STUDY ON

“MARKET DYNAMISM AND FEW INDICATORS OF

TECHNICAL ANALYSIS”

Name: Divya Vootkuru

Roll Number: 121441

Batch XX, 2012-2014

Project Submitted in partial fulfilment for the award of

Post Graduate Diploma in Management

VIGNANA JYOTHI INSTITUTE OF MANAGEMENT

BACHUPALLY, HYDERABAD

ANDHRA PRADESH –INDIA

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DECLARATION

I hereby declare that this project titled “MARKET DYNAMISM AND FEW

INDICATORS OF TECHNICAL ANALYSIS” submitted by me is a bonafide work done

by me and it is not submitted to any institution or university for the award of any

degree/diploma certificate published any time before.

Name of the Student Signature of the Student

V. Divya

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CERTIFICATE

This is to certify that the Project Report titled “MARKET DYNAMISM AND FEW

INDICATORS OF TECHNICAL ANALYSIS” being submitted to “Vignana Jyothi Institute

of Management” is a bonified work done by V.Divya bearing roll. No 121441, under my

guidance.

Date: Signature of the Guide

Name:

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ACKNOWLEDGEMENTS

Success of a project like “MARKET DYNAMISM AND FEW INDICATORS

OF TECHNICAL ANALYSIS” is never a result of one man’s effort, it springs out of

multiple or combined efforts, assistance and guidance. Now when I have acquired

substantial knowledge about the subject and successfully accomplished the project.

I express my thanks to Mr. Kamal Gosh Ray, Director of Vignana Jyothi Institute of

Management, Hyderabad for extending his support.

I would like to thank, Mr. Sanjay Aggarwal (company guide, manager) for his

cooperation, willingness to share his knowledge and making me work on such a crucial

and informative project.

I would also like to thank Mrs.Sushma Kaaza (Faculty guide) for providing me an

opportunity to work under her expert guidance and finally “Vignana Jyothi Institute of

Management” for providing me such a corporate exposure to enhance my knowledge,

skills and gain experience. I appreciate their faith, support and expect the same in future

course of my project. 

V. Divya (121441)

VIGNANA JYOTI INSTITUTE OF MANAGEMENT

HYDERABAD

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EXECUTIVE SUMMARY

India is second fastest growing major economy in the world, with a GDP growth rate of

4.8%. It has emerged as the world's fastest growing wealth creator, thanks to a buoyant stock

market and higher earnings

The name “stock market” which when comes into the mind, everyone has different

opinion. One feels it is risky to invest in stock market, others may perceive that it is game

of gambling. Many of the investors may feel it’s great opportunity to make profit in the stock

market. The opinion differs from person to person, investor to investors.

But the recent trend in the stock regarding its volatility which leads to the depression and

also losses for many investors. If when the investors ask him about why did the stock market

behaved in this way; the factor may be many. One has to develop a bird’s view over the stock

market and analyse every factor with tools and technique so that he/she may not go wrong in the

investment decision.

One of the tools may be technical analysis which helps to study the market action,

primarily through the use of charts, for the purpose of forecasting future price trends. The

movement of the scrip price and its behaviour can be explained in a more illustrative form by

using the technical analysis. It provides better insight and also to take decision on

the investment. It considers only the actual price behaviour of the market or instrument.

The project deals with a brief introduction to stock market & technical analysis how to

invest in stock market as the investors are more concerned of return and they want to be far

from risk, technical analysis is very helpful in deciding as when to buy & sell a particular stock.

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CONTENTS

1 Introduction

1.1 Introduction…………………………………………… 01

1.2 Literature Review……………………………………. 02

1.3 Objectives……………………………………………. 03

1.4 Limitations…………………………………………… 03

1.5 Methodology………………………………………… 04

2 Company Profile

2.1 Process………………………………………………. 05

2.2 Alliance Partners……………………………………. 07

2.3 People………………………………………………. 09

3 Steps in Project…………………………………………….. 11

4 Fundamental Analysis

4.1 Price Fields………………………………………….. 13

5 Technical Analysis

5.1 Assumptions………………………………………… 14

5.2 Advantages…………………………………………. 15

5.3 Disadvantages………………………………………. 16

5.4 Indicators…………………………………………….. 17

6 Difference between Technical and Fundamental Analysis

6.1 Differences………………………………………….. 18

6.2 Can they Co-Exist…………………………………… 19

7 Trends

7.1 Types…………………………………………………. 20

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7.2 Trend lines…………………………………………… 22

7.3 Importance of Trend………………………………… 24

8 Swing Analysis………………………………………………. 25

9 Support & Resistance

9.1 Importance…………………………………………… 26

10 Moving averages

10.1 Types………………………………………………… 28

10.2 SMA…………………………………………………. 29

10.3 EMA…………………………………………………. 29

10.4 Uses…………………………………………………. 30

11 Empirical Analysis…………………………………………… 31

12 Calculation

12.1 CNX Nifty Index……………………………………… 32

12.2 ITC…………………………………………………….. 45

12.3 ONGC…………………………………………………. 49

12.4 CIPLA…………………………………………………. 53

12.5 Hdfc Bank……………………………………………. 58

12.6 Dr Reddy’s……………………………………………. 63

12.7 Coal India…………………………………………….. 67

13 Observations………………………………………………… 79

14 Conclusions…………………………………………………………. 81

14 Bibliography………………………………………………… 82

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CHAPTER-1

INTRODUCTION

Technical Analysis is a study of the stock market considering factors related to the

supply and demand of stocks. Technical analysis is a method of evaluating securities by

analysing the statistics generated by market activity, such as past prices and volume. Technical

analysts do not attempt to measure a securities intrinsic value, but instead use charts and other

tools to identify patterns that can suggest future activity. In fact the decision made on the basis

of technical analysis is done only after inferring a trend and judging the future movement of the

stock on the basis of the trend. Technical Analysis assumes that the market is efficient and the

price has already taken into consideration the other factors related to the company and the

industry. It is because of this assumption that many think technical analysis is a tool, which is

effective for short term investing.

The study on technical analysis of selected companies based on Stratified sampling

technique is significant as it helps in understanding the intrinsic value of shares and to know

whether the shares are undervalued or overvalued or correctly priced. It becomes essential to

know the performance of the company so that the investment will be duly giving returns and

ensure safety of the investment. Further it helps in understanding the price behaviour of the

shares, the signals given by them and the major turning points of the market price. The

Technical analysis concentrates on plotting the price movements of stock, drawing inferences

from the price movements in the market. It is an approach by prediction of future prices through

the forces like supply and demand. It is very much useful for a speculator who aims at profit

margins.

LITERATURE REVIEW

Cooter (1962) found that the stock prices move at random when studied at one week

interval. The data for his study was weekend prices of forty five stocks from New York stock

exchange. He tested randomness of share by means of a mean square successive difference test.

He concluded that there was not one random walk model. He concluded that the share price

trends could be predicted when studied at fourteen-week interval. But in total the stock prices

followed a random walk at weekly intervals.

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Eugene F.Fama (1965) has answered the questions to what extend can the past history of

a common stock price can be used to make meaningful predictions concerning the future prices

of the stock? The theory of random walk on stock prices is studied with two hypotheses. They

are

i) Successive price changes are independent and

ii) The price changes conform to some probability distribution.

The data for this study consists of daily prices for each of the thirty stocks of the Dow –Jones

industrial average. This study concludes that there is strong and voluminous evidence in favour

of random walk theory.

Ramaswami.K (1996) assessed the relationship among book values, earnings, dividend

and market price of share, impact of bonus issues, impact of security scam on equity return .to

that end, the author used daily share price of 30 companies included in the construction of BSE

sensitive index, daily data of BSESI and NYSE composite index, annual data on BV per share

market price per share, EPS and DPS and data on bonus issue made ,during the period of study,

the researcher used correlation ,regression and frequency distribution for interpreting data.

Sharma and Robert E. Kennedy (1977) tested the applicability of random walk

hypothesis to the stock market in developing country namely India and compare this to that of

stock markets in developed countries namely USA, and England. For this purpose the price

behaviour of Bombay stock exchange is statistically examined both for randomness and

independence .The test the random walk hypothesis. The test covers 132 monthly observations

for each stock market index of common stock listed in Bombay exchange for eleven years from

1968-1973.The study indicates that price dependence while statistically significant, is

comparably small in the developing countries. Based on the test, it is evident that the Bombay

stock exchange stock obeys a random walk and is equivalent to developed countries stock

exchange.

Fernando Fernandez –Rodriguez, Simon Sosvilla –Rivero, Julian Andrada –Felix (1999)

assessed whether some simple forms of technical analysis can predict stock price movement in

the Madrid stock exchange, covering thirty-one-year period from Jan 1966 –Oct 1997.the results

provide strong support for profitability of those technical trading rules. By making use of

bootstrap techniques the author shows the returns obtained from these trading rules are not

consistent with several null models frequently used in finance.

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C. L. Osler (2001) provides a microstructural explanation for the success of two familiar

predictions from technical analysis:

(1) Trends tend to be reversed at predictable support and resistance levels, and

(2) Trends gain momentum once predictable support and resistance levels are crossed.

The explanation is based on a close examination of stop-loss and take-profit orders at a large

foreign exchange dealing bank. Take-profit orders tend to reflect price trends, and stop-loss

orders tend to intensify trends. The requested execution rates of these orders are strongly

clustered at round numbers, which are often used as support and resistance levels. Significantly,

there are marked differences between the clustering patterns of stop-loss and take-profit orders,

and between the patterns of stop-loss buy and stop-loss sell orders. These differences explain the

success of the two predictions.

1.1OBJECTIVES:

Observing which moving average has a better efficiency compared with other.

To understand trends and patterns in share price movements using Simple Moving

Average.

To understand the trend and swing variations for different individual stocks as well as

CNX Nifty index values.

To make a study on Technical Analysis on selected stocks and interpret on whether to

buy or sell them

Moving average efficiency is done by comparing the trend with the stop loss and carry

conditions based on the daily intraday price movements.

To find out which equity share is preferable for the investors i.e., when to buy & when to

sell a particular stock.

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1.2 Limitations

At high volatile conditions swing analysis of technical analysis cannot be determined

with a greater efficiency.

This analysis mainly works for the CNX Nifty index compared to other stocks because

there can have a more volatility in the stocks.

The study on technical analysis was conducted by taking only selected energy companies

scrip’s.

The study is confined only for 3 years and hence the study cannot be used for a period

before and after.

The study is for a limited period; hence the behaviour pattern may serve limited purpose.

METHODOLOGY:

The study aims at analysing the price movements of selected company’s scrips. As the

study describes the existing facts and figures given in the financial statement and the price

movements of the selected companies, the research design followed is descriptive and analytical

in nature. For Technical Analysis, the daily share price movements of the selected companies in

NSE were absorbed for the 4 years i.e. 01-April- 2010 to 31-March-2013. The closing prices of

share prices were taken and the future price movement was analysed using various tools. For the

purpose of comparing different stocks closing prices of the companies in NSE and the closing

value of NIFTY were taken. Data were collected from trading of equity market in NSE, various

books, journals, magazines and websites. All the listed companies in the National Stock

Exchange constitute the population for the study. 6 companies which are actively traded in NSE

were taken on Stratified sampling basis for the study. The selected companies are

• NSE Nifty Index

• Oil and Natural Gas Corporation (ONGC)

• ITC

• CIPLA

• Hdfc Bank

• Dr Reddy’s

• Coal India

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CHAPTER-2

COMPANY PROFILE

FinVisdom is proud to be our partner in making our wealth grows. We are a

professional, process oriented and well-regulated company that successfully merges its

collective vision and wisdom in finance to exponentially create value for your investment needs.

Our central philosophy revolves around aligning our goals to your investment goals, thus

creating a symphony of prosperity-based initiatives and wealth practices.

FinVisdom is a client centric boutique financial services firm with an open architecture.

At FinVisdom, we have the innate capability to manage every aspect of our financial world.

FinVisdom strives to be a one-stop destination for all products and services in the financial

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sphere. We have created a network of closely knitted partners and alliances to deliver on our

commitments.

2.1 PROCESS

FinVisdom processes are conceptualized to complement our client-focused approach.

Our Advisory Services are guided by your goals, expectations, risk appetite and needs. Our

Financial Tool accounts for specific inputs to arrive at a comprehensive financial plan.

© PRIME, the Financial Tool developed by our team, is a core part of all product

offerings at FinVisdom. It is designed to collect relevant information and deliver appropriate

solutions.

Broadly, this process involves 5 stages. A pictorial representation of the process is as below:

PLANNING

This foundation stage requires collection of relevant data which is processed by our

customized software to arrive at a detailed analysis. This is aimed at creating a comprehensive

Plan to meet clients’ requirements especially clients who avail our Family Office and Trust &

Estate Planning Services. The plan throws up key observations which are then used to draw a

detailed plan of execution.

This being the most critical stage in the management and advisory of clients financial

assets, the graph below helps understand the same:

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RESOURCE ALLOCATION

To ensure our promise of success, we allocate appropriate resources with well-defined

roles and responsibilities. These finVisdomers are well-qualified with proven delivery track

record and are accountable for the successful execution of the agreed plan.

IMPLEMENTATION

This stage involves interaction with different partners. In some cases, execution is a

continuous process and is achieved through a detailed plan designed towards this objective.

The finVisdomer assigned to your relationship will be your single point of contact and

will work with you on delivery of objectives as per the plan defined.

MONITOR

This is a litmus test to determine the efficiency of the detailed plan designed for the

clients. For one-time projects, a detailed result-oriented report is submitted to you highlighting

all the achievements. Periodic reports are provided in cases where the execution is a continuous

process. The interval is defined by the client. The success of the plan is measured through the

achievement of definitive objectives against the goals defined at the planning stage taking into

account the environment and market conditions.

ENGAGEMENT

A regular interaction with the client helps the team at finVisdom to report the progress of

the project, achievement of goals and re-planning. Our team will be in constant touch with you

to update you on the progress and seek your feedback. Course corrections are initiated if

warranted, with your consent.

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2.2 ALLIANCE PARTNERS

FinVisdom understands the need to collaborate with various intermediaries to be a

preferred financial advisor to its clients while offering the entire gamut of financial services

under one roof. In this pursuit, we have formed strong alliances with select institutions which

share our client-centric approach and have a strong track record of delivering quality to clients.

In our endeavour to ensure our clients enjoy the finVisdom advantage, we operate on an

open architecture platform. Hence, we also evaluate all other market players to select those who

meet our client expectations most effectively.

INVESTMENT & BROKING SERVICES

Kotak Securities Ltd.- The Kotak Mahindra Group is one of India's leading financial

institutions, offering complete financial solutions that encompass every sphere of life. Since the

inception of the erstwhile Kotak Mahindra Finance Limited in 1985, it has been a steady and

confident journey leading to growth and success.

Kotak Securities Ltd (KSL) is a 100 % subsidiary of Kotak Mahindra Group, is one of the

oldest and largest stock brokers in the Industry. It has a large network that spans over 400 cities

with 1200 outlets. One of the primary goals of KSL through its network is to simplify stock

market investments for its clients and in the process create long term value for them. KSL offer

all clients quality research, quick trade execution, and superior customer service.

CORPORATE STRUCTURING AND ADVISORY SERVICES

Sekhar & Co.-sekhar & co is a reputed Chartered Accountancy Firm of Hyderabad, It is

operational for over 25 years and its clients' testimony best defines its track record. Clients can

avail a range of services from it like Tax Filing, Corporate and Non-corporate Statutory Audits,

Corporate Structuring, Company Law related, Tax Consultancy, etc. Sekhar & Co. would be

able to advise client on all regulatory aspects of his financial dealings.

OFFSHORE INVESTMENT ADVISORY SERVICES

Neuvo Asia Advisors Pte Ltd- Through its business associates in South East Asia Neuvo Asia

provide a comprehensive range of Global investment products across asset class and

geographies to its Clients. It also provide access to growth capital and asset financing to Asian

companies in select sectors – its current focus is on companies in Energy, Shipping & Logistics,

Real Estate & Infrastructure, Telecom Media & Technology.

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PHILANTHROPY ADVISORY SERVICES

GiveIndia- GiveIndia today is a leading online philanthropy marketplace that has

institutionalized philanthropy. Since inception, we have channeled over 250,000 donations

totaling over Rs.100 Cr to more than 200 NGOs all over India, impacting over a million lives. It

is also responsible for conceptualizing the Standard Chartered Mumbai Marathon and the Joy of

Giving Week.

GiveIndia has built expertise in assisting HNIs manage their philanthropy activities

starting from planning stage to implementation to reporting its usage for the desired cause.

Trust and Estate Planning Services

IL&FS Trust Company Ltd.– Incorporated in 1995, IL&FS Trust Company Ltd. , is a

subsidiary of IL&FS. ITCL is the country’s largest service provider in this space with total

Assets Under Trusteeship aggregating to INR 2,50,000 Crs. ITCL has proven expertise and

experience in Private Family Trusts with arm’s length relationship from Private Banking and

other support services viz, Banking, DEMAT, Broking etc, allowing unbiased execution of

clients’ mandates. ITCL offers its services to both Resident Indians and Non-Resident Indians.

The open architecture provides flexibility to structure the trusts as per clients’ requirements.

2.3 PEOPLE

finVisdom is upheld by passionate people who are high on energy and constantly

endeavouring to serve its clientele. Everyone associated with finVisdom, comes on board with

relevant experience and proven track record. Integrity, ethics and morale underlie finVisdom

philosophy and is not compromised at any cost.

The Advisory Board* at finVisdom comprises of

Sanjay Agarwala

Sanjay brings with him 10 years of experience in the financial world. He has worked

with institutions like 3rd Agenda, ICICI Bank, ABN AMRO Bank and ING Private Banking.

Before joining finVisdom, Sanjay was heading ING Private Banking for Andhra Pradesh.

Sanjay started his career at an early stage and has hands on experience in Retail, Trading, IT and

Finance Industry. An entrepreneur at heart, he's now pursuing his dream after spending 12 years

in the corporate world.

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Health and Wealth (Finances) are the two most important aspects of life for every

individual. We at finVisdom have developed a robust platform to help you manage one of these

facets i.e. Wealth. Financial world has been expanding, thus, delivering new and more

complicated instruments and solutions. Managing ones finance has become a very complex

affair. Clients today are looking for expert advice to help them manage their financial kingdom.

At finVisdom, we not only take care of this requirement but also understand our responsibilities.

We are aware that a client is handing over his hard earned wealth to us for management. Hence,

take up this duty with utmost honesty and ethically.

FinVisdom is able to address all the financial requirements of its clients through a range

of financial products and services. We have developed an indigenous financial planning tool that

helps us arrive at a comprehensive financial plan to achieve their financial objectives.

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CHAPTER-3

PROCESS

Technical analysis is taken into consideration to observe the trends that are taking place

in the market on different stocks as well as on the nifty index. Technical analysis will have good

results when an investor invests money based on this analysis on any of the stocks. The main

reason behind to say that technical analysis is working good is that it have a conditions of both

long and short where by this two we can have a better buy and sell conditions, but for

fundamental analysis we will have only a long call.

Let us take an example that at the end of the year 2007 i.e., Dec 2007 to Jan 2008, the

people who invested in this period are still in losses because the stock value is higher and till

now the price has not reached there. This is mainly done for fundamental analysis if technical

analysis is done and invested money on stocks according to this it would have been better and

the results would have been better for the investors. The main problem with the fundamental

analysis is it takes more time to recover compared to technical analysis. In the technical analysis

we have many indicators but to observe a trend and swing it’s better to go with swing analysis

and moving averages. Swing analysis is used to capture and square of the positions where there

is a buy call and sell call.

Swing and moving averages have a direct relationship to capture a position, here in this

different moving averages are been calculated like 14-day, 11-day, 9-day, 7-day, 5-day, and 3-

day and made and comparison with closing prices of that particular day. If the moving closing

breaches moving average higher long, if it breaches shorter we can observe short. To square off

a position and to observe the swing I have taken cut of 2%, 2.5%, 3% etc., based on the moving

average values. To square off a position it was decided manually so we made a move to moving

averages and it’s intelligent enough to observe the intraday positions and the point where it

breaches. Considering intraday positions is very important because many stocks are volatile and

there is a chance of losing money. Here, all the different day moving averages are taken into

consideration and intraday prices are taken into consideration and drawn positions to observe the

carry and no position point price movements. Here finally we observed that the returns that we

calculate are good for 14-day moving average compared to others by calculating the probability

percentage for carry and no positions.

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CHAPTER-4

FUNDAMENTAL ANALYSIS

Fundamental analysis is the examination of the underlying forces that affect the

wellbeing of the economy, industry groups, and companies. As with most analysis, the goal is to

derive a forecast and profit from future price movements. At the company

level, fundamental analysis may involve examination of financial data, management, business

concept and competition. At the industry level, there might be an examination of supply and

demand forces for the products offered. For the national economy, fundamental analysis might

focus on economic data to assess the present and future growth of the economy. To forecast

future stock prices, fundamental analysis combines economic, industry, and company analysis to

derive a stock's current fair value and forecast future value. If fair value is not equal to the

current stock price, fundamental analysts believe that the stock is either over or under valued

and the market price will ultimately gravitate towards fair value. Fundamentalists do not heed

the advice of the random walkers and believe that markets are weak-form efficient. By believing

that prices do not accurately reflect all available information, fundamental analysts look to

capitalize on perceived price discrepancies.

If we were all totally logical and could separate our emotions from our investment

decisions, then, fundamental analysis the determination of price based on future earnings, would

work magnificently. And since we would all have the same completely logical expectations,

prices would only change when quarterly reports or relevant news was released. Investors would

seek "overlooked" fundamental data in an effort to find undervalued securities. The hotly

debated "efficient market theory" states that security prices represent everything that is known

about the security at a given moment. This theory concludes that it is impossible to forecast

prices, since prices already reflect everything that is currently known about the security.

4.1 PRICE FIELDS

Technical analysis is based almost entirely on the analysis of price and volume. The

fields which define a security's price and volume are explained below.

OPEN: This is the price of the first trade for the period (e.g., the first trade of the day). When

analysing daily data, the Open is especially important as it is the consensus price after all

interested parties were able to "sleep on it."

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HIGH: This is the highest price that the security traded during the period. It is the point at

which there were more sellers than buyers (i.e., there are always sellers willing to sell at higher

prices, but the High represents the highest price buyers were willing to pay).

LOW: This is the lowest price that the security traded during the period. It is the point at which

there were more buyers than sellers (i.e., there are always buyers willing to buy at lower prices,

but the Low represents the lowest price sellers were willing to accept).

CLOSE: This is the last price that the security traded during the period. Due to its availability,

the Close is the most often used price for analysis. The relationship between the Open (the first

price) and the Close (the last price) are considered significant by most technicians.

VOLUME

This is the number of shares (or contracts) that were traded during the period. The

relationship between prices and volume (e.g., increasing prices accompanied with increasing

volume) is important.

Fundamental analysis is performed on historical and present data, but with the goal of

making financial forecasts. There are several possible objectives:

To conduct a company stock valuation and predict its probable price evolution,

To make a projection on its business performance,

To evaluate its management and make internal business decisions,

To calculate its credit risk.

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CHAPTER-5

TECHNICAL ANALYSIS

Technical analysis is a method of evaluating securities by analysing the statistics

generated by market activity, such as past prices and volume. Technical analysts do not attempt

to measure a security's intrinsic value, but instead use charts and other tools to identify patterns

that can suggest future activity. Just as there are many investment styles on the fundamental

side, there are also many different types of technical traders. Some rely on chart patterns; others

use technical indicators and oscillators, and most use some combination of the two. In any case,

technical analysts' exclusive use of historical price and volume data is what separates them from

their fundamental counterparts. Unlike fundamental analysts, technical analysts don't care

whether a stock is undervalued - the only thing that matters is a security's past trading data and

what information this data can provide about where the security might move in the future.

5.1 ASSUMPTIONS

The field of technical analysis is based on three assumptions:

The market discounts everything.

Price moves in trends.

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.

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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.

5.2 ADVANTAGES

1. Technical analysis focuses on price movement.

The primary focus of technical analysis is on the movement of prices. Charts show how

prices are moving (or not moving), when prices are trending, and the strength of those trends.

Volume, oscillators and momentum give a clearer picture of market action. And this information

can be obtained at a glance. Unlike fundamentalists, technicians do not use economic reports

that analyse the demand for a cure

2. Trends are easily found.

Taking a look at a moving average line quickly displays a price that is trending or stuck

in a range. Whether it is up, down, or sideways, a chart can quickly display a currency that is

exhibiting a trend. Trends are critical to technicians because a currency is likely to continue

moving in the direction of the trend. Charts show them clearly and quickly.

3. Patterns are easily identified.

One of the basic tenets of market action is that it repeats itself in clear, unmistakable

patterns. Using charts helps the trader to find patterns and predict price movements based on

these patterns. Like star constellations, patterns can be complex and complicated. Head-and-

shoulders patterns, rounding tops and bottoms, ascending and descending triangles, and double

and triple tops are proven patterns that many currency prices will follow. Hence, they have

strong predictive powers. They can be impossible to detect without using a chart.

4. Charting is quick and inexpensive.

Computers have relieved us from the burden of performing complex mathematical

operations. The Internet has a wealth of different technical indicators available that can help the

trader to make more profitable and more reliable trades. Many brokers offer these types of

technical indicators to their clients as part of their package. Technical analysis is less time

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consuming and less costly than fundamental analysis. It can be performed in less than five

minutes and the services are very often offered for free or at a nominal cost.

5. Charts provide a wealth of information.

Charts and indicators can provide a huge amount of information in only a few moments.

Trends are easily found. Support and resistance levels are quickly identified. Momentum,

volatility, and trading patterns appear quickly and easily. There are more than fifty kinds of

indicators and they each provide information on different aspect of how a currency is moving.

This information is critical to technicians to make sound and profitable trades.

Charts tell a story about the personality and price movement of a currency. The story can

be complex with many different plots and twists or quite simple with only a few characters and

single narrative. Charts are the same way. They can provide only the most basic information on

a trend or support and resistance.

5.3 DISADVANTAGES

1. At their heart, all technical indicators - no matter how complex - are based on price, which

always reflects what has already happened in the market. Thus, technical analysis is reactive -

not truly predictive of what will happen.

2. Today's markets are much more chaotic and choppy compared to previous decades. This is

because of hedge funds and computerized ultra-stockstackup.com" title “short term trading

“short term trading activity. The result is more false signals and ill-formed patterns from

technical analysis techniques.

3. The bulk of technical traders still rely on a handful of indicators first created in the 1970's.

This result in their overuse and, thus, the markets adjust and render them less effective.

4. The majority of technical traders attempt to do trend-following. While trend following

techniques can make big money over time, they have a low accuracy rate and a high draw down

(most trades are losses and it’s not uncommon to be down 50-60% at some point). Most traders

cannot handle this psychologically. They end up overriding stockstackup.com" title="Trading

Signals">Trading Signals and/or switching between systems.

5. Classical trading chart patterns can be found in graphs of non-market related activities,

including temperature charts. Also, chart patterns can appear and disappear depending on the

23 | P a g e

scaling of the chart. This strongly suggests that chart patterns are a trick of the human eye and

have no predictive value

5.5 INDICATORS

Indicators are calculations based on the price and the volume of a security that measure

such things as money flow, trends, volatility and momentum. Indicators are used as a secondary

measure to the actual price movements and add additional information to the analysis of

securities. Indicators are used in two main ways: to confirm price movement and the quality of

chart patterns, and to form buy and sell signals.

Types

1. Swing Analysis

2. EMA

3. SME

4. Accumulation/ distribution

5. Average directional index

6. Commodity channel index

7. Stochastic Oscillator

8. MACD

9. Momentum

10. Money flow index

11. On balances volume

12. RSI

13. Relative Vigor index

24 | P a g e

CHAPTER-6

DIFFERENCE BETWEEN TECHNICAL ANALYSIS AND

FUNDAMENTAL 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. Technical analysis is working

good and it have both long and short calls, but fundamental analysis will have only a long call.

Fundamental analysis takes more time compared to technical analysis. Technical analysis is

more risky when compared to fundamental analysis but more the risk, the more the returns.

Technical analysis aim for the absolute returns, whatever be the returns but the healthy mix of

both fundamental and technical analysis plays good returns.

6.1 DIFFERENCES

1. Charts vs. Financial Statements

At the most basic level, a technical analyst approaches 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. In this

approach, investment decisions are fairly easy to make - if the price of a stock trades below its

intrinsic value, it's a good investment.

Time Horizon

Fundamental analysis takes a relatively long-term approach to analysing 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. The

different timeframes that these two approaches use is a result of the nature of the investing style

to which they each adhere. It can take a long time for a company's value to be reflected in the

market, so when a fundamental analyst estimates intrinsic value, a gain is not realized until the

stock's market price rises to its "correct" value. This type of investing is called value investing

and assumes that the short-term market is wrong, but that the price of a particular stock will

correct itself over the long run. This "long run" can represent a timeframe of as long as several

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years, in some cases. Furthermore, the numbers that a fundamentalist analyses are only released

over longer periods of time. Financial statements are filed quarterly and changes in earnings per

share don't emerge on a daily basis like price and volume information.

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. The line between a trade and an

investment can be blurry, but it does characterize a difference between the two schools.

6.2 Can They Co-Exist?

Although technical analysis and fundamental analysis are seen by many as polar

opposites - the oil and water of investing - many market participants have experienced great

success by combining the two. For example, some fundamental analysts use technical analysis

techniques to figure out the best time to enter into an undervalued security. Oftentimes, this

situation occurs when the security is severely oversold. By timing entry into a security, the gains

on the investment can be greatly improved.

Fundamental analysis holds good some time to invest in stocks compared to technical

analysis. So it’s better to have a healthy mix of both technical analysis and fundamental analysis.

Fundamental and technical analysis has two parameters like standardization and

customization. Customization has no set of rules where there a probability to buy but not sure

but depends on 5 parameters like

Assume

Presume

Projidics

Biousness

Standardisation doesn’t have any set of rules but it is like rule based process where the investor

will buy the stocks which are related to quantitative analysis.

26 | P a g e

CHAPTER-7

TREND

One of the most important concepts in technical analysis is that of trend. The meaning in finance

isn't all that different from the general definition of the term - a trend is really nothing more than

the general direction in which a security or market is headed.

It isn't hard to see that the trend in figure is up. However, it's not always this easy to see a

trend. There are lots of ups and downs in this chart, but there isn't a clear indication of which

direction this security is headed. 

Formal Definition 

Unfortunately, trends are not always easy to see. In other words, defining a trend goes

well beyond the obvious. In any given chart, we can probably notice that prices do not tend to

move in a straight line in any direction, but rather in a series of highs and lows. In technical

analysis, it is the movement of the highs and lows that constitutes a trend. For example,

an uptrend is classified as a series of higher highs and higher lows, while a downtrend is one of

lower lows and lower highs. 

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Above chart is an example of an uptrend. Point 2 in the chart is the first high, which is

determined after the price falls from this point. Point 3 is the low that is established as the price

falls from the high. For this to remain an uptrend each successive low must not fall below the

previous lowest point or the trend is deemed a reversal. 

7.1 TYPES OF TREND 

There are three types of trend: 

Uptrends

Downtrends

Sideways/Horizontal Trends 

As the names imply, when each successive peak and trough is higher, it's referred to as

an upward trend. If the peaks and troughs are getting lower, it's a downtrend. When there is little

movement up or down in the peaks and troughs, it's a sideways or horizontal trend. If we want to

get really technical, we might even say that a sideways trend is actually not a trend on its own,

but a lack of a well-defined trend in either direction. In any case, the market can really only

trend in these three ways: up, down or nowhere.

Trend Lengths 

Along with these three trend directions, there are three trend classifications. A trend of

any direction can be classified as a long-term trend, intermediate trend or a short-term trend. In

terms of the stock market, a major trend is generally categorized as one lasting longer than a

year. An intermediate trend is considered to last between one and three months and a near-term

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trend is anything less than a month. A long-term trend is composed of several intermediate

trends, which often move against the direction of the major trend. If the major trend is upward

and there is a downward correction in price movement followed by a continuation of the

uptrend, the correction is considered to be an intermediate trend. The short-term trends are

components of both major and intermediate trends.

When analysing trends, it is important that the chart is constructed to best reflect the type

of trend being analysed. To help identify long-term trends, weekly charts or daily charts

spanning a five-year period are used by chartists to get a better idea of the long-term trend.

Daily data charts are best used when analysing both intermediate and short-term trends. It is also

important to remember that the longer the trend, the more important it is; for example, a one-

month trend is not as significant as a five-year trend.

7.2 TRENDLINES

A trend line is a simple charting technique that adds a line to a chart to represent the

trend in the market or a stock. Drawing a trend line is as simple as drawing a straight line that

follows a general trend. These lines are used to clearly show the trend and are also used in the

identification of trend reversals. 

Above chart shows, an upward trend line is drawn at the lows of an upward trend. This

line represents the support the stock has every time it moves from a high to a low. Notice how

the price is propped up by this support. This type of trend line helps traders to anticipate the

point at which a stock's price will begin moving upwards again. Similarly, a downward trend

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line is drawn at the highs of the downward trend. This line represents the resistance level that a

stock faces every time the price moves from a low to a high.

Channels 

A channel, or channel lines, is the addition of two parallel trend lines that act as strong

areas of support and resistance. The upper trend line connects a series of highs, while the lower

trend line connects a series of lows. A channel can slope upward, downward or sideways but,

regardless of the direction, the interpretation remains the same. Traders will expect a given

security to trade between the two levels of support and resistance until it breaks beyond one of

the levels, in which case traders can expect a sharp move in the direction of the break. Along

with clearly displaying the trend, channels are mainly used to illustrate important areas of

support and resistance. 

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Above chart illustrates a descending channel on a stock chart; the upper trend line has

been placed on the highs and the lower trend line is on the lows. The price has bounced off of

these lines several times, and has remained range-bound for several months. As long as the

price does not fall below the lower line or move beyond the upper resistance, the range-bound

downtrend is expected to continue. 

7.3 THE IMPORTANCE OF TREND It is important to be able to understand and identify trends so that we can trade with

rather than against them. Two important sayings in technical analysis are "the trend is your

friend" and "don't buck the trend," illustrating how important trend analysis is for technical

traders.

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CHAPTER-8

SWING ANALYSIS

Swing analysis is a speculative activity in financial markets where a tradable asset is

held for between one to several days in an effort to profit from price changes or 'swings'. A

swing trading position is typically held longer than a day trading position, but shorter than buy

and hold investment strategies that can be held for months or years. Profits can be sought by

either buying an asset or short selling. Using a set of mathematically based objective rules for

buying and selling is a common method for swing traders to eliminate the subjectivity,

emotional aspects, and labour-intensive analysis of swing trading. The trading rules can be used

to create a trading algorithm or "trading system" using technical analysis or fundamental

analysis to give buy and sell signals.

Simpler rule-based trading approaches include Alexander Elder's strategy, which

measures the behaviour of an instrument's price trend using three different moving averages of

closing prices. The instrument is only traded long when the three averages are aligned in an

upward direction, and only traded Short when the three averages are moving downward. Trading

algorithms/systems may lose their profit potential when they obtain enough of a mass following

to curtail their effectiveness: "Now it's an arms race. Everyone is building more sophisticated

algorithms, and the more competition exists, the smaller the profits," observes Andrew Lo, the

Director of the Laboratory for Financial Engineering, for the Massachusetts Institute of

Technology.

Identifying when to enter and when to exit a trade is the primary challenge for all swing

trading strategies. However, swing traders do not need perfect timing—to buy at the very

bottom and sell at the very top of price oscillations—to make a profit. Small consistent earnings

that involve strict money management rules can compound returns over time. It is generally

understood that mathematical models and algorithms do not work for every instrument or

market situation.

Risks in swing trading are commensurate with market speculation in general. Risk of

loss in swing trading typically increases in a trading range, or sideways price movement, as

compared to a bull market or bear market that is clearly moving in a specific direction.

32 | P a g e

CHAPTER-9

SUPPORT AND RESISTANCE

SUPPORT

A support level is a price level where the price tends to find support as it is going down.

This means the price is more likely to "bounce" off this level rather than break through it.

However, once the price has passed this level, by an amount exceeding some noise, it is likely to

continue dropping until it finds another support level.

RESISTANCE

A resistance level is the opposite of a support level. It is where the price tends to find

resistance as it is going up. This means the price is more likely to "bounce" off this level rather

than break through it. However, once the price has passed this level, by an amount exceeding

some noise, it is likely that it will continue rising until it finds another resistance level.

Identifying support and resistance levels

Support and resistance levels can be identified by trend lines (technical analysis). Some

traders believe in using pivot point calculations. The more often a support/resistance level is

"tested" (touched and bounced off by price), the more significance given to that specific level. If

a price breaks past a support level, that support level often becomes a new resistance level. The

opposite is true as well, if price breaks a resistance level, it will often find support at that level in

the future. Technical analysts talk about the on-going battle between the bulls and the bears, or

the struggle between buyers (demand) and sellers (supply). This is revealed by the prices a

security seldom moves above (resistance) or below (support). Support is the price level through

which a stock or market seldom falls (illustrated by the blue arrows). Resistance, on the other

hand, is the price level that a stock or market seldom surpasses (illustrated by the red arrows).

When judging entry and exit investment timing using support or resistance levels it is

important to choose a chart based on a price interval period that aligns with your trading strategy

timeframe. Short term traders tend to use charts based on interval periods, such as 1 minute (i.e.

the price of the security is plotted on the chart every 1 minute), with longer term traders using

price charts based on hourly, daily, weekly or monthly interval periods. Typically traders use

shorter term interval charts when making a final decisions on when to invest, such as the

following example based on 1 week of historical data with price plotted every 15 minutes. In

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this example the early signs that the stock was coming out of a downtrend was when it started to

form support at $30.48 and then started to form higher highs and higher lows signalling a

change from negative to positive trending.

9.1 THE IMPORTANCE OF SUPPORT AND RESISTANCE 

Support and resistance analysis is an important part of trends because it can be used to

make trading decisions and identify when a trend is reversing. For example, if a trader identifies

an important level of resistance that has been tested several times but never broken, he or she

may decide to take profits as the security moves toward this point because it is unlikely that it

will move past this level.  Support and resistance levels both test and confirm trends and need to

be monitored by anyone who uses technical analysis.

As long as the price of the share remains between these levels of support and resistance,

the trend is likely to continue. It is important to note, however, that a break beyond a level of

support or resistance does not always have to be a reversal. For example, if a price moved above

the resistance levels of an upward trending channel, the trend has accelerated, but not reversed.

This means that the price appreciation is expected to be faster than it was in the channel. 

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CHAPTER-10

MOVING AVERAGES

Moving averages are one of the oldest and most popular technical analysis tools. It is a

method of technical analysis which is used to identify long term, medium term or short term

trends by smoothing out the way price movements are graphically represented. A moving

average is the average price of a security at a given time. Most chart patterns show a lot of

variation in price movement. This can make it difficult for traders to get an idea of a security's

overall trend. The Moving Average Technical Indicator shows the mean instrument price value

for a certain period of time. When one calculates the moving average, one averages out the

instrument price for this time period. As the price changes, its moving average either increases,

or decreases.

One simple method traders use to combat this is to apply moving averages. A moving

average is the average price of a security over a set amount of time. By plotting a security's

average price, the price movement is smoothed out. Once the day-to-day fluctuations are

removed, traders are better able to identify the true trend and increase the probability that it will

work in their favour. Moving averages are normally expressed by way of the number of

previous day’s data which is used to calculate the moving average. As with most technical

analysis tools, moving averages can be used for most financial instruments including stocks and

shares, currencies, bonds etc.

Moving averages "smooth out" market rate fluctuations that often occur with each

reporting period in a price chart. The more frequent the rate updates - that is, the more often the

price chart displays an updated rate - the greater the potential for market noise. For traders

dealing in a fast-moving market that is "ranging" or "whipsawing" up and down, the potential

for false signals is a constant concern.

10.1 TYPES OF MOVING AVERAGES 

There are a number of different types of moving averages that vary in the way they are

calculated, but how each average is interpreted remains the same. The calculations only differ in

regards to the weighting that they place on the price data, shifting from equal weighting of each

price point to more weight being placed on recent data.

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The four most common types of moving averages are 

Simple moving average

Linear moving average

Exponential moving average

Smoothed moving average

10.2 SIMPLE MOVING AVERAGE (SMA) 

This is the most common method used to calculate the moving average of prices. It

simply takes the sum of all of the past closing prices over the time period and divides the result

by the number of prices used in the calculation. For example, to calculate a 14-day moving

average of Nifty Index: First, we would add Nifty Indexes closing prices for the most recent 14

days. Next, we would divide that sum by 14; this would give us the average price of Nifty Index

over the preceding 14 days. We can plot this average price on the chart.

SMA = (summation of closing prices up to n)/n

SMA = SUM (CLOSE, N)/N

Where:

n=the number of time periods in the moving average

10.3 EXPONENTIAL MOVING AVERAGE

An exponential moving average is similar to a simple moving average, but whereas a

simple moving average removes the oldest prices as new prices become available, an

exponential moving average calculates the average of all historical ranges, starting at the point

we specify. For instance, when you add a new exponential moving average overlay to a price

chart, we assign the number of reporting periods to include in the calculation. Let's assume we

specify for the last 14 prices to be included. This first calculation will be exactly the same as a

simple moving average also based on 14 reporting periods, but when the next price becomes

available, the new calculation will retain the original 14 prices, plus the new price, to arrive at

the average. This means there are now 15 reporting periods in the exponential moving average

calculation while the simple moving average will always be based on just the most recent 14

rates.

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Today's Exponential Moving Average= (current day's closing price x Exponent) +

(previous day's EMA x (1-Exponent)).

10.4 USES

Moving averages cover a specific period of time: 10, 20, 50, 100 or 200 days. They

appear as a simple line that rises or falls with the general direction of the price. In a common

technique of technical analysis, short- and long-term moving averages are superimposed over a

price chart. A short-term moving average crossing over a long-term moving average may

indicate a new price trend, or a change in direction. Many traders use this crossover as a buy or

sell signal.

10.5 DECIDING ON WHICH MOVING AVERAGE TO USE

To determine which moving average is best for us, we must first understand our needs.

If our main objective is to reduce the noise of consistently fluctuating prices in order to

determine an overall market direction, then a simple moving average of the last 20 or so

rates may provide the level of detail we require.

If we want our moving average to place more emphasis on the latest rates, a weighted

average is more appropriate.

Keeping in mind however, that because weighted moving averages are affected more by

the latest prices, the shape of the average line could be distorted potentially resulting in

the generation of false signals.

When working with weighted moving averages, we must be prepared for a greater

degree of volatility.

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EMPERICAL ANALYSIS

Below stocks are used to observe the changes in price and to know the swing analysis

with the help of moving averages. The main objective to take the index is that volatility in index

values are less compared to other stocks. This analysis helps to understand which moving

average works better and to know when an investment can be made. Stocks volatility depends

on many factors which relates to stocks but nifty index volatility depends only on few factors

like economy driven and political driven factors. Based on the risk appetite and based on

volatility and investment can be made on any of the stocks.

CNX NIFTY INDEX

ITC

ONGC

CIPLA

HDFC BANK

DR REDDY’S

COAL INDIA

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CHAPTER-12

12.1 CNX NIFTY INDEX

MOVING AVERAGES

Date Close 14 DMA 11 DMA 7 DMA 5 DMA 3 DMA

01-01-2013 5950.85

02-01-2013 5993.25

03-01-2013 6009.5 5984.53

04-01-2013 6016.15 6006.30

07-01-2013 5988.4 5991.63 6004.68

08-01-2013 6001.7 6001.80 6002.08

09-01-2013 5971.5 5990.19 5997.45 5987.20

10-01-2013 5968.65 5992.74 5989.28 5980.62

11-01-2013 5951.3 5986.74 5976.31 5963.82

14-01-2013 6024.05 5988.82 5983.44 5981.33

15-01-2013 6056.6 5993.81 5994.60 5994.42 6010.65

16-01-2013 6001.85 5998.45 5996.52 6000.49 6027.50

17-01-2013 6039.2 6002.63 6001.88 6014.60 6032.55

18-01-2013 6064.4 6002.67 6007.62 6015.15 6037.22 6035.15

21-01-2013 6082.3 6012.06 6013.63 6031.39 6048.87 6061.97

22-01-2013 6048.5 6016.01 6019.10 6045.27 6047.25 6065.07

23-01-2013 6054.3 6019.21 6023.88 6049.59 6057.74 6061.70

24-01-2013 6019.35 6019.44 6028.23 6044.27 6053.77 6040.72

25-01-2013 6074.65 6025.60 6037.86 6054.67 6055.82 6049.43

28-01-2013 6074.8 6030.82 6049.09 6059.76 6054.32 6056.27

29-01-2013 6049.9 6036.42 6051.44 6057.69 6054.60 6066.45

30-01-2013 6055.75 6042.64 6051.36 6053.89 6054.89 6060.15

31-01-2013 6034.75 6048.60 6054.35 6051.93 6057.97 6046.80

01-02-2013 5998.9 6046.80 6050.69 6044.01 6042.82 6029.80

04-02-2013 5987.25 6041.85 6043.68 6039.43 6025.31 6006.97

05-02-2013 5956.9 6038.64 6032.28 6022.61 6006.71 5981.02

06-02-2013 5959.2 6032.93 6024.16 6006.09 5987.40 5967.78

07-02-2013 5938.8 6023.95 6013.66 5990.22 5968.21 5951.63

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08-02-2013 5903.5 6011.18 6003.13 5968.47 5949.13 5933.83

11-02-2013 5897.85 6000.42 5987.05 5948.91 5931.25 5913.38

12-02-2013 5922.5 5991.01 5973.21 5938.00 5924.37 5907.95

13-02-2013 5932.95 5984.84 5962.58 5930.24 5919.12 5917.77

14-02-2013 5896.95 5972.14 5948.14 5921.68 5910.75 5917.47

15-02-2013 5887.4 5958.76 5934.75 5911.42 5907.53 5905.77

18-02-2013 5898.2 5947.92 5925.59 5905.62 5907.60 5894.18

19-02-2013 5939.7 5939.63 5921.27 5910.79 5911.04 5908.43

20-02-2013 5943.05 5933.08 5920.01 5917.25 5913.06 5926.98

21-02-2013 5852.25 5922.61 5910.29 5907.21 5904.12 5911.67

22-02-2013 5850.3 5912.83 5902.24 5895.41 5896.70 5881.87

25-02-2013 5854.75 5905.53 5897.81 5889.38 5888.01 5852.43

26-02-2013 5761.35 5891.40 5885.40 5871.37 5852.34 5822.13

27-02-2013 5796.9 5881.26 5873.98 5856.90 5823.11 5804.33

28-02-2013 5693.05 5866.23 5852.17 5821.66 5791.27 5750.43

01-03-2013 5719.7 5853.50 5836.06 5789.76 5765.15 5736.55

04-03-2013 5698.5 5837.50 5818.89 5767.79 5733.90 5703.75

05-03-2013 5784.25 5826.88 5808.53 5758.36 5738.48 5734.15

06-03-2013 5818.6 5821.29 5797.52 5753.19 5742.82 5767.12

07-03-2013 5863.3 5819.56 5790.27 5767.76 5776.87 5822.05

08-03-2013 5945.7 5822.96 5798.76 5789.01 5822.07 5875.87

11-03-2013 5942.35 5823.15 5807.13 5824.63 5870.84 5917.12

12-03-2013 5914.1 5821.08 5812.53 5852.40 5896.81 5934.05

13-03-2013 5851.2 5821.00 5820.70 5874.21 5903.33 5902.55

14-03-2013 5908.95 5825.19 5830.88 5892.03 5912.46 5891.42

15-03-2013 5872.6 5826.47 5847.20 5899.74 5897.84 5877.58

18-03-2013 5835.25 5831.75 5857.71 5895.74 5876.42 5872.27

19-03-2013 5745.95 5828.11 5862.02 5867.20 5842.79 5817.93

20-03-2013 5694.4 5828.20 5853.85 5831.78 5811.43 5758.53

21-03-2013 5658.75 5823.85 5839.32 5795.30 5761.39 5699.70

22-03-2013 5651.35 5820.48 5820.05 5766.75 5717.14 5668.17

25-03-2013 5633.85 5809.74 5791.70 5727.45 5676.86 5647.98

26-03-2013 5641.6 5797.10 5764.36 5694.45 5655.99 5642.27

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28-03-2013 5682.55 5784.19 5743.31 5672.64 5653.62 5652.67

01-04-2013 5704.4 5766.95 5729.97 5666.70 5662.75 5676.18

02-04-2013 5748.1 5753.08 5715.35 5674.37 5682.10 5711.68

03-04-2013 5672.9 5735.85 5697.19 5676.39 5689.91 5708.47

04-04-2013 5574.75 5716.10 5673.51 5665.45 5676.54 5665.25

05-04-2013 5553.25 5690.69 5655.99 5653.94 5650.68 5600.30

08-04-2013 5542.95 5667.15 5642.22 5639.84 5618.39 5556.98

09-04-2013 5495.1 5642.85 5627.35 5613.06 5567.79 5530.43

10-04-2013 5558.7 5629.48 5618.92 5592.25 5544.95 5532.25

11-04-2013 5594 5622.30 5615.30 5570.24 5548.80 5549.27

12-04-2013 5528.55 5613.00 5605.02 5549.61 5543.86 5560.42

15-04-2013 5568.4 5607.08 5594.65 5548.71 5548.95 5563.65

16-04-2013 5688.95 5611.01 5593.24 5568.09 5587.72 5595.30

17-04-2013 5688.7 5614.38 5587.84 5588.91 5613.72 5648.68

18-04-2013 5783.1 5621.56 5597.86 5630.06 5651.54 5720.25

22-04-2013 5834.4 5630.85 5621.46 5669.44 5712.71 5768.73

23-04-2013 5836.9 5637.19 5647.25 5704.14 5766.41 5818.13

25-04-2013 5916.3 5654.58 5681.19 5759.54 5811.88 5862.53

26-04-2013 5871.45 5675.77 5715.40 5802.83 5848.43 5874.88

29-04-2013 5904.1 5700.83 5746.80 5833.56 5872.63 5897.28

30-04-2013 5930.2 5728.49 5777.37 5868.06 5891.79 5901.92

02-05-2013 5999.35 5764.51 5820.17 5898.96 5924.28 5944.55

03-05-2013 5944 5792.03 5854.31 5914.61 5929.82 5957.85

06-May-13 5971.05 5818.96 5879.96 5933.78 5949.74 5971.47

07-May-13 6043.55 5855.75 5912.22 5951.96 5977.63 5986.20

08-May-13 6069.3 5891.53 5938.24 5980.22 6005.45 6027.97

09-May-13 6050.15 5917.33 5957.85 6001.09 6015.61 6054.33

10-May-13 6094.75 5946.33 5981.29 6024.59 6045.76 6071.40

11-May-13 6107.25 5969.48 5998.65 6040.01 6073.00 6084.05

13-May-13 5980.45 5979.91 6008.56 6045.21 6060.38 6060.82

14-May-13 5995.4 5991.24 6016.86 6048.69 6045.60 6027.70

15-May-13 6146.75 6007.70 6036.55 6063.44 6064.92 6040.87

16-May-13 6169.9 6029.01 6052.05 6077.81 6079.95 6104.02

17-May-13 6187.3 6049.24 6074.17 6097.40 6095.96 6167.98

20-May-13 6156.9 6065.44 6091.06 6106.28 6131.25 6171.37

41 | P a g e

21-May-13 6114 6073.63 6097.47 6107.24 6154.97 6152.73

22-May-13 6094.5 6084.38 6099.76 6123.54 6144.52 6121.80

23-May-13 5967.85 6084.15 6092.28 6119.60 6104.11 6058.78

24-May-13 5983.55 6079.86 6082.17 6096.29 6063.36 6015.30

27-May-13 6083.15 6080.85 6079.98 6083.89 6048.61 6011.52

28-May-13 6111.75 6085.25 6091.91 6073.10 6048.16 6059.48

29-May-13 6104.3 6085.93 6101.81 6065.59 6050.12 6099.73

30-May-13 6124.05 6087.13 6099.75 6067.02 6081.36 6113.37

31-May-13 5985.95 6087.53 6083.03 6051.51 6081.84 6071.43

03-Jun-13 5939.3 6083.52 6060.48 6047.44 6053.07 6016.43

04-Jun-13 5919.5 6067.28 6038.90 6038.28 6014.61 5948.23

05-Jun-13 5923.9 6049.71 6021.61 6015.52 5978.52 5927.53

06-Jun-13 5921.4 6030.71 6005.87 5988.33 5937.99 5921.57

07-Jun-13 5881 6011.01 5997.98 5956.43 5917.00 5908.75

10-Jun-13 5878 5994.15 5988.38 5921.28 5904.74 5893.47

11-Jun-13 5788.8 5972.31 5961.62 5893.11 5878.61 5849.27

12-Jun-13 5760.2 5957.48 5929.66 5867.53 5845.88 5809.00

13-Jun-13 5699.1 5937.16 5892.83 5836.05 5801.42 5749.37

14-MVA

14 day moving average is calculated by taking the closing values of first day and averaging it

with 14

14-mva= (Average (closing value on 01-01-2013: closing value on 18-01-2013))

42 | P a g e

03-Jan-1112-May-1116-Sep-11 24-Jan-1231-May-1205-Oct-12 12-Feb-13 20-Jun-130

1000

2000

3000

4000

5000

6000

7000

0

1000

2000

3000

4000

5000

6000

7000

14 DMAClose

03-Jan-11 16-May-1122-Sep-11 02-Feb-12 12-Jun-12 19-Oct-12 28-Feb-130

1000

2000

3000

4000

5000

6000

7000

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

14 DMALowHighOpen

43 | P a g e

RETURN CALCULATIONS

Date Close

14-DAY

RETURN

11-DAY

RETURN

7-DAY

RETURN

5-DAY

RETURN

3-DAY

RETURN

01-Jan-13 5950.85

02-Jan-13 5993.25

03-Jan-13 6009.5

04-Jan-13 6016.15 -0.21%

07-Jan-13 5988.4 0.77%

08-Jan-13 6001.7 -0.12% -0.36%

09-Jan-13 5971.5 0.12% 0.32%

10-Jan-13 5968.65 -0.20% -0.02% -0.10%

11-Jan-13 5951.3 1.05% 0.80% 0.67%

14-Jan-13 6024.05 -0.40% -0.40% -0.74%

15-Jan-13 6056.6 0.37% 0.38% -0.74%

16-Jan-13 6001.85 -0.90% -0.89% -1.63% -0.91%

17-Jan-13 6039.2 -2.09% -1.96% -1.69% -0.85%

18-Jan-13 6064.4 -2.60% -1.68% -0.98% 0.24%

21-Jan-13 6082.3 0.23% -0.27% -0.68% -0.01% 0.42%

22-Jan-13 6048.5 0.00% -1.45% -1.02% -0.49% -0.39%

23-Jan-13 6054.3 0.52% -1.87% -0.94% -0.56% -0.52%

24-Jan-13 6019.35 -0.65% -1.59% -0.57% -0.42% -0.10%

25-Jan-13 6074.65 0.51% -2.33% -1.35% -1.15% -0.57%

28-Jan-13 6074.8 -0.23% -3.56% -2.75% -2.23% -1.18%

29-Jan-13 6049.9 -1.09% -3.94% -1.61% 0.97% 0.02%

30-Jan-13 6055.75 -0.27% 0.47% 0.48% -0.01% -0.40%

31-Jan-13 6034.75 0.49% -0.40% -0.17% -0.62% -1.01%

01-Feb-13 5998.9 0.00% -0.31% -0.86% -1.82% -0.83%

04-Feb-13 5987.25 0.00% -2.08% -2.48% -1.87% 0.92%

05-Feb-13 5956.9 0.65% -0.47% -0.49% -0.33% -0.85%

06-Feb-13 5959.2 0.03% 0.20% -0.18% -0.76% -0.81%

07-Feb-13 5938.8 0.21% -2.07% -2.67% -2.80% -1.48%

08-Feb-13 5903.5 2.10% 0.43% -0.18% -1.38% -0.40%

44 | P a g e

11-Feb-13 5897.85 -2.34% -2.32% -2.60% -1.75% -0.85%

12-Feb-13 5922.5 -0.95% -2.43% -2.15% 1.21% 0.56%

13-Feb-13 5932.95 0.00% 0.53% -0.30% -0.99% -1.26%

14-Feb-13 5896.95 1.62% -0.20% -0.22% -0.47% -1.13%

15-Feb-13 5887.4 2.96% -1.11% -2.31% -1.92% -0.86%

18-Feb-13 5898.2 0.92% 0.91% 1.41% 0.99% 0.11%

19-Feb-13 5939.7 -1.18% 0.57% 0.75% 0.02% -0.16%

20-Feb-13 5943.05 -0.13% -2.77% -2.90% -3.26% -1.51%

21-Feb-13 5852.25 0.25% 0.33% -0.15% -0.04% 0.32%

22-Feb-13 5850.3 0.27% 1.57% 1.22% -0.77% -0.08%

25-Feb-13 5854.75 0.65% -1.47% -1.47% -0.51% -1.96%

26-Feb-13 5761.35 1.95% -1.32% -0.58% 0.36% -2.09%

27-Feb-13 5796.9 0.75% -6.81% -5.13% -4.23% -3.00%

28-Feb-13 5693.05 0.02% -7.34% -5.18% -4.26% -1.86%

01-Mar-13 5719.7 0.77% -8.73% -6.32% -2.87% 0.70%

04-Mar-13 5698.5 -1.33% -5.53% -2.93% 0.36% -0.71%

05-Mar-13 5784.25 -2.30% -3.85% 0.49% -0.92% -0.89%

06-Mar-13 5818.6 0.00% -1.82% -1.13% -1.69% -0.65%

07-Mar-13 5863.3 -0.06% -0.30% 0.80% 0.63% -0.03%

08-Mar-13 5945.7 -0.90% 2.00% 0.39% 0.85% 0.97%

11-Mar-13 5942.35 -0.33% -1.48% -2.08% -1.61% -1.61%

12-Mar-13 5914.1 0.22% -1.21% -1.02% -0.76% -0.67%

13-Mar-13 5851.2 -0.51% -1.01% -0.40% -0.30% -0.36%

14-Mar-13 5908.95 0.50% -0.86% -0.24% -0.14% -0.15%

15-Mar-13 5872.6 0.31% -0.68% -0.23% 0.20% -0.02%

18-Mar-13 5835.25 -1.65% 6.17% 5.88% 5.67% 5.71%

19-Mar-13 5745.95 0.00% -3.35% -3.51% -3.04% -2.34%

20-Mar-13 5694.4 0.00% -5.85% -5.44% -4.66% -2.98%

21-Mar-13 5658.75 0.00% -5.28% -4.41% -3.29% -0.49%

22-Mar-13 5651.35 1.14% -4.05% -2.74% -1.71% 0.06%

25-Mar-13 5633.85 -0.79% -4.78% -2.89% -0.63% -0.30%

26-Mar-13 5641.6 0.16% -4.90% -1.37% 0.07% 0.01%

28-Mar-13 5682.55 -0.19% 1.64% 1.73% -1.01% -0.95%

01-Apr-13 5704.4 1.56% 1.21% -4.31% -4.06% -2.10%

45 | P a g e

02-Apr-13 5748.1 0.74% 0.92% -0.16% 0.21% 0.03%

03-Apr-13 5672.9 -0.08% 1.86% 2.11% 1.47% 0.39%

04-Apr-13 5574.75 2.82% -0.07% 0.40% 1.17% 1.17%

05-Apr-13 5553.25 1.15% -3.21% -1.88% -1.17% -1.17%

08-Apr-13 5542.95 1.32% -2.04% -0.86% -0.68% -0.65%

09-Apr-13 5495.1 -1.04% -1.49% 0.40% 0.32% -0.24%

10-Apr-13 5558.7 -0.88% -0.47% 0.26% 0.30% 0.56%

11-Apr-13 5594 -0.77% 0.81% 0.27% -0.05% 0.21%

12-Apr-13 5528.55 0.99% -0.41% -0.55% -0.70% -0.42%

15-Apr-13 5568.4 -2.85% -0.30% -0.41% -0.02% 0.37%

16-Apr-13 5688.95 0.00% -4.18% -3.94% -3.34% -2.00%

17-Apr-13 5688.7 0.00% -3.97% -2.65% -1.96% 1.18%

18-Apr-13 5783.1 -0.09% -3.12% -1.36% 0.46% -0.56%

22-Apr-13 5834.4 0.93% 1.19% 0.10% 3.44% -0.84%

23-Apr-13 5836.9 0.00% -3.16% -4.08% -4.37% -3.27%

25-Apr-13 5916.3 4.79% -0.94% -1.65% -1.09% -1.23%

26-Apr-13 5871.45 -0.08% -3.44% -3.60% -2.41% -1.04%

29-Apr-13 5904.1 0.33% -5.99% -5.38% -2.19% 0.95%

30-Apr-13 5930.2 1.54% -0.58% -1.09% 0.42% 0.98%

02-May-13 5999.35 -0.91% -4.38% -1.87% -0.97% -0.62%

03-May-13 5944 -0.41% -2.26% -0.48% -0.03% -0.20%

06-May-13 5971.05 -0.42% -3.17% 0.66% 0.38% 0.10%

07-May-13 6043.55 -0.05% 1.12% 1.78% 1.87% -0.33%

08-May-13 6069.3 0.34% -2.08% -2.79% -2.80% -1.65%

09-May-13 6050.15 -0.59% 0.13% 0.10% 0.23% -0.20%

10-May-13 6094.75 1.78% 1.00% 1.08% -1.42% -0.49%

11-May-13 6107.25 3.43% -6.03% -5.39% -4.57% -3.73%

13-May-13 5980.45 -0.69% -0.69% 0.18% 1.19% -0.14%

14-May-13 5995.4 -2.38% -3.97% -2.70% -2.51% -1.10%

15-May-13 6146.75 1.84% -6.59% -4.84% -2.02% 1.23%

16-May-13 6169.9 2.60% -1.82% -0.72% 0.38% -0.97%

17-May-13 6187.3 -1.92% -1.93% -0.59% -0.07% 0.25%

20-May-13 6156.9 -1.61% -2.02% 1.70% 1.30% 1.70%

21-May-13 6114 0.42% 2.34% 1.28% 1.12% 1.34%

22-May-13 6094.5 0.00% -1.02% -1.80% -1.31% -0.96%

46 | P a g e

23-May-13 5967.85 0.00% -3.26% -3.36% -2.85% -1.19%

24-May-13 5983.55 0.71% -1.43% -0.89% -0.38% 0.14%

27-May-13 6083.15 1.20% -1.26% -0.57% 0.29% 0.94%

28-May-13 6111.75 1.24% -0.22% 0.86% 1.82% 2.07%

29-May-13 6104.3 0.28% -4.16% -2.72% -1.95% -1.12%

30-May-13 6124.05 -0.71% -5.56% -3.90% -3.22% -1.79%

31-May-13 5985.95 -0.74% -5.89% -4.12% -2.20% 0.47%

03-06-2013 5939.3 -0.78% -2.92% -1.21% -0.40% -0.59%

04-Jun-13 5919.5 2.14% -3.35% -1.30% 0.09% -0.01%

05-Jun-13 5923.9 0.16% -1.99% 0.75% 0.08% -0.09%

06-Jun-13 5921.4 -1.06% -1.10% -0.50% -0.58% -0.42%

07-Jun-13 5881 2.45% 0.65% 0.46% 0.73% -0.20%

10-Jun-13 5878 -0.40% -0.80% -1.44% -1.20% -0.78%

11-Jun-13 5788.8 0.11% 1.52% 1.50% 1.78% -0.32%

12-Jun-13 5760.2 -0.25% -0.71% -0.20% 0.34% 1.14%

13-Jun-13 5699.1 -0.89% -4.60% -3.58% -2.77% -1.46%

14-Day Return Calculations

47 | P a g e

03-Jan-11 20-May-11 04-Oct-11 21-Feb-12 04-Jul-12 20-Nov-12 05-Apr-13

-0.04

-0.03

-0.02

-0.01

0

0.01

0.02

0.03

0.04

14-Day returns

14-Day returns

Total return percentage for 14-day is: 135.75%

Op/Carry: 479

Sl/Nonp: 135

11-Day Return Calculations

03-Jan-11 20-May-11 04-Oct-11 21-Feb-12 04-Jul-12 20-Nov-12 05-Apr-13

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

11-Day returns

11-Day returns

Total return percentage for 11-day is: 120.65%

Op/Carry: 373

Sl/Nonp: 244

48 | P a g e

7-Day Return Calculations

03-Jan-11 16-May-11 22-Sep-11 02-Feb-12 12-Jun-12 19-Oct-12 28-Feb-13

-0.15

-0.1

-0.05

0

0.05

0.1

7-Day returns

7-Day returns

Total return percentage for 7-day is: -505.19%

Op/Carry: 292

Sl/Nonp: 330

5-Day Return Calculations

03-Jan-11 16-May-11 22-Sep-11 02-Feb-12 12-Jun-12 19-Oct-12 28-Feb-13

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

5-Day returns

5-Day returns

Total return percentage for 5-day is: 93.02%

Op/Carry: 291

Sl/Nonp: 332

49 | P a g e

3-Day Return Calculations

03-Jan-11 16-May-11 22-Sep-11 02-Feb-12 12-Jun-12 19-Oct-12 28-Feb-13

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

3-Day returns

3-Day returns

Total return percentage for 3-day is: 30.82%

Op/Carry: 71

Sl/Nonp: 554

50 | P a g e

12.2 ITC

MOVING AVERAGES

The following is the daily chart of ITC starting from first week of 01-Jan 2013 till 1st

week of June 2013. The price has decreased from Rupee value 359.95 to 298.9. In a time span

of nearly more than three years price decrease by rupee value -152.20, which is a decrease in the

initial price. The price has gone through various trends in this time span. This company has nt

been a good investment propositions in past three years. In the 1st week of May 2011 the ADX

reflects a less trend and the price started to toll down. The market moved lower. 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 uptrend continued till the 1st week of February 2013. The market moved lower then after.

Ideal investor should have maintained logical stops for short positions. Any open long positions

should be closed. After an upswing, the market is now undergoing a reaction. Such moves

should trade using overbought/oversold indicators. Here, the returns are good for 14-day moving

average compared to other and when it is compared with the index values it is less. CNX Nifty

Index has a better positive returns compared to the other stock values.

14 DAY MOVING AVERAGE

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

100

50

100

150

200

250

300

350

400

0

50

100

150

200

250

300

350

400

14-DMA

14 DMACLOSE PRICE

51 | P a g e

1/3/20

11

2/5/20

11

3/10/2

011

4/12/2

011

5/15/2

011

6/17/2

011

7/20/2

011

8/22/2

011

9/24/2

011

10/27

/2011

11/29

/2011

1/1/20

12

2/3/20

12

3/7/20

12

4/9/20

12

5/12/2

012

6/14/2

012

7/17/2

012

8/19/2

012

9/21/2

012

10/24

/2012

11/26

/2012

12/29

/2012

1/31/2

013

3/5/20

13

4/7/20

13

5/10/2

013

6/12/2

013

0

100

200

300

400

500

600

700

52 | P a g e

RETURN CALCULATIONS

14-DAY RETURN

12/30

/1899

9/2/19

05

5/2/19

11

1/2/19

17

9/2/19

22

5/2/19

28

1/2/19

34

9/2/19

39

5/2/19

45

1/2/19

51

9/2/19

56

5/2/19

62

1/2/19

68

9/2/19

73

5/2/19

79

1/2/19

85

9/2/19

90

5/2/19

96

1/2/20

02

9/2/20

07

5/2/20

13

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

14-Day Returns

14-Day Returns 

Total return percentage of 14-day moving average is 109.11%

OP/CARRY=414

SL/NONP=199

11-DAY RETURN

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

11-day returns

11-day returns

53 | P a g e

Total return percentage of 11-day moving average is 108.03%

OP/CARRY=386

SL/NONP=231

7-DAY RETURN

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.1

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

7-day returns

7-day returns

Total return percentage of 7-day moving average is -460.21%

OP/CARRY=307

SL/NONP=314

54 | P a g e

5-DAY RETURN

12/30/1899

7/2/1905

1/2/1911

7/2/1916

1/2/1922

7/2/1927

1/2/1933

7/2/1938

1/2/1944

7/2/1949

1/2/1955

7/2/1960

1/2/1966

7/2/1971

1/2/1977

7/2/1982

1/2/1988

7/2/1993

1/2/1999

7/2/2004

1/2/2010

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

5 day Returns

5 day Returns

Total return percentage of 5-day moving average is -283.06%

OP/CARRY=224

SL/NONP=398

3-DAY RETURN

12/30/1899

7/2/1905

1/2/1911

7/2/1916

1/2/1922

7/2/1927

1/2/1933

7/2/1938

1/2/1944

7/2/1949

1/2/1955

7/2/1960

1/2/1966

7/2/1971

1/2/1977

7/2/1982

1/2/1988

7/2/1993

1/2/1999

7/2/2004

1/2/2010

-0.05

-0.04

-0.03

-0.02

-0.01

0

0.01

0.02

0.03

0.04

3-day returns

3-day returns

Total return percentage of 3-day moving average is -4.66%

OP/CARRY=58

SL/NONP=566

55 | P a g e

12.3 ONGC

MOVING AVERAGES

The following is the weekly chart of ONGC starting from 1st week of 01-Jan 2013 till

1st week of June 2013. The price has increased from Rupee value 308.2 to 309.1. In a time span

of nearly more than three years price down by rupee value 14.1, which is nearly 20% decrease in

the initial price. The price has gone through various trends in this time span. This blue chip

company has not been a good investment propositions in past three years. From the 2nd week of

January 2013 till the 2nd week of February 2013 the ADX reflects a strong trend. It is in this

period when it does not reach its lifetime high. Then in June 2013 the trend started to weaken

and price consolidated. The price moved sideways but gradually decreased. In May 2013 after

an upswing, the market is now undergoing a reaction. Such moves should trade using

overbought/oversold indicators (1) this reaction may be followed by another up move. We may

consider buying above the 2 period high. (2) The reaction may be the beginning of a downtrend.

We should carefully examine chart patterns and other indicators before coming to a conclusion. 

14-DAY Moving Average

1/3/20

11

2/16/2

011

4/1/20

11

5/15/2

011

6/28/2

011

8/11/2

011

9/24/2

011

11/7/

2011

12/21

/2011

2/3/20

12

3/18/2

012

5/1/20

12

6/14/2

012

7/28/2

012

9/10/2

012

10/24

/2012

12/7/

2012

1/20/2

013

3/5/20

13

4/18/2

013

6/1/20

13

0

50

100

150

200

250

300

350

400

0

50

100

150

200

250

300

350

400

14 DMACLOSE PRICE

56 | P a g e

4/1/2013

4/5/2013

4/9/2013

4/13/2013

4/17/2013

4/21/2013

4/25/2013

4/29/2013

5/3/2013

5/7/2013

5/11/2013

5/15/2013

5/19/2013

5/23/2013

5/27/2013

5/31/2013

6/4/2013

6/8/2013

6/12/2013

0

10

20

30

40

50

60

Close

57 | P a g e

RETURN CALCULATIONS

14-DAY Return calculations

12/30/1899

7/2/1905

1/2/1911

7/2/1916

1/2/1922

7/2/1927

1/2/1933

7/2/1938

1/2/1944

7/2/1949

1/2/1955

7/2/1960

1/2/1966

7/2/1971

1/2/1977

7/2/1982

1/2/1988

7/2/1993

1/2/1999

7/2/2004

1/2/2010

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

14-day returns

14-day returns

Total return percentage of 14-day moving average: 134.72%

Op/carry: 375

Sl/nonp: 219

11-Day Return calculations

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

11-day returns

11-day returns

58 | P a g e

Total return percentage of 11-day moving average: 151.43%

Op/carry: 362

Sl/nonp: 255

7-Day Return Calculations

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.1

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

7-day returns

7-day returns

Total return percentage of 7-day moving average: -510.75%

Op/carry: 301

Sl/nonp: 321

59 | P a g e

5-Day Return Calculations

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

5-Day returns

5-Day returns

Total return percentage of 5-day moving average: 134.72%

Op/carry: 375

Sl/nonp: 239

3-Day Return Calculations

12/30/1899

7/2/1905

1/2/1911

7/2/1916

1/2/1922

7/2/1927

1/2/1933

7/2/1938

1/2/1944

7/2/1949

1/2/1955

7/2/1960

1/2/1966

7/2/1971

1/2/1977

7/2/1982

1/2/1988

7/2/1993

1/2/1999

7/2/2004

1/2/2010

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

3-day returns

3-day returns

Total return percentage of 3-day moving average: 37.14%

Op/carry: 71

Sl/nonp: 554

60 | P a g e

12.4 CIPLA

MOVING AVERAGES

The following is the weekly chart of CIPLA LTD starting from first week of Jan 2013

till last week of June 2013. The price of Rupee value is same from 372.5 to 372.5. In a time span

of nearly more than three years there is no change in price. The price has gone through various

trends in this time span. This company has been a good investment propositions in past three

years. In the first week of jan 2013 the ADX 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 uptrend continued till the 1st week of February 2013

where it reached its life time high of 415.61. The price after reaching the lifetime high started to

consolidate and the trend weakened as reflected through ADX in the chart. The market moved

lower. Ideal investor should have maintained logical stops for short positions. Any open long

positions should be closed. After an upswing, the market is now undergoing a reaction. Such

moves should trade using overbought/oversold indicators (1) this reaction may be followed by

another up move. You may consider buying above the 2 period high. (2) This reaction may be

the beginning of a downtrend.

14-MVA

14 day moving average is calculated by taking the closing values of first day and averaging it

with 14

14-mva= (Average (closing value on 01-01-2013: closing value on 18-01-2013))

61 | P a g e

1/3

/2011

2/13/2

011

3/26/2

011

5/6/20

11

6/16/2

011

7/27/2

011

9/6/20

11

10/17

/2011

11/27

/2011

1/7/20

12

2/17/2

012

3/29/2

012

5/9/20

12

6/19/2

012

7/30/2

012

9/9/20

12

10/20

/2012

11/30

/2012

1/10/2

013

2/20/2

013

4/2/20

13

5/13/2

013

6/23/2

013

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

14-DMA

Close14 DMA

4/1/2013

4/5/2013

4/9/2013

4/13/2013

4/17/2013

4/21/2013

4/25/2013

4/29/2013

5/3/2013

5/7/2013

5/11/2013

5/15/2013

5/19/2013

5/23/2013

5/27/2013

5/31/2013

6/4/2013

6/8/2013

6/12/20130

10

20

30

40

50

60

Close

62 | P a g e

RETURN CALCULATIONS

14-DAY RETURN CALCUALTION CHART

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

14-Day returns

14-Day returns

Total percentage of returns for 14-day moving average=24.27%

OP/CARRY=74

SL/NONP=26

11-DAY RETURN CALCUALTION CHART

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

11-Day returns

11-Day returns

Total percentage of returns for 11-day moving average=-156.10%

63 | P a g e

OP/CARRY=67

SL/NONP=36

7-DAY RETURN CALCUALTION CHART

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.15

-0.1

-0.05

0

0.05

0.1

7-Day returns

7-Day returns

Total percentage of returns for 7-day moving average= -112.02%

OP/CARRY=53

SL/NONP=54

5-DAY RETURN CALCUALTION CHART

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

5-Day returns

5-Day returns

64 | P a g e

Total percentage of returns for 5-day moving average= -79.12%

OP/CARRY=40

SL/NONP=69

3-DAY RETURN CALCUALTION CHART

12/30

/1899

7/2/19

05

1/2/19

11

7/2/19

16

1/2/19

22

7/2/19

27

1/2/19

33

7/2/19

38

1/2/19

44

7/2/19

49

1/2/19

55

7/2/19

60

1/2/19

66

7/2/19

71

1/2/19

77

7/2/19

82

1/2/19

88

7/2/19

93

1/2/19

99

7/2/20

04

1/2/20

10

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

3-Day returns

3-Day returns

Total percentage of returns for 3-day moving average=-33.10%

OP/CARRY=16

SL/NONP=95

65 | P a g e

12.5 HDFC BANK

MOVING AVERAGE CALCULATIONS

The following is the daily chart of HDFC BANK starting from 01 January 2011 to 2st

week July 2013. The price has decreased from Rupee value 2390.5 to 667.75. In a time span

from first week of Jan 2011 to 2nd week of July 2011 of nearly 7 months price has been

decreased by 75% which is nearly 2013.75 rupee value. 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. A weak trend is prevailing now as a strong trend is

indicated by ADX in the chart. There is a downward trend. The price broke the support line with

significant value. The price moved downward. The market moved lower. If an investor would

have invested in this period there would have got a great loss.

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 long

positions. The downward arrow in the chart signals selling when the distribution exceeds

accumulation reflecting the bears being more active than the bulls. The trend is still in weak

positions around 667.75 points. The price failed to break its resistance level. It tried to reach its

previous high but falls short and the bearish forces made the price to move down. The price

moved sideways making most of investor to stay away from investing into it. There are only few

long positions revert back to reach the previous high but on a due to sudden spurt of event or

news the market opened next week with extreme selling and the bearish forces made price fall

from 2519.7 to 505.95 . Here not only the moving averages but also the returns got changed by

much percentage. The change in the value of returns on the day of July 2011 is very high around

80%. There were couple of trading opportunities available reflected in the chart indicated by

Stochastic and RSI on the basis of oversold overbought indication.

66 | P a g e

14-DAY MOVING AVERAGE

3-Jan

-11

16-Fe

b-11

1-Ap

r-11

15-M

ay-11

28-Ju

n-11

11-Aug-11

24-Se

p-11

7-No

v-11

21-Dec-11

3-Feb-12

18-M

ar-12

1-May-12

14-Ju

n-12

28-Ju

l-12

10-Se

p-12

24-Oct-12

7-Dec-1

2

20-Jan-13

5-Mar-13

18-Apr-13

1-Jun-13

0

500

1000

1500

2000

2500

3000

0

500

1000

1500

2000

2500

3000

14 DMA7CLOSE PRICE

3-Jan-11

16-Feb-11

1-Ap

r-11

15-M

ay-11

28-Ju

n-11

11-Aug-11

24-Sep-11

7-No

v-11

21-Dec-11

3-Feb-12

18-M

ar-12

1-May-12

14-Ju

n-12

28-Ju

l-12

10-Sep-12

24-Oct-12

7-Dec-1

2

20-Jan-13

5-Mar-13

18-Apr-13

1-Jun-13

-500

0

500

1000

1500

2000

2500

3000

% Ret in Positive7CLOSE PRICE

67 | P a g e

RETURN CALCULATIONS

14-DAY RETURN CALCULATIONS

3-Jan-11

16-Feb-11

1-Ap

r-11

15-M

ay-11

28-Ju

n-11

11-Aug-11

24-Sep-11

7-No

v-11

21-Dec-11

3-Feb-12

18-M

ar-12

1-May-12

14-Ju

n-12

28-Ju

l-12

10-Sep-12

24-Oct-12

7-Dec-12

20-Jan-13

5-Mar-13

18-Apr-13

1-Jun-13-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

14-day % Return

14-Day % Return 

Total return percentage for 14-day moving average: 194.46%

Op/carry: 425

Sl/nonp: 189

11-DAY RETURN CALCULATIONS

3-Jan-11

17-Feb-11

3-Ap

r-11

18-M

ay-11

2-Jul-11

16-Aug-11

30-Sep-11

14-Nov-11

29-Dec-11

12-Feb-12

28-M

ar-12

12-M

ay-12

26-Ju

n-12

10-Aug-12

24-Sep-12

8-No

v-12

23-Dec-12

6-Feb-13

23-M

ar-13

7-May-13

21-Ju

n-13-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

11-day % Return

11-Day % Return 

Total return percentage for 11-day moving average: 195.49%

68 | P a g e

Op/carry: 385

Sl/nonp: 232

7-DAY RETURN CALCULATIONS

3-Jan-11

15-Feb-11

30-M

ar-11

12-M

ay-11

24-Ju

n-11

6-Au

g-11

18-Sep-11

31-Oct-11

13-Dec-11

25-Jan-12

8-Mar-12

20-Apr-12

2-Jun-12

15-Ju

l-12

27-Aug-12

9-Oct-1

2

21-Nov-12

3-Jan-13

15-Feb-13

30-M

ar-13

12-M

ay-13

24-Ju

n-13

-4

-3

-2

-1

0

1

2

7-Day % Return

7-Day % Return 

Total return percentage for 7-day moving average: -1533.67%

Op/carry: 306

Sl/nonp: 316

5-DAY RETURN CALCULATIONS

3-Jan-11

16-Feb-11

1-Ap

r-11

15-M

ay-11

28-Ju

n-11

11-Aug-11

24-Sep-11

7-No

v-11

21-Dec-11

3-Feb-12

18-M

ar-12

1-May-12

14-Ju

n-12

28-Ju

l-12

10-Sep-12

24-Oct-12

7-Dec-1

2

20-Jan-13

5-Mar-13

18-Apr-13

1-Jun-13

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

5-day % Return

5-Day % Return 

Total return percentage for 5-day moving average: 56.56%

69 | P a g e

Op/carry: 219

Sl/nonp: 405

3-DAY RETURN CALCULATIONS

3-Jan-11

16-Feb-11

1-Ap

r-11

15-M

ay-11

28-Ju

n-11

11-Aug-11

24-Sep-11

7-No

v-11

21-Dec-11

3-Feb-12

18-M

ar-12

1-May-12

14-Ju

n-12

28-Ju

l-12

10-Sep-12

24-Oct-12

7-Dec-1

2

20-Jan-13

5-Mar-13

18-Apr-13

1-Jun-13

-1.5

-1

-0.5

0

0.5

1

3-day % Return

3-Day % Return 

Total return percentage for 11-day moving average: -30.41%

Op/carry: 88

Sl/nonp: 537

70 | P a g e

12.6 DR REDDY’S

MOVING AVERAGE

The following is the weekly chart of DR.REDDY’S starting from last week of Jan 2011

till 1st week of july 2013. The price has increased from Rupee value 1670.5 to 2,238.85. In a time

span of nearly more than three years price increased by rupee value 568.35. The price has gone

through various trends in this time span. This stock has been very impressive and been a good

investment proposition. With initial weak trend as reflected by ADX in the chart the market

moved upways. From the 1st week of april 2013, the trend strengthened as reflected by ADX in

the chart. The previous resistance became the new support. The market gained momentum and

the trend strengthen. The uptrend is still continuing till 2nd week of july 2013. Long positions

should have been closed if price trades below two period low. This may have also be an

opportunity to go short, if chart patterns support a short sell. The price consolidated and the

market moved sideways. The price has not changed much from the starting day of January 2011.

The change in price variations is of small amount and there is no much longer long positions.

Not only moving averages there is a change of returns which look good only for 14-day moving

averages compared to other moving averages. The market then began to move sideways with

some trading opportunities available on the basis of oversold overbought indicator like

Stochastic and RSI.

14-MVA

14 day moving average is calculated by taking the closing values of first day and averaging it

with 14

1/3/2011

2/16/2011

4/1/2011

5/15/2011

6/28/2011

8/11/2011

9/24/2011

11/7/2011

12/21/2011

2/3/2012

3/18/2012

5/1/2012

6/14/2012

7/28/2012

9/10/2012

10/24/2012

12/7/2012

1/20/2013

3/5/2013

4/18/2013

6/1/2013

0

500

1000

1500

2000

2500

0

500

1000

1500

2000

2500

14-MVA

14 DMACLOSE PRICE

71 | P a g e

1/3/2011

2/5/2011

3/10/2011

4/12/2011

5/15/2011

6/17/2011

7/20/2011

8/22/2011

9/24/2011

10/27/2011

11/29/2011

1/1/2012

2/3/2012

3/7/2012

4/9/2012

5/12/2012

6/14/2012

7/17/2012

8/19/2012

9/21/2012

10/24/2012

11/26/2012

12/29/2012

1/31/2013

3/5/2013

4/7/2013

5/10/2013

6/12/2013

0

100

200

300

400

500

600

700

72 | P a g e

RETURN CALCULATIONS

14-DAY RETURN CALCUALTION CHART

1/3/2011

2/18/2011

4/5/2011

5/21/2011

7/6/2011

8/21/2011

10/6/2011

11/21/2011

1/6/2012

2/21/2012

4/7/2012

5/23/2012

7/8/2012

8/23/2012

10/8/2012

11/23/2012

1/8/2013

2/23/2013

4/10/2013

5/26/2013

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

14-Day % Return

11-Day % Return 

Total percentage of returns for 14-day moving average= 82.97%

OP/CARRY=392

SL/NONP=222

11-DAY RETURN CALCUALTION CHART

12/30/1899

9/2/1905

5/2/1911

1/2/1917

9/2/1922

5/2/1928

1/2/1934

9/2/1939

5/2/1945

1/2/1951

9/2/1956

5/2/1962

1/2/1968

9/2/1973

5/2/1979

1/2/1985

9/2/1990

5/2/1996

1/2/2002

9/2/2007

5/2/2013

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

11-Day % Return

11-Day % Return 

73 | P a g e

Total percentage of returns for 11-day moving average= 75.12%

OP/CARRY=359

SL/NONP=258

7-DAY RETURN CALCUALTION CHART

12/30/1899

9/2/1905

5/2/1911

1/2/1917

9/2/1922

5/2/1928

1/2/1934

9/2/1939

5/2/1945

1/2/1951

9/2/1956

5/2/1962

1/2/1968

9/2/1973

5/2/1979

1/2/1985

9/2/1990

5/2/1996

1/2/2002

9/2/2007

5/2/2013

-0.1

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

7-Day % Return

7-Day % Return 

Total percentage of returns for 7-day moving average= -384.40%

OP/CARRY=187

SL/NONP=437

5-DAY RETURN CALCUALTION CHART

12/30/1899

9/2/1905

5/2/1911

1/2/1917

9/2/1922

5/2/1928

1/2/1934

9/2/1939

5/2/1945

1/2/1951

9/2/1956

5/2/1962

1/2/1968

9/2/1973

5/2/1979

1/2/1985

9/2/1990

5/2/1996

1/2/2002

9/2/2007

5/2/2013

-0.04

-0.03

-0.02

-0.01

0

0.01

0.02

0.03

0.04

0.05

0.06

5-Day % Return

5-Day % Return 

Total percentage of returns for 5-day moving average= 36.81%

OP/CARRY=187

74 | P a g e

SL/NONP=437

3-DAY RETURN CALCUALTION CHART

12/30/1899

9/2/1905

5/2/1911

1/2/1917

9/2/1922

5/2/1928

1/2/1934

9/2/1939

5/2/1945

1/2/1951

9/2/1956

5/2/1962

1/2/1968

9/2/1973

5/2/1979

1/2/1985

9/2/1990

5/2/1996

1/2/2002

9/2/2007

5/2/2013

-0.04

-0.03

-0.02

-0.01

0

0.01

0.02

0.03

0.04

0.05

3-Day % Return

3-Day % Return 

Total percentage of returns for 3-day moving average= 33.89%

OP/CARRY=72

SL/NONP=553

75 | P a g e

12.7 COAL INDIA

MOVING AVERAGES

14-DAY MVA

12/30

/1899

5/2/19

05

9/2/19

10

1/2/19

16

5/2/19

21

9/2/19

26

1/2/19

32

5/2/19

37

9/2/19

42

1/2/19

48

5/2/19

53

9/2/19

58

1/2/19

64

5/2/19

69

9/2/19

74

1/2/19

80

5/2/19

85

9/2/19

90

1/2/19

96

5/2/20

01

9/2/20

06

1/2/20

120

50

100

150

200

250

300

350

400

450

0

50

100

150

200

250

300

350

400

450

14-DMA

14 DMAClose

12/31

/2010

2/8/20

11

3/19/2

011

4/27/2

011

6/5/20

11

7/14/2

011

8/22/2

011

9/30/2

011

11/8/

2011

12/17

/2011

1/25/2

012

3/4/20

12

4/12/2

012

5/21/2

012

6/29/2

012

8/7/20

12

9/15/2

012

10/24

/2012

12/2/

2012

1/10/2

013

2/18/2

013

3/29/2

013

5/7/20

13

6/15/2

013

0

100

200

300

400

500

600

700

Close

RETURN CALCULATIONS76 | P a g e

14-DAY RETURN

12/30

/1899

9/2/19

05

5/2/19

11

1/2/19

17

9/2/19

22

5/2/19

28

1/2/19

34

9/2/19

39

5/2/19

45

1/2/19

51

9/2/19

56

5/2/19

62

1/2/19

68

9/2/19

73

5/2/19

79

1/2/19

85

9/2/19

90

5/2/19

96

1/2/20

02

9/2/20

07

5/2/20

13

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

14-day % Return

% Ret in Positive

Total percentage of returns for 14-day moving average= 108.08%

OP/CARRY=399

SL/NONP=216

11-DAY RETURN

12/31

/2010

2/14/2

011

3/31/2

011

5/15/2

011

6/29/2

011

8/13/2

011

9/27/2

011

11/11

/2011

12/26

/2011

2/9/20

12

3/25/2

012

5/9/20

12

6/23/2

012

8/7/20

12

9/21/2

012

11/5/

2012

12/20

/2012

2/3/20

13

3/20/2

013

5/4/20

13

6/18/2

013

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

11-day % Return

% Ret in Positive

Total percentage of returns for 11-day moving average= 108.37%

77 | P a g e

OP/CARRY=373

SL/NONP=245

7-DAY RETURN

12/31

/2010

2/14/2

011

3/31/2

011

5/15/2

011

6/29/2

011

8/13/2

011

9/27/2

011

11/11

/2011

12/26

/2011

2/9/20

12

3/25/2

012

5/9/20

12

6/23/2

012

8/7/20

12

9/21/2

012

11/5/

2012

12/20

/2012

2/3/20

13

3/20/2

013

5/4/20

13

6/18/2

013

-0.15

-0.1

-0.05

0

0.05

0.1

7-day % Return

% Ret in Positive

Total percentage of returns for 7-day moving average= -513.95%

OP/CARRY=308

SL/NONP=315

5-DAY RETURN

78 | P a g e

12/30/1899

9/2/1905

5/2/1911

1/2/1917

9/2/1922

5/2/1928

1/2/1934

9/2/1939

5/2/1945

1/2/1951

9/2/1956

5/2/1962

1/2/1968

9/2/1973

5/2/1979

1/2/1985

9/2/1990

5/2/1996

1/2/2002

9/2/2007

5/2/2013

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

5-day % Return

% Ret in Positive

Total percentage of returns for 5-day moving average= 75.79%

OP/CARRY=235

SL/NONP=390

3-DAY RETURN

12/31/2010

2/14/2011

3/31/2011

5/15/2011

6/29/2011

8/13/2011

9/27/2011

11/11/2011

12/26/2011

2/9/2012

3/25/2012

5/9/2012

6/23/2012

8/7/2012

9/21/2012

11/5/2012

12/20/2012

2/3/2013

3/20/2013

5/4/2013

6/18/2013

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

3-day % Return

% Ret in Positive

Total percentage of returns for 11-day moving average= 34.52%

OP/CARRY=92

SL/NONP=534

CHAPTER-13

OBSERVATIONS79 | P a g e

Stocks

Trend

Return (%)

Conditions

Long Shor

t

Open Stop

Loss

CNX nifty

Index

14-day 46 54 137.75 479 135

11-day 47 56 120.65 373 244

7-day 48 59 -505.19 292 330

5-day 51 58 93.02 291 332

3-day 47 64 30.82 71 554

ITC

14-day 42 57 109.11 414 199

11-day 43 60 108.03 386 231

7-day 44 63 -460.21 307 314

5-day 48 61 -283.06 224 398

3-day 48 63 -4.66 58 566

ONGC

14-day 50 50 134.72 375 239

11-day 52 51 151.43 362 255

7-day 54 53 -510.75 301 321

5-day 54 55 134.72 375 239

3-day 58 53 37.14 71 554

Coal India

14-day 70 30 108.08 399 216

11-day 69 34 108.37 373 245

7-day 65 42 -513.95 308 315

5-day 60 49 75.79 235 390

3-day 64 47 34.92 92 534

Stocks

Trend

Return

Conditions

Open Stop

Buy Sell80 | P a g e

Loss

Cipla

14-day 43 57 135.38 412 202

11-day 47 56 120.65 373 244

7-day 44 63 -505.19 292 330

5-day 46 63 135.38 412 202

3-day 47 64 30.82 71 554

HDFC Bank

14-day 65 35 194.46 425 189

11-day 64 39 195.49 385 232

7-day 64 43 -1533.67 306 316

5-day 65 44 56.56 219 405

3-day 62 49 -30.41 88 537

Dr Reddy’s

14-day 43 57 82.97 392 222

11-day 47 56 75.12 359 258

7-day 44 63 -384.40 271 351

5-day 46 63 36.81 187 437

3-day 47 64 33.89 72 553

81 | P a g e

CHAPTER-14

CONCLUSIONS

We can observe from above inferences that technical analysis can have both long and

short call which is used to determine the conditions like when to have a buy and sell in the

investments. Technical analysis holds a lower duration of time but risk is higher in technical

analysis compared to fundamental analysis. Return calculations are calculated for all the moving

averages like 3-day, 5-day, 7-day, 11-day, and 14-day. Technical analysis aiming for absolute

returns compared to fundamental analysis. Fundamental analysis holds good some time to

invest in stocks compared to technical analysis. So it’s better to have a healthy mix of both

technical analysis and fundamental analysis. When we observe Risk Reward Ratio for both nifty

index as well as individual stocks it changes based on different parameters. For Nifty risk

reward ratio changes less when compared to other individual stocks. If an investment is made on

nifty index it can have an opportunity to make lot more money or loose lot more money.

Considering an example like Ranbaxy and OAKART where the stocks have a great

volatility that 30% of their stock prices have been reduced in US by Food and Drug Association.

Nifty volatility is seen for quantity easing 3 will be reversed results in lesser liquidity impact on

all emerging markets hence market globally corrected. Recent times China overnight went upto

27% lack of liquidity. Hence, globally corrected china in highly hitted, where there is no money

in ATM. This results in an impact on stocks. If these things happen stock may go down by 90%.

From the observations of both the return as well as moving average calculations we can

observe that 14-day daily moving average works better compared to other moving averages

because, return values are more positive for 14-day. Carry and stop loss conditions are made by

comparing moving average with high and low price values of that particular day.

82 | P a g e

CHAPTER-15

BIBLIOGRAPHY

• Barber, Brad M., Terrance Odean (2000). “Trading is hazardous to your wealth: The

common stock investment performance of individual investors”. Journal of Finance, 55,

p 773- 806.

• Bessembinder, H., K. Chan (1995). “The profitability of technical trading rules in the

Asian stock markets”. Pacific- Basin Finance Journal, 3, p 257-284.

• Brock, W., J. Lakonishok, B. LeBaron (1992). “Simple technical trading rules and the

stochastic properties of stock returns”. Journal of Finance, 47, p 1731-1764.

• Neely, C. J., Weller, P. (1998). “Technical training rules in the EMS”. Journal of

International Money and Finance 18, p 429-458.

• Osler, C.L. (2000).”Support for Resistance: Technical Analysis and Intraday Exchange

Rates,” Federal Reserve Bank of New York Economic Policy Review 6 , p 53-65.A

• http://www.nseindia.com/live_market/dynaContent/live_watch/get_quote/GetQuote.jsp?

symbol=CIPLA&illiquid=0

• http://www.moneycontrol.com/technicals/movingavg/viewsecind.php

• http://www.tradersedgeindia.com/swing_trading_picks_newsletter.html

• http://academia.edu/1650768/

TECHNICAL_ANALYSIS_OF_EQUITY_SHARES_PROJECT_REPORT

• http://www.precisiontradingsystems.com/what%20is%20a%20moving_average.html.

83 | P a g e