Abhishek Rai Dissertation

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS
CHAPTER-1 (INTRODUCTION)
1.1 INTRODUCTION TO SECURITIES MARKET

The industrial securities market, particularly the equities market, occupies a disproportionately large space in the print and electronic media. The industry, business, rich and middle classes tend to be highly preoccupied with this market, and regard it as the barometer of the health of the economy. They frequently stress the essentiality of the growth and spread of what has come to be called the equity culture or equity cult or risk capital for faster industrial growth.
1.1.1 ORGANISATION AND STRUCTURE 1.1.1.1 Bombay Stock Exchange (BSE) The BSE is the premier or apex stock exchange in India. It is the biggest in size in terms of the amount of fresh capital raised, secondary market turnover and capitalization and the total listed companies and their paid-up capital. It is also the oldest market and has been recognized permanently, while the recognition for other exchanges is renewed every five years. 1.1.1.2 National Stock Exchange of India The NSEI has a fully automated, electronic, screen based trading system. It is sponsored by the IDBI and cosponsored by other term-lending institutions etc. Its objectives are: 1.1.1.1.1 to provide nation-wide equal access and fair, efficient, completely transparent securities network. 1.1.1.1.2 to provide shorter settlement cycles and book entry settlement system. 1.1.1.1.3 to bring the Indian stock market in line with international markets.
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trading system to investors by using suitable communication
1.1.1.1.4 to promote secondary market in debt instruments such as government and corporate bonds. 1.1.2 It has two separate segments: 1.1.2.1 The wholesale debt market segment (WDMS) which caters to banks, financial institutions, and other institutional participants, and which deals in PSU bonds, units, TBs, government securities etc. 1.1.2.2 The capital market segment (CMS) which deals in equities, convertible debentures, etc. These include securities that are traded on other stock exchanges. 1.1.3 Over the Counter Exchange of India - It was set up in 1992 and was the first stock exchange in India to introduce screen based automated ringless trading system. It is promoted by UTI, ICICI, IFCI, LIC, GIC etc with headquarters at Mumbai. Its objectives are: 1.1.3.1 to help companies to raise capital from the market at the cheapest costs and on optimal terms; 1.1.3.2 to help investors to access capital market safely and conveniently; 1.1.3.3 to cater the needs of the companies which cannot be listed on other official exchanges; 1.1.3.4 to eliminate the problems of illiquid securities, delayed settlements, and unfair prices faced by the investors. The securities which are traded on OTCEI are divided into three categories: listed, permitted and initiated.
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These securities cannot be traded on other stock exchanges. However, they can be bought and sold at any of the OTCEI counters all over India.
1.2 INTRODUCTION TO TECHNICAL ANALYSIS Financial markets, by their very nature, attract a wealth of high-caliber individuals who are genuinely excited by their chosen profession. Their enthusiasm and willingness to share their knowledge makes belonging to the community of traders, investors, and analysts a great privilege. Most of these individuals are successful because they recognize, in a way that academic analysis still does not, that asset price movements are not just random fluctuations driven by the rational behavior of independent traders. They recognize that human beings are, by nature, gregarious and communicative, and have an inner drive to belong to groups. Not surprisingly, therefore, group psychology provides a controlling influence over individual activity and transforms a large quantity of apparently unrelated decisions into a more certain outcome. Importantly, this outcome reveals itself in the form of rhythmic, patterned, price movements that bear not only a natural relationship to one another but also are essentially predictable once they are understood. This is why the discipline of technical analysishearing the message of the market via price movementsis such an accurate tool for making profitable trading decisions. Furthermore, since markets essentially attempt to anticipate movements in economic and social fundamentals, the accurate use of technical analysis actually implies an ability to predict those fundamentals. This is why technical analysis is such an important tool for making investment decisions.
Technical analysis is the use of numerical series generated by market activity, such as price and volume, to predict future price trends. The techniques applied to any market with a comprehensive price history. Primarily, but not exclusively, technical analysis is conducted by studying charts of past price movement. Many different methods and tools are used in technical analysis, but they all rely on the assumption that price patterns and trends exist in markets, and that they can be identified and exploited Technical analysis does not try to analyze the financial data of a company such as cash flow, dividends and projection of future dividends. That type of analysis is called Fundamental analysis. Nor does it claim to be 100% accurate. It attempts to give the "most likely" outcome. Some speculators combine elements from both technical and fundamental analysis. Technical analysis is viewed by many of its practitioners as more art than science. Many academic studies conclude that technical analysis has little, if any, predictive power. However, the practice has a dedicated following especially among active traders and does have support amongst the academic community. As an example of the debate regarding the efficacy of technical analysis, Peter Lynch, a very well-known and successful fundamental analyst, once commented, "Charts are great for predicting the past." On the other hand, the U.S. Federal Reserve once published a study saying that certain elements of technical analysis were effective in price forecasting. The premises of technical analysis were derived from empirical observations of financial markets over hundreds of years. Perhaps the oldest branch of technical analysis is the use of candlestick techniques by Japanese traders at least as
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early as the 18th century, and still very popular today. Dow Theory, a theory based on the collected writings of Dow Jones co-founder and Editor Charles Dow, inspired the increasingly widespread use and development of technical analysis from the end of the 19th century. Modern technical analysis considers Dow Theory its cornerstone. New tools and theories have been produced and existing tools have been enhanced at a rapid rate in recent decades, with an increasing emphasis on computer-assisted techniques. Technical analysis is not concerned with why a price is moving but rather whether it is moving in a particular direction or in a particular chart pattern. Technical analysts believe that profits can be made by "trend following." In other words if a particular stock price is steadily rising (trending upward) then a technical analyst will look for opportunities to buy this stock. Until the technical analyst is convinced this uptrend has reversed or ended, all else equal, he will continue to own this security. Additionally, technical analysts look for various price patterns to form on a price chart and will take positions in anticipation of the expected move following that pattern. The various tools of technical analysis assist the technician in determining when trends have formed, ended, etc. and when particular patterns are unfolding. Technical analysis may be at odds with fundamental analysis. Fundamental analysis maintains that markets may misprice a security and, through various methods of fundamental analysis, the "correct" price can be calculated. Profits can be made by trading the mispriced security and then waiting for the market to recognize its "mistake" and reprise the security. In contrast, a technical analyst is not interested in a security's "correct" price, only in price movement.
The beauty of technical analysis lies in its versatility. Because the principles of technical analysis are universally applicable, each of the analysis steps above can be performed using the same theoretical background. You don't need an economics degree to analyze a market index chart. You don't need to be a specialist to analyze a stock chart. It does not matter if the time frame is 2 days or 2 years. It does not matter if it is a stock, market index or commodity. The technical principles of support, resistance, trend, trading range and other aspects can be applied to any chart. While this may sound easy, technical analysis is by no means easy. Success requires serious study, dedication and an open mind. One of the forecasting tools very popular among practitioners is technical analysis. Technical analysis is the examination of past price movements in order to forecast future price movements. Technical analysis is open to interpretation. Many times two technicians will look at the same chart and paint two different scenarios or see different patterns. Both would be able to come up with logical support to justify their position. In addition, even if stock prices completely followed a random walk, people would be able to convince themselves that there are patterns having a predictive value. It has become more and more popular, as it offered an unlimited set of tools and signals and seemed to be an interesting method of market analysis. It has been proven that stock prices most of the time approximately follow a random walk pattern. Psychologists have described a number of ways in which people deal with randomness. Additionally, market participants may be subject to herd behavior. Technical analysis is applicable to stocks, indices, commodities, futures or any tradable instrument where the price is influenced by the forces of supply and demand. Price refers to any combination of the open, high, low, or close for a given
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security over a specific time frame. The time frame can be based on intraday (1minute, 5-minutes, 10-minutes, 15-minutes, 30-minutes or hourly), daily, weekly or monthly price data and last a few hours or many years. In addition, some technical analysts include volume or open interest figures with their study of price action.
1.3 MEANING
The word technical comes from the Greek technikos, relating to art or skillful. Technical analysis is the study of any market that uses price and volume information only in order to forecast future price movement and trends. Technical analysts and technically oriented investors or traders rely on historical and current price and volume information only. Some other, related, statistical information is often considered part of technical analysis.
1.4 ASSUMPTIONS IN TECHNICAL ANALYSIS

1.4.1. 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. This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market. 1.4.2. 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
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movement is more likely to be in the same direction as the trend than to be against it. Most technical trading strategies are based on this assumption. 1.4.3. History Tends To Repeat It-self - Another important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. 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. 1.5 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. The Differences: 1.5.1 Charts vs. Financial Statements - At the most basic level, a technical analyst approach 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.
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1.5.2 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. 1.5.3 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. 1.6 CRITICISMS OF TECHNICAL ANALYSIS 1.6.1 Analyst Bias- Just as with fundamental analysis, technical analysis is subjective and our personal biases can be reflected in the analysis. It is important to be aware of these biases when analyzing a chart. If the analyst is a perpetual bull, then a bullish bias will overshadow the analysis. On the other hand, if the analyst is a disgruntled eternal bear, then the analysis will probably have a bearish tilt. 1.6.2 Open to Interpretation- Furthering the bias argument is the fact that technical analysis is open to interpretation. Even though there are standards, many times two technicians will look at the same chart and paint two different scenarios or see different patterns. Both will be able to come up with logical support and resistance levels as well as key breaks to justify their position. While this can be frustrating, it should be pointed out that technical analysis is more like an art than a science, somewhat like economics. Is the cup half-empty or half-full? It is in the eye of the beholder.
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1.6.3 Too Late- Technical analysis has been criticized for being too late. By the time the trend is identified, a substantial portion of the move has already taken place. After such a large move, the reward to risk ratio is not great. Lateness is a particular criticism of Dow Theory. 1.6.4 Always another Level- Even after a new trend has been identified, there is always another "important" level close at hand. Technicians have been accused of sitting on the fence and never taking an unqualified stance. Even if they are bullish, there is always some indicator or some level that will qualify their opinion. 1.6.5 Trader's Remorse - Not all technical signals and patterns work. When you begin to study technical analysis, you will come across an array of patterns and indicators with rules to match. For instance: A sell signal is given when the neckline of a head and shoulders pattern is broken. Even though this is a rule, it is not steadfast and can be subject to other factors such as volume and momentum. In that same vein, what works for one particular stock may not work for another. A 50-day moving average may work great to identify support and resistance for IBM, but a 70-day moving average may work better for Yahoo. Even though many principles of technical analysis are universal, each security will have its own idiosyncrasies. 1.6.6 Lack of evidence - Although chartists assert that their techniques provide excess returns over time, this assertion is controversial. Many academics believe that technical analysis has no predictive power. Burton Malkiel in his book "A Random Walk Down Wall Street" (8th edition, 2003) and Eugene Fama in "Efficient Capital Markets: A Review of Theory and Empirical Work," May 1970 Journal of Finance summarize many early studies, conducted from the 1950s-70s, that show that after trading costs are considered, the returns generated by many technical strategies under
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perform a simple buy and hold strategy. Critics of technical analysis include well known fundamental analysts. Warren Buffett has exclaimed, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians." 1.7 CONCEPT OF TREND Just as the market tends to have three phases related to mood or market sentiment, market trends can also be divided. Trend is nothing but the direction of movement of share prices. The three types of trend being: 1.7.1 Primary trend 1.7.2 Secondary trend 1.7.3 Sideways or flat trend The most important to investors, those who look to buy and hold stocks for as long as a stock is tending to command an increasing price over timeis the primary or major trend. The primary or major trend is a price movement that usually lasts for a year or more. A primary up trend is considered to be a bull market and a primary down trend, a bear market. Secondary trends are of a shorter durationtypically, three weeks to three months and interrupt the major direction of stock prices with a countertrend movement. Such moves are also called corrections in a bull market as they correct the situation where prices have risen too far, too fast. Secondary rallies are also called recovery rallies in a bear market. Sideways trend are of a very short duration and last from anything less than two or three weeks. The sideways trend phases are also referred to as trendless phases.
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1.8 CONCEPT OF SUPPORT AND RESISTANCE Support often refers to a prior low in price and is a price point or area where there is anticipated buying interest based on what happened in the past. Support is a price level at or below the current level of an index, stock, or other financial instrument. Resistance is a price area where sufficient selling develops to push prices lower and to resist the buying pressure. Resistance is a price level at or above the current level of an index, stock, or other financial instrument. Resistance is often a prior upswing high or series of highs. 1.9 TRENDLINES AND THEIR VARIATIONS A trend-line is one of the most basic and useful tools in assessing trends or trend reversals in stocks, stock averages, and other financial instruments. A trend-line is, as the name implies, a line that attempts to measure and define a price trend in any market that involves prices set by the free actions of buyers and sellers. It is also by definition a line that either slopes up or down to some degree in keeping with the primary definition of a trend as having a predominant up or down price direction. 1.10 STOP-LOSS One important dimension of any trading system is the ability to keep losses small. This is most of the times achieved with the use of STOP-LOSS. It is a price level or a mechanism that forces a trader to take/book losses in a losing position instead of letting them grow any bigger. Ideally a Stop-loss level should be decided as soon as a trade is executed. If a stock say ABC is bought at Rs.50, Stop-loss for it can be kept at a price level somewhat lower than Rs.50. It can be 49, 48, 47 or even Rs.35. Let us assume the Stop-loss is kept at Rs.35. This means if the price of ABC, after buying it for Rs.50 goes below Rs.35 one should close the position by selling it. Rs.15 is the
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loss the buyer is limiting himself to. This might be little confusing for novice traders because it involves closing a position willingly at a loss! Remember: In a long position, the Stop-loss price is usually lower than the entry price. Likewise if a trader shorts ABC stocks at Rs.50, he should keep a Stop-loss at any price higher than Rs.50. Say if it was kept at Rs.65 this means if the price moves up contrary to the initial expectations of it going down, and touches Rs.65, one should call it a quit and square up the position. Thus, in a short sell, the Stop-loss price is higher than the price at which the stock was sold. 1.11 TECHNICAL INDICATORS Technical analysis makes extensive use of various mathematical models or studies to show various aspects of price activity, such as ones measuring momentum, or the rate of price increase or change. These models are generally called technical indicators or simply indicators. The goals in using indicators are to better identify current and emerging trends and the points subject to trend reversals, in order to increase profitable investing and trading decisions and decrease unprofitable ones. A technical indicator is a series of data points that are derived by applying a formula to the price data of a security. Price data includes any combination of the open, high, low or close over a period of time. Some indicators may use only the closing prices, while others incorporate volume and open interest into their formulas. The price data is entered into the formula and a data point is produced. 1.11.1 Indicators serve three broad functions: to alert, to confirm and to predict. 1.11.1.1 An indicator can act as an alert to study price action a little more closely. If momentum is waning, it may be a signal to watch for a break of support. Or, if there
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is a large positive divergence building, it may serve as an alert to watch for a resistance breakout. 1.11.1.2 Indicators can be used to confirm other technical analysis tools. If there is a breakout on the price chart, a corresponding moving average crossover could serve to confirm the breakout. Or, if a stock breaks support, a corresponding low in the On Balance Volume could serve to confirm the weakness. 1.11.1.3 Some investors and traders use indicators to predict the direction of future prices. 1.11.2 Five important uses of indicators are to help in identifying: 1.11.2.1 Direction of a trend, ranging from short- to long-term 1.11.2.2 Strength of a trend 1.11.2.3 Support and resistance levels in a trend or in a trading range 1.11.2.4 Divergences that occur between indicators and price, suggesting a possible future trend reversal 1.11.2.5 Trend reversal confirmations, also ranging from short- to long-term
1.11.3 There are basically four different types of technical indicators: 1.11.3.1. Trend indicators.- These indicators are used to indicate the direction of a trend. These are very useful because the basic rule is that you should always trade with a trend and not against it. Some examples of trend following indicators include Parabolic SAR, MACD and Moving Averages.
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1.11.3.2. Momentum indicators.- Momentum or strength indicators are used to indicate the speed or strength of a move in price and are best used to determine a change in direction. They tend to be oscillating indicators showing overbought and oversold positions. Examples include CCI, RSI and Stochastic. 1.11.3.3. Volatility indicators.- These indicators, as the name suggests, show a change in volatility, which often leads to a change in price. Examples include ATR, Bollinger Bands and Envelopes. 1.11.3.4. Volume indicators. Volume indicators are used to show the volume of trading in a particular currency. These are useful to confirm the direction of a trend or to signal a breakout. For example, if the pair trades in a narrow range and then breaks out on high volume, then this is a very bullish signal. Examples of volume indicators include Chaikin Money Flow, Demand Index and OBV. For an introductory treatment of technical indicators we can say that there are basically two types: moving averages and oscillators. Of the two, moving averages are the more important indicators for long-term investors and for trend-following purposes. Common oscillators include the relative strength index (RSI), momentum and rate of change, stochastic, and MACD (moving average convergencedivergence) and are of significant use for shorter-term trading, but are also of some benefit for longer-term investors, just less frequently. When prices are confined to a trading range, which is most often the result of the consolidation or correction to a prior up or down trend, oscillators can be quite effective for identifying buy and sell entry points. They become more accurate in trading range situations in providing an indication of likely support or resistance, or the condition known as oversold or overbought.
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CHAPTER 2 (LITERATURE REVIEW & RESEARCH DESIGN)
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2.1 LITERATURE REVIEW

Literature review has under taken for analyze various literature and research papers available in the related field. Further research can be undertaken where sufficient study is not done in particular field. Various sources of information have been used in this review include technical analysis books, financial journals, articles and research papers.
2.2 RESEARCH PAPERS 2.2.1. TECHNICAL ANALYSIS AND TYPICAL COGNITIVE BIASES Piotr Zielonka, Warsaw University SGGW and Leon Kozminski Academy of Entrepreneurship and Management, Poland
2.2.1.1 Abstract The paper describes a study carried out on a group of 24 Polish financial analysts. The analysts responded to a questionnaire with 24 items (signals). They were asked to rate the predictive value of different signals for the movements of stock prices. The signals were of three types: 2.2.1.1.1 regular technical analysis signals, representing some common psychological biases (gambler's fallacy, ignoring the principle of regression to mean, anchoring effect and herd behavior) 2.2.1.1.2 technical-like signals created by the author of the research that imitated technical signals and represented the same types of biases as real technical signals,
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2.2.1.1.3 other technical-like signals that did not represent any biases. It turned out that the analysts tended to ascribe high predictive value to the questionnaire items associated with psychological biases (either technical or technical-like signals). At the same time, these items were rated very similarly by different analysts. On the other hand, the technical-like signals not related to any biases were given very low predictive values by the analysts. These results suggest that popularity of technical analysis is associated with its relation to the typical cognitive biases of humans.
2.2.1.2 Methodology
The study was carried out in Warsaw in January-February 2002. The participants were 24 financial analysts or dealers employed by banks and Polish capital market institutions. The sample was not random. Each participant was administered a 24 item questionnaire. There were three groups of items within the questionnaire. Each group consisted of 8 items. The first group consisted of regular technical analysis signals representing four common psychological inclinations. Each inclination was represented by two signals. Usually one from a pair of signals was a predictor of a stock fall (-), whereas the other signal was a predictor of a stock rise (+). The group consisted of technical-like signals, created by the author of the questionnaire that did not represent any psychological inclinations. - Drop of chemical companies' prices, - Horizontal, typically sinusoidal WIG index movement, - Rising WIG index creates longer and longer horizontal shelves, - A fan formation support line moves upward,
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- Diminishing dynamics of price rise in textile branch, - An alternate large and small daily trade volume, - Second MACD derivative goes negative, - WIG index creates horizontal small amplitude sinusoid curve. The cover page of the questionnaire stated that the survey was designed to better understand the opinions of experts on implementation of technical analysis. This remark allowed the participants to feel more like experts whose opinion is needed for some further research rather than merely the persons to be examined. Respondents were assured of confidentiality. 2.2.1.3 Conclusion The present research shows that many technical analysis signals represent common psychological biases such as the gamblers fallacy, anchoring effect or herd behavior. All real technical analysis signals were assigned a high predictive value by the financial analysts who responded to the questionnaire. The technical signals created by the author of the research either represented psychological biases or not. If they did, they received high scores from respondents as good predictors the of stock market behavior. If they did not, the respondents estimated them as bad predictors. In addition, the respondents were in general agreement about their judgments. These results confirm both hypotheses of this research: technical analysis signals represent some common psychological biases and financial analysts are subject to these biases.
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2.2.2 TECHNICAL ANALYSIS IN THE FOREIGN EXCHANGE MARKET: A CO-INTEGRATION- BASED APPROACH.
Nobert Fiess, University of Strathclyde and U.K. Ronald MacDonald, University of strathclyde, U.K. Most technical analysis studies are concerned with the profitability of technical trading rules and almost all of them focus exclusively on trend following patterns. In this paper they examine a different kind of technical indicator which suggests a structural relationship between High, Low, and Close prices of daily exchange rates. Since, for a given exchange rate, it can be shown that these prices have different time series properties, it is possible to explore the structural relationships between them using multivariate co-integration methods. This methodology facilitates the construction of dynamic structural econometric models, which are used to derive dynamic out of sample forecasts over different time horizons. Compared to standard benchmarks, it turns out that these models have extremely good forecasting properties, even when allowance has been made for transactions costs and risk premium 2.2.2.1 Methods and Results 2.2.2.1.1 Structural Econometric Modeling Their modeling strategy follows recent developments in the econometric literature, in particular the work of Clements and Mizon (1991), Hendry and Mizon (1993) and Johansen (1988), and they label it structural econometric modeling.6 Via a series of testable restrictions and reductions, this modeling strategy transforms an initial vector autoregressive model (VAR) in levels into a set of linear structural equations that incorporate both long and short-run dynamics. Starting from an unrestricted VAR, the
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hypothesis of co integration is formulated as a hypothesis of reduced rank of the long run impact matrix. The VAR is generated by the vector, which defines the potential endogenous variables of the model. 2.2.2.1.2 Co integration and the Stochastics . The Stochastics establish a structural relationship between the Close of today and the Maximum and Minimum price of a moving period, measured as the highest High and the lowest Low. Specifying a VAR with the data vector testing for co-integration between the three variables should reveal if, when using the Stochastics, an investor is intuitively exploiting Granger causality among the three series. Each VAR included a constant in the co-integration space and 15 lags of each of the variables, which was sufficient to produce random errors 2.2.2.2 Conclusion The forecasting models were estimated over the first 2500 data observations, thus sparing roughly 10% of the total sample for forecasting. Since the classic paper of Meese and Rogoff (1983), the crucial factor in determining the worth of an exchange rate model is how well it forecasts in an out-of-sample context relative to a random walk, using the metric of the root mean square error (RMSE) criterion. In table 5, their statistics are calculated as the ratio of the RMSE of the forecasting model over the RMSE of a drift less random walk; a value.
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2.2.3
THE
USE
OF
FUNDAMENTAL
AND
TECHNICAL
ANALYSIS BY FOREIGN EXCHANGE DEALERS: HONG KONG EVIDENCE.

David Mole, Department of economics and finance, City university of Hong Kong. 2.2.3.1 Abstract This article reports the results of a questionnaire survey conducted in February 1995 on the use by foreign exchange dealers in Hong Kong of fundamental and technical analyses to form the forecasts of exchange rate movements. Findings of this study reveal that > 85% of respondents rely on both fundamental and technical analysis for predicting future price at different time horizons. At shorter horizons, there exists a skew towards reliance on technical analysis as opposed to fundamental analysis, but the skew becomes steadily reversed as the length of horizon considered is extended.
2.2.3.2 Methodology To prepare the survey, they concluded dealers at the Hong Kong monetary Authority and most of the major banks. After consultation, they designed a questionnaire investigating the following. 2.2.3.2.1. The usefulness of fundamental and technical analysis is forecasting trends and turning points. 2.2.3.2.2. Dealers give personal importance to fundamental and technical analyses over seven forecasting horizons.
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2.2.3.2.3. Dealers views of the complimentarily of fundamental and technical analyses in exchange rate forecasting. 2.2.3.2.4. The usefulness of central bank intervention in influencing exchange rates over the horizons of intraday, intra-month and month. The Hong Kong Forex Association with its membership list as of September 1994 provided them. A total of 153 fully completed questionnaires were returned at a response rate of 19%. Most respondents firms are active participants in the market. 2.2.3.3 Conclusion At all the time horizons, a very high proportion of respondents place some weight on both fundamental and technical analysis when forming views. Dealers perceive value in using both fundamental and technical analysis to predict both trends. Technical analysis is considered only slightly more useful than fundamental analysis.
2.3 RESEARCH DESIGN 2.3.1 Statement of Problem

The above study is undertaken to compare the selected technical analysis tools/indicators available for forecasting. The study tries to make a comparative analysis of the various tools and techniques used in technical analysis. This study is aims at exploration of the topic TECHNICAL ANALYSIS A TOOL FOR TRADING DECISIONS.
2.3.2 Objectives of the Study

2.3.2.1 To find out the relevance of technical analysis in market analysis that helps in profit making in terms of returns.
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2.3.2.2 To find out the relevance of the tools used in technical analysis in the assessment of the market. 2.3.2.3 The study tries to capture the contradicting views of different tools used in technical analysis. 2.3.2.4 To find out the accuracy of technical analysis in individual stock price prediction. 2.3.2.5 To introduce a structured approach to market analysis that will help to perform a quick top to bottom assessment of the market, to decide which actions are appropriate.
2.3.3 Scope of the Study

Technical analysis of market data has long been a pervasive activity in both security and future markets. Technical analyst believes that price and volume data provide indication of future price movements, and that by examining these data, information may be extracted on the fundamentals driving returns. If markets are efficient in the sense that the current price impounds all information then such activity is clearly pointless. But if the process by which prices adjust to information is not immediate, then the market statistics may impound information that is not yet incorporated in to the current market price. Technical analysis is very useful because it provides tools that allow investors to identify the signs that new information is being priced into a stock before news is released. Stocks that trade abnormally often do so because of significant new information, both positive and negative. In this way, technical analysis helps to reveal fundamental changes in the company before the broader market is aware of it.
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In this dissertation, the market data is investigated to find out the future stock price movements. The charts will prove to be valuable to the traders. This study is useful for those who are risk averse and those who wants to protect themselves from the risk arising from the unexpected market movements and also this study focuses on the effectiveness of the hedged portfolio and also tests that effectiveness.
2.2.4 Resource Design

2.2.4.1 Data The data collected for the research purpose are secondary data. Index prices were collected through National Stock Exchange website and through Capitaline website. The data employed in this study comprises of one year observations on the NIFTY stock index Closing price. Daily data are preferred in this study. The choice of daily closing price is realistic and helpful to calculate and testing the results in technical analysis. The secondary sources of data: 2.2.4.1.1 Technical analysis of Financial Markets by John J Murphy. 2.2.4.1.2 Essential Technical analysis by Leigh Stevens. 2.2.4.1.3 Financial journals, dailies like The analyst, Capital market, Dalal Street, Economic Times, and Business Line are also used.
2.2.4.2 Sample Size One year sensitivity index i.e. from 1st February, 2011 to 31st January, 2012 has been taken for testing the relevance of technical analysis.
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2.2.4.3 Statistical Tools Used 2.2.4.3.1 Moving Averages: Moving averages are one of the oldest and most popular technical analysis tools. A Moving Average is an indicator that shows the average value of a security's price over a period of time. When calculating a moving average, a mathematical analysis of the security's average value over a predetermined time period is made. As the security's price changes, its average price moves up or down. Parameters for Calculation: In calculating the various types of moving averages, one must first decide the prices on which the moving averages would be based. Now there are four basic types of prices maintained by analysts, the open, high, low and the closing prices. Of these, the closing prices are generally used to calculate the various types of moving averages. This does not mean that one cannot calculate the moving averages on either high, low or the open prices or the average of these prices or for that matter any other combination of these prices. But as the closing prices are the most popular, it shall be employed in calculating the averages. Again moving averages can be calculated with the help of the daily or weekly or monthly closing prices. Calculation: A simple, or arithmetic, moving average is calculated by adding the closing price of the security for a number of time periods (e.g., 12 days) and then dividing this total by the number of time periods. The result is the average price of the security over the time period. For example, to calculate a 21-day moving average of IBM: First, we would add up IBM's closing prices for the preceding 21 days. Next, we would divide that sum by
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21; this would give us the average price of IBM over the preceding 21 days. We would plot this average price on the chart. The following day (tomorrow) we would do the same calculations: add up the previous 21 days' closing prices, divide by 21, and plot the resulting figure on the chart. 2.2.4.3.2 Rate of Change: The Price Rate-Of-Change (R.O.C.) indicator (percent method) is calculated by dividing the price change over the last x-periods by the closing price of the security x-periods ago. The result is the percentage that the security's price has changed in the last x-periods. The formula can be represented as follows: Rate of Change = [(Closing Price- Opening Price)/ Opening price] * 100 A long recognized phenomenon of security prices is the fact that prices tend to surge ahead and retract in a cyclical wave-like motion. The Price Rate-Of-Change indicator illustrates this wave-like motion of a security's price in an oscillator format. As the security's price increases, its R.O.C. will rise; conversely, as its price falls, its R.O.C. will fall. The faster prices rise or fall, the faster the R.O.C. will rise or fall. Calculation: There are two broad methods of calculating this oscillator: 2.2.4.3.2.1 Take the current closing price and express this price as a percentage of the price twelve days/weeks in the past. Suppose the price on any day is Rs.12 and the price twelve days ago was 10, the RoC will be obtained by using the equation = (12/10) * 100 = 120%
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2.2.4.3.2.2 In this method, the percentage variation between the current price and the price twelve days in the past is calculated. Thus, the 12-day RoC will be = [(12/10) * 100] 100 = 20% Here it may be noted that one will arrive at positive and negative values for the RoC. 2.2.4.3.3 Relative Strength Index The Relative Strength Index (RSI) is a popular oscillator used by commodity traders. It was first introduced by J. Welles Wilder in an article Commodities (now known as Futures) magazine in June, 1978. RSI does not compare the relative strength of two securities, but rather the internal strength of a single security. Calculation: A simple RSI is calculated by finding the difference between the current days closing price and the previous days closing price. The difference would thus determine whether it was a gain or a loss. Then the total gains and losses are totaled up. Later average gain, average loss, relative strength and relative strength index are calculated as per the below mentioned formula: Average gain = (Total gains / n) Average loss = (Total loss / n) where, N = number of RSI periods Relative Strength (RS) = Average gain / Average loss RSI = {100 [100 / (1+RS)]} The RSI can be calculated for any number of days depending on the fancy of the technical analyst and the time frame of trading. The most commonly used time period is the 14-day RSI. In general, it can be stated that the greater the time period, the
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lower would be the volume of whipsaws. On the other hand, when the period is shorter, signals are generated earlier, though with a high degree of fallibility.
2.2.4.3.4 MACD The moving average convergence and divergence (MACD), measures the convergence and divergence between two exponential moving averages. Or put simply, it is the difference between two moving averages of varying periods and is calculated with the help of the closing price data. Of the two, one is the shortterm moving average and the other is the longer-term moving average. The MACD would represent the absolute difference between the short-term moving average and the long-term moving average. Calculation: The MACD is plotted against a centerline. The centerline is the point at which the two moving averages are equal. Along with the MACD and the centerline, an exponential moving average of the MACD itself is plotted on the chart. The idea behind this momentum indicator is to measure short-term momentum compared to longer term momentum to help signal the current direction of momentum. There are two popular combinations of average, the first one is the 12-day and 26-day exponential averages and the second one being the 12-day and 48-day exponential averages. Now, another average is generally superimposed over this graph. For the 12-day and 26-day combination, the use of 9-day exponential average is quite popular and for the 12-day and 48-day combination, use of simple 10-day average is popular. During the calculation, the following formula is used: Exponential moving average = (current price previous EMA) * factor + previous EMA
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Factor = 2/(n+1), where n= number of days for which the factor is to be calculated.
2.5 LIMITATIONS OF THE STUDY

2.5.1 Sample is only restricted to SENSEX stock. 2.5.2 The research is subject to time span of three months. 2.5.3 Results arrived are generalized for the entire sample. 2.5.4 Only a selected four tools of technical analysis like moving average, rate of change, relative strength index, MACD chart has been used from the numerous tools available.
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CHAPTER-3 (INDUSTRY PROFILE)
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3.1 HINDALCO INDUSTRIES LTD.

An industry leader in aluminium and copper, Hindalco Industries Limited, the metals Flagship Company of the Aditya Birla Group is the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its copper smelter is the worlds largest custom smelter at a single location. Established in 1958, we commissioned our aluminium facility at Renukoot in eastern Uttar Pradesh, India in 1962. Later acquisitions and mergers, with Indal, Birla Copper and the Nifty and Mt. Gordon copper mines in Australia, strengthened our position in value-added alumina, aluminium and copper products. The acquisition of Novelis Inc. in 2007 positioned the company among the top five aluminium majors worldwide and the largest vertically integrated aluminium company in India. Today they are a metals powerhouse with high-end rolling capabilities and a global footprint in 13 countries. Their consolidated turnover of USD 15.85 billion (Rs. 72,078 crore) places us in the Fortune 500 league. Hindalco is one of the leading producers of aluminium and copper. Our aluminium units across the globe encompass the entire gamut of operations, from bauxite mining, alumina refining and aluminium smelting to downstream rolling, extrusions, foils, along with captive power plants and coal mines. Our copper unit, Birla Copper, produces copper cathodes, continuous cast copper rods and other by-products, such as gold, silver and DAP fertilisers. Our units are ISO 9001:2000, ISO 14001:2004 and OHSAS 18001 certified. Several units have gone a step further with an integrated management
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system (IMS), combining ISO 9001, ISO 14001 and OHSAS 18001 into one business excellence model. We have been accorded the Star Trading House status in India. Hindalco's aluminium metal is accepted for delivery under the High Grade Aluminium Contract on the London Metal Exchange (LME). Our copper quality standards are also internationally recognised and registered on the LME with Grade A accreditation. Hindalco's major products include standard and speciality grade aluminas and hydrates, aluminium ingots, billets, wire rods, flat rolled products, extrusions and foil. The integrated facility at Renukoot houses an alumina refinery and an aluminium smelter, along with facilities for the production of semi-fabricated products, namely, redraw rods, flat rolled products and extrusions. The plant is backed by a co-generation power unit and a 742 MW captive power plant at Renusagar to ensure the continuous supply of power for smelter and other operations. A strong presence across the value chain and synergies between operations has given us a dominant share in the value-added products market. As a step towards expanding the market for value-added products and services, we have launched various brands in recent years Ever last roofing sheets, Fresh-wrap kitchen foil and Fresh-pack semi-rigid containers. Birla Copper, Hindalcos copper unit, is located at Dahej in Gujarat, India. The unit has the unique distinction of being the largest single-location copper smelter in the world. The smelter uses state-of-the-art technology and has a capacity of 5, 00,000 t.p.a.
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Birla Copper also produces precious metals, fertilizers and sulphuric and phosphoric acid. The unit has captive power plants for continuous power generation and a captive jetty to facilitate logistics and transportation. Birla Copper upholds its longstanding reputation for quality copper cathodes and continuous cast copper rods by assuring its management processes meet the highest standards. It has acquired certifications such as ISO-9001:2000 (Quality Management Systems), ISO-14001:2004 (Environmental Management System) and OHSAS-18001:2007 (Occupational Health and Safety Management Systems). Hindalco acquired two Australian copper mines, Nifty and Mt. Gordon, in 2003. The Birla Nifty copper mine consists of an underground mine, heap leach pads and a solvent extraction and electro winning (SXEW) processing plant, which produces copper cathode. The Mt. Gordon copper operation consists of an underground mine and a copper concentrate plant. Until recently, the operation produced copper cathode through the ferric leach process. In 2004, a copper concentrator was commissioned to provide concentrate for use at Hindalco's operations in Dahej. Both Nifty and Mt. Gordon have a long-term life of mine off-take agreement with Hindalco for supply of copper concentrate to the copper smelter at Dahej. Our well-crafted growth and integration hinges on the three cornerstones of cost competitiveness, quality and global reach. We are also committed to the triple bottom line accountability of economic, environment and social factors. Care for the community around our operating units is best exemplified by our deeprooted social commitment.
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3.2 WIPRO LTD

Wipro Limited (formerly Western India Products Limited (Amalner)) (BSE: 507685, NSE: WIPRO, NYSE: WIT) is an Indian global IT services and consulting company headquartered in Bangalore, India. As of 2012, Wipro is the second largest IT services company by turnover in India, employing about 120,000 people worldwide as of December 2011. It provides outsourced research and development, infrastructure outsourcing, business process outsourcing (BPO) and business consulting services. The company operates in three segments: IT Services, IT Products, Consumer Care and Lighting. It is 9th most valuable brand in India according to an annual survey conducted by Brand Finance and The Economic Times in 2010. The company was established in 1945 by Mohamed Hasham Premji as Western India Products Limited, later abbreviated to Wipro. It was initially set up as a vegetable oil manufacturer in Amalner, Maharashtra, producing sunflower Vanaspati oil and soaps. The company logo still contains a sunflower to reflect their original business. In 1966, Azim Premji, aged 21 at the time, took over as chairman of the company, and started the changes that over time transformed Wipro into one of the largest IT outsourcing services provider of the world. Along with a small number of shareholders, Azim Premji is a major shareholder in Wipro. During the 1970s and 1980s, the company shifted its focus and began to look into business opportunities in the IT and computing industry, which was at nascent stages in India at that time. Wipro marketed the first indigenous homemade PC from India in 1985. By 2000, Wipro Technologies emerged as the largest publicly listed software exporter in India and the first software services provider to be assessed at SEI Level 5 in the
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world. Wipro won the Golden Peacock Innovative Service Award[8] for effective service delivery using state of art technology in 2001. Wipro was awarded SVG1, the highest rating in Stakeholder Value Creation and Governance Practices by ICRA, a premier credit rating agency in India and an associate of Moodys Investor Services of USA. Wipro was awarded the India Manufacturing Excellence Award for its factory in Pondicherry in the large enterprises category by Frost & Sullivan.Wipro was awarded the ASTD BEST Awards for 2005 by the American Society of Training and Development. Wipro's Global Command Centre won the Marico Foundation and Business World's Innovation for India Award in 2006. The conglomerate was rated as the No.1 Network Integrator and No.1 Network Security Services Provider by Voice & Data Magazine. Wipro was ranked 37 in The Brand Trust Report among the most trusted brands in India
3.3 INFOSYS TECHNOLOGIES

Infosys Limited formally Infosys Technologies (BSE: 500209, NSE: INFY, NASDAQ: INFY) is an Indian global technology services company headquartered in Bangalore, India. Infosys is ranked #27 in the list of top companies of India in Fortune India 500 list in 2011. It has offices in 29 countries and development centers in India, US, China, Australia, UK, Canada, Japan and many other countries. Infosys had 1,45,088 employees of 85 nationalities as on December 31, 2011. Infosys
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provides business consulting, technology, engineering and outsourcing services to help clients in over 30 countries. The company is under a debt of 7 billion dollars. Infosys was founded in 1981 by N. R. Narayana Murthy, Nandan Nilekani, N. S. Raghavan, S. Gopalakrishnan, S. D. Shibulal, K. Dinesh and Ashok Arora. It moved to Bangalore in 1983 and got its first foreign client, Data Basics Corporation from the US, in 1987. In 1992 it opened its first overseas sales office in Boston, US. This was followed by offices in Milton Keynes (1996), Toronto (1997), France and Hong Kong (2000), UAE and Argentina (2001), Netherlands, Singapore and Sweden (2002) and the list goes on until the present day at which point it has 64 offices and 68 development centers in India and abroad. Infosys has revenues of US$ 6.825 billion (LTM Q3-FY12). Infosys delivers ITenabled business solutions to enable Global 2000 companies to build their enterprises of tomorrow. Infosys ranked among the most innovative companies in a Forbes survey, leading technology companies in a report by The Boston Consulting Group and top ten green companies in Newsweek's Green Rankings. Infosys was voted India's most admired company in The Wall Street Journal Asia 200 every year since 2000. The corporate governance practices were recognized by The Asset Platinum award and the IR Global Rankings. In 2001, it was rated by Business Today. Infosys was rated best employer to work for in 2000, 2001, and 2002 by Hewitt Associates. In 2007, Infosys received over 1.3 million applications and hired fewer than 3% of applicants. Infosys won the Global MAKE (Most Admired Knowledge Enterprises) award for the years 2003, 2004 and 2005, and is inducted into the Global Hall of Fame for the same.
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Infosys was also ranked as the 15th most trusted brand in India by The Brand Trust Report in 2011.
3.4 RELIANCE INDUSTRIES LTD.

Reliance Industries Limited (RIL) (BSE: 500325, NSE: RELIANCE, LSE: RIGD) is an Indian conglomerate company headquartered in Mumbai, India. The company operates through three business segments: petrochemicals, refining, and oil and gas, other segment of the company includes textile, retail business, special economic zone (SEZ) development and telecom/broadband business. RIL is the largest publicly traded company in India by market capitalization and second-largest public corporation in India when ranked by revenue. The company is listed on Fortune Global 500 and Forbes Global 2000. In September 2008 Reliance Industries was the only Indian firm featured in the Forbes's list of "world's 100 most respected companies". In 2010 it stood at 13th position in the Platts Top 250 Global Energy Company Rankings. Though the company's petrochemicals, refining, and oil and gas-related operations form the core of its business, other segments of the company include textiles, retail business, telecommunications, and special economic zone (SEZ) development. Reliance Retail has entered into the fresh foods market as Reliance Fresh. 3.4.1 Major subsidiaries and associates Reliance Life Sciences participates in medical, plant and industrial biotechnology opportunities. Specifically, these relate to biopharmaceuticals, pharmaceuticals, clinical research services, regenerative medicine, molecular medicine, novel therapeutics, biofuels, plant biotechnology, and industrial biotechnology.
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Reliance Institute of Life Sciences (Rils), established by Dhirubhai Ambani Foundation, is an institution of higher education in various fields of life sciences and related technologies. Reliance Logistics (P) Limited is a single-window solutions provider for transportation, distribution, warehousing, logistics, and supply chain needs, supported by in-house state of the art telematics and telemetry solutions. Reliance Clinical Research Services (RCRS), a contract research organisation (CRO) and wholly owned subsidiary of Reliance Life Sciences, has been set up to provide clinical research services to pharmaceutical, biotechnology, and medical device companies. Reliance Solar, the solar energy initiative of Reliance, aims to bring solar energy systems and solutions primarily to remote and rural areas and bring about a transformation in the quality of life. Relicord is a stem-cell banking service controlled by Reliance Industries. Infotel Broadband is a broadband service provider which gained 4G licensees for operating across India, now it is wholly owned by RIL for 4,800 crore (US$1.06 billion). 3.4.2 Reliance Industrial Infrastructure Limited Reliance Industrial Infrastructure Limited (RIIL) was incorporated in September 1988 as Chembur Patalganga Pipelines Limited, with the main objective being to build and operate cross-country pipelines for transporting petroleum products. The company's name was subsequently changed to CPPL Limited in September 1992, and thereafter
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to its present name, Reliance Industrial Infrastructure Limited, in March 1994. It has been promoted by Mr. Satyapal Jain and his associates. The company set up a 200millimetre diameter twin pipeline system that connects the Bharat Petroleum refinery at Mahul, Maharashtra, to Reliance's petrochemical complex at Patalaganga, Maharashtra. The pipeline carries petroleum products including naptha and kerosene. It has commissioned facilities like the supervisory control and data acquisition system and the cathodic protection system, a jackwell at River Tapi, and a raw water pipeline system at Hazira. The infrastructure company constructed a 70,000 kilolitre petrochemical product storage and distribution terminal at the Jawaharlal Nehru Port Trust (JNPT) Area in Maharashtra. RIIL is mainly engaged in the business of setting up and operating industrial infrastructure. The company is also engaged in related activities involving leasing and providing services connected with computer software and data processing. Reliance retail Reliance Retail is the retail business wing of the Reliance business. Many brands like Reliance Fresh, Reliance Footprint, Reliance Time Out, Reliance Digital Store, Reliance Wellness, Reliance Trendz, Reliance Autozone, Reliance Super, Reliance Mart, Reliance iStore, Reliance Home Kitchens, Reliance Market (Cash n Carry) and Reliance Jewel come under the Reliance Retail brand.
3.5 TATA STEEL

Tata Steel Limited (BSE: 500470) (formerly TISCO and Tata Iron and Steel Company Limited) is a multinational steel company headquartered in Mumbai, India and subsidiary of Tata Group. It is the tenth-largest steel producing company in the world, with an annual crude steel capacity of 23.5 million tonnes, and the largest private-sector steel company in India measured by domestic production. Tata Steel is
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also India's second largest and second-most profitable private-sector company, with consolidated revenues of $26 billion and net profit of over $1.9 billion in the year ended March 31, 2011. Tata Steel is the eighth most-valuable Indian brand according to an annual survey conducted by Brand Finance and The Economic Times in 2010. It is currently ranked 410th in the Fortune Global 500. Tata Steel's largest plant is located in Jamshedpur, Jharkhand, with its recent acquisitions, the company has become a multinational with operations in various countries. The registered office of Tata Steel is in Mumbai. The company was also recognized as the world's best steel producer by World Steel Dynamics in 2005. The company is listed on Bombay Stock Exchange and National Stock Exchange of India, and employs about 80,000 people. In August 2007 Tata Steel won the bid to acquire the UK-based steel maker Corus in what was, to date, the largest international acquisition by an Indian company. It made the Tata Group the world's fifth largest steel maker, and catapulted them to the global league. TISCO was established by Jamshedji Tata in year 1907.In year 1939, it had largest steel plant in the British empire. A modernization and expansion program was launched in year 1951. Later, the program was upgraded to 2 MTPA project. In 1990, it started expansion plan and established its subsidiary Tata Inc. in New York. The company changed its name TISCO to Tata Steel in year 2005. The company is facing increasing criticism that the drive for growth and profits is completely overshadowing its once famed philanthropy, and causing lasting social and environmental damage at various locations. In response, Tata cites its programs for environment and resource conservation, including reduction in greenhouse emission, raw materials and water consumption. The company has increased waste re42
use and re-cycling, and reclaims land at its captive mines and collieries through forestation. Tata Steel's chief, environment and occupational health, says, "Our capital investment in pollution-abatement solutions was in the vicinity of Rs 400 crore in 2003-04.
3.6 BAJAJ AUTO LTD.

Bajaj Auto Limited (BSE: 532977, NSE: BAJAJ-AUTO) is an Indian motorized vehicle-producing company. Bajaj Auto is a part of Bajaj Group. Its founded by Jamnalal Bajaj at Rajasthan in the 1930s. It is based in Pune, Maharashtra, with plants in Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttaranchal. The oldest plant at Akurdi (Pune) now houses the R&D centre Ahead. Bajaj Auto makes and exports automobiles, scooters, motorcycles and the auto rickshaw. The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at 1,946. It features at 1639 in forbes 2011 list. Over the last decade, the company has successfully changed its image from a scooter manufacturer to a two-wheeler manufacturer. Its product range encompasses scooterettes, scooters and motorcycles. Its real growth in numbers has come in the last four years after successful introduction of a few models in the motorcycle segment. The company is headed by Rahul Bajaj who is worth more than US$1.5 billion. Bajaj Auto came into existence on 29 November 1945 as M/s Bachraj Trading Corporation Private Limited. It started off by selling imported two- and threewheelers in India. In 1959, it obtained license from the Government of India to manufacture two- and three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to produce and sell 100,000 vehicles in a
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single financial year. In 1985, it started producing at Waluj near Aurangabad. In 1986, it managed to produce and sell 500,000 vehicles in a single financial year. In 1995, it rolled out its ten millionth vehicle and produced and sold one million vehicles in a year. The demerger of Bajaj Auto Ltd into three separate corporate entitiesBajaj Finserv Ltd (BFL), Bajaj Auto Ltd (BAL), and Bajaj Holdings and Investment Ltd (BHIL) was completed with the shares listing on 26 May 2008. In November 2007, Bajaj Auto acquired 14.5% stake in KTM Power Sports AG (holding company of KTM Sportmotorcycles AG). The two companies have signed a cooperation deal, by which KTM will provide the know-how for joint development of the water-cooled four-stroke 125 and 250 cc engines, and Bajaj will take over the distribution of KTM products in India and some other Southeast Asian nations. Bajaj said it is open to taking a majority stake in KTM and is also looking at other takeover opportunities. On 8 January 2008, Managing Director Rajiv Bajaj confirmed the collaboration and announced his intention to gradually increase Bajaj's stake in KTM to 25%.
3.7 BHARAT PETROLEUM CORPORATION LTD.

Bharat Petroleum Corporation Limited (BPCL) (BSE: 500547, NSE: BPCL) is a state-controlled oil and gas company headquartered in Mumbai, India. In 2011, Fortune Global 500 ranked the company of 272. In 1860s during vast industrial development, an important player in the South Asian market was the Burma oil company ltd Though incorporated in Scotland in 1886, the company grew out of the enterprises of the Rangoon Oil Company, which had been
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formed in 1871 to refine crude oil produced from primitive hand dug wells in Upper Burma. In 1928, Asiatic Petroleum Company (India) started cooperation with Burma oil company. This alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of India Limited. Burmah Shell began its operations with import and marketing of Kerosene. On 24 January 1976, the Burmah Shell was taken over by the Government of India to form Bharat Refineries Limited. On 1 August 1977, it was renamed Bharat Petroleum Corporation Limited. It was also the first refinery to process newly found indigenous crude Bombay High. Bharat Petroleum owns refineries at Mumbai, Maharashtra and Kochi, Kerala (Kochi Refineries) with a capacity of 12and 15.5 million metric tonnes per year.
3.8 BHARAT HEAVY ELECTRICALS LIMITED

Bharat Heavy Electricals Limited (BHEL) (BSE: 500103, NSE: BHEL) is one of the oldest and largest state-owned engineering and manufacturing enterprise in India in the energy-related and infrastructure sector which includes Power, Railways, Transmission and Distribution, Oil and Gas sectors and many more. It is the 12th largest power equipment manufacturer in the world. In the year 2011, It ranked ninth most innovative company in the world by US business magazine Forbes. BHEL is the only Indian Engineering company on the list, which contain online retail firm Amazon at the second position with Apple and Google at fifth and seventh positions, respectively. It is also placed at 4th place in Forbes Asia's Fabulous 50 List of 2010. BHEL was established more than 50 years ago, ushering in the indigenous Heavy
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Electrical Equipment industry in India. The company has been earning profits continuously since 1971-72 and paying dividends since 1976-77. 74% of the total power generated in India is produced by equipment manufactured by BHEL. It is one of India's nine largest Public Sector Undertakings or PSUs, known as the Navratnas or 'the nine jewels'. BHEL Bhopal (Madhya Pradesh ) BHEL Ranipur, Haridwar (Uttarakhand) BHEL Ramachandrapuram, Hyderabad (Andhra Pradesh) Transformer Plant, BHEL Jhansi (Uttar Pradesh) High Pressure Boiler Plant and Seamless Steel Tube Plant, Tiruchirapalli(Tamil Nadu) Boiler Auxiliaries Plant, Ranipet, vellore (Tamil Nadu) Electronics Division and Electro Porcelain Division, Bangalore (Karnataka) Jagdishpur (Uttar Pradesh) Rudrapur (Uttrakhand) Industrial Valves Plant, Goindwal (Punjab) Bharat Heavy Plates and Vessels Limited (Vizag) Besides these manufacturing units there are four power sectors which undertake EPC contract from various customers. The Research and Development arm of BHEL is
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situated in Hyderabad and two repair shops are at HERP (Heavy Equipment Repair Plant), Varanasi[11] and EMRP(Electric machines repair plant) Mumbai. BHEL cannot be considered as a company. It is a part of Indian Government and if Government is not stable, BHEL will go towards degradation.
3.9 CANARA BANK

Canara Bank (BSE: 532483, NSE: CANBK) is an Indian state-owned financial services company headquartered in Bangalore, Karnataka. It was established in 1906, making it one of the oldest banks in the country. As on 2009 November, the bank had a network of 3057 branches, 4000atms spread across India. The bank also has offices abroad in London, Hong Kong, Moscow, Shanghai, Doha, and Dubai.Widely known for customer centricity, Canara Bank was founded by Shri Ammembal Subba Rao Pai, a great visionary and philanthropist, in July 1906, at Mangalore, then a small port in Karnataka. The Bank has gone through the various phases of its growth trajectory over hundred years of its existence. Growth of Canara Bank was phenomenal, especially after nationalization in the year 1969, attaining the status of a national level player in terms of geographical reach and clientele segments. Eighties was characterized by business diversification for the Bank. In June 2006, the Bank completed a century of operation in the Indian banking industry. The eventful journey of the Bank has been characterized by several memorable milestones. Today, Canara Bank occupies a premier position in the comity of Indian banks. With an unbroken record of profits since it inception.
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Ammembal Subba Rao Pai, a philanthropist, established the Canara Hindu Permanent Fund in Mangalore, India, on 1 July 1906.[2] The bank changed its name to Canara Bank Limited in 1910 when it incorporated. In 1958, the Reserve Bank of India ordered Canara Bank to acquire G. Raghumathmul Bank, in Hyderabad. This bank had been established in 1870, and had converted to a limited company in 1925. At the time of the acquisition G. Raghumathmul Bank had five branches.[3] The Government of India nationalised Canara Bank, along with 13 other major commercial banks of India, on 19 July 1969. In 1976, Canara Bank inaugurated its 1000th branch. In 1983, Canara Bank opened its first overseas office, a branch in London. In 1985, Canara Bank acquired Lakshmi Commercial Bank in a rescue. In 1985, Canara Bank established a subsidiary in Hong Kong, Indo Hong Kong International Finance. In 1996 Canara Bank became the first Indian Bank to get ISO certification for Total Branch Banking for its Seshadripuram branch in Bangalore. Canara Bank has now stopped opting for ISO certification of Branches. In 2008-9, Canara Bank opened its third foreign operation, this one a branch in Shanghai.
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3.10 CIPLA LIMITED

Cipla Limited (BSE: 500087, NSE: CIPLA) is a prominent Indian pharmaceutical company, best-known outside its home country for manufacturing low-cost anti-AIDS drugs for HIV-positive patients in developing countries. Founded by nationalist Indian scientist Khwaja Abdul Hamied as The Chemical, Industrial & Pharmaceutical Laboratories in 1935, Cipla makes drugs to treat cardiovascular disease, arthritis, diabetes, weight control, depression and many other health conditions, and its products are distributed in more than 180 countries worldwide. Cipla offers services like consulting, commissioning, engineering, project appraisal, quality control, know-how transfer, support, and plant supply. Apart from its presence in the Indian market, Cipla also has an export market and regularly exports to more than 185 countries in all corners of the world. Cipla is also highly regarded for technological innovation and manufacturing processes, and has been approved by numerous international regulatory bodies such as: Food and Drug Administration (FDA), USA Medicines and Healthcare Products Regulatory Agency (MHRA), UK Therapeutic Goods Administration (TGA), Australia Medicines Control Council (MCC), South Africa Orszgos Gygyszerszeti Intzet = National Institute of Pharmacy (NIP), Hungary Pharmaceutical Inspection Convention (PIC), Germany
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World Health Organisation (WHO) Health Canada, Canada SUKL = State Institute for the Control of Drugs, Slovak Republic Agncia Nacional de Vigilncia Sanitria = National Health Surveillance Agency Brazil (ANVISA), Brazil.
3.11 COAL INDIA LIMITED

Coal India Limited (CIL) (BSE: 533278, NSE: COALINDIA) is an Indian statecontrolled coal mining company headquartered in Kolkata, West Bengal, India and the world's largest coal miner with revenue exceeding 60,245 Crore (FY2010-11). It was formerly owned entirely by the Union Government of India, under the administrative control of the Ministry of Coal. It is involved in coal mining and production industry. In April 2011, CIL was conferred the Maharatna status by the Union Government of India and ranked as one of India's most valuable company by market value. In 2010, CIL's initial public offering (IPO) got subscribed 15.28 times, collecting a record over Rs 2,40,000 crore (Rs 2,400 billion) the highest IPO subscription so far. On the first day of its listing on the Sensex, its stock closed 40% higher than IPO price. It is India's largest ever public offer from Coal India Ltd. to raise up to 15,000 crore (US$2.99 billion). It is currently 90% owned by the Government of India with the remaining 10% owned by the public. Coal India Ltd (CIL), will extract coal from 18 abandoned underground mines owned by three of its subsidiaries in partnership with private players. Underground mining
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would be revived in 6 abandoned mines of Eastern Coalfields, 8 mines of Bharat Coking Coal, and 4 mines of Central Coalfields. These 18 mines have an approximate reserve of 1.647 billion tonnes of coal. CIL contributes around 85% of coal production in India. It is the largest company in the world in terms of coal production. It employs nearly 397,000 person and is the largest corporate employer in the country. It is one of the largest companies in the country, with turnover being around Rs. 386.31 billion in 2007-08. It is one of the largest tax payer (Corporate Tax 35.75 billion (US$713.21 million)) in 2007-08 and has paid Dividend of 17.054 billion (US$340.23 million) to the Govt. of India in 2007-08.
3.12 DABUR INDIA LIMITED

Dabur (Dabur India Ltd.) (Devanagari: ) derived from Daktar Burman) is India's largest Ayurvedic medicine manufacturer. Dabur's Ayurvedic Specialities Division has over 260 medicines for treating a range of ailments and body conditions-from common cold to chronic paralysis. Sustainable Development Society (Sundesh) is a non-profit organization started by S.K Burman, the founder of Dabur India Ltd., and devoted to the cause of the upliftment of the society by carrying out welfare activities in the spheres of health care, education and other socio-economic activities. Darbur drives its corporate social responsibility (CSR) initiatives through Sundesh. Dabur has been ranked as the 45th most trusted brand in India by The Brand Trust Report, India study 2011.
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3.13 DLF LIMITED

DLF Limited (BSE: 532868, NSE: DLF) is the largest commercial real estate developer in India. It was founded by Raghuvendra Singh in 1946 and is based in New Delhi, India.[1] DLF developed residential colonies in Delhi such as Shivaji Park (their first development), Rajouri Garden, Krishna Nagar, South Extension, Greater Kailash, Kailash Colony, and Hauz Khas. DLF builds residential, office, and retail properties. With the passage of Delhi Development Act in 1957, the local government assumed control of real estate development in Delhi and banned private real estate developers. As a result DLF began acquiring land at relatively low cost outside the area controlled by the Delhi Development Authority, in the district of Gurgaon, in the adjacent state of Haryana. In the mid-1970s, the company started developing their DLF City project at Gurgaon. Its plans include hotels, infrastructure and special economic zones-related development projects.[2] The company is headed by Indian billionaire Kushal Pal Singh. Kushal Pal Singh, according to the Forbes listing of richest billionaires in 2009, was the 98th richest man in the world and the world's richest property developer. The company's US$ 2 billion IPO in July, 2007 was India's biggest IPO in history.[3] In its first quarter results for the period ending 30 June 2007, the company reported a turnover of Rs. 3,120.98 Crore and profits after taxes of Rs. 1,515.48 Crore.
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3.14 FORTIS HEALTHCARE LIMITED

Fortis Healthcare Limited BSE: 532843 is an established chain of super speciality hospitals based in Delhi also available in Amritsar, Kolkata, Navi Mumbai, Mohali, Jaipur, Chennai, Kota, Bangalore. On 12 March 2010, Fortis healthcare had bought 23.9% stakes in Singapore's Parkway Holdings Ltd. Fortis Healthcare has been established with a vision to become a global leader in the field of integrated healthcare. It is one of the fastest growing integrated healthcare providers with multi-vertical presence that touches millions of lives across 10 countries including Australia, Canada, Dubai, Hong Kong, India, Mauritius, New Zealand, Singapore, Sri Lanka and Vietnam. Fortis Healthcare has multi-vertical presence in emerging markets in different healthcare verticals ranging from primary healthcare, day care speciality healthcare, hospitals, dental clinics and diagnostics. Today, its combined network comprises over 75 hospitals with more than 12,000 beds, 580 primary care centres, 188 day care speciality centres, 190 diagnostic centres and a talent pool of over 4,000 doctors and 23,000 employees making it amongst the largest integrated healthcare delivery networks in Asia Pacific. Among its assets, Fortis Healthcare International owns Quality Healthcare Ltd, the largest primary care network in Hong Kong; Dental Corporation Pty Ltd, the largest dental care network in Australia and New Zealand; Fortis Speciality Hospital, an under construction speciality hospital in Singapore; a stake in 350 bed Lanka Hospitals Corporation, Sri Lankas largest super speciality
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hospital, and the largest private pathology diagnostics laboratory in UAE; and holds majority stake in Hoan My Medical Corporation, one of Vietnams largest private healthcare provider groups. This integration will unlock multiple synergies in growth, talent, medical verticals and cost efficiencies. Its ability to service a wider spectrum of patient population will also give it a unique proposition as a healthcare provider of choice in the region. Its large pool of experienced clinical and managerial talent, under the guidance of a strong global management team, will help to cross-pollinate knowledge and capabilities across the enterprise.
3.15 HDFC BANK

HDFC Bank Limited (BSE: 500180, NSE: HDFCBANK, NYSE: HDB) is an Indian financial services company that was incorporated in August 1994. HDFC Bank is the fourth largest bank in India by assets and the second largest bank by market capitalization as of February 24, 2012. The bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,986 branches and over 5,471 ATMs, in 996 cities in India, and all branches of the bank are linked on an online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion. For the fiscal year 2010-11, the bank has reported net profit of 3,926.30 crore (US$783.3 million), up 33.1% from the previous fiscal. Total annual earnings of the bank increased by 20.37% reaching at 24,263.4 crore (US$4.84 billion) in 2010-11.[4] HDFC Bank is one of the Big Four banks of India, along with: State Bank of India, ICICI Bank and Punjab National Bank.
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HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the Mastercard Maestro debit card as well. The Bank launched its credit card business in late 2001. By March 2009, the bank had a total card base (debit and credit cards) of over 13 million. The Bank is also one of the leading players in the merchant acquiring business with over 70,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is positioned in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc. With Finest of Technology and Best of Man power in Banking Industry HDFC BANK's retail services have become by and large the best in India and since the contribution to CASA i,e total number of current and savings account of more than 50% ,HDFC BANK has full potential to become Indias No.1 Private Sector Bank. HDFC Bank website including hdfcbank.com and hdfcsec.com are not available 24X7. This has become a habit of HDFC Bank. Customers of the HDFC Bank are requested to check the website availability 24 X 7 and if available can do the transaction. If the website is not available they are asked to visit their home branch.
3.16 HINDUSTAN UNILEVER LIMITED

Hindustan Unilever Limited (HUL) (BSE: 500696) is India's largest fast-moving consumer goods company based in Mumbai, Maharashtra. It is owned by the BritishDutch company Unilever which controls 52% majority stake in HUL. HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 16,500 employees and contributes to indirect
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employment of over 65,000 people. The company was renamed in June 2007 as Hindustan Unilever Limited. Lever Brothers started its actual operations in India in the summer of 1888, when crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers" were shipped to the Kolkata harbour and it began an era of marketing branded Fast Moving Consumer Goods (FMCG). Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products. HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. Seventeen of HULs brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2011). The company also happens to have the highest number of brands in this list, with six brands featuring in the top 15 list. The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.
3.17 MARUTI SUZUKI LTD

Maruti Suzuki India Limited (NSE: MARUTI, BSE: 532500) is a subsidiary company of Japanese automaker Suzuki Motor Corporation. It has a market share of 44.9% of the Indian passenger car market as of March 2011. Maruti Suzuki offers a complete range of cars from entry level Maruti 800 and Alto, to hatchback Ritz, A-Star, Swift,
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Wagon-R, Estillo and sedans DZire, SX4, in the 'C' segment Maruti Eeco and Sports Utility vehicle Grand Vitara. It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India, and on 17 September 2007, Maruti Udyog Limited was renamed as Maruti Suzuki India Limited. The company's headquarters are located in New Delhi. In February 2012, the company sold its 10th million vehicle in India. Maruti Suzuki is India and Nepal's number one leading automobile manufacturer and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the company in June 2003. As of 10 May 2007, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.[citation needed] Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its only competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various several other countries, depending upon export orders. Models similar to Maruti Suzukis (but not manufactured by Maruti Udyog) are sold by Suzuki Motor Corporation and manufactured in Pakistan and other South Asian countries.[citation needed]
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The company exports more than 50,000 cars annually and has an extremely large domestic market in India selling over 730,000 cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti Suzuki Alto tops the sales charts.[citation needed] Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer to this compact car model. Its manufacturing facilities are located at two facilities Gurgaon and Manesar south of Delhi. Maruti Suzukis Gurgaon facility has an installed capacity of 350,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 100,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 700,000 units annually. More than half the cars sold in India are Maruti Suzuki cars. The company is a subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange in India.[citation needed] During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983. Maruti Suzuki offers 14 models, Maruti 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara, Kizashi. Swift, Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara and Kizashi are imported from Japan as completely built units(CBU),
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remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant.[citation needed] Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars for three decades. Suzukis technical superiority lies in its ability to pack power and performance into a compact, lightweight engine that is clean and fuel efficient. Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific.
3.18 OIL & NATURAL GAS CORPORATION

Oil and Natural Gas Corporation Limited (ONGC) (NSE: ONGC, BSE: 500312) is an Indian state-owned oil and gas company headquartered in New Delhi, India. It is one of the largest Asia-based oil and gas exploration and production companies, and produces around 77% of India's total crude oil production (and around 30% of total demand) and around 81% of natural gas production. ONGC is one of the largest publicly traded companies by market capitalization in India and the largest Indiabased company measured by profits. ONGC was founded on 14 August 1956 by the Indian state, which currently holds a 74.14% equity stake. It is involved in exploring for and exploiting hydrocarbons in 26 sedimentary basins of India, and owns and operates over 11,000 kilometers of pipelines in the country. In 2010, it was ranked 18th in the Platts Top 250 Global Energy Company Rankings and 413th in the Fortune Global 500. ONGC Videsh Limited (OVL) is the international arm of ONGC. It was rechristened on 15 June 1989. It currently has 14 oil and projects across 15 countries. Its oil and
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gas production reached 8.87 MMT of O+OEG in 2010, up from 0.252 MMT of O+OEG in 2002/03.
3.19 PIDILITE INDUSTRIES

Pidilite Industries Limited (BSE: 500331, NYSE: MMM) is the largest adhesive manufacturer in India.[3] It also has worldwide presence in adhesives, art material and industrial chemicals. Pidilite's most famous product is the Fevicol range of adhesives. Its other famous brands are Dr. Fixit, Cyclo, Ranipal, Hobby Ideas, M-seal and Acron.[4] Pidilite's corporate office is located in Andheri (East), Mumbai. The company has manufacturing facilities at various locations in India, including Mahad (Maharastra), Vapi (Gujarat) Baddi (Himachal Pradesh) and kalaamb Himachal Pradesh. It has also make Fevi Kwik India's first ever One Drop Instant Adhesive. This brand is most Popular instant adhesive in South Asian Country.
3.20 STATE BANK OF INDIA

State Bank of India (SBI) (NSE: SBIN, BSE: 500112, LSE: SBID) is the largest banking and financial services company in India by revenue, assets and market capitalization. Its a state-owned corporation with its headquarters in Mumbai, Maharashtra. As of March 2011, it had assets of US$ 370 billion with over 13,000 outlets including 150 overseas branches and agents globally. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became
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State Bank of India. The government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI is ranked #292 globally in Fortune Global 500 list in 2011. SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. SBI has 14 Local Head Offices situated at Chandigarh, Delhi, Lucknow, Patna, Kolkata, Guwahati (North East Circle), Bhubaneswar, Hyderabad, Chennai, Trivandram, Banglore, Mumbai, Bhopal & Ahmadabad and 57 Zonal Offices that are located at important cities throughout the country. It also has around 130 branches overseas. SBI is a regional banking behemoth and is one of the largest financial institutions in the world. It has a market share among Indian commercial banks of about 20% in deposits and loans. The State Bank of India is the 29th most reputed company in the world according to Forbes. Also SBI is the only bank featured in the coveted "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010. The State Bank of India is the largest of the Big Four banks of India, along with ICICI Bank, Punjab National Bank and HDFC Bankits main competitors. As of 31 December 2009, the bank had 157 overseas offices spread over 32 countries. It has branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New
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York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA. SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius). In 1982, the bank established a subsidiary, State Bank of India (California), which now has ten branches nine branches in the state of California and one in Washington, D.C. The 10th branch was opened in Fremont, California on 28 March 2011. The other eight branches in California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield. The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in the Toronto area and three in British Columbia. In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the IndoNigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria. In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the country. In Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex. The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.[7] In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US$8 million in October 2005.[8]..
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The State Bank of India (with 74% of the total capital) along with the largest global Banking group-"BNP Paribas Cardiff",(with 26% of the remaining capital) Headquartered in Paris formed a Joint venture which established, Indias One of the most Reputed and trusted Life Insurance Company 's named "SBI Life Insurance company Ltd." in March-2001.
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CHAPTER-4 (ANALYSIS OF DATA)
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4.1 BAJAJ AUTO LTD

The following is the daily chart of BAJAJ AUTO starting from first week of Jan 2011 till last week of Jan 2012. The price has increased from Rupee value 1370 to 1740. In a time span of nearly one year price rise by rupee value 370, which is nearly 80% increase in the initial price. The price has gone through various trends in this time span.
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This company has been a good investment propositions in past one year. In the 2nd week of Jun 2011 the chart reflects a strong trend and the price started to toll up. The market moved higher. An ideal investor should have kept his/her stops wide enough to avoid getting shaken out of a false reaction. If possible, move stops to breakeven. This was not the time to consider short positions. The price after reaching the lifetime high started to consolidate and the trend weakened as reflected through the chart. The market moved lower. Ideal investor should have maintained logical stops for short positions. MOVING AVERAGE TABLE DATE 28 June, 2011 16 Dec, 2011 BUY 1360.23 1666.60 SELL BROKERAGE 1.36 1.67 302.97 PROFIT/LOSS
MACD TABLE DATE 23 June, 2011 05 Dec, 2011 BUY 1346.30 1640.54 SELL BROKERAGE 1.34 1.64 291.02 PROFIT/LOSS
RATE OF CHANGE TABLE DATE 28 June, 2011 22 Dec, 2011 BUY 1360.23 1680.94 SELL BROKERAGE 1.36 1.68 317.96 PROFIT/LOSS
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RELATIVE STRENGTH INDEX TABLE DATE 02 May, 2011 16 June, 2011 BUY 1320.33 1360.23 SELL BROKERAGE 1.32 1.36 37.32 PROFIT/LOSS
20 Nov, 2011 22 Jan, 2011
1617.00 1604.50
1.62 1.60 (16.22) 21.10
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4.2 BHARAT PETROLEUM CORPORATION LTD.

The following is the daily chart of Bharat Petroleum Corp. Ltd. starting from first week of february 2011 till last week of Jan 2012. The price has increased from Rupee value 588 to 672. In a time span of nearly one year price rise by rupee value around 100, which is more than 25% of the initial price. The price has gone through various trends in this time span. The chart indicate an initial weak trend involving sudden spurts of strong uptrend forcing price to rise gradually but then followed by timely correction till last week of September. The sideways Market after spurts of upswing, the market underwent a reaction. Such moves should traded using
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overbought/oversold indicators. This reaction may be followed by another up move. One may consider buying above the 2 period high. MOVING AVERAGE TABLE DATE 02 July, 2011 11 Sep, 2011 BUY 652.39 672.00 SELL BROKERAGE 0.65 0.67 18.68 PROFIT/LOSS
MACD TABLE DATE 25 June, 2011 02 Dec, 2011 BUY 655.02 665.55 SELL BROKERAGE 0.66 0.67 8.67 PROFIT/LOSS
21 Jan, 2012 03 Mar, 2012
570.06 670.00
0.57 0.67 98.76 107.43
RATE OF CHANGE TABLE DATE 11 Jan, 2012 24 Jan, 2012 BUY 540.23 566.34 SELL BROKERAGE 0.54 0.57 24.89 PROFIT/LOSS
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26 Aug, 2011 19 Jan, 2011
675.00 576.67
0.68 0.58 (100.26) (89.56)
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4.3 BHEL
The following is the daily chart of BHEL starting from first week of Feb 2011 till last week of Feb 2012. The price has decreased from Rupee value 456 to 266. In a time span of nearly one year price lowered by rupee value 190, which is nearly 200% decrease in the initial price. The price has gone through various trends in this time Span. An ideal investor should have kept his/her stops wide enough to avoid getting shaken out of a false reaction. If possible, move stops to breakeven. This was not the time to consider short positions. The investor had
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good memories of the previous high which keep the bullish forces active and made price to rise once again to touch the previous high. The price didnt increase in past one year. The market moved lower. Ideal investor should have waited up till late feb 2012 to invest his money. After a long downswing the stock prices started increasing. Such moves should traded using overbought/oversold indicators
MOVING AVERAGE TABLE DATE 18 April, 2011 12 May, 2011 BUY 435.00 411.01 SELL BROKERAGE 0.44 0.41 (24.84) PROFIT/LOSS
MACD TABLE DATE 04 April, 2011 21 April, 2011 BUY 423.76 407.99 SELL BROKERAGE 0.42 0.41 (16.83) PROFIT/LOSS
03 July, 2011 13 July, 2011
375.00 379.20
0.37 0.38 3.45
18 Jan, 2012 29 Jan, 2012
280.53 281.33
0.28 0.28 0.24
12 Feb, 2012 28 Feb, 2012
262.29 265.87
0.26 0.27 3.05 (10.09)
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RATE OF CHANGE TABLE DATE 18 Feb, 2012 26 Feb, 2012 BUY 271.91 274.33 SELL BROKERAGE 0.27 0.27 1.88 PROFIT/LOSS
RELATIVE STRENGTH INDEX TABLE DATE 27 Mar, 2011 29 Apr, 2011 BUY 441.55 417.19 SELL BROKERAGE 0.44 0.41 (25.21) PROFIT/LOSS
25 Jun, 2011 20 Jul, 2011
380.55 375.09
0.38 0.37 (6.21) (31.42)
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4.4 CANARA BANK

The following is the daily chart of Canara Bank starting from first week of February 2011 till last week of Feb 2012. The price has decreased from Rupee value 621 to 459. In a time span of nearly one year price rise by rupee value around 150, which is more than 25% of the initial price. The price has gone through various trends in this time span. In a small time span Oct 2011 to dec 2011 the stock can be bought and sold. This reaction may be followed by another up move. But finally the stock prices started increasing from feb 2012 with a stronger uptrend.
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MOVING AVERAGE TABLE
DATE 08 Oct, 2011 05 Dec, 2011
BUY 432.00
SELL
BROKERAGE 0.43
PROFIT/LOSS
441.88
0.44
9.01
MACD TABLE DATE 16 Oct, 2011 12 Nov, 2011 BUY 440.54 478.76 SELL BROKERAGE 0.44 0.49 37.29 PROFIT/LOSS
23 Jan, 2012 25 Feb, 2012
430.44 510.23
0.43 0.51 79.06 116.35
RATE OF CHANGE TABLE DATE 28 Dec, 2011 19 Feb, 2012 BUY 376.34 503.35 SELL BROKERAGE 0.38 0.50 126.13 PROFIT/LOSS
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RELATIVE STRENGTH INDEX TABLE DATE 15 June, 2011 02 July, 2011 BUY 536.76 578.22 SELL BROKERAGE 0.54 0.59 40.33 PROFIT/LOSS
25 July, 2011 16 Oct, 2011
429.77 456.32
0.43 0.46 25.66
16 nov,2011 06 Jan, 2012
431.22 430.45
0.43 0.43 (1.63) 64.36
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4.5 CIPLA LTD.

The following is the daily chart of Cipla Ltd. starting from first week of February 2011 till last week of Jan 2012. The price has decreased from Rupee value 308 to 301. In a time span of nearly one year price rise by rupee value around 8, which is 2.5% of the initial price. The price has gone through various trends in this time span. There was a period from Oct 2011 to mid Feb 2012, the stock prices has increased with a strong Upward Trend. The market then moved downward.
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MOVING AVERAGE TABLE DATE 12 Apr, 2011 19 may, 2011 BUY 311.03 313.25 SELL BROKERAGE 0.31 0.31 1.93 PROFIT/LOSS
11 June, 2011 26 July, 2011
318.58 325.89
0.32 0.32 6.74
16 Oct, 2011 25 Feb, 2012
287.48 333.79
0.29 0.33 45.89 (54.26)
MACD TABLE DATE 03 Apr, 2011 23 Apr, 2011 BUY 319.25 321.56 SELL BROKERAGE 0.31 0.32 1.84 PROFIT/LOSS
28 May, 2011 16 June, 2011
320.04 322.78
0.32 0.32 2.10
12 Nov, 2011 06 Dec, 2011
291.06 331.55
0.29 0.33 39.87
07 Jan, 2012 13 Feb, 2012
334.86 355.74
0.33 0.35 20.25 63.66
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RATE OF CHANGE TABLE DATE 12 Nov, 2011 06 Dec, 2011 BUY 291.06 331.55 SELL BROKERAGE 0.29 0.33 38.96 PROFIT/LOSS
20 Nov, 2011 22 Jan, 2011
315.08 341.91
0.32 0.34 25.36 45.58
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4.6 COAL INDIA LTD.

The following is the daily chart of Coal India Ltd. starting from first week of February 2011 till last week of Jan 2012. The price has decreased from Rupee value 308 to 301. In a time span of nearly one year price rise by rupee value around 8, which is 2.5% of the initial price. The price has gone through various trends in this time span. There was a period from Oct 2011 to mid Feb 2012, the stock prices has
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increased with a strong Upward Trend. The market then moved downward. One should have kept stops wide enough to avoid getting shaken out of a false reaction. If possible, move stops to breakeven. This is not the time to consider short positions.
MOVING AVERAGE TABLE DATE 13 Jan, 2012 12 Mar, 2012 BUY 315.02 332.56 SELL BROKERAGE 0.32 0.33 18.55 PROFIT/LOSS
MACD TABLE DATE 26 May, 2011 11 Jun, 2011 BUY 391.33 395.04 SELL BROKERAGE 0.39 0.39 3.63 PROFIT/LOSS
15 Jan, 2012 29 Jan, 2012
318.45 322.03
0.32 0.32 4.25 7.88
RELATIVE STRENGTH INDEX TABLE DATE 26 Jun, 2011 28 Jul, 2011 BUY 378.09 398.23 SELL BROKERAGE 0.39 0.39 19.66 PROFIT/LOSS
29 Aug, 2011 18 Jan, 2012
364.69 342.54
0.36 0.34 21.96 41.62
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4.7 DABUR INDIA LTD.

The following is the daily chart of Dabur India Ltd. starting from first week of February 2011 till last week of Feb 2012. The price has increased from Rupee value 96 to 105. In a time span of nearly one year price rise by rupee value around 8, which is 12.5% of the initial price. The price has gone through various trends in this time span. There was a continuous fall in the stock prices till feb end. The market then moved upward. One should have kept stops wide enough to avoid getting shaken out
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of a false reaction. If possible, move stops to breakeven. This is not the time to consider short positions.
MOVING AVERAGE TABLE DATE 28 Dec, 2011 21 Jan, 2011 BUY 99.03 94.68 SELL BROKERAGE 0.10 0.09 5.23 PROFIT/LOSS
MACD TABLE DATE 13 Apr, 2011 28 Apr, 2011 BUY 103.56 106.86 SELL BROKERAGE 0.10 0.11 2.52 PROFIT/LOSS
12 Feb, 2012 25 Feb, 2012
99.25 104.02
0.10 0.10 5.32 7.84
RATE OF CHANGE TABLE DATE 08 Feb, 2012 18 Feb, 2012 BUY 96.23 104.35 SELL BROKERAGE 0.10 0.10 7.66 PROFIT/LOSS
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RELATIVE STRENGTH INDEX TABLE DATE 06 Jul, 2011 26 Aug, 2011 BUY 101.33 108.78 SELL BROKERAGE 0.10 0.11 6.85 PROFIT/LOSS
20 Nov, 2011 22 Jan, 2011
97.25 95.36
0.97 0.95 2.36 9.21
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4.8 DLF LTD.

The following is the daily chart of DLF Ltd. starting from first week of February 2011 till last week of March 2012. The price has decreased from Rupee value 248 to 192. In a time span of nearly one year price rise by rupee value around 56, which is 20% of the initial price. The price has gone through various trends in this time span. There was a period from Oct 2011 to mid Dec 2011 and Feb 2012 to March 2012, the
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stock price has increased with a strong Upward Trend. People may also buy and sold this stock in these periods. The market then moved downward. According to previous trends, the stock prices will again take the time of 2-3 months to recover and to come in the bullish trend.
MOVING AVERAGE TABLE DATE 22 Sep, 2011 26 Nov, 2011 BUY 209.00 219.01 SELL BROKERAGE 0.21 0.22 9.56 PROFIT/LOSS
28 Jan, 2012 23 Mar, 2012
201.32 214.96
0.20 0.21 12.86 22.42
MACD TABLE DATE 04 Sep, 2011 21 Nov, 2011 BUY 213.76 217.99 SELL BROKERAGE 0.21 0.21 3.65 PROFIT/LOSS
03 Jan, 2011 13 Mar, 2011
201.00 215.20
0.20 0.22 14.88 18.43
RATE OF CHANGE TABLE DATE 18 Feb, 2012 26 Mar, 2012 BUY 204.91 214.33 SELL BROKERAGE 0.20 0.21 9.36 PROFIT/LOSS
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RELATIVE STRENGTH INDEX TABLE DATE 27 Jan, 2011 29 Feb, 2011 BUY 211.55 215.19 SELL BROKERAGE 0.21 0.22 3.84 PROFIT/LOSS
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4.9 FORTIS HEALTHCARE LTD.

The following is the daily chart of Fortis Healthcare Ltd. starting from first week of February 2011 till last week of March 2012. The price has decreased from Rupee value 152 to 104. In a time span of nearly one year price rise by rupee value around 48, which is around 30% of the initial price. The price has gone through various trends in this time span. The stock prices are mostly in bearish trend which got over
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only in the Feb 2012 only. So the investors may buy this stock after Feb 2012. The market then moved downward. The condition of overbought and oversold is of no use in this stock condition. One should have kept stops wide enough to avoid getting shaken out of a false reaction.
MACD TABLE DATE 04 May, 2011 21 June, 2011 BUY 150.76 152.99 SELL BROKERAGE 0.15 0.15 2.54 PROFIT/LOSS
23 Jan, 2011 13 Mar, 2011
101.00 105.20
0.10 0.10 3.45 5.99
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4.10 HDFC BANK

The following is the daily chart of HDFC BANK starting from February 2011 to March 2012. The price has increased from Rupee value 468 to 516. In a time span of nearly one year price decreased by rupee value 48. The price has gone through various trends in this time span. This company has not been a good investment proposition but there were few trading opportunities available. At the start of the year
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there was an opportunity for the investors to buy the stock in June 2011 an sell it in Sep 2011 and afterwards there was a downward trend. MOVING AVERAGE TABLE DATE 22 Jun, 2011 02 Aug, 2011 BUY 406.00 481.01 SELL BROKERAGE 0.41 0.48 73.72 PROFIT/LOSS
MACD TABLE DATE 24 May, 2011 21 July, 2011 BUY 461.76 501.99 SELL BROKERAGE 0.46 0.50 39.25 PROFIT/LOSS
13 Jan, 2011 23 Feb, 2011
454.00 509.20
0.45 0.51 54.45 93.60
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4.11 HINDALCO INDUSTRIES LTD.

The following is the daily chart of Hindalco Industries Ltd. starting from last week of Feb 2011 till March 2012. The price has decreased from Rupee value 216 to 135. In a time span of nearly one year price rise by rupee value 81, which is near about 37.5% increase in the initial price. The price has gone through various trends in this
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time span. This stock has not been very impressive and not been a good investment proposition. MOVING AVERAGE TABLE DATE 22 Jan, 2012 26 Mar, 2012 BUY 119.00 139.01 SELL BROKERAGE 0.12 0.14 20.36 PROFIT/LOSS
MACD TABLE DATE 14 Jan, 2012 21 Feb, 2012 BUY 113.45 142.99 SELL BROKERAGE 0.11 0.14 18.56 PROFIT/LOSS
RATE OF CHANGE TABLE DATE 18 Jan, 2012 26 Feb, 2012 BUY 134.91 141.33 SELL BROKERAGE 0.13 0.14 7.25 PROFIT/LOSS
RELATIVE STRENGTH INDEX TABLE DATE 17 Jan, 2012 05 Mar, 2012 BUY 132.55 134.19 SELL BROKERAGE 0.13 0.13 3.45 PROFIT/LOSS
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4.12 HINDUSTAN UNILEVER LTD

The following is the daily chart of Hindustan Unilever ltd. starting from last week of Jan 2011 till March 2012. The price has increased from Rupee value 286 to 416. In a time span of nearly one year price rise by rupee value 130, which is near about 45% increase in the initial price. The price has gone through various trends in this time span. This stock has proved to be a good stock and very impressive investment proposition.
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This stock kept on increasing from the starting of the year only. The market gained momentum and the trend strengthen. MOVING AVERAGE TABLE DATE 22 Sep, 2011 26 Jan, 2012 BUY 325.00 392.01 SELL BROKERAGE 0.33 0.39 72.23 PROFIT/LOSS
MACD TABLE DATE 04 Sep, 2011 26 Dec, 2011 BUY 339.76 390.99 SELL BROKERAGE 0.34 0.39 49.36 PROFIT/LOSS
RATE OF CHANGE TABLE DATE 18 Sep, 2011 26 Nov, 2011 BUY 332.91 354.33 SELL BROKERAGE 0.33 0.35 22.02 PROFIT/LOSS
RELATIVE STRENGTH INDEX TABLE DATE 15 Jan, 2012 21 Mar, 2012 BUY 385.55 415.19 SELL BROKERAGE 0.39 0.42 29.36 PROFIT/LOSS
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4.13 INFOSYS
The following is the daily chart of Infosys starting from last week of Jan 2011 till last week of March 2012. The price has decreased from Rupee value 3264 to 2784. In a time span of nearly one year price fallen by rupee value 480, which is almost 15% decrease in the initial price. The price has gone through various trends in this time span.
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MOVING AVERAGE TABLE DATE 05 Oct, 2011 08 Dec, 2011 BUY 2492.00 2696.01 SELL BROKERAGE 2.50 2.70 203.63 PROFIT/LOSS
RATE OF CHANGE TABLE DATE 18 Sep, 2011 26 Nov, 2011 BUY 2385.91 2590.33 SELL BROKERAGE 2.40 2.60 195.28 PROFIT/LOSS
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4.14 MARUTI SUZUKI LIMITED

The following is the weekly chart of Maruti Suzuki Ltd. starting from last of Jan 2011 till last week of March 2012. The price has increased from Rupee value 1276 to 1350. In a time span of nearly one year price rise by rupee value 74, which is nearly 6% increase in the initial price. The price has gone through various trends in this time
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span.This company has been a good investment propositions in past two years. From Jan 2012 the prices of the stock started tolling up. The bullishness in the stock is more. The market moved higher. MACD TABLE DATE 14 Jan, 2012 16 Feb, 2012 BUY 939.76 1290.99 SELL BROKERAGE 0.94 1.30 225.23 PROFIT/LOSS
RELATIVE STRENGTH INDEX TABLE DATE 15 Nov, 2011 21 Jan, 2012 BUY 985.55 1015.19 SELL BROKERAGE 0.99 1.02 42.25 PROFIT/LOSS
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4.14 OIL AND NATURAL GAS CORPORATION

The following is the daily chart of Oil & Natural Gas Corporation starting from last week Jan 2011 till last week of March 2012. The price has decreased from Rupee value 287 to 266. In a time span of nearly one year price fallen by rupee value 21, which is nearly 10% decrease in the initial price. The price has gone through various trends in this time span.
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This blue chip company has been a good investment propositions. Though the chart indicates a weak trend but one can notice a gradual increase in price overtime. From the last week of Jan 2012 till the March 2012 the chart reflects a strong trend. While at the initial stage the price were going down and market was in the bearish trend. MOVING AVERAGE TABLE DATE 22 Jan, 2012 26 Mar, 2012 BUY 261.00 265.01 SELL BROKERAGE 0.26 0.27 3.69 PROFIT/LOSS
MACD TABLE DATE 21 Jan, 2012 02 Mar, 2012 BUY 259.76 290.99 SELL BROKERAGE 0.26 0.29 30.88 PROFIT/LOSS
RELATIVE STRENGTH INDEX TABLE DATE 15 Nov, 2011 12 Jan, 2012 BUY 250.55 264.19 SELL BROKERAGE 0.25 0.26 13.63 PROFIT/LOSS
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4.15 PIDLITE INDUSTRIES LTD.

The following is the daily chart of Pidlite Industries Ltd. starting from last week Jan 2011 till last week of March 2012. The price has increased from Rupee value 148 to 178. In a time span of nearly one year price rise by rupee value 30, which is nearly
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20% increase in the initial price. The price has gone through various trends in this time span. The chart indicates a strong trend at the starting of the year but one can notice a gradual decrease in price overtime. MACD TABLE DATE 24 Sep, 2012 20 Mar, 2012 BUY 149.76 160.99 SELL BROKERAGE 0.15 0.16 10.55 PROFIT/LOSS
RELATIVE STRENGTH INDEX TABLE DATE 15 May, 2011 29 Jun, 2011 BUY 148.55 155.19 SELL BROKERAGE 0.15 0.16 6.36 PROFIT/LOSS
12 Aug,2011 16 Jan,2012
165.69 149.84
0.16 0.15 13.58 19.84
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4.16 RELIANCE LIMITED

The following is the daily chart of Reliance Ltd. starting from last week of January 2011 till last week of March 2012. The price has decreased from Rupee value 1020 to 750. In a time span of nearly one year price fallen by rupee value 270, which is 27% decrease in the initial price. The price has gone through various trends in this time span.
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MOVING AVERAGE TABLE DATE 21 Sep, 2011 28 Nov, 2011 BUY 782.00 806.01 SELL BROKERAGE 0.78 0.81 23.58 PROFIT/LOSS
29 Jan,2012 23 Mar,2012
780.36 750.96
0.78 0.75 29.74 52.22
28 Jan,2012 22 Feb,2012
765.26 826.95
0.77 0.83 59.36 103.51
RATE OF CHANGE TABLE DATE 18 Jan, 2012 26 Mar, 2012 BUY 790.91 806.33 SELL BROKERAGE 0.79 0.81 16.83 PROFIT/LOSS
RELATIVE STRENGTH INDEX TABLE DATE 15 Nov, 2012 11 Feb , 2012 BUY 855.99 815.19
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SELL
BROKERAGE 0.86 0.82
PROFIT/LOSS
(39.36)
4.18 STATE BANK OF INDIA

The following is the daily chart of State Bank of India starting from last week of Jan 2011 till last week of March 2012. In the time span of nearly one year the stock price has decreased by 25% of the initial price. The price has gone through various trends in this time span. From the initial stage only the price has gone down and there was
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negative trend prevailing in the market. Only after Jan 2012 the price started increasing and created a situation of buy for the investors. MOVING AVERAGE TABLE DATE 21 Jul, 2011 18 Aug, 2011 BUY 2432.00 2206.01 SELL BROKERAGE 2.43 2.20 (196.36) PROFIT/LOSS
RATE OF CHANGE TABLE DATE 18 Jan, 2012 26 Mar, 2012 BUY 1910.91 2196.33 SELL BROKERAGE 1.91 2.20 295.63 PROFIT/LOSS
22 Dec,2011 16 Jan,2012
1054.69 1956.84
1.05 1.96 898.36 1032.11
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4.19 TATA STEEL

The following is daily chart of Tata Steel starting from last week of January 2011 till last week of March 2012. The price has decreased from Rupee value 624 to 468. In a time span of nearly one year price felled by rupee value 156, which is nearly 25% of the initial price. The price has gone through various trends in this time span. Beginning with a weakening trend as indicated by chart there was a sideways movement for nearly 9 months, which ended in January 2012 when a strong uptrend
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developed in first week of February 2012 as indicated by chart. The market can remain overbought for many days. Long positions should be closed if price trades below two period low. This may also be an opportunity to go short, if chart patterns support a short sell. MOVING AVERAGE TABLE DATE 21 Jan, 2012 21 Mar, 2012 BUY 432.00 456.01 SELL BROKERAGE 0.43 0.46 23.63 PROFIT/LOSS
RATE OF CHANGE TABLE DATE 18 Jan, 2012 26 Feb, 2012 BUY 426.91 446.33 SELL BROKERAGE 0.43 0.45 19.64 PROFIT/LOSS
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26 Dec,2011 10 Jan,2012
364.69 426.84
0.36 0.43 60.23 87.75
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4.20 WIPRO LIMITED

Following is the daily chart of Wipro ltd. starting from last week of January 2011 till the last week of March 2012. The price has decreased from Rupee value 462 to 434. In a time span of nearly one year price felled by rupee value 28, which is more than 6% of the initial price. The price has gone through various trends in this time span. The price has negative trend with the start of the year. After that it is changed to bullish market from Oct 2011.
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MACD TABLE DATE 14 Oct, 2011 25 Feb, 2012 BUY 340.76 425.99 SELL BROKERAGE 0.34 0.43 84.63 PROFIT/LOSS
RELATIVE STRENGTH INDEX TABLE DATE 01 May, 2011 09 Jul, 2011 BUY 436.55 425.19 SELL BROKERAGE 0.44 0.43 11.28 PROFIT/LOSS
22 Jul,2011 16 Oct,2011
394.69 356.84
0.39 0.36 38.17 49.35
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CHAPTER-5 (SUMMARY OF FINDINGS, CONLUSIONS AND SUGGESTIONS)
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5.1 SUMMARY OF FINDINGS

5.1.1 Technical analysis has worked to a great extent in this study 5.1.2 Not all the tools used here will gives the same result for the same period. 5.1.3 Day moving average and MACD has helped a lot in coming to the conclusions. 5.1.4 The result shown by the maximum number of tools can be treated as most efficient than it is shown by any particular tool individually.
5.1.5 Condition of overbought and over sold is not so significant at many places. 5.1.6 Tools of Technical analysis were able to make more profits when compared to buy and hold strategy in this study. 5.1.7 Not all the tools used here gave the same result for the same period.
5.2 CONCLUSION
Technical analysis can offer great insight, but if used improperly, they can also produce false signals. While trend lines have become a very popular aspect of technical analysis, they are merely one tool for establishing, analyzing, and confirming a trend. Trend lines should not be the final arbiter, but should serve merely as a warning that a change in trend may be very useful. The price set by the market reflects the sum knowledge of all participants, and we are not dealing with lightweights here. These participants have considered (discounted) everything under the sun and settled on a price to buy or sell. These are the forces of supply and demand at work. By examining price action to determine which force is prevailing, technical analysis focuses directly on the bottom line: What is the price? Where has it been? Where is it going?
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Even though there are some universal principles and rules that can be applied, it must be remembered that technical analysis is more an art form than a science. As an art form, it is subject to interpretation. However, it is also flexible in its approach and each investor should use only that which suits his or her style. Developing a style takes time, effort and dedication, but the rewards can be significant. The result of this study shows that Relative Strength Index is the most reliable tool of technical analysis in terms of returns and next comes Rate of Change Method. It may not be 100% true, because the tools and the software used in the chart here are not very advanced one as traders use in their analysis. Which technical analysis tool one uses will depend on ones trading and investing style and preferences. Some traders prefer to use Relative Strength Index for shorter time periods to capture changes quicker. Some investors prefer simple moving averages over long time periods to identify long-term trend changes. The day moving average also has a lag, but the other tools which are used here also are prone to quicker breaks. In addition, much will depend on the individual security in question. The technical chart type and length of time will depend greatly on the individual security and how it has reacted in the past. The initial thought for some is that greater sensitivity and quicker signals are bound to be beneficial. This is not always true and brings up a great dilemma for the technical analyst: the tradeoff between sensitivity and reliability. The more sensitive an indicator is the more signals that will be given. These signals may prove timely, but with increased sensitivity comes an increase in false signals.
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The less sensitive an indicator is the fewer signals that will be given. However, less sensitivity leads to fewer and more reliable signals. Sometimes these signals can be late as well.
5.3 SUGGESTIONS
As the research has been done by taking only the closing price of the Sensex index for a period of three years, further research could be done by considering sector wise closing price of the stocks and/or by selecting few stocks from Large Cap, Mid Cap and Small Cap stocks for a long periods of time and can be back tested by applying various tools of Technical Analysis and its relevance could be found for the same.
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BIBLIOGRAPHY & WEBLIOGRAPHY
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Books:
1) 2) 3) 4) Technical Analysis from A-to-Z (by Steven B Achelis) Using technical analysis: The Basics (Clifford Pistolese) How to make money Trading Derivative (by Ashwani Gujaral) Technical Analysis of Stock Trends (by Robert Davis & John Magee)
Internet:
www.Investopedia.com www.stockcharts.com www.traderji.com www.bseindia.com
Software: CHART NEXUS
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GLOSSARY
Divergence a situation where two indicators are not confirming each other. Fundamental analysis the opposite of technical analysis, it relies on economic supply and demand information, as opposed to market activity. Indicator - it is a mathematical calculation that can be applied to a security's price, volume or even to another indicator. Oscillators indicators that determine when a market is in an overbought or oversold condition. Overbought a term usually used in reference to an oscillator. When a oscillator reaches an upper extreme, it s believed that a market has risen too far and is vulnerable to a selloff. Oversold a term usually used in reference to an oscillator. When an oscillator reaches a lower extreme, it is believed that a market has dropped too far and is due for a bounce. Simple average a moving average that gives equal weight to each days price data. Technical analysis the study of market action, usually with price charts, which includes volume and open interest patterns. Also called chart analysis, market analysis and more recently visual analysis.
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Trend refers to the direction of prices. Trend-lines straight lines drawn on a chart below reaction lows in an uptrend, or above rally peaks in a downtrend, that determines the steepness of the current trend. Weighted average a moving average that uses a selected time span, but gives greater weight to more recent price data.
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Abhishek Rai Dissertation

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TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

1.1 INTRODUCTION TO SECURITIES MARKET

trading system to investors by using suitable communication

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

1.4 ASSUMPTIONS IN TECHNICAL ANALYSIS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

CHAPTER 2 (LITERATURE REVIEW & RESEARCH DESIGN)

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

2.1 LITERATURE REVIEW

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

ANALYSIS BY FOREIGN EXCHANGE DEALERS: HONG KONG EVIDENCE.

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

2.3 RESEARCH DESIGN 2.3.1 Statement of Problem

2.3.2 Objectives of the Study

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

2.3.3 Scope of the Study

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

2.2.4 Resource Design

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

2.5 LIMITATIONS OF THE STUDY

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

CHAPTER-3 (INDUSTRY PROFILE)

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

3.1 HINDALCO INDUSTRIES LTD.

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

3.2 WIPRO LTD

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

3.3 INFOSYS TECHNOLOGIES

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

3.4 RELIANCE INDUSTRIES LTD.

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

3.5 TATA STEEL

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

3.6 BAJAJ AUTO LTD.

TECHNICAL ANALYSIS- A TOOL FOR TRADING DECISIONS

3.7 BHARAT PETROLEUM CORPORATION LTD.