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1.1 Introduction to topic

The methods used to analyze securities and make investment decisions fall
into two very broad categories, fundamental analysis and technical analysis.
Fundamental analysis involves analyzing the characteristics of a company in order
to estimate its value. Technical analysis takes a completely different approach, it
doesn't care about the "value" of a company or a commodity. Technicians
(sometimes called chartists) are only interested in the price movements in the
market.
Despite all the fancy and exotic tools it employs, technical analysis really just
studies supply and demand in a market in an attempt to determine what direction,
or trend, will continue in the future. In other words, technical analysis attempts to
understand the emotions in the market by studying the market itself, as opposed to
its components. If you understand the benefits and limitations of technical
analysis, it can give you a new set of tools or skills that will enable you to be a
better trader or investor.

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



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

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1.2 Need for study
The share price movement is analyzed broadly with two approaches,
namely, fundamental approach and the technical approach. Fundamental approach
analyses the share price on the basis of economic, industry and company statistics.
If the price of the share is lower than its intrinsic value, investor buys the share.
But, if he finds the price of the share higher than the intrinsic value, he sells and
gets profit. The technical analyst mainly studies the stock price movements of the
security market. If there is an uptrend in the price movement investor may
purchase the scrip. With the onset of fall in price he may sell it and move from the
scrip. Basically, technical analyst and the fundamental analyst aim at good return
on investment.Technical analysis is a very important to know stock market trend,
breath, strength of trend same apply for individual stock also.
1. To make a big money in stock market it is necessary to know stock market
trend and strength of the trend. For any stock, ETF or penny stocks before
to trade if you know the trend and strength that make a really big
difference in your trading approach.
2. After doing good study of technical indicators you can easily identify
stock market trend, trend reversal, and major top or major bottom
3. Technical analysis is just like weather forecast. When you today there is
more chance for rain then before to go out from your house you prepare
for rain. Same way technical analysis gives that guide for stock trading,
day trading or long term investment.
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1.3 Objectives of the study

To understand the concept of Technical analysis.
To know about various indicators and tools used in technical analysis.
To study how the indicators help to predict the future of a stock.
To identify various factors that influences the behavior of global market,
Indian market and the behavior of the stocks.
To generate long and short positions using the indicators.
To offer suggestions based on my findings.










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1.4 Scope of the study
It is the process of identifying trend reversals at an earlier stage to
formulate the buying and selling strategy. With the help of several technical
indicators they analyze the relationship between price volume and supply
demand for overall market and the individual stocks.


















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1.5 Research methodology
Research design
For the present study the research design is drafted as giving buy and sell
calls for the intraday traders and short term investors. The period for short term
investors is 15 to 30 days.
The intraday calls and positional calls are generated by using some of the
technical indicators like Candle Sticks, Relative Strength Index, Moving Average
Convergence Divergence, Volumes, Simple Moving Averages, and Crossovers.
Data collection
The various sources for data collection include websites and stock
exchange. Primary data and secondary data are collected for this research. The
graphs for intraday calls are obtained by online trading application Power
Indiabulls (PIB) and graphs for positional calls are collected from websites.








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Review of literature
Article 1 :
Title: An alternative test for weak form efficiency based on technical
analysis.
Author : Elaine Y. L. Loh
Journal Financial economies
Volume 17, year 2007, issue 12, pages1003 - 1012
This study suggests a test for weak form efficiency based on the analysts
approach to technical analysis. In the previous days those studies make
implications on weak form efficiency based on the empirical results of testing
only one class of trend indicators. On the other hand the analysts typically involve
the use of trend indicators simultaneously with the other confirming indicators
because trend indicators do not sufficiently capture the information content in past
prices. By combining trend indicators with confirming other technical indicators
and are also based on the past practices.
The patterns and rules suggested by the analysts using technical indicators
are applied on five of the Asian-Pacific markets, the result obtained suggests that
a test for weak form efficiency based solely on trend indicators is ineffective than
the alternative test proposed in this study. An examination of weak form
efficiency based on this alternative test suggests that weak form efficiency is
determined by factors other than technological progress.

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Article 2 :
Title : Emerging Markets and Stock Market Bubbles: Nonlinear

Author : Ehsan Ahmed, J. Barkley Rosser Jr., and Jamshed .Y
Journal Emerging Markets Finance And Trade
Volume 46, year 2010, pages 23 - 40
The article displays different methods are used to test the absence of
excessively rapid movements of price movements in daily stock market indices in
27 emerging market economies from the early 1990s through 2006. The absences
of nonlinearities beyond autoregressive conditional heteroskedasticity (ARCH)
effects are also tested.
Daily returns of stock markets in emerging markets in Asia, Africa, South
America, and Eastern Europe from the early 1990s through 2006 are analyzed for
the possible presence of nonlinear speculative bubbles. The absence of these is
tested for by studying residuals of vector autoregressivebased fundamentals,
using the Hamilton regime switching model and the rescaled range analysis of
Hurst. For the first test, absence of bubbles is rejected for twenty-four countries
(except Mexico, Sri Lanka, and Taiwan), for the second test, it is rejected for 26
countries (except Malaysia). BDS testing on these residuals after autoregressive
conditional heteroskedasticity (ARCH) effects are removed fails to reject further
nonlinearity (except for Israel). Policy issues are discussed, noting that what is
appropriate varies from country to country and time period to time period.
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Theoretical Problems of Speculative bubbles has been to identify it as a
price of an asset staying away from the fundamental value of the asset for some
extended period of time.


















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Article 3 :
Title : Frequency of Corporate Announcements via Stock Exchange
Web Sites and Market Efficiency
Authors : Asheq Rahman, Roger Debreceny
Journal : Exchange of accounting, auditing, finance
Volume: 25, pages 457 - 490
The Online trading softwares setup by the brokerages and the platform set
up by their online trading applications of the brokerages have been creating a well
organized environment for the clients to trade and invest.
Continuous corporate reporting is gaining prominence in the current real-
time reporting environment. This has added a new dimension to corporate
reporting, the frequency with which firms report their material information. This
article tells about the impact of frequency of online material information
disclosures on market efficiency. The measure of frequency of online material
information disclosures is the monthly frequency of corporate announcements via
stock exchange Web sites. It is found that the frequency of announcements is
positively associated with returns and volume metrics and negatively associated
with bid-ask spread. We infer from the results that the frequency of material
online disclosures has a beneficial impact on market efficiency.




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Article 4 :
Title : Product Market Competition, Insider Trading and Stock Market
Efficiency
Author : Joel Peress
Journal of Finance
Volume: 65, pages 1 - 43
The competition of products of different firms in the stock market is
influencing the behavior of equity markets, the situation examined shows that the
product market imperfections may spread to equity markets.
The author explains these concepts in the article saying, How does
competition in firms product markets influence their behavior in equity markets?
Do product market imperfections spread to equity markets? These questions are
increasingly of interest as product markets are becoming more competitive in
many countries. Firms use their monopoly power to pass on shocks to customers,
thereby insulating their profits. This encourages stock trading, expedites the
capitalization of private information into stock prices and improves the allocation
of capital. Several implications are derived and tested.
In this paper, the author analyzed that these questions using a noisy
rational expectations model in which firms operate under monopolistic
competition while their shares trade in perfectly competitive markets. The model
is guided by recent empirical work showing that stock returns are affected by the
intensity of product market competition. Gaspar and Massa (2005) and Irvine and
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Pontiff (2009) document that more competitive firms have more volatile
idiosyncratic returns, and Hou and Robinson (2006) show that such firms earn
higher risk-adjusted returns.


















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Article 5 :
Title : Stock Market Declines and Liquidity.
Authors : Hameed, Allaudeen Kang, Wenjin Viswanathan
Journal of Finance
Volume 65 issue 1 pages 257 - 293
The different trends of stock markets the declining trend, the rising trend,
the reversal trend and the trends some cause effect of illiquidity are considered to
be important. Liquidity dry-ups are argued to occur because market participants
engage in panic selling (a demand effect), financial intermediaries withdraw from
providing liquidity (a supply effect), or both. In this paper, the work done is on
what happens to market liquidity after large market declines and whether supply
effects exist in equity markets.
Consistent with recent theoretical models where binding capital
constraints lead to sudden liquidity dry-ups, we find that negative market returns
decrease stock liquidity, especially during times of tightness in the funding
market. The asymmetric effect of changes in aggregate asset values on liquidity
and commonality in liquidity cannot be fully explained by changes in demand for
liquidity or volatility effects. The research brought up the economically
significant returns to supplying liquidity following periods of large drops in
market valuations.



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Article 6 :
Title : Stock Market Mispricing: Money Illusion or Resale Option?
Authors : Carl R. Chen, Peter P. Lung, and F. Albert Wang
Journal of Finance and quantitative analysts
Volume 44 year 2009 pages 1125 - 1147
The Stock Market mispricing the very happening thing in the stock
market, the reason for this cannot be assumed as one particular one the money
illusion or resale option or any other. In this article these two reasons are focused
and made clear to understand.
Here in the article two hypothesis are used to explain stock mispricing:
i) the money illusion hypothesis (Modigliani and Cohn (1979)) and
ii) the resale option hypothesis (Scheinkman and Xiong (2003)).
We find that the money illusion hypothesis may explain the level, but not
the Volatility of mispricing in the U.S. market. In contrast, the stock resale option
hypothesis, which stems from heterogeneous beliefs about future dividend growth
rates and short-sale constraints, can explain both the level and the volatility of
mispricing. The evidence suggests that while the two hypotheses complement
each other in explaining the level of mispricing, the resale option hypothesis
provides a more coherent explanation for asset price bubbles, in which
extraordinarily high price levels are often accompanied by excessive volatility and
frenzied trading.


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Article 7 :
Title : Tests of Technical Analysis in India
Authors : Sanjay Sehgal and Meenakshi Gupta
Journal of business
Volume 11 year 2007 issue 3 pages 11 22
The study evaluates the economic feasibility of technical analysis in the
Indian stock market. It discusses that technical indicators do not outperform
simple Buy and Hold strategy on net return basis for individual stocks. Technical
indicators seem to do better during market upturns compared to market
downturns. However, technical based trading strategies are not feasible vis--vis
passive strategy irrespective of market cycle conditions.
Technical indicators also do not provide economically significant profit
for industry as well as economy based data. Combining fundamentals with
technical information, we find, that technical indicators are more profitable for
small stocks compared to big stocks and for high value stocks compared to low
value stocks. However, the economic feasibility of fundamentals based technical
strategies is still questionable. Our results seem to confirm with the efficient
market hypothesis.





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Article 8 :
Title : The Role of the Media in the Internet IPO Bubble.
Authors : Bhattacharya, Utpal
1
Galpin, Neal
,
Ray, Rina, Yu,
Xiaoyun
Journal of Finance and quantitative analyst
Volume 44 issue 03 year 2009 pages 657 - 682

Internet has brought greater improvement in the concept of online trading,
the introducing of IPO has become much easier by online trading platform by the
brokerage companies.
People are aware of the news items that came out between 1996 and 2000
on 458 Internet initial public offerings (IPOs) and a matching sample of 458 non-
Internet IPOs (a total of 171,488 news items) and classify each news item as good
news, neutral news, or bad news. The information is first documented that the
media were more positive for Internet IPOs in the period of the dramatic rise in
share prices and more negative for Internet IPOs in the period of the dramatic fall
in share prices. Then media hype is unable to explain the Internet bubble was
documented. A 1,646% difference exists in returns between Internet stocks and
non-Internet stocks from January 1, 1997, through March 24, 2000 (the market
peak), and the media can explain only 2.9% of that.



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Article 9 :
Title : Technical indicators: A statistical approach
Author : Michael Gutmann
The article discusses trading techniques to improve the performance of the
futures industry. It mentions that in order to manage one's financial assets,
analyzing price and volume data should be practiced. It notes that in trading
securities market, relying on time frame indicator and making technical indicators
robust are important factors in financial management.
The technical analyst seeks tools that are independent of any particular
market or time frame. We need to modify your indicators to work with other
markets. We just need to make them robust. Some of the best known technical
indicators are asset-specific and may not be robust. For example, the well-known
and widely used moving average convergence divergence (MACD) indicator
outputs the difference between two exponential moving averages, and the moving
averages are based on the price of the underlying asset.
The most common method of estimating the spread, or dispersion, of a
data set is Standard Deviation. The data set's mean, or average, is first calculated.
The Greek letter ]i ("mu") stands for the data set's mean value. The data set's
standard deviation is then calculated as the average distance of the data points
from their mean.



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Article 10 :
Title : Getting technical with economic data.
Author : McCurtain, Robert
The article discusses the application of technical analysis to analyze the
data in the financial market and the economy. It stresses the distinct role of
the technical and the fundamental analysts. It explains how the stock market can
be analyzed with a top-down approach with four coincident indicators. Moreover,
the exceptions to the rule in looking for linkage between data as well as the
importance of considering two separate markets in combining with second
fundamental data are expounded.
Because of the nature and historical relationship of technical analysis
indicators with financial markets data and the tenuous traditional relationship of
technicians with fundamental analysts, the latter who study earnings, economic
data, and other "non-price-oriented" statistical information, there has always been
an intellectual gulf between the two. Technical analysts have tended to assume
that fundamental data have already been discounted by the time the numbers
become known. Thus, fundamentals have limited value as market timing tools. On
the other hand, fundamental analysts claim that fundamental factors drive all
prices in the financial markets. The question remains: "Can fundamental data be
used to help with market timing decisions?"





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3.1 Industry profile

Industry overview
The securities market achieves one of the most important functions of
channeling idle resources to productive resources or from less productive
resources to more productive resources. Hence in the broader context the people
who save and investors who invest focus more towards the economys abilities to
invest and save respectively. This enhances savings and investments in the
economy, the two pillars for economic growth. The Indian Capital Market has
come a long way in this process and with a strong regulator it has been able to
usher an era of a modern capital market regime. The past decade in many ways
has been remarkable for securities market in India. It has grown exponentially as
measured in terms of amount raised from the market, the number of listed stocks,
market capitalization, trading volumes and turnover on stock exchanges, and
investor population. The market has witnessed fundamental institutional changes
resulting in drastic reduction in transaction costs and significant improvements in
efficiency, transparency and safety.
Stock exchange
A stock exchange, share market or bourse is a corporation or mutual
organization which provides facilities for stock brokers and traders, to trade
company stocks and other securities. Stock exchanges also provide facilities for
the issue and redemption of securities, as well as, other financial instruments and
capital events including the payment of income and dividends. The securities
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traded on a stock exchange include shares issued by companies, unit trusts and
other pooled investment products and bonds. To be able to trade a security on a
certain stock exchange, it has to be listed there. Usually there is a central location
at least for recordkeeping, but trade is less and less linked to such a physical
place, as modern markets are electronic networks, which gives them advantages
of speed and cost of transactions. Trade on an exchange is by members only. The
initial offering of stocks and bonds to investors is by definition done in the
primary market and subsequent trading is done in the secondary market. A stock
exchange is often the most important component of a stock market. Supply and
demand in stock a market is driven by various factors which, as in all free
markets, affect the price of stocks.
There is usually no compulsion to issue stock via the stock exchange
itself, nor must stock be subsequently traded on the exchange. Such trading is said
to be off exchange or over-the-counter. This is the usual way that bonds are
traded. Increasingly, stock exchanges are part of a global market for securities.
History of stock exchanges
In 12th century France courtier de change were concerned with managing and
regulating the debts of agricultural communities on behalf of the banks. As these
men also traded in debts, they could be called the first brokers.
Some stories suggest that the origins of the term "bourse" come from the
Latin bursa meaning a bag because, in 13th century Bruges, the sign of a purse
(or perhaps three purses), hung on the front of the house where merchants met.
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However, it is more likely that in the late 13th century commodity traders
in Bruges gathered inside the house of a man called Van der Burse, and in 1309
they institutionalized this until now informal meeting and became the "Bruges
Bourse". The idea spread quickly around Flanders and neighboring counties and
"Bourses" soon opened in Ghent and Amsterdam.
In the middle of the 13th century, Venetian bankers began to trade in
government securities. In 1351, the Venetian Government outlawed spreading
rumors intended to lower the price of government funds. There were people in
Pisa, Verona, Genoa and Florence who also began trading in government
securities during the 14th century. This was only possible because these were
independent city states ruled by a council of
Influential citizens, not by a duke. The Dutch later started joint stock
companies, which let shareholders invest in business ventures and get a share of
their profits - or losses. In 1602, the Dutch East India Company issued the first
shares on the Amsterdam Stock Exchange. It was the first company to issue
stocks and bonds. In 1688, the trading of stocks began on a stock exchange in
London Stock Exchange.
The role of stock exchanges:
Stock exchanges have multiple roles in the economy, this may include the
following:
Raising capital for businesses
The Stock Exchange provides companies with the facility to raise capital
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for expansion through selling shares to the investing public.
Mobilizing savings for investment
When people draw their savings and invest in shares, it leads to a more
rational allocation of resources because funds, which could have been consumed,
or kept in idle deposits with banks, are mobilized and redirected to promote
business activity with benefits for several economic sectors such as agriculture,
commerce and industry, resulting in a stronger economic growth and higher
productivity levels.
Facilitating company growth
Companies view acquisitions as an opportunity to expand product lines,
increase distribution channels, hedge against volatility, increase its market share,
or acquire other necessary business assets. A takeover bid or a merger agreement
through the stock exchange is one of the simplest and most common ways for a
company to grow by acquisition or fusion.
Redistribution of wealth
Stocks exchanges do not exist to redistribute wealth although casual and
professional stock investors through stock prices increases (that may result in
capital gains for the
Investor) and dividends get a chance to share in the wealth of profitable
businesses.
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Corporate governance
By having a wide and varied scope of owners, companies generally tend to
improve on their management standards and efficiency in order to satisfy the
demands of these shareholders and the more stringent rules for public
corporations imposed by public stock exchanges and the government.
Consequently, it is alleged that public companies (companies that are owned by
shareholders who are members of the general public and trade shares on public
exchanges) tend to have better management records than privately held companies
(those companies where shares are not publicly traded, often owned by the
company founders and/or their families and heirs, or otherwise by a small group
of investors). However, some well-documented cases are known where it is
alleged that there has been considerable slippage in corporate governance on the
part of some public companies (pets.com (2000), Enron corporation (2001),
One.tel (2001), Sunbeam (2001), Webvan (2001), Adelphia (2002), Mci world
com (2002), or paramalat(2003), are among the most widely scrutinized by the
media).
Creating investment opportunities for small investos
As opposed to other businesses that require huge capital outlay, investing
in shares is open to both the large and small stock investors because a person buys
the number of shares they can afford. Therefore the Stock Exchange provides the
opportunity for small investors to own shares of the same companies as large
investors.
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Government capital-raising for development projects
Governments at various levels may decide to borrow money in order to
finance infrastructure projects such as sewage and water treatment works or
housing estates by selling another category of securities known as bonds. These
bonds can be raised through the Stock Exchange whereby members of the public
buy them, thus loaning money to the government. The issuance of such municipal
bonds can obviate the need to directly tax the citizens in order to finance
development, although by securing such bonds with the full faith and credit of the
government instead of with collateral, the result is that the Government must tax
the citizens or otherwise raise additional funds to make any regular coupon
payments and refund the principal when the bonds mature.
Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on
market forces. Share prices tend to rise or remain stable when companies and the
economy in general show signs of stability and growth. An economic recession,
depression, or financial crisis could eventually lead to a stock market crash.
Therefore the movement of share prices and in general of the stock indexes can be
an indicator of the general trend in the economy.
Major stock exchanges
Twenty Largest Stock Exchanges by Market Capitalization as of July 12,
2008 (in trillions of US dollars)
NYSE Euro next
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Tokyo Stock Exchange
NASDAQ
London Stock Exchange
Hong Kong Stock Exchange
Toronto Stock Exchange
Frankfurt Stock Exchange (Deutsche Brose)
Shanghai Stock Exchange
Madrid Stock Exchange (BME Spanish Exchanges)
Australian Securities Exchange
Swiss Exchange
Nordic Stock Exchange Group OMX (Copenhagen, Helsinki, Iceland,
Stockholm, Tallinn, Riga and Vilnius Stock Exchanges)
Milan Stock Exchange (Boras Italian)
Bombay Stock Exchange
Korea Exchange
Sao Paulo Stock Exchange Bovespa
National Stock Exchange of India
Moscow Interbank Currency Exchange
Johannesburg Securities Exchange
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Stock exchange & shares
The market or place, where securities, viz. shares are exchanged/traded or
simply where buying and selling takes place, is called stock exchange or stock
market. Presently, the stock market in India consists of twenty three regional
stock exchanges and two national exchanges, namely, the National Stock
Exchange of India (NSE) and Bombay Stock Exchange (BSE).
The Bombay Stock Exchange (BSE) is the largest Stock Exchange, in the country,
where maximum transactions, in terms of money and shares take place. The other
major stock exchanges are Calcutta, Madras and Delhi Stock Exchanges. Other
one at Ahmadabad, Jaipur, Bangalore, Kanpur, Rajkot, Hyderabad, Cochin, Pune,
Bhubaneswar, Guwahati, Indore, Mangalore, Ludhiana, Patna, Saurashtra,
Vadodara, Coimbatore, Meerut, and Surat.
Functioning of stock exchange
Listing:
Listing of shares, on a stock exchange, means, such shares can be bought
and sold, in stock exchange. A Company, which intends to issue shares, through
prospectus, shall have to apply to one or more stock exchanges, for getting its
shares listed.
The detailed and elaborate procedure of getting the shares listed on a stock
exchange is monitored by SEBI. The SEBI, issues guidelines and notifications,
from time to time, with regard to listing of securities


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Once the shares are listed, they are divided into two categories:
1. GROUP A SHARES
2. GROUP "B" SHARES

Group "A" Shares are referred to as Cleaned Securities or specified
shares". The facility for carrying forward a transaction from one account period to
another is available for these shares. Group "A" shares represent companies, with
huge amount of capital, and equally a large scope for investment. These shares are
frequently traded and command higher price earnings multiples.
Group "B" Shares are referred to as none cleaned securities or non-specified
shares. For these groups facility of carrying forward is not available.
Whenever a share is moved from Group "B" to Group "A" its market price rises,
likewise, when a share is shifted from Group "A" to Group "B", its market price
declines. There are some criteria and guide lines, laid down by stock exchange,
for shifting stocks from the non-specified list to the specified list.
Primary market
Since 1991/92, the primary market has grown fast as a result of the
removal of investment restrictions in the overall economy and a repeal of the
restrictions imposed by the Capital Issues Control Act. In 1991/92, Rs62.15
billion was raised in the primary market. This figure rose to Rs276.21 billion in
1994/95. Since 1995/1996, however, smaller amounts have been raised due to the
overall downtrend in the market and tighter entry barriers introduced by SEBI for
investor protection .SEBI has taken several measures to improve the integrity of
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the secondary market. Legislative and regulatory changes have facilitated the
corporatization of stockbrokers. Capital adequacy norms have been prescribed
and are being enforced. A mark-to-market margin and intraday trading limit have
also been imposed. Further, the stock exchanges have put in place circuit
breakers, which are applied in times of excessive volatility. The disclosure of
short sales and long purchases is now required at the end of the day to reduce
price volatility and further enhance the integrity of the secondary market.
The primary is that part of the capital markets that deals with the issuance
of new securities. Companies, governments or public sector institutions can obtain
funding through the sale of a new stock or bond issue. This is typically done
through a syndicate of securities dealers. The process of selling new issues to
investors is called underwriting. In the case of a new stock issue, this sale is an
initial public offering (IPO). Dealers earn a commission that is built into the price
of the security offering, though it can be found in the prospectus.
Features of primary market
1. This is the market for new long term capital. The primary market is the
market where the securities are sold for the first time. Therefore it is also called
New Issue Market (NIM).
2. In a primary issue, the securities are issued by the company directly to
investors.
3. The company receives the money and issue new security certificates to
the investors
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4. Primary issues are used by companies for the purpose of setting up new
business or for expanding or modernizing the existing business.
5. The primary market performs the crucial function of facilitating capital
formation in the economy.
6. The new issue market does not include certain other sources of new
long term external finance, such as loans from financial institutions. Borrowers in
the new issue market may be raising capital for converting private capital into
public capital; this is known as going public.
Methods of issuing securities in the primary market
1. Initial Public Offer,
2. Rights Issue (For existing Companies) and
3. Preferential Issue
Secondary market
The secondary market is the financial market for trading of securities that
have already been issued in an initial private or public offering. Alternatively,
secondary market can refer to the market for any kind of used goods. The market
that exists in a new security just after the new issue is often referred to as the
aftermarket. Once a newly issued stock is listed on a stock exchange, investors
and speculators can easily trade on the exchange, as market makers provide bids
and offers in the new stock.
Function
In the secondary market, securities are sold by and transferred from one
investor or speculator to another. It is therefore important that the secondary
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market be highly liquid (Originally, the only way to create this liquidity was for
investors and speculators to meet at a fixed place regularly. This is how stock
exchanges originated; see History of the Stock Exchange).
Secondary marketing is vital to an efficient and modern capital market.
Fundamentally, secondary markets mesh the investor's preference for liquidity
(i.e., the investor's desire not to tie up his or her money for a long period of time,
in case the investor needs it to deal with unforeseen circumstances) with the
capital user's preference to be able to use the capital for an extended period of
time. For example, a traditional loan allows the borrower to pay back the loan,
with interest, over a certain period. For the length of that period of time, the bulk
of the lender's investment is inaccessible to the lender, even in cases of
emergencies. Likewise, in an emergency, a partner in a traditional partnership is
only able to access his or her original investment if he or she finds another
investor willing to buy out his or her interest in the partnership. With a securitized
loan or equity interest (such as bonds) or tradable stocks, the investor can sell,
relatively easily, his or her interest in the investment, particularly if the loan or
ownership equity has been broken into relatively small parts. This selling and
buying of small parts of a larger loan or ownership interest in a venture is called
secondary market trading.
Under traditional lending and partnership arrangements, investors may be
less likely to put their money into long-term investments, and more likely to
charge a higher interest rate if they do.

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Private equity secondary market
In finance, the private equity secondary market (also often called private
equity secondary or secondary) refers to the buying and selling of pre-existing
investor commitments to private equity and other alternative investment funds.
Sellers of private equity investments sell not only the investments in the fund but
also their remaining unfunded commitments to the funds. By its nature, the
private equity asset class is illiquid, intended to be a long-term investment for
buy-and-hold investors. For the vast majority of private equity investments, there
is no listed public market; however there is a robust and maturing secondary
market available for sellers of private equity assets.
Driven by strong demand for private equity exposure, a significant amount
of capital has been committed to dedicated secondary market funds from investors
looking to increase and diversify their private equity exposure
Laws governing capital market:
The four main legislations governing the securities market are:
(a) The SEBI Act, 1992 which establishes SEBI to protect investors and develop
and
Regulate the Markets.
(b) The Companies Act, 1956, which sets out the code of conduct for the
corporate sector in relation to issue, allotment and transfer of securities, and
disclosures to be made in public issues.
32

(c) The Securities Contracts (Regulation) Act, 1956, read with the Securities
Contracts (Regulation) Rules, 1957 which provide for regulation of transactions
in securities through control over stock exchanges; and
(d) The Depositories Act, 1996 which provides for electronic maintenance and
transfer of ownership of demat securities.
Regulators
SEBI is the primary regulator of the Securities Market and the entities
operating therein. The SEBI Act and the Depositories Act are mostly administered
by SEBI. The rules under the securities laws are framed by government and
regulations by SEBI. All these are administered by SEBI. The powers under the
Companies Act relating to issue and transfer of securities and non-payment of
dividend are administered by SEBI in case of listed public companies and public
companies proposing to get their securities listed
Market value
The current quoted price at which investors buy or sell a share of common
stock or a bond at a given time. Also known as "market price The market
capitalization plus the market value of debt. Sometimes referred to as "total
market value".
In the context of securities, market value is often different from book
value because the market takes into account future growth
potential. Most investors who use fundamental analysis to pick stocks look at a
company's market value and then determine whether or not the market value is
33

adequate or if it's undervalued in comparison to its book value, net assets or some
other measure.
Stock
A type of security that signifies ownership in a corporation and represents
a claim on part of the corporations assets and earnings. There are two main types
of stock common and preferred. Common stock usually entitles the owner to vote
at shareholders' meetings and to receive dividends. Preferred stock generally does
not have voting rights, but has a higher claim on assets and earnings than the
common shares. For example, owners of preferred stock receive dividends before
common shareholders and have priority in the event that a company goes
bankrupt or when liquidated, also known as "shares" or "equity".
A holder of stock (a shareholder) has a claim to a part of the corporation's
assets and earnings, in other words, a shareholder is an owner of a company.
Ownership is determined by the number of shares a person owns relative to the
number of outstanding shares. For example, if a company has 1,000 shares of
stock outstanding and one person owns 100 shares, that person would own and
have claim to 10% of the companys assets stocks are the foundation of nearly
every portfolio. Historically, they have outperformed most other investments over
the long run.
Share holder
Any person, company, or other institution that has own at least 1 share in a
company. A shareholder may also be referred to as a stockholder. Shareholders
34

are the owners of a company. They have the potential to profit if the company
does well, but that comes with the potential to lose if the company does poorly.
Share
A unit of ownership interest in a corporation or financial asset. While
owning shares in a business does not mean that the shareholder has direct control
over the business's day-to-day operations, being a shareholder does entitle the
possessor to an equal distribution in any profits, if any are declared in the form of
dividends. The two main types of shares are common shares and preferred shares.
In the past, shareholders received a physical paper stock certificate that
indicated that they owned "x" shares in a company. Today, brokerages have
electronic records that show ownership details. Owning a paperless
share makes conducting trades a simpler and more streamlined process, which is a
far cry from the days were stock certificates needed to be taken to a. Brokerage
before a trade could be conducted.
35

Index
An Index is used to summarize the price movements of a unique set of
goods in the financial, commodity, forex or any other market place. Financial
indices are created to measure price movements of stocks, bonds, T-bills and
other type of financial securities. More specifically, a stock index is created to
provide investors with the information regarding the average share price in the
stock market. Broad indices are expected to capture the overall behavior of equity
market and need to represent the return obtained by typical portfolios in the
country. BSE SENSEX and NSE NIFTY are major indices in India.
Sensex
SENSEX is India's first Index compiled in 1986. It is a basket of 30
constituent stocks representing a sample of large, liquid and representative
companies.
The base year of BSE-SENSEX is 1978-79 and the base value is 100. The
index is widely reported in both domestic and international markets through print
as well as electronic media. Due to its wide acceptance amongst the investors,
SENSEX is regarded to be the pulse of the Indian stock market. All leading
business newspapers and the business channels report SENSEX, as it is the
language that all investors understand.
36

As the oldest index in the country, it provides the time series data over a
fairly long period of time (from 1979 onwards) to be used for various research
purposes. The Index Cell of the exchange is responsible for the day-to-day
maintenance of the index within the broad index policy set by the Index
Committee. The Index Cell ensures that the SENSEX and all other BSE indices
maintain their benchmark properties by striking a delicate balance between
frequent replacements in index and maintaining its historical continuity.
SENSEX is calculated using a market capitalization weighted method. As
per this methodology, the level of the index reflects the total market value of all
30- component stocks from different industries related to particular base period.
The total market value of a company is determined by multiplying the price of the
stock by the number of shares outstanding Statisticians call the index of a set of
combined variables (such as price and No. of shares) a composite index. An
indexed number is used to represent the results of this calculation in order to make
the value easier to work with and track over a time. It is much easier to graph a
chart based on indexed values than one used on actual values. World over
majority of the well known indices are constructed using Market Capitalization
Weighted Method.
37

In practice, the daily calculation of SENSEX is done by dividing the
aggregate market value of the 30 Companies in the index by a number called the
Index Divisor. The Divisor is the only link to the original based period value of
the SENSEX. The Divisor keeps the Index comparable over a period of time and
the reference point for the entire index maintenance adjustments. SENSEX is
widely used to describe the mood in the Indian Stock Markets.
Nifty
The National Stock Exchange of India was promoted by leading Financial
institutions at the behest of the Government of India, and was incorporated in
November 1992 as a tax-paying company. In April 1993, it was recognized as a
stock exchange under the Securities Contracts (Regulation) Act, 1956.
NSE is mutually-owned by a set of leading financial institutions, banks,
insurance companies and The National Stock Exchange of India Limited (NSE),
is a Mumbai-based stock exchange..






38

3.2 Company profile

India bulls Group is one of the top business house in the country with
business interests in Real Estate, Infrastructure, Financial Services, Retail,
Multiplex and Power Sectors.Indiabulls Group companies are listed in Indian and
overseas financial markets. The net worth of the Group exceeds USD 2 billion.
In middle of 1999, when e-commerce was just about starting in India,
Sameer Gehlaut and his close IIT Delhi friend Rajiv Rattan got together and
bought a defunct securities company with a NSE membership and started offering
brokerage services . A Few months later, their friend Saurabh Mittal also joined
them. By December 1999, the company embarked on its journey to build one of
the first online platforms in India for offering internet brokerage services. In
January 2000, the 3 founders incorporated Indiabulls Financial Services and made
it as the flagship company.
In mid 2000, Indiabulls Financial Services received venture capital
funding from Mr L.N. Mittal & Mr Harish Fabiani. In late 2000, Indiabulls
Securities, a subsidiary of Indiabulls Financial Services started offering online
brokerage services and simultaneously opened physical offices across India.
By 2003, Indiabulls securities had established a strong pan India presence and
client base through its offices and on the internet.
In September 2004, Indiabulls Financial Services went public with an IPO
at Rs 19 a share. In late 2004, Indiabulls Financial Services started its financing
business with consumer loans. In March 2005, Indiabulls Properties Private Ltd, a
subsidiary of Indiabulls Financial Services, participated in government auction of
Jupiter Mills, a defunct 11 acre textile mill owned by NTC in Lower Parel,
Mumbai. Indiabulls Properties private Ltd won the mill in auction and that
purchase started Indiabulls real estate business. A few months later, Indiabulls
39

Real Estate company pvt ltd bought Elphinstone mill in Lower Parel, another
textile mill auctioned by NTC.
With real estate business gaining size, Indiabulls Financial Services
demerged the real estate business under Indiabulls Real Estate and each
shareholder of Indiabulls Financial Services received additional share of
Indiabulls Real Estate through the demerger. Subsequently, Indiabulls Financial
Services also demerged Indiabulls Securities and each shareholder of Indiabulls
Financial Services also received a share of Indiabulls Securities.
In year 2007, Indiabulls Real Estate incorporated a 100% subsidiary,
Indiabulls Power, to build power plants and started work on building Nashik &
Amrawati thermal power plants. Indiabulls Power went public in September 2009.
Today, Indiabulls Group has a net worth of Rs 16,796 Crores & has a strong
presence in important sectors like financial services, power & real estate through
independently listed companies and Indiabulls Group continues its journey of
building businesses with strong cash flows.

Vision

To be the largest and most profitable financial services organization in
Indian retail market and become one stop shop for all non banking financial
products and services for the retail customers
Mission
Rapidly increase the number of client relationships by providing a broad
array of product offering to emerge as a clear market leader






40

Group structure

India bulls Group has four separately listed companies with subsidiaries
which contributed in enhancing scope and profile of the business



Figure no.3.2.1 Group Structure

Indiabulls Financial Services Limited was incorporated on January
10, 2000 as M/s Orbis InfoTech Private Limited at New Delhi under the
Companies Act, 1956. The name of company was changed to M/s. Indiabulls
Financial Services Private Limited on March 16, 2001. In the year 2004,
Indiabulls came up with it own public issue & became a public limited company
on February 27, 2004. The name of company was changed to M/s. Indiabulls
Financial Services Limited.


41

The company was promoted by three engineers from IIT Delhi, and has attracted
more than Rs.700 million as investments from venture capital, private equity and
institutional investors and has developed significant relationships with large
commercial banks such as Citibank, HDFC Bank, Union Bank, ICICI Bank, ABN
Amro Bank, Standard Chartered Bank and IL&FS.



Th
e company
headquarte
rs are co-
located in Mumbai and Delhi, allowing it to access the two most important
regions for Indian financial markets, The marketing and sales efforts are
headquartered out of Mumbai, with a regional headquarter in Delhi. Back office,
risk management, internal finances etc. are headquartered out of Delhi/NCR
allowing the company to scale these processes efficiently for the nationwide
network
Company is listed on:
National Stock Exchange
Bombay Stock Exchange
Luxemburg Stock Exchange


Mr. Rajiv Rattan
Co-Founder &
Vice Chairman
(Indiabulls Group)
Mr. Sameer Gelhaut
Chairman
(Indiabulls Group)
Mr. Saurabh K Mittal
Director
(Indiabulls Group)
42

Market capitalization:
USD 6,300 million (31st December, 2012)
Net worth
USD 905 million (31st December, 2012)
Highest ratings from crisil CRISIL is India's leading Ratings, Research,
Risk and Policy Advisory Company


Figure no.3.2.2



Broad array of product offering
1. Loans & mortgage
Home Loans/Home Equity
Small Medium Enterprises
Commercial Vehicle
43

Commercial Credit
2. Life Insurance
3. Advisory Services
4. IPO Financing

Strategic updates
Indiabulls Financial Services limited (IBFSL) completed the de-merger of
its real estate business into a separate publicly traded company, (IBREL)
unlocked over Rs. 10000 crore of shareholder wealth.
De-merger: De-merger of Indiabulls Securities Limited from Indiabulls
financial services limited. Each shareholder of Indiabulls Financial
Services Limited received a share of Indiabulls Securities Limited.
Sarfaesi Act Notification: Indiabulls Housing Finance Limited, a
wholly owned subsidiary of Indiabulls Financial Services Limited has
been notified as a Financial Institution for the purpose of SARFAESI
Act, 2002. This notification is being effectively used by the Company to
yield positive results in speedy recoveries of delinquent mortgage loans.
New business venture update:
Life insurance venture: Indiabulls Financial Services Limited
(IBFSL) has entered into an MOU with Sogecap, the insurance arm of
Society General (SocGen) for its upcoming life insurance joint venture.
44

Sogecap will invest Rs 150 crore to subscribe to 26% of the paid up
capital in the joint venture.
Commodities exchange: Indiabulls Financial Services Limited has
entered into a MOU with MMTC Limited, the largest commodity trading
business in India to establish a Commodities Exchange with 26%
ownership with MMTC. Ministry of Commerce, Govt. of India has given
its in-principle approval and the formal approval of the Forward Markets
Commission is awaited.
Asset management business: Indiabulls Financial Services Limited
proposes to set up an asset management company to manage mutual funds
and has applied to SEBI for its approval and the same is awaited.



Indiabulls real estate limited
Indiabulls stepped into the real estate market as Indiabulls Real Estate
Limited (IREL) in 2005. A joint venture between Indiabulls and a US based
investment major Farallon Capital Management LLC resulted in bringing FDI
(Foreign Direct Investment) for the first time in the Indian Real Estate Market.
Another joint venture amongst Indiabulls and DLF, Kenneth Builders and
Developers (KBD), has brought up projects for development

45

Projects:
Indiabulls is currently evaluating many large-scale projects worth several hundred
million dollars.
1. Jupiter Mills
2. Elphinstone Mills
3. Sonepat Township
4. Castlewood
5. Raigarh SEZ
6. Gurgaon Housing
7. Goa Luxury Resort
8. Nashik SEZ
9. Chennai Housing
10. Thane SEZ
11. Chennai Township
12. Mumbai Township




Indiabulls securities limited
Indiabulls Securities Limited is the jewel in the crown of
Indiabulls group. The products and services offered include securities, credit
services, demat account for share trading, mutual fund news, commodity and
review along with technical analysis of themarket.
Indiabulls also provide commodity brokerage services under Indiabulls
Commodities Limited (ICL). It deals in research work and formation of reports on
agri-commodites and metals. ICL has one of the largest retail branch networks in
the country.
46



Products offered equities and derivatives
Offers purchase and sale of securities (stock, bonds, debentures etc.)
Broker assisted trade execution
Automated online investing
Access to all IPO's
Equity analysis
Helps to build ideal portfolio
Satisfies need by rating stocks based on facts-based measures
Free of cost for all securities clients

Depository services
Depository participant with NSDL and CDSL.
Helps in trading and settlement of dematerialized shares
47

Performs clearing services for all securities transactions
Offers platform to execute trade and settle transaction
Top sales team structure
Figure No : 3.2.3 Top Sales Team Structure
CUSTOMER CARE DEPARTMENT Providing solution to the queries of
customers as well as branches from a centralized location based out of gurgaon

MILESTONES ACHIEVED
Developed one of the first Internet trading platforms in India
Amongst the first to develop in-house real-time CTCL (computer to
computer link) with NSE
Introduction of integrated accounts with automatic gateways to client bank
accounts
EVP's Name
(Online)
Vijay Babbar Amiteshwar Chaudhay Prasenjeet Mukherjee
Region
Managing NCR and UP,
Punjab,Haryana,Uttranchal,
Rajasthan and Gujarat
Managing Mahrashtra and
Goa, Kerala, Karnataka,
Andhra Pradesh
and Tamil Nadu
Managing West Bengal,
Orissa, Bihar and
Jharkhand
EVP's Name
(Offline)
Nirdosh Gaur
Hemanshu
Kamdar
Anirban
Bhattacharya
Manoj
Srivastava
Region
Managing NCR
and Haryana
, Punjab, Uttar
Pradesh and
Madhya Pradesh
Managing Bengal,
Andhra Pradesh
,Tamil Nadu,
Karnataka and part of
Mumbai and Gujarat
Managing Mumbai,
Pune and other
surrounding regions
Managing
Rajasthan,
part of Gujarat
and Mumbai
48

Development of Products such as Power Indiabulls for high volume
traders
Indiabulls Signature Account for self-directed investors
Indiabulls Group Professional Network for information and trading service





49



Figure No : 3.2.5 Elements of strong Business Model

Corporate information
Registered office
F-60, Malhotra Building, 2nd Floor,
Connaught Place, NEW DELHI - 110001, INDIA
Website: www.indiabulls.com
Corporate offices
S.P.Centre, C Wing, 41/44, Minoo Desai
Road, Near Radio Club, Colaba,
MUMBAI 400005
50


Indiabulls house
448-451, Udyog Vihar, Phase V
GURGOAN 122001




51


Figure No : 3.2.6 ISL organizational structure




52

Data analysis & interpretations
Data analysis is done by considering 16 different securities using positional calls
and intraday calls. Positional calls are generated for 8 scrips and intraday calls for
the remaining 8scrips.
Positional calls
The prerequisites taken by me for the positional calls:
The time period considered for all the positional calls is 6 months; the
short and long SMAs are taken as 10 & 25 periods for some stocks and 9 & 27 for
some stocks. The ideal and most of the analysts follow is 9 & 27 periods for
positional calls.
The RSI is 14 periods, each candle present in the below charts represents a
single day. The MACD is considered as 26, 12 and the exponential considered is
9 periods.





53

Positional calls

State bank of India



Figure 4.1: Chart for positional call of SBI

Moving average cross over -- Sell MACD -- Sell
Candle stick -- Buy SMA -- Sell
Volumes -- Buy Last Price -- 2151
RSI -- Buy Recommended -- Buy
Table 4.1: Positional recommendation for SBI using technical indicators
The call generated for above State Bank of India Ltd is to Buy. The last
traded price (LTP) of the share on Rs1756 as on 10/10/11 and the share price
54

increased to Rs2151 as on 10/04/12. A positive difference of Rs 395 is observed
i.e. increase of 22%.
Interpretation
As per the technical indicators the short SMA is below the long SMA which
means its not a good indication for the stock to hold.
The last candle formed creates new high than the previous candle and the candles
obtained looks bullish which yields good result confirms to hold this stock.
The volumes that traded on that day are good in number when compared to the
previous days and are expected to be good in future, so recommended good stock.

RSI shows its around 40 and this might be a positive indication.

MACD is negative which means a bad indication for the stock.

The short SMA line should be below the candle but here it touches the candle
which is not a good indication.
Here half the indicators recommend to sell and half to hold or buy, as candle
sticks are observed very well at this time this stock is recommended to Buy.











55


Steel authority of India ltd


Figure 4.2: Chart for positional call of SAIL


Table 4.2: Positional recommendation for SAIL using technical indicators
Moving average cross over -- Sell MACD -- Sell
Candle stick -- Sell SMA -- Sell
Volumes -- Sell Last Price -- 93.15
RSI -- Sell Recommended -- Sell
56

The call generated for above Steel Authority of India Ltd is to sell. The last
traded price (LTP) of the share on Rs104 as on 10/10/11and the share price
dipped down to 10/04/12 is Rs 93.15. A negative difference of Rs10.5 is
observed.
Interpretation
As per the technical indicators the short SMA is below the long SMA which
means its not a good indication for the stock to hold.
The last candle formed failed to create new high than the previous candle and the
candles pattern indicates bearish so it is better to exit from this stock and be safe.
The volumes that traded on that day are good in number but when compared to
the previous days the volumes are same as the previous days, so if any more
volumes are traded then the stock is said to be in bullish. As if now its good to
exit
RSI shows its around 50 and it looks in downward trend, its recommended as to
quit this stock.
MACD is negative which means a bad indication for the stock.
The short SMA line should be below the candle but here it touches the candle
which is not a good indication.
All the indicators recommend Selling the stock.
57

Allied digital services ltd



Figure 4.3: Chart for positional call of Allied Digital Services Ltd.


Moving average cross over -- Buy MACD -- Buy
Candle stick -- Sell SMA -- Buy
Volumes -- Buy Last Price -- 30
RSI -- Sell Recommended -- Buy
Table 4.3: Positional recommendation for ADSL using technical indicators
The call generated for above scrip Allied Digital Services Ltd is Buy. The last
traded price (LTP) of the share on 10/10/11 is Rs25.95 and the share price is
increased to Rs30 as on 10/04/12. A positive difference of Rs 4.05 is observed.
58

Interpretation
As per the technical indicators the short SMA is above the long SMA which
means its a good indication for the stock to hold.
The last candle formed failed to create new high than the previous candles formed
shows the stocks goes downtrend and the stock price decreases.
The volumes that traded on that day are good in number when compared to the
previous days and are expected to be good in future, so recommended good stock.
RSI shows its above 70 and it looks in downward trend, its recommended as to
quit this stock.
MACD is positive which means a good indication for the stock.
The short SMA line should be below the candle but here it shows the same and
recommended is to hold this stock.
More number of indicators recommends Buying this stock.




59

Dr Reddy's laboratory ltd

Figure 4.4: Chart for positional call of Dr Reddy's Laboratories Ltd
Moving average cross over -- Buy MACD -- Buy
Candle stick -- Sell SMA -- Sell
Volumes -- Sell Last Price -- 1715
RSI -- Sell Recommended -- Sell
Table 4.4: Positional recommendation for Dr Reddy's Laboratories Ltd using
technical indicators
60

The call generated for above scrip Dr Reddy's Laboratories Ltd is sell. The last
traded price (LTP) of the share on 10/10/11 is Rs1510 and the share price
increased to Rs1715 as on 10/04/12. A positive difference of Rs205 is observed.
Interpretation
As per the technical indicators the short SMA is above the long SMA
which means its a good indication for the stock to hold.
The last candle formed failed to create new high than the previous candle and the
candle shows long shadow than the body, it is recommended not to hold this
stock.
The volumes that traded on that day are very high and that did not happen on the
previous days and it might be a false indication. For short term investment it is not
good to hold this stock.
RSI shows its around 50 and it looks downward trend, intimates that the
investors from this stock should take an exit position.
MACD is positive which means a good indication for the stock.
The short SMA line should be below the candle but here it touches the candle
which is not a good indication.
More number of indicators recommends selling this stock

61

Maruti suzuki india ltd


Figure 4.5: Chart for positional call of Maruti Suzuki India Ltd

Moving average cross over -- Sell MACD -- Sell
Candle stick -- Sell SMA -- Sell
Volumes -- Sell Last Price -- 1276
RSI -- Buy Recommended -- Sell

Table 4.5: Positional recommendation for Maruti Suzuki India Ltd using technical
indicators


The call generated for above scrip Maruti Suzuki India Ltd is sell. The last
traded price (LTP) of the share on 10/10/11 is Rs1071 and the share price
increased to Rs1276 as on 10/04/12. A positive difference of Rs205 is observed.
62

Interpretation
As per the technical indicators the short SMA is below the long SMA which
means its not a good indication for the stock to hold.
The last candle formed failed to create new high than the previous candle and the
candle shows long shadow than the body, it is recommended not to hold this
stock.
The volumes that traded on that day are very high and that did not happen on the
previous days and it might be a false indication. For short term investment it is not
good to hold this stock.
RSI shows below 30 i.e. it is at oversold position which means the next day the
price of the stock rises, which indicates to hold this stock.
MACD is negative which means a bad indication for the stock.
The short SMA line should be below the candle but here it touches the candle
which is not a good indication.
More number of indicators recommends selling this stock.









63

Man Industries India ltd


Figure 4.6: Chart for positional call of Man Industries Ltd.


Moving average cross over -- Sell MACD -- Sell
Candle stick -- Buy SMA -- Sell
Volumes -- Buy Last Price -- 103
RSI -- Buy Recommended -- Buy

Table 4.6: Positional recommendation for Man Industries ltd using technical
indicators

The call generated for above scrip Man Industries India Ltd. is buy. The last
traded price (LTP) of the share as on 10/10/11 is Rs120 and the LTP on 10/04/12
is 103, a negative difference Rs 17 is observed.
64

Interpretation
As per the technical indicators the short SMA is below the long SMA which
means its not a good indication for the stock to hold.
The last candle formed creates new high than the previous candle and the candles
obtained looks bullish which yields good result confirms to hold this stock.
The volumes that traded on that day are good in number when compared to the
previous days and are expected to be good in future, so recommended good stock.
RSI shows below 30 i.e. it is at oversold position which means the next day the
price of the stock rises, which indicates to hold this stock.
MACD is negative which not a good indication for the stock is.
The short SMA line should be below the candle but here it shows the same and
recommended is to hold this stock.
Here half the indicators recommend to sell and half to hold or buy, as candle
sticks are observed very well at this time this stock is recommended to Buy.














65

Mbl Infrastructures ltd



Figure 4.7: Chart for positional call of MBL Infrastructures


Moving average cross over -- Buy MACD -- Sell
Candle stick -- Buy SMA -- Sell
Volumes -- Buy Last Price -- 182
RSI -- Buy Recommended -- Buy
Table 4.7: Positional recommendation for MBL Infrastructures using technical
indicators
The call generated for above scrip MBL Infrastructures Ltd is Buy. The
last traded price (LTP) of the share on 10/10/11 is Rs129 and the share price
increased to 182 as on 10/4/12. A positive difference of Rs53is observed.
66

Interpretation
As per the technical indicators the short SMA is above the long SMA which
means its a good indication for the stock to hold.
The last candle formed created new high than the previous candle which is good
indication and the previous candles formed are not good, but we can go for buy by
the latest candle formed, it can be recommended to hold this stock.
The volumes that traded on that day are good in number when compared to the
previous days and are expected to be good in future, so recommended good stock.
RSI shows around 40 which means the price will rise, which indicates to hold this
stock.
MACD is positive which means a good indication for the stock.
The short SMA line should be below the candle but here it touches the candle
which is not a good indication.
More number of indicators recommends Buying this stock.








67

Reliance industries ltd


Figure 4.8: Chart for positional call of Reliance Industries Ltd


Moving average cross over -- Sell MACD -- Sell
Candle stick -- Sell SMA -- Sell
Volumes -- Buy Last Price -- 743
RSI -- Buy Recommended -- Sell
Table 4.8: Positional recommendation for Reliance Industries Ltd using technical
indicators
The call generated for above scrip Reliance Industries Ltd is sell. The last
traded price (LTP) of the share on 10/10/11 is Rs829 and the share price dipped
down to Rs743 as on 10/04/12. A negative difference of Rs86 is observed.
68

Interpretation
As per the technical indicators the short SMA is below the long SMA which
means its not a good indication for the stock to hold.
The last candle formed failed to create new high than the previous candle and the
candles pattern indicates bearish so it is better to exit from this stock and be safe.
The volumes that traded on that day are good in number when compared to the
previous days and are expected to be good in future, so recommended good stock.
RSI shows its around 40 and still it looks upward trend, at a level it starts an
downtrend and then falls, this might be a positive indication.
MACD is negative which means a bad indication for the stock.
The short SMA line should be below the candle but here it touches the candle
which is not a good indication.
More number of indicators recommends selling this stock.







69

Oil & natural gas corporation ltd

Figure 4.9: Chart for positional call of ONGC Ltd
Moving average cross over -- Sell MACD -- Sell
Candle stick -- Sell SMA -- Sell
Volumes -- Sell Last Price -- 265
RSI -- Buy Recommended -- Sell

Table 4.9: Positional recommendation for Reliance ONGC Ltd using technical
indicators
70

The call generated for above scrip ONGC is sell. The last traded price
(LTP) of the share on 10/10/11 is Rs274 and the share price dipped down to
Rs265 as on 10/04/12. A negative difference of Rs9 is observed.
Interpretation
As per the technical indicators the short SMA is below the long SMA which
means its not a good indication for the stock to hold.
The last candle formed failed to create new high than the previous candle and the
candle shows long shadow than the body, it is recommended not to hold this
stock.
The volumes that traded on that day are very high and that did not happen on the
previous days and it might be a false indication. For short term investment it is not
good to hold this stock.
RSI shows below 50 which means the next day the price of the stock rises, which
indicates to hold this stock.
MACD is negative which is not a good indication for the stock.
The short SMA line should be below the candle but here it touches the candle
which is not a good indication.
More number of indicators recommends selling this stock.
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HDFC Bank ltd
Figure 4.10: Chart for positional call of HDFC Bank Ltd

Table 4.10: Positional recommendation for HDFC Bank Ltd using technical
indicators
Moving average cross over -- buy MACD -- Sell
Candle stick -- Sell SMA -- Sell
Volumes -- Buy Last Price -- 525
RSI -- Sell Recommended -- Sell
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The call generated for above scrip HDFC Bank Ltd is sell. The last traded
price (LTP) of the share on 10/10/11 is Rs 455 and the share price increased to
Rs525 as on 10/04/12. A positive difference of Rs 70 is observed.
Interpretation
As per the technical indicators the short SMA is below the long SMA which
means its not a good indication for the stock to hold.
The last candle formed failed to create new high than the previous candle and the
stock is recommended not to hold.

The volumes that traded on that day are good in number and are expected to be
good in future, so recommended good stock
RSI shows its around 50 and it looks downward trend, intimates that the
investors from this stock should take an exit position.
MACD is negative which means a bad indication for the stock.
The short SMA line should be below the candle but here it touches the candle
which is not a good indication.
More number of indicators recommends selling this stock.









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5.1 Findings:
1. Volumes and candlesticks charts are the major, important and widely
used indicators in the present day around the world. The other
indicators like RSI, MACD, SMA crossovers are used for positional
calls for the future
2. Considering the sectors to invest, for the long term investment its
better to invest in pharmacy & banking sectors.
3. The intraday trading and short term investing is done on basis of
technical analysis, but for long term investment we need to consider
also the fundamental analysis of those scrips.
4. Indian markets are mostly depended on global markets, so its
recommended to have a glance at the world markets before we invest
in stocks in our market and also many other factors like inflation, RBI
policies, economic & socio-political factors should be considered
before we invest.






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5.2 Suggestions:
1. Before investing or trading in any particular stock the share holding
pattern of the company should be checked out. Higher the holding of
FIIs than the promoters is not good for investor to invest in that stock,
those types of stocks should be avoided and stocks with low volumes
are also to be avoided.
2. Prefer the stocks which have good profits and show increasing profits
when compared to the previous results. Beware of the results and
profits of the stocks that you choose, during the results its advised to
noticing the market, because big cap companies like Reliance will
influence the market a lot.
3. The daily news and press releases should be sighted for intraday and
short term these factors are more to be considered to gain short term
benefits.







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5.3 Conclusion
Stock market is the term given to the act of trading company shares, stocks, and
other securities and its derivatives. The stock market has a number of players,
which could be range from an individual stockholder to a very large corporate
trader. These players can be anybody coming from any part of the world. Trading
in the stock market can be done privately with an attorney or with a professional
stock exchange dealer who have the power to execute the order.
For the most part, stock market is very volatile in nature and that's the
reason why it is so hard to predict. But due to persistent studies, the changes in the
stock market can now be calculated in a relatively acceptable precision. Here are
the various efforts carried out by stock market experts to predict the market's
movements. Such a tool is Technical analysis which helps the investors to identify
the right stocks at right time with right amounts.


















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Bibliography
Journals :
Financial economies volume 17 year 2007
Emerging markets finance and trade volume 46 year 2010
Exchange of accounting, auditing,finance volume 25
Journal of finance volume 65
Journal of business volume 11 year 2007
Websites:
www.nseindia.com
www.bseindia.com
www.nseguide.com
www.makemystocks.com
www.informedtrades.com