Inuustiy Analysis:

Telecom Sectoi
resenLed 8y
Croup 3
Indian TeIecom Overview
Subscribers (M)
Fixed Line Wireless
584
392
261
34
165
2 4 7 13
52
90
27
33 38 41 43 41 42 42 39 38 37
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Revenue (USD B)
43
32
20
15
9
10
11
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2009-10
India is one of the biggest telecom markets in
the world
%e unprecedented growt witnessed by Indian
telecom sector as been possible because oI
wireless revolution.
%otal Subscriber - 621.28 M Penetration -
49.5
%ere are more tan 10 players in eac circle,
making it one oI te most Iragmented telecom
market in te world
Indian teIecom services market is
dominated by TeIephony services
(mobiIe & basic) and internet services
%e Indian telecom industry generated
revenues oI approximately US$ 32 B in
2007-08 wit a growt rate oI 60 per cent
over 2006-07.
It witnessed a compound annual growt
rate (CAGR) oI approximately 29 per cent
Irom 2002-03 to 2007-08
voIution of the TeIecom Sector
ISIEmergingMarketsPDF ChandraguptInstituteJfManagementPatna from 112.133.195.178 on 2011-07-24 12:31:20 EDT. DownloadPDF.
2000 - BSNL establised
2000 - National Long Distance (NLD) &
international Long Distance (ILD) services
opened to competition
2000 - CDMA%ecnology launced
2002 - VSNL privatised
2004 - Intra circle merger guidelines
establised
2005 - FDI limits increased Irom 49 to
74
2010 - Auctioning oI 3G licenses
1984-Entry oI Private Sector intelecom
equipment manuIacturing
1986 - Formation oI M%NL & VSNL
1989 - %elecom Commission was setup
Pase - I
(1980 - 89)
1992 - Private Sector participation in
provision oI VAS suc as cellular & paging
1994 - National %elecom Policy
1997 - %RAI establised
1999 - New %elecom Policy announced
Pase - II
(1990 - 99)
2010 - MNP to be rolled out
Pase - III
(2000 - Onwards)
DI in Indian TeIecom Sector
Despite the gIobaI economic sIowdown in 2008-09, the teIecom DI InfIows in India (USD B)
sector is one of the highest DI attracting sectors in India
%e Indian government allows FDI oI up to 74, subject to 34.4
35.2
ISIEmergingMarketsPDF ChandraguptInstituteJfManagementPatna from 112.133.195.178 on 2011-07-24 12:31:20 EDT. DownloadPDF.
licensing and security requirements, in te Iollowing areas:
Basic & cellular services
22.8
National/international long distance services
VAS suc as PMR%S & GMPCS
9
4.3
6.1
Radio paging services
Internet services (providing service gateway)
InIrastructure providers (category II)
%e Indian government allows FDI oI up to 100 in te Iollowing
categories:
ManuIacturing oI telecom equipment
Internet services (not providing international gateways)
InIrastructure providers (dark Iibre, rigt oI way, duct
space, tower)
Electronic mail
Voice mail
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
DI in Indian TeIecom Sector (USD M)
2008-09 2558
2007-08 1261
2006-07 478
Despite GIobaI conomic sIowdown
2005-06 624 in 2008-09 DI in TeIecom increased
2004-05 129
2003-04 116
M&A in Indian TeIecom Sector
The market is witnessing severaI M&A activities that are resuIting in consoIidations in the industry. This trend has assisted
companies in expanding their reach in the Indian teIecom market to offer better services to customers
ISIEmergingMarketsPDF ChandraguptInstituteJfManagementPatna from 112.133.195.178 on 2011-07-24 12:31:20 EDT. DownloadPDF.
Recent M&A in Indian TeIecom Industry
Deal Date %arget Company Acquirer Company Deal Value ($ M)
January 05, 2009 Wireless %ata %elecom InIras Quippo %elecom InIrastructure NA
February 02, 2009 Cellucom Llc Spice Group NA
May 27, 2009 Allianz InIratec Swan %elecom NA
June 06, 2009 Spanco Ltd Investor Group 3.93
July 08, 2009 HFCL InIotel Investor Group 17.78
July 12, 2009 S %el Ltd Investor Group 225
July 14, 2009 Spice Mobiles Ltd Spice %eleventures Ltd 7.05
July 20, 2009 Sree Sree %elecom Goldstone InIratec NA
July 27, 2009 Acticemedia %ecnologies 2 Ergo Group Plc NA
August 19, 2009 Wireless %% InIo Services Quippo %elecom InIrastructure 1320.6
September 15, 2009 XL %elecom & Energy Morgan Stanley Mauritius 3.68
October 29, 2009 %ranscend InIrastructure American %ower Corp CIA NA
Zain AIrica Barti Airtel
Operating Matrix
ISIEmergingMarketsPDF ChandraguptInstituteJfManagementPatnasfrom 112.133.195.178 on 2011-07-24 12:31:20 EDT. DownloadPDF.
Indicators Units Barti Airtel Idea Rcom VodaIone
No. oI Circles no. 22 22 22 NA
Subscribers M 127.65 63.8 102.422 100.86
Market Sare 21.8 10.9 17.5 17.3
RPM INR 0.47 0.47 0.44 NA
MoU min 468 398 318 NA
ARPU INR 220 185 139 NA
%otal Minutes oI use M 172797 68275 93500 NA
Employees no. 10357 6763 37150 NA
Subscribers Per Employee no. 12325 9438 2757 NA
Average Revenue Per Employee Per Mont INR'000 2711 1741 383 NA
VAS as oI Revenue NA 12.4 NA NA
Literature Review
ndusLry Analysls Macroeconomlc Mlcroeconomlc and
valuaLlon raLlos
LkCn nflaLlon Cu
Ceneral lndlcaLors proflLablllLy raLlos llquldlLy raLlos
flnanclal cycles flnanclal leverage raLlos producLlon facLors
lnvesLmenL ouLlays cosLs sLrucLure of flxed asseLs sLrucLure
of currenL asseLs sLrucLure of currenL llablllLles lnvesLmenL
aLLracLlveness analysls of revenue and uuonL's pyramld
8elley 8rown Cycllcal and sLrucLural changes evaluaLlon of
lndusLry llfe cycle orLer's 3 forces uuM lClL
nvesLopedla Larnlngs rlce Lo sales raLlo L8u1A cash flow
8alance sheeL and borrowlng
Tective
1o analyze Lhe buslness cycle of Lhe Lelecom secLor
1o evaluaLe Lhe llfe cycle of Lelecom lndusLry
1o analyze Lhe compeLlLlve envlronmenL of Lelecom lndusLry
1o analyze Lhe sLrucLural economlc changes ln Lhe Lelecom
lndusLry
1o esLlmaLe Lhe lndusLry raLes of reLurn
valuaLlon uslng Lhe reduced form uuM
valuaLlon uslng Lhe free cash flow Lo equlLy Model
1o flnd Lhe oLher relaLlve valuaLlon 8aLlos
1he rlce/8ook value raLlo
1he rlce/Cash flow raLlo
1he rlce/Sales raLlo
Strengtbs
lasLesL growlng Lelecom markeL
rogresslve reform process
lorward looklng approach of Lhe CovernmenL
v 1echnology neuLrallLy
v lormulaLlon of pollcles ln Lune wlLh Lhe growLh requlremenL
v lasL adapLaLlon of Lechnologlcal developmenL le Moblle number
orLablllLy (Mn) nexL generaLlon neLwork (nCn) 3C and 8roadband
Wlreless Access (8WA) v6 eLc
v LsLabllshmenL of 8egulaLory /ulspuLe resoluLlon bodles
v lramework for responslve CusLomer Crlevance Mechanlsm
O LsLabllshmenL of decenLrallzed unlLs of uo1 llke ConLroller of
CommunlcaLlon AccounL (CCA) and 1elecom LnforcemenL 8esource and
MonlLorlng (1L8M) unlLs eLc
O Llberal lu pollcy
O PealLhy compeLlLlon resulLlng ln Lhe mosL affordable Larlffs ln Lhe world
O ollcy of lnfrasLrucLure sharlng leadlng Lo opLlmum uLlllzaLlon of resources
Weaknesses
Lack of lndlgenous 1elecom ManufacLurlng and 8u
ComparaLlvely slower growLh of 1elecom servlces ln
rural/remoLe areas
Low 8roadband peneLraLlon ln Lhe counLry
v Lack of local conLenL/appllcaLlon developmenL
v Low proflLablllLy of 1elecom Sus
v non avallablllLy of adequaLe specLrum
v uLlllzaLlon agalnsL Lhe avallable corpus of uSCl
v non avallablllLy of adequaLe power supply for 1elecom
Servlce
O Plgh CosL of daLa hosLlng ln ndla
\\[rtunities
lor developlng a new comprehenslve 1elecom pollcy
lor acceleraLlng Lhe growLh of LeledenslLy ln Lhe counLry
lor creaLlon of Lelecom lnfrasLrucLure ln rural and remoLe areas by
uLlllzaLlon of Lhe uSC lund
lor laylng of CpLlcal llbre Cable (ClC) Lo uncovered areas and
effecLlve uLlllzaLlon of Lhe exlsLlng resources Lo provlde backhaul
connecLlvlLy
lor huge 8roadband poLenLlal ln Lhe counLry
lor 8u producL developmenL and lndlgenous Lelecom
manufacLurlng
uevelopmenL of local conLenL/appllcaLlon
uevelopmenL of affordable equlpmenL aL Lhe cusLomer end
AdopLlon of emerglng Lechnologles
Tbreats
non avallablllLy of adequaLe specLrum for Lelecom servlces
underperformance of Sus resulLlng ln lndusLrlal unresL and
eroslon of value of governmenL equlLy
uependence on forelgn Lelecom equlpmenL suppllers
v Cyber LhreaLs on C1 neLworks leadlng Lo securlLy concerns
v Cbsolence of exlsLlng neLwork elemenLs due Lo fasL
changlng Lelecom Lechnologles
P[rter's five f[rces Analysis
1hreaL of new LnLranLs (Plgh)
ower of Suppllers (Low)
ower of 8uyers (Plgh)
AvallablllLy of SubsLlLuLes (Medlum)
CompeLlLlve 8lvalry(Plgh)
Industry Life Cycle
INDIAN TELEC INDUSTRY
FRAEWRK
INDIAN GCVLkNING 8CDILS
1bey fotmolote votloos
pollcles ooJ poss lows to
teqolote tbe telecom
loJostty lo loJlo
Lg Wlreless lannlng
and CoordlnaLlon (WC)
ueparLmenL of
1elecommunlcaLlons
1elecom Commlsslon
Croup on 1elecom and 1
(Co11)
INDLLNDLN1 8CDILS
1bey ooJettoke votloos
teseotcb octlvltles ooJ
mooltot tbe poollty of
setvlce ptovlJeJ lo tbe
loJloo telecom loJostty
1bey olso ptovlJe votloos
tecommeoJotloos to
lmptove tbe stotos of
telecom opetotloos lo
loJlo
Lg 1elecom 8egulaLory
AuLhorlLy of ndla (18A)
Goahead
to the
CDMA
techno|ogy

n
u

A

r|vate
p|ayers were
a||owed |n
Va|ue Added
Serv|ces
Nat|ona|
1e|ecom
o||cy (N1)
was
formu|ated
1992
1994
1997
Independent
regu|ator
1kAI was
estab||shed
N199 |ed to
m|grat|on from
h|ghcost f|xed
||cense fee to
|owcost
revenue shar|ng
reg|me
1999
2000
2002
8SNL was
estab||she
d by Do1
ILD serv|ces
was opened to
compet|t|on
Internet
te|ephony
|n|t|ated
keduct|on
of ||cence
fees
2003
Ca|||ng arty
ays (C) was
|mp|emented
Un|f|ed
Access
L|cens|ng
(UASL)
reg|me was
|ntroduced
keference
Interconne
ct order
was |ssued
2004
Intrac|rc|e
merger
gu|de||nes
were
estab||shed
8roadband
po||cy 2004
was
formu|ated
target|ng
20 m||||on
subscr|bers
by 2010
200S
IDI ||m|t was
|ncreased
from 49 to
74 percent
Attempted
to boost
kura|
te|ephony
2006
Number
portab|||ty was
proposed
(pend|ng)
Dec|s|on on 3G
serv|ces
(awa|ted)
2007
Department of 1e|ecommun|cat|on (Do1) |s the ma|n body
formu|at|ng |aws and var|ous regu|at|ons for the Ind|an te|ecom
|ndustry
vorious importont requ/otions ond /ows hove been possed in the lndion
te/ecom industry post/ibero/isotion ero
Tbe acr[ec[n[ic fact[rs
affecting Telec[ Industry:
Lagglng ndlcaLor
nLeresL raLe Leadlng ndlcaLor
W ColncldenL ndlcaLor
lC8LO Lagglng ndlcaLor

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Sep/03
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Sep/07
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Mar/08
May/08
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Sep/08
nov/08
!an/09
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!un/08
Aug/08
CcL/08
uec/08
leb/09
Apr/09
!un/09
Aug/09
CcL/09
uec/09
leb/10
Apr/10
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6000
4000
2000
000
2000
4000
6000
8000
2011 2010 2009 2008 2007 2006 2003 2004 2003 2002
1elecom SecLor ndex Close
Money Supply
6000
4000
2000
000
2000
4000
6000
8000
10000
12000
2009 2008 2007 2006 2003 2004 2003 2002
1elecom SecLor ndex Close
Cu
6000
4000
2000
000
2000
4000
6000
8000
2010 2009 2008 2007 2006 2003 2004
1elecom SecLor ndex Close
C
6000
4000
2000
000
2000
4000
6000
8000
2011 2010 2009 2008 2007 2006 2003 2004 2003
1elecom SecLor ndex Close
nLeresL 8aLe
IvI YIL
0
03
1
13
2
23
2002 2003 2004 2003 2006 2007 2008 2009 2010 2011
uv ?LLu 8SL
uv ?LLu 1LLLCCM
ere as the |ntr|ns|c va|ue |s be|ow the market pr|ce we shou|d underwe|ght
the |ndustry
IC BY B00K vAL0
10
3
0
3
10
13
20
23
30
33
2002 2003 2004 2003 2006 2007 2008 2009 2010 2011
/8 8SL
/8 1LLLCCM
ere as the |ntr|ns|c va|ue |s be|ow thw market pr|ce we shou|d underwe|ght the
|ndustry
IC BY 0ITY
0
20
40
60
80
100
120
2002 2003 2004 2003 2006 2007 2008 2009 2010 2011
/L 8SL
/L 1LLLCCM
nLrlnslc values are almosL equal
u ont Analysis
ROE
2008 2009 2010 2011
12.91
%
16.16
%
10.93
%
10.95
%
ROA Leverage
2008 2009 2010 2011 "*" 2008 2009 2010 2011
8.96
%
10.38
%
7.23
%
7.62
%
1.44 1.56 1.51 1.44
ROS TAT
2008 2009 2010 2011 "*" 2008 2009 2010 2011
15.19
%
18.64
%
15.72
%
16.90
%
0.59 0.56 0.46 0.45
Net profit per
company
Net revenue per
company
Assets per company Equity per comapny
2008 2009 2010 2011 "/" 2008 2009 2010 2011 "/" 2008 2009 2010 2011 "/" 2008 2009 2010 2011
4,826
.48
7,095
.94
7,431
.09
8,372
.63
31,76
6.98
38,06
8.78
47,26
6.57
49,53
7.75
53,86
7.42
68,36
4.15
1,02,8
26.73
1,09,8
06.86
37,39
9.91
43,90
4.15
67,99
9.13
76,43
1.89

Mar 11 Mar 10 Mar 09 Mar 08 Mar 07 Mar 06 Mar 0S Mar 04 Mar 03 Mar 02
ulvlden
d
37980 38276 73086 136383 102912 88369 98128 71986 80401 280231
neL
proflL
783844 330341 886482 1397113 1474888 1483707 1174314 684933 143231 724113
u/L
003 017 008 010 007 006 008 011 033 039
8eLenLl
on raLe
9317 8338 9133 9022 9302 9403 9164 8949 4464 6130
nLeresL
8aLe
817 763 632 782 776 703 698 723 702 823
8lsk
remlu
m
812 342 643 743 943 1032 736 634 344 343
beLa
101
k
1637 1310 1281 1332 1730 1747 1462 1363 1231 1371
8CL
800 820 733 1064 1093 937 823 843 307 920
g
761 684 673 960 1019 881 736 734 137 364

D|v|dend 2011 onward 40871SS3S1

rlce of lndusLry 4666832321
MarkeL prlce 484363
ndusLry ls overvalued
Pr[ecti[n using c[nstant gr[wtb
rate
LAk
Gr kate D|v * V
factor
V
2012 10 4493870886 0837339 3834483 2
2013 10 4943437973 0793832 3923864 3
2014 10 3440003772 073303 3998363 4
201S 10 398400413 0680383 4072613 3
2016 10 6382404363 063017 4148031 6
2017 10 7240643021 038349 4224847 7
2018 10 7964709323 0340269 4303083 8
2019 10 8761180473 0300249 4382771 9
2020 10 9637298323 0463193 4463934 10
2021 10 1060102838 0428883 4346399 11
cont va|ue 1830288048 0397114 7268326 12
Pr[ecti[n using variaTle gr[wtb
rate
LAk Gr
kate
D|v *V factor V
2012 130 4618483347 0837339 481228
1
2
2013 120 3172703812 0793832 499031
3
3
2014 110 3741701232 073303 312913
9
4
201S 100 6313871333 0680383 322412
3
3
2016 90 6884299777 063017 327249
4
6
2017 80 7433043739 038349 327249
4
7
2018 70 7933496822 0340269 322367
3
8
2019 60 8432826631 0300249 312694 9
2020 30 8834467963 0463193 498432
3
10
2021 40 9208646682 0428883 479991
3
11
C
ear Mar
11
Mar
10
Mar 09 Mar
08
Mar
07
Mar
06
Mar
0S
Mar
04
Mar 03 Mar
02
Net Income
42,003.
69
1,47,785
.98
1,53,978.8
3
1,29,039.
45
98,316.90 86,993.
13
70,807.
64
61,750.
86
51,113.68 48,013.
60
Deprec|at|on
5,000.9
4
24,825.0
6
23,213.30 22,058.7
6
17,747.81 15,812.
77
14,387.
31
13,201.
09
13,117.77 10,942.
10
Cap|ta| Spend|ng
44,311.
96
2,31,172
.57
2,32,377.0
3
1,74,002.
08
1,46,162.1
2
1,27,01
8.17
1,20,44
3.56
89,116.
67
80,624.01 77,782.
23
Change In
Work|ng Cap|ta|
21649.
93
-
52730.1
1
28532.78 2556.09 9222.57 7291.05 7813.7
5
11843.0
8
-4141.33 8087.65
Net Debt Issued
19,327.
35
18,987.0
0
18,790.00 17,900.0
0
13,579.00 19,870.
00
20,987.
00
45,678.
89
17,584.90 17,587.
00
ICIL
370.09 13,155.5
8
-64,927.68 -7,559.96 -25,740.98 -
11,633.
32
-
22,075.
36
19,671.
09
5,333.67 -
9,327.1
8
Bharti AirteI
BhartiAirteI (AirteI) is India's Iargest mobiIe operator
It as close to 119 M subscribers at te end oI Marc 2010
Present in all 23 oI India`s circles, Barti opes to double it`s
INANCIALS O AIRTL (INR M)
396,150
369,612
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Barti Airtel is divided into tree business units - mobile
services, broadband and telepone services, and enterprise
services
%e operator`s enterprise unit is divided into carriers and
corporate business units. %e carrier unit oIIers data and voice
wolesale services, wile te corporate business units supply
data and telecommunications needs Ior corporates and SMEs
Altoug Airtel is majority owned by te Barti Group, Sing%el
owns a strategic 30.84
270,250
10 09 08
Revenue EBI%DA EBI% PA%
CAPITAL MART PRORMANC INANCIALS O AIRTL (INR M)
BSE Sensex
Barti Airtel
79.43
ey igures 10 09 08
Net Worth
398,789 291,279 217,244
CMP (24 Aug'10)
Airtel : INR 322.05 BSE Sensex: 18,311.6
Mcap: INR 1,222,995 M
Debt 64,618 118,801 97,063
Cash 13,903 11,145 6,777
SHP (Jun'10)
Promoter : 67.87 FII: 16.65%
Public: 6.64 DII: 8.84%
-58.21
Revenue Growth (%)
7.2 36.8 44.5
BITDA (%)
40.5 41.0 42.1
PAT (%)
23.5 23.4 25.2
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BBATI AITL
Idea CeIIuIar
Idea CeIIuIar (Idea) is a gIobaI system for mobiIe communication
(GSM) mobiIe services operator in India
It operates under te brand IDEA and is a pan India integrated
GSM operator covering te entire telepony landscape oI te
INANCIALS O IDA (INR M)
1,24,494
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It as close to 64 M subscribers at te end oI Marc 2010 and is
present in 22 circles
Idea oIIers basic voice and sort message service (SMS) services
to ig-end value added and general packet radio service (GPRS)
services, suc as Blackberry, Datacard, Mobile %V and Games
Idea as been adjudged to be te no. 4 buzziest brand in India
across all categories - 3rd Year in a row
It as 16 stake in Indus, wic is te largest independent tower
company in te world wit ~ 103,000 towers
67,200
10 09 08
Revenue EBI%DA EBI% PA%
CAPITAL MART PRORMANC
BSE Sensex Idea
79.43 ey igures
INANCIALS O IDA (INR M)
10 09 08
Net Worth
30.65 113,724 132,653 35,408
Debt
78,593 89,122 65,154
Cash
14,204 30,864 4 ,975
SHP (Jun'10)
Promoter : 46.98 FII: 6.05%
Public: 39.25 DII: 7.72%
CMP (24 Aug'10)
Idea : INR 68.15 BSE Sensex: 18,311.6 Revenue Growth (%)
Mcap: INR 224,914.5 M
BITDA (%)
22.9 50.7 52.3
27.4 28.0 33.5
PAT (%)
7.7 8.9 15.5
IA
ReIiance Communications
ReIiance Communications (Rcom) is India's second biggest
wireIess operator
Rcom as close to 102 M subscribers at te end oI Marc 2010
and is present in 22 circles
INANCIALS O RCOM (INR M)
2,21,323 2,29,416
1,90,672

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oI wireless, wireline and long-distance voice, data, video and
internet communications services.
It also as an international presence via its submarine cable
network inIrastructure, wic connects 40 countries Irom te US
to Europe, te Middle East, India, Sout East Asia and Japan
%e operator is split into tree business units, namely
Wireless, Global and Broadband. Reliance oIIers wireless
services troug its CDMA and GSM networks
Reliance is also a signiIicant broadband operator, oIIering 10 09 08
enterprise voice, data, video and internet services. It as more
Revenue EBI%DA EBI% PA%
tan 1mn access lines
CAPITAL MART PRORMANC
BSE Sensex Rcom
INANCIALS O RCOM (INR M)
79.43
ey igures 10 09 08
Net Worth
387,825
422,803 290,263
Debt
247,473 391,623 258,217
-27.64
Cash 48,585 109,629 115,981
SHP (Jun'10) CMP (24 Aug'10)
Promoter : 67.72 FII: 8.01% Rcom : INR 166 BSE Sensex: 18,311.6
Revenue Growth (%)
-3.5 20.3 -3.4
Public: 14.91 DII: 9.36% Mcap: INR 342,628.48 M BITDA (%)
35.3 40.5 43.0
PAT (%)
21.6 26.8 35.6
LIAC
SI
Concept
8S ls an osclllaLor whose value osclllaLes beLween 0100
calculaLed based on relaLlve sLrengLh a measure of
momenLum An nperlod relaLlve sLrengLh ls Lhe raLlo of galns
ln Lhe prlce ln lasL n days dlvlded by Lhe losses ln lasL n days
Use
Plgher values of 8S lndlcaLe overboughL markeL where as low
values lndlcaLe oversold markeL 30 and 70 are usually seL as
Lhresholds for a buy and sell slgnal respecLlvely 8uy/Sell
slgnals are also generaLed by observlng dlvergence beLween
sLock and lndlcaLor (A dlvergence ls sald Lo exlsL lf Lhe prlce
moves ln one dlrecLlon and Lhe lndlcaLor moves ln opposlLe
dlrecLlon) underlylng sLock usually reverses Lhe dlrecLlon and
follows Lhe dlrecLlon of Lhe lndlcaLor
AC
Concept
Movlng Average Convergence ulvergence (MACu) ls Lhe
dlfference beLween a fasL and a slow exponenLlal movlng
average 1yplcally 12 and 26 days LMAs are used MACu ls Lhe
dlfference beLween Lhe values of Lhese Lwo LMAs A slgnal
llne ls formed by calculaLlng Lhe LMA (Lyplcally 9day) of Lhe
MACu 1he dlfference beLween MACu and Lhe slgnal llne ls
calculaLed and ploLLed as a hlsLogram
0LL ST0CBASTIC
Concept
SLochasLlc CsclllaLor ls a momenLum lndlcaLor LhaL shows Lhe
locaLlon of Lhe currenL close relaLlve Lo Lhe hlgh/low range
over a range of pasL perlods Closlng prlces near Lhe Lop of Lhe
range lndlcaLes buylng pressure where as closlng prlces near
Lhe boLLom of Lhe range lndlcaLes selllng pressure
Use
Closlng levels LhaL are conslsLenLly near Lhe Lop of Lhe range
lndlcaLe accumulaLlon (buylng pressure) and Lhose near Lhe
boLLom of Lhe range lndlcaLe dlsLrlbuLlon (selllng pressure)
8eadlngs below 20 are consldered oversold and readlngs
above 80 are consldered overboughL 8uy and sell slgnals can
be glven when k crosses above or below u
A
Concept
A momenLum lndlcaLor LhaL aLLempLs Lo gauge supply and
demand by deLermlnlng wheLher lnvesLors are generally
accumulaLlng (buylng) or dlsLrlbuLlng (selllng) a cerLaln
sLock by ldenLlfylng dlvergences beLween sLock prlce and
volume flow
AT
volaLlllLy lndlcaLor
Pow much a sLock has moved elLher up or down on average
over Lhe deflned perlod
Plgh values lndlcaLe LhaL prlces are changlng a large amounL
durlng Lhe day
Low values lndlcaLe LhaL prlces are sLaylng relaLlvely consLanL
CCI
An osclllaLor used ln Lechnlcal analysls Lo help deLermlne
when an lnvesLmenL vehlcle has been overboughL and
oversold 1he CommodlLy Channel ndex flrsL developed by
uonald LamberL quanLlfles Lhe relaLlonshlp beLween Lhe
asseLs prlce a movlng average (MA) of Lhe asseLs prlce and
normal devlaLlons (u) from LhaL average L ls compuLed wlLh
Lhe followlng formula
CC rlce MA/(0013*u)
0
L aLLempLs Lo ellmlnaLe Lhe Lrend ln prlces by fllLerlng ouL
cycles longer Lhan lLs movlng average L accompllshes Lhls by
comparlng Lhe currenL prlce Lo a movlng of prlce (n/2)+1
perlods ago 8y deLrendlng prlces shorLerLerm cycles are
more easlly ldenLlfled allowlng for a qulcker deLermlnaLlon of
poLenLlal overboughL and oversold levels
Conclusion
LkCn ndusLry ls overvalued
key lndlcaLors nflaLlon Cu
Angel 8roklng neuLral on Lelecom secLor
Lnam SecurlLles 1elecom secLor wlll grow
Thank You!