount.
An impairment loss is charged to the profit and loss account in the year in which an asset is
defined as impaired. An impairment loss recognized in prior accounting periods is reversed if
there has been a change in the estimate of the recoverable amount







c















BIBLIOGRAPHY





















d


BIBLIOGRAPHY

Books


Punithavathy Pandian, Security Analysis and Portfolio Management (1
st
ed; New Delhi:
Vikas Publishing House, 2009) Ch.13, pp.257-264.

S.Kevin, Portfolio management (2
nd
ed; New Delhi: Prentice Hall India, 2007) Ch.8, pp.97-
121.

Kothari C R, Research Methodology: Methods and Techniques, (2nd ed; New Delhi: Viswa
Prakasham, 1996) Ch.I, pp.30-38.


Magazine/Journal AND COURSE MATERIALS

1) Icharts technical analysis course material.

Websites

1) http:// www.icharts.in
2) http:// www.chartfilter.com
3) http:// www.informedtrades.com
4) http://www. www.mudraa.com
5) http:// www.stockcharts.com
6) http:// www.equitymaster.com
7) http:// www.moneycontrol.com
8) http:// www.investopedia.com
9) http:// www.tradersedgeindia.com


















e

(Weekly progress report)
VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)
Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS PARTNER
TO RELIGARE
Area of specialization: FINANCE
Name of the student: REENA SUBHASH SALUNKE
USN N0: 1CR08MBA88

Date

Work done

Remarks

4/01/2010
Getting permission to do
project.


5/01/2010
Consultation with External
Guide


6/01/2010
Selection of project topic

7/01/2010
Consultation with External
Guide


8/10/2010
Approval from college to
start the project


9/10/2010
Project work commenced





SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE









f


VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)

Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS PARTNER
TO RELIGARE.
Name of the student: REENA SUBHASH SALUNKE

Date

Work done

Remarks

10/01/2010
Sunday

11/01/2010
Knowing the organization

12/01/2010
Collecting facts and
figures


13/01/2010
Consultation with External
Guide


14/01/2010
Gathering information
For industry profile


15/01/2010
Gathering information for
industry profile







SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE








g


VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)

Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS TO
PARTNER RELIGARE.
Name of the student: REENA SUBHASH SALUNKE

Date

Work done

Remarks

16/01/2010
Gathering information for
industry profile


17/01/2010
Sunday

18/01/2010
Gathering information for
company profile


19/01/2010
Gathering information for
company profile


20/01/2010
Gathering information for
7S model


21/01/2010
Gathering information for
7S MODEL





SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE








h

VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)

Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS PARTNER
TO RELIGARE
Name of the student: REENA SUBHASH SALUNKE

Date

Work done

Remarks

22/01/2010
Gathering information for
SWOT analysis


23/01/2010
Consultation with External
Guide


24/01/2010
Sunday

25/01/2010
Gathering information for
annual reports


26/01/2010
Republic day

27/01/2010
Analysis of financial
statements






SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE










i

VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)

Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS PARTNER
TO RELIGARE
Name of the student: REENA SUBHASH SALUNKE

Date

Work done

Remarks

28/01/2010
Consultation with External
Guide


29/01/2010
Framing of part B

30/01/2010
Work for part B
commenced


31/01/2010
Sunday

1/02/2010
Preparation of project
synopsis


02/02/2010
Consultation with External
Guide





SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE








j


VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)

Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS PARTNER
TO RELIGARE
Name of the student: REENA SUBHASH SALUNKE

Date

Work done

Remarks

03/02/2010
Collection of information
for theoretical framework


04/02/2010
Collecting information for
theoretical framework


05/02/2010
Presentation of synopsis

06/02/2010
Synopsis correction

07/02/2010
Sunday

08/02/2010
Gathering data on technical
analysis





SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE








k

VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)

Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS PARTNER
TO RELIGARE
Name of the student: REENA SUBHASH SALUNKE

Date

Work done

Remarks

09/02/2010
Gathering data on
technical analysis


10/02/2010
Consultation with
External Guide


11/02/2010
Consultation with
External Guide


12/02/2010
Holiday for mahashivratri

13/02/2010
Correction in theoretical
framework


14/02/2010
Sunday





SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE










l

VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)

Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS PARTNER
TO RELIGARE
Name of the student: REENA SUBHASH SALUNKE

Date

Work done

Remarks

15/02/2010
Learnt about stock and
commodity trading


16/02/2010
Collecting information on
technical analysis


17/02/2010
Gathering data on technical
indicators


18/02/2010
Selection of technical
indicators


19/02/2010
Consultation with External
Guide


20/02/2010
Understanding technical
indicators






SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE









m

VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)

Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS PARTNER
TO RELIGARE
Name of the student: REENA SUBHASH SALUNKE

Date

Work done

Remarks

21/02/2010
Sunday

22/01/2010
Selection of companies for
short term comparison


23/02/2010
Analysis of companies for
short term comparison


24/02/2010
Selection of companies for
long term comparison


25/02/2010
Analysis and interpretation

26/02/2010
Analysis and interpretation




SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE








n

VTU MBA PROGRAM
SUMMER PROJECT (08MBA48)

Name of the organization: MULTIRAY FINANCIAL SERVICES A BUSINESS
PARTNER TO RELIGARE
Name of the student: REENA SUBHASH SALUNKE


Date Work done

Remarks
27/02/2010 Analysis and interpretation
28/02/2010 Sunday
1/03/2010 Preparation of draft copy
2/03/2010 Preparation of draft copy
3/03/2010 Submission of draft copy to
Internal Guide

4/03/2010 Evaluation and correction







SIGNATURE OF THE STUDENT SIGNATURE OF EXTERNAL GUIDE








o