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CONTENT
Introduction to stock exchange Security meaning Types of securities Security analysis types fundamental analysis Technical analysis Conclusion
STOCK MARKET
Stock Exchange also called Stock Market or Share Market market forces. Stock markets started in 1881. Totally 21 stock exchanges in India. National stock exchange and Bombay stock exchanges are famous stock exchanges.
SECURITY
According to securities contract act 1956 , has defined the security as inclusive of shares, scripts, bonds , stocks , debentures (or) any other marketable securities of like nature.
TYPES OF SECURITIES
Equity shares
Shares
Preference shares Government securities
Securities market
Debt
Debentures
Bonds
Futures
Derivatives
Options
BOND
DEBENTURE
DERIVATIVES
SECURITY ANALYSIS
The analysis of various tradable financial instruments is called security analysis. It is the initial phase of the portfolio management process. This step consists of examining the risk-return characteristics of individual securities. Buy under priced securities and sell over priced securities.
Security analysis
Fundamental analysis
Technical analysis
FUNDAMENTAL ANALYSIS
It is a logical and systematic approach. The fundamental factors are relating to EIC analysis framework
Economy analysis
Fundamental analysis
Company analysis
Industry analysis
ECONOMY ANALYSIS
Factors including while making economy analysis
GDP Interest rates Inflation Exchange rates Government revenue , expenditure and deficits
INDUSTRY ANALYSIS
Industry life cycle
COMPANY ANALYSIS
Profit volume ratio (P/E ratio):Market price /Earnings per share(EPS) Earnings per share(EPS):Net Profit Available To Equity Shareholders/ Number Of Shareholders
Company P/E
Wipro Bharti Airtel Cipla ITC L&T NTPC ONGC 16.24 26.44 23.34 30.82 20.86 14.45 8.86
8
9 10
DR.REDDY S HDFC
AXIS Bank
18.96
28.94 9.8
13.2
20 17.8
88.15
26.91 107.50
TECHNICAL ANALYSIS
A technical analyst tries to identify the historical patterns from the chart, based on this he/she is going to forecast the future price movement. stages in technical analysis:
Collecting data Represent in charts Evaluation of historical patterns Forecasting the prices
TYPES OF CHARTS
Line chart
Bar charts
A candlestick chart
22-Aug-12
23-Aug-12 24-Aug-12 27-Aug-12 28-Aug-12 29-Aug-12 30-Aug-12 31-Aug-12
355
355.65 362.95 366.5 360.5 364 364 369
357.45
366.75 366.5 366.85 365 369 370 372.5
350.25
355.65 360.25 360.05 359 361.5 362.1 360.55
354.5
363.1 365.1 361.25 363.65 364.15 369 362.6
11-Sep-12
12-Sep-12 13-Sep-12 14-Sep-12
373.5
377.25 387.1 395.95
377
386 389.35 395.95
372.1
375.3 385.5 387.55
374.85
384.55 387.9 391.55
CONCLUSION
Helpful for the investor Long term investments Minimizes the risk Maximizes the profits Knowledge about the market conditions