Group Ajit Daniel Akkapeddi Srinivas Kapil Edke Mihir Shah Nikhil Moharir Yogesh Gupta

(in Rs.) CMP Open High Low Previous Close

BSE 404.85 380 408 375.1 382.5

NSE 405.5 378.7 409.4 372.1 382.45

Market Capitalisation = Rs. 153,710 crores Split- 2:1 announced on July 24, 2009 Dividend- 0.48% announced on July 24, 2009

 A simple moving average is formed by computing the average (mean) price of a security over a specified number of periods Like all moving averages, it is also a lagging indicator It is a visual aid to determine trend which works well when prices are trending can be misleading when prices are not trending Eliminates periodic variations that make it harder to see trends When price crosses above or below the moving average it is an indication of a reversal of existing trend

SMA for Bharti (1 month) : 20day and 50day

For past 10 days, stock price was consistently below the SMA line for 20/50 days which shows that stock remained weak during that period Currently price is above the 20 day and 50 day moving averages which shows a reversal of the trend on the stock

A trend following indicator which shows relationship between two moving averages of prices : MACD = 12 day EMA 26 day EMA 9 day EMA also referred to a signal line is plotted 3 common methods used to interpret MACD
Crossovers When the MACD falls below the signal line, it is a bearish signal, which indicates that it may be time to sell. Conversely, when the MACD rises above the signal line, the indicator gives a bullish signal, which suggests that the price of the asset is likely to experience upward momentum Divergence When the security price moves away from the MACD, it signals the end of current trend Dramatic rise A dramatic rise in MACD means that the shorter moving average pulls away from the longer moving average, indicates that the stock was over-bought

MACD = 4.66 EMA = 3.02 Divergence = 1.65 Since the MACD line has crossed the EMA i.e. Signal line upward, it indicates a BUY for this stock.

The RSI compares the magnitude of a stock's recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100

RS = Average Gain / Average Loss

Generally, if the RSI rises above 30 it is considered bullish for the underlying stock and conversely, if the RSI falls below 70, it is a bearish signal
The average period is generally 14 days. For long term charts the average period may be up to 30 days period When the RSI crosses the 80% line, many technicians consider the stock to be overbought , and a candidate for a "pullback. Conversely, when the RSI crosses below the 20% line, the stock is considered oversold and a candidate for a "bounce" upward

In the last 3 trading days the RSI for Bharti has increased from 3.33 to 86.97. We are bullish on this stock for short term. The corresponding news at the turnaround point was that Bharti may increase its offer for a stake in MTN by between 5 and 10 percent

If we see the data for the past 3 months then the recent trough was at 9.46 and has risen to 38.91 This again is a bullish indicator for this stock in the short term

Bollinger bands were introduced by a technical trader, John Bollinger. It is plotted m standard deviations away from simple moving average, where m is generally 2. Upper and lower Bollinger Bands act as strong areas of support and resistance. The Bollinger Bands contract and widen as per the market volatility. Traders use the Bollinger bands to determine overbought and oversold levels of the stocks

Bollinger Band for Bharti Airtel for the 5 days period Aug 6-12, 2009 with period = 15

 As the diagram shows, Upper and Lower Bollinger bands convey sell and buy signals only in range bound markets. Eg. Between Aug 06 BOD to Aug 07 13:30. Traders who continuously sell at the top and buy at the bottom can face losses. Eg. Sudden price drop on Aug 10 morning, price jump on Aug 12 morning etc. When price channels between +1 SD & +2 SD Bollinger Bands the trend is up. (Eg. Aug 12 morning) When price channels between -1 SD & -2 SD Bollinger Bands the trend is down. (Eg. Aug 10 morning)