EXECUTIVE SUMMARY

The share prices in the stock market fluctuate on a daily basis due to continuous buying and
selling. Stock prices move in trends and cycles and are never stable. An investor in the stock
market is interested to get a good return on his investment and hence purchases securities at a
low price and sells them at a high price. However, to gain successfully return on investments
in a volatile stock market is not an easy job to do. An investor should adequate knowledge
about the working of the stock and securities market and the kind of risks involved in it. Well
defined information about securities being traded in the markets, its fluctuation in prices
provides the investors with basic understanding of the markets and helps them in their
investments, i.e. investing in the right type of securities at the right time. Hence, this is where
technical analysis comes into picture. Technical analysts consider a wide range of factors
most importantly price movements and volume to indicate the future trend of the market and
the best buying and selling opportunities of stocks.
The purpose of this study is to analyze five stocks belonging to various sectors trading
in the Bombay Stock Exchange (BSE) through technical analysis. The market movements are
analyzed using tools such as Exponential Moving Average (EMA), Relative Strength Index
(RSI), Moving Average Convergence/Divergence (MACD) and Rate of Change (ROC).
The study aims at extracting the price movements of selected company stocks over a
period of one year. These prices are observed and analyzed using the above mentioned
indicators and on the basis of which conclusions are drawn on the trend of price movements
and whether to buy or sell the stock in the near future.

CHAPTER - 1

INTRODUCTION
The bank interest rates have been increasing steadily but we cannot ignore that
Inflation rate has also been increasing. The impact of inflation is that the value of money is
decreasing and cost of living is increasing. For example at an inflation rate of 15% the
monthly expenses of Rs. 30000 would increase to Rs. 38288 after 5 years, Rs. 62,368 after 15
years and Rs. 79,599 after 20 years. In the similar way the value of Rs. 100000 at an inflation
rate of 15% would reduce to to Rs. 78,353 after 5 years, Rs. 48,102 after 15 years and Rs.
37,689 after 20 years. This throws light on the fact that just having made savings in banks is
not a financially prudent decision. So, the investors are now searching for proper investment
avenues which possess both safety of principal and give good return on investments.
In 2014, the Indian capital markets were one of the best performing markets globally.
The BSE Sensex rose a whopping 30% this year, its highest gain in five years. Mid- and
small-cap indices have performed much better, with 50% and 70% gains, respectively. Going
ahead, India is expected to continue the good show in 2015. Here comes the role fundamental
and technical analysis of stocks which facilitate investors make better decisions. This study
particularly concentrates on technical analysis of stocks and assists the readers in
understanding the use of charts and technical indicators in short term stock market trading.
The stock market indicators help the investor to identify price behaviour and major
market turning points. Any investor must definitely consider technical analysis as a tool
whether to buy or sell a stock at a particular point of time. The objective of the project is to
make a study on the technical analysis on selected stocks across various sectors and interpret
on whether to buy or sell them by using techniques.

NEED FOR THE STUDY

To help comprehend the behaviour of share price movements in the past using charts.
To understand the use of technical indicators in making buying or selling decisions of
stocks.
To predict future prices of stocks in the near short term and be able to choose
appropriate stop loss and target prices.

OBJECTIVES OF THE STUDY

 To study the significance of technical analysis in Indian capital market.

To analyze the performance of select companies using advanced interactive charts and
to predict the future trends in the share prices.
Technical analysis on selected stocks by means of certain technical indicators and
interpret on whether to buy or sell.
To assist the investors in making investment decisions regarding to buy or sell the
selected stocks.

SCOPE OF THE STUDY

This study mainly focuses on investment decisions by predicting futures stock price
movements through the use of Technical analysis i.e. by means of advanced interactive charts
and certain well known technical indicators. This study is based on five stocks belonging to
various different sectors listed in Bombay Stock Exchange.

METHODOLOGY ADOPTED
The major Tools and Techniques used in this study are:

a. Candlestick Chart
Japanese candlestick charts form the basis of the oldest form of technical analysis.
Candlestick charts provide the information as namely open price. High price, low
price and Close price. However, Candlestick charting provide a visual indication of
market psychology, market sentiment and potential weakness making it a rather
valuable trading tool.

b. Exponential moving average

Exponential moving average (EMA) is calculated by using the following formula:
EMA = (Current closing price Previous EMA) * Factor + Previous EMA

Where
Factor = 2/ (n+1)
and n = number of days from which the average is to be calculated.
The moving averages are plotted on the price charts. The curved line joining these
moving averages represent the trend line. When the price of the share intersects and
moves above or below this trendline, it may be taken as the first sign of trend reversal.
c. Rate of Change Indicator (ROC)
ROC helps to indentify overbought and oversold conditions and also the possibility of
trend reversals. It measures the rate of change of the current price as compared to
price a certain number of days or weeks back.
ROC = (Current price / Price n period ago) 1

d. Relative strength index (RSI)

This is a powerful indicator that signals buying and selling opportunities ahead of the
market.
RSI = 100 [100 / (1+RS)]
Where
RS = Average gain per day / Average loss per day

e. Moving Average Convergence and Divergence (MACD)

The MACD Line is the difference between 12-day Exponential Moving Average
(EMA) and the 26-day EMA. Closing prices of the share are used for these moving
averages. A 9-day EMA performs as the signal line and recognizes turns in the trend.
The MACD Histogram represents the difference between MACD and its 9-day EMA,
the Signal line. When the MACD Line is above the signal line, the histogram is
positive and when the MACD Line is below the signal line, the histogram is negative.

LITERATURE REVIEW
R Chitra 2011 In the study undertaken by Mrs. R Chitra at GRG School of
Management Studies, Peelamedu, Coimbatore conducted technical analysis on selected
stocks of Energy sector and interpreted whether to buy or sell those stocks. She carried out
the analysis using Beta, Relative Strength Index and Simple moving average. To find out the
risk involved with the scrip on par with market Beta was used. To analyze price movements

Relative Strength Index was used. To understand trends and patterns in share price
movements Simple Moving Average was used. She concluded that technical analysis gives
investor a better understanding of the stocks and also gives them right direction to go on
further to buy or sell the stocks .Therefore, the small vvginvestors and traders should not
blindly make an investment rather they should analyze using the various tools to check if the
scrip is technically strong.
Ranjit Singh, Amit Kumar 2011 Authors Ranjit Singh and Amit Kumar from GGS
College of Modern Technology, Kharar, Mohali, Punjab, India. and College of Information
Science and Technology, Nanjing Forestry University, Nanjing, Jiangsu, China respectively
presented a research report on the topic Intelligent Stock Trading Technique using Technical
Analysis. The paper presents intelligent trading setup which can be used by any investor to
pick stock for buying at right time to get handsome profits. The study is conducted on
parameters such as charts, trend lines, moving averages and other technical indicators. The
authors introduce a setup which is a combination of price pattern and technical indicators
together, that gives the right conditions for predicting with reasonable confidence the future
direction of the stocks price
A. Jayakumar, K. Sumathi 2014 This paper presents a significant technical analysis
of Union bank which helps to understand the price behaviour of the shares. It also describes
about the use of technical analysis for investors while buying and selling decisions with the
technical analysis done for the stocks of Union Bank. It helps investors to identify the current
trend and risk. For the purpose of analysis weekly average are used for the analysis to know if
the stock is technically strong or not.

LIMITATIONS OF THE STUDY

The analysis is based on five selected company stocks.
For carrying out analysis limited parameters were considered. These parameters may
not be enough to predict the future price movements.
Technical analysis only for three year is undertaken; from this data we cannot predict
prices accurately.
This study can be used only for short term decision making.

CHAPTER - 2

COMPANY PROFILE
Introduction
Anand Rathi, founded in the year 1994, is one among the prime investment banks in
India operating from 350 different locations. The firm has shown a notable presence in
various other international locations including Hongkong, Dubai and London. Under the
active leadership of Mr. Anand Rathi and Mr. Pradeep Gupta, the firm has grown to a strength
of 2500 professional span over all the locations. The principal focus has been to provide
financial services and wealth management solutions for HNIs, conglomerates and
organizations.
A client centric approach with an objective of providing long term value addition to
the customers while retaining excellent professionalism and ethics has enabled the firm to

make a distinct remark in this field. The objectives and the virtues to attain them have been
widely appreciated and acknowledged with The Best Domestic Private Bank in India by
Asiamoney in their Fifth Annual Private Banking Poll 2009. The company has come out as a
winner across all key segments in Asiamoneys largest survey of high net worth individuals in
India.

Anand Rathi Vision:

To be a shining example as a leader in innovation, and the
first choice for clients & employees.

Service Offerings
Equity Research:
AnandRathis exceptionally rated 25 member equity research team covers almost 200
companies across 15 sub-sectors. They possess a unique understanding of sectors and
companies, ensuing in profitable investment opportunities.

Investment Banking
AnandRathis 30 member sector focused investments banking team works entirely with small
and mid-sized companies, offering high quality advice on capital raising, M&As and
restructuring.

Equity trading and distribution

AnandRathis encompasses a rich 16 year history in equity trading and distribution making it
exclusively placed to offer the complete gamut of capital market services to small and midsized companies.

Fund based activities:

Anand Rathi Global Finance Limited (ARGFL) is a wholly owned subsidiary of

Anand Rathi Financial Services Ltd established on 3rd February, 1982. The firm is registered
with Reserve Bank of India (RBI) as non-banking finance company (NBFC) and classified as
Loan company and grouped as 'Systemically important non-deposit taking non-banking
financial company'(NBFC - ND SI). The Company is affianced in the business of financial
advisory, corporate consultancy and fund based activities. The firm handles various
consultancy projects for reputed companies both in India and abroad. ARGFL has striving
plans to expand its fund based activities to provide value added products / services to the
large client base of the Group.

Products offered
Loan against Shares
This product offers you instant liquidity. In case there is requirement of funds for
personal need or need to increase holding/ investment in listed collaterals, there is no need to
sell the securities. All that is to be done is execute a loan agreement with ARGFL. A Loan
facility up to a value determined based on existing portfolio can be given. A sanction limit
based on requirement just like overdraft facility from the bank is made available. There are
nil minimum commitment charges, hidden cost and early payment charges other than interest
on your actual utilization of limits and sanction limit is flexible based on movement of
portfolio and its valuation.

Loan against demat

This product caters to the financial needs of those involved in the commodities
business. A credit of up to Rs. 10 Crs is offered for agricultural functions with agricultural
commodities as securities maintained in demat form.

IPO Finance
This product is a loan facility offered for applying in Primary Market Issues (IPOs
and FPOs). With the help of this product, investors can apply for IPOs. The investors can
invest only a margin amount specified separately for each IPO.

ESOP funding

This product is a loan facility presented against shares which have been approved /
allotted to employees by their employer. This facility enables employees to exercise their
ESOP options by providing a loan against ESOP Grants.

Customized Financing
This facility helps create customized and secured financing products catering to your
requirements. The Collateral can be presented in the form of Mutual Fund units, Exchange
Traded Funds (ETF), Fixed Maturity Plans (FMPs), Saving Bonds and other securities.

Anand Rathi - At a Glance

Anand Rathi offers institutional and retail brokerage of equities, commodities,

currency, derivatives, online trading, investment banking, depository services, IPOs,
mutual funds, fixed deposits, insurance broking, portfolio & wealth management,

margin funding & research.

Anand Rathis retails footprint extends across over 500+ location across India.
We manage more than 3.5 lakh client accounts across the country, with daily

turnover in excess of INR 15 billon.

Anand Rathi is a member of all the leading Equity, Commodities, Derivatives,
Currency

& Spot Commodity Exchanges of India

Highly dedicated workforce of more than 3000 employees throughout India and in
International Offices.

Journey of Anand Rathi Group

1994
Started activities in Consulting & Institutional Equity Sales with 16 Employees.

1995
Set up a Research Desk empanelled with major institutional investors.

1997
Introduced Investment Banking Business and Retail Brokerage Services.

2001

Initiated Wealth Management Services-WMS.

2002
Retail Business recommences with Ownership Model.

2003

Started Insurance Broking.

Wealth Management Assets crossed 1500Crs& WMS services were launched
at Dubai.

2004
Commodities Brokerage & Real estate Services were introduced.

2005
Retail Branch Network Expands across 200 Locations.

2006

ARG acquires membership of Dubai Gold & Commodity Exchange-DGCX.

Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia

Money.
Ranked 6th in FY2006 for All India Broker Performance in equity distribution
in the HNI Category.

2007
Citigroup Venture Capital International picks up 19.9% equity stake.

2009-2011:

Ranked as No. 1 amongst South Asia's wealth managers for the ultra-rich

by Asia Money Poll.

ARG Asset Under Management is 5500Crs.
Has strengthened its manpower with 6500+ Employees.

Top Management

Anand Rathi, Founder & Chairman

Mr. Rathi, a gold medallist chartered accountant, has a vast experience spanning over 40
years. Mr. Rathi has presided ICAI and BSE as a valuable member, eventually rising to the
position of president of BSE in 1999. He pioneered the expansion of the online trading
system BOLT. He also set up the Trade Guarantee Fund and played a vital role in setting up
the Central Depository Services Ltd (CDSL).

Pradeep Gupta, Co-founder & Vice chairman

Mr. Gupta has a vast industrial experience in managing and operating enterprises with
different business interests. He has an experience of over two decades in the field of financial
markets and has pioneered the Institutional Broking and Investment Services arm of the
group. He has been the source of motivation behind the companys dynamic growth. With his
business acumen, the AnandRathi Group has setup franchisee business and branch network
across India.

Amit Rathi, Managing Director

Mr. Amit Rathi is a Chartered Accountant and holds an MBA graduate degree from the New
York University - Leonard N. Stern School of Business. He has played a key role in setting
up the Private Wealth Management (PWM) and Investment Banking (IB) businesses of the
Anand Rathi group, and instituting them in the global markets. By the virtue of his leadership
skills and inspiration the group has been able to flag consistent growth in this field.

Corporate structure

Unique Features of Anand Rathi Group

Is a One Stop Financial Shop for its Clients giving a wide Range of Financial Services
under 1 roof

17 Years of Experience in such a Volatile Market

Having one of the oldest Research Desk

A 25-member research team, comprising 15 analysts (including sector specialists,

macro economist, strategist) and 10 associates.

The fundamental research team covers ~100 stocks and tracks a further 150.

Our Vision of being the first Choice for our clients

Total AUM has grown up to 5500crs

Our networking across the country making ourselves easily accessible to our Clients

Availability of a proper Financial Planning without any additional cost

Achievements of Anand Rathi Group

Ranked No.1 Domestic Banker 2009 & 2010 (Wealth Management Company) by
Asia Money Poll.

Ms. Priti Gupta got Women Leader of the year Award" in 2010 in Financial
Category by NDTV Profit.

Mr. D. D. Sharma awarded as Best Analyst 2010 by Zee Business.

Best Contribution in Investor Education and Category Enhancement of the

Year in Bloomberg UTV Financial Leadership Awards.

Mr. Anand Rathi awarded by Zee Business for his contribution towards Indias
Capital market in January, 2010.

Private Wealth Team was awarded for generating the Highest AUM growth in 2010
for Kotak (by Mr. Uday Kotak himself)

Mr. Kishore Narne won the Zee Businesss as Best Technical AnalystCommodities