A Summer Internship Project Report on

To Study Technical Analysis With The Help Of Different Indicators & Candlestick Patterns
In Capital Market

Submitted in partial fulfillment of the requirement for the degree of

Master of Business Administration

(Affiliated to Savitribai Phule Pune University)

By
Prashant Shinde

Roll No. D2F-13

Under the guidance of

A study conducted for

Jmarathon Advisory Services Privet Limted

At

Indira School of Business Studies

Tathawade, Pune – 411033

2019-20
Acknowledgement
My sincere thanks to the Jmarathon Advisory Services Privet Ltd. for giving all the interns an
opportunity to work as a intern.

I would also like to express our heartfelt gratitude towards my company mentor Mr. MEGESH
M. for supporting us in the process of our research work and for the assistance extended from
time to time in completing the research project. I also sincerely thank my college SIP mentor
Prof. AMRITA KARNAVAT for guiding me in this report.

We, all the interns, also thank the all HR team Jmarathon Advisory Services Privet limted for
wonderful collaboration and helping us to add our knowledge about this industry.

Student Name : PRASHANT SHINDE

Roll No. / Batch : D2F-19 (2019-20)

i
Certificate from ISBS

ii
Certificate from the Company

iii
Executive Summary
EQUITY ANALYSIS is the systematic study of the performance of companies in stock market
with help of fundamental analysis and technical analysis. Equity analysis consists of fundamental
analysis & technical analysis. While decision in investment of shares should be base on actual
movement of shares price measured more in money & percentage term & nothing else. Equity is
a share in the ownership of a company. Equity represents a claim on the company's assets and
earnings. As you acquire more equity, your ownership stake in the company becomes greater.
Whether you say shares, equity, it all means the same thing. A stock is represented by a stock
certificate. This is a piece of paper that is proof of your ownership. Today its in dematerialized
form i.e. in electronic form shares have been kept safe. This is done to make the shares easier to
trade. In the past, when a person wanted to sell his or her shares, that person physically took the
certificates down to the brokerage. Now, trading with a click of the mouse or a phone call makes
life easier for everybody.

Technical analysis really just studies supply and demand in a market in an attempt to determine
what direction, or trend, will continue in the future. In other words, technical analysis attempts to
understand the emotions in the market by studying the market itself, as opposed to its
components. If you understand the benefits and limitations of technical analysis, it can give you
a new set of tools or skills that will enable you to be a better trader or investor. 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

The Technical Approach to investment is essentially a reflection of the idea that prices moves in
a trend that are determined by the changing attitude of investor's toward a variety of cconomic,
monetary, political and psychological for ces. The art of technical analysis, for it is an art, is to
identify a trend reversal at a relatively early stage and ride on that trend until the weight of the
evidence shows or proves the trend has reversed.

The present market scenario has shown us the Boom in Share Market. Even some of the research
firms showed that Share Market is the fastest growing in India. From last two years share market
is in boom until the pandemic. Now it is possible for the investors to trade from their own place.
As compare to last two years there is a growth in the number of share brokers and market
analysts. Media is playing an important role in these regards. Now the common man is also
thinking of some investment in share market. Too many investors invest their money for the
short span, the intention is speculative.

iv
Index / Table of Contents

Sr. Contents Pg. No.

No.

1 Introduction 1

2 Sector Analysis 3

3 Company Analysis 5

4 News Analysis (w.r.t selected sector & 8

company)

5 Review of Literature/ Theoretical 10

Background

6 Objectives 16

7 Research Methodology 18

8 Data Analysis/ Data visualization, 20

Results and Interpretation

9 Conclusions / Learnings from the 47

Project

10 Limitations of the project 49

11 Recommendations 51

v
12 -Bibliography 53

-Appendices

vi
Chapter 1: Introduction

1
Introduction
In todays world, more and more individuals are getting aware of the concept of stock market and
its potential of employement generation and as a investment vehicle. But due to lack of
knowledge and limited resources these individuals are setting a foot back. This project will help
them to understand stock market and how it can be analysed with the help of Technical analysis.

Technical analysis is the study of uw past and present price action in a given financial market
may help determine its future direction. At the same time, however, technical analysis should not
be considered a crystal ball. Rather, the skills of a technical analyst are used primarily to help
determine the highest-probability reactions to past and current price mw lenient, as well as likely
future price movement. Therefore.technical analysis is less about actually predicting the future
and more about finding high-probability potential opportunities to trade in the financial markets.

Technical analysis is a broad collection of methods and strategies which attempt to forecast
future prices on the basis of past prices of other observable market statistics, such as volume or
open interest Different analysts/traders may choose to use different types of charts at different
times, whether it is a line chart, a bar chart, a candlestick chart, a point- and-figure chart, or any
of a number of other chart types. Technical analysis involves putting stock information like
prices, volumes and open interest on a chart and applying various patterns and indicators to it in
order to assess the future price movements. The time frame in which technical analysis is applied
may range from intraday (1-minute, 5-minutes, 10-minutes, 15-minutes, 30-minutes or hourly),
daily, weekly or monthly price data to many year

Technical analysis really just studies supply and demand in a market in an attempt to determine
what direction, or trend, will continue in the future. In other words, technical analysis attempts to
understand the emotions in the market by studying the market itself opposed to its components.
If you understand the benefits and limitations of technical analysis, it can give you a new set of
tools or skills that will enable you to be a better trader or investor.

In this project, we will study Indian stock market with the help of different technical analysis
tools and the candle stick patterns and try to understand and predict what future patterns a
particular stock will form analyse how the stocks behave with the help of a particular indicators.
And then we will interprete that findings briefly in this project.

2
Chapter 2: Sector Analysis

3
Financial Services industry Analysis-
The country’s financial services sector consists of capital markets, insurance sector and non-
banking financial companies (NBFCs). India’s gross national savings (GDS) as a percentage of
Gross Domestic Product (GDP) stood at 30.50 per cent in 2019. In 2019, US$ 2.5 billion was
raised across 17 initial public offerings (IPOs). The number of Ultra High Net Worth Individuals
(UHNWI) are estimated to increase to 10,354 in 2024 from 5,986 in 2019.

The Government of India has taken various steps to deepen reforms in the capital market,
including simplification of the IPO process, which allows qualified foreign investors (QFIs) to
access the Indian bond market. In 2019, investment in Indian equities by foreign portfolio
investors (FPIs) touched five-year high of Rs 101,122 crore (US$ 14.47 billion). Investment by
FPIs in India’s capital markets reached a net Rs 12.30 lakh crore (US$ 174.55 billion) between
FY02-21 (till June 09, 2020).

The Government has also approved 100 per cent FDI for insurance intermediaries. The insurance
sector could be opened to 74 per cent FDI from the existing 49 per cent.

India has scored a perfect 10 in protecting shareholders' rights on the back of reforms
implemented by Securities and Exchange Board of India (SEBI) in the World Bank's Ease of
Doing Business 2020 report.

The asset management industry in India is among the fastest growing in the world. In March
2019, corporate investors Assets Under Management (AUM) stood at Rs 9.55 lakh crore (US$
136.59 billion), while HNWIs and retail investors reached Rs 7.52 lakh crore (US$ 107.55
billion) and Rs 6.30 lakh crore (US$ 90.12 billion), respectively. In the Asia-Pacific region, India
is among the top five countries in terms of HNWIs. The value of alternative investment funds
rose from Rs 13,776 crore (US$ 1.97 billion) in June 2016 to Rs 74,817 crore (US$ 10.70
billion) in June 2019.

Mutual Fund industry’s AUM (asset under management) grew from Rs 10.96 trillion (US$
156.82 billion) in October 2014 to Rs 24.54 trillion (US$ 348.24 billion) in May 2020. Inflow in
India's mutual fund schemes via the Systematic Investment Plan (SIP) route reached Rs 82,453
crore (US$ 11.70 billion) in 2019. Equity mutual funds registered a net inflow of Rs 8.04 trillion
(US$ 114.06 billion) by end of December 2019.

Porter Five (5) Forces Analysis for Financial Industry

Threats of New Entrants

New entrants in Advisory Services brings innovation, new ways of doing things and put pressure
on Discover Financial Services through lower pricing strategy, reducing costs, and providing
new value propositions to the customers. Discover Financial Services has to manage all these
challenges and build effective barriers to safeguard its competitive edge.

4
How Discover Financial Services can tackle the Threats of New Entrants

• By innovating new products and services. New products not only brings new customers
to the fold but also give old customer a reason to buy Discover Financial Services
products.

• By building economies of scale so that it can lower the fixed cost per unit.

• Building capacities and spending money on research and development. New entrants are
less likely to enter a dynamic industry where the established players such as Discover
Financial Services keep defining the standards regularly. It significantly reduces the
window of extraordinary profits for the new firms thus discourage new players in the
industry.

Bargaining Power of Suppliers

All most all the companies in the Advisory Services industry buy their raw material from
numerous suppliers. Suppliers in dominant position can decrease the margins Discover Financial
Services can earn in the market. Powerful suppliers in Financial sector use their negotiating
power to extract higher prices from the firms. The overall impact of higher supplier bargaining
power is that it lowers the overall profitability of Credit Services.

How Discover Financial Services can tackle Bargaining Power of the Suppliers

• By building efficient supply chain with multiple suppliers.

• By experimenting with product designs using different methods.

• Developing dedicated suppliers whose business depends upon the firm. One of the
lessons

Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by paying the
minimum price as possible. This put pressure on Discover Financial Services profitability in the
long run. The smaller and more powerful the customer base is of Discover Financial Services the
higher the bargaining power of the customers and higher their ability to seek increasing discounts
and offers.

How Discover Financial Services can tackle the Bargaining Power of Buyers

• By building a large base of customers. This will be helpful in two ways. It will reduce the
bargaining power of the buyers plus it will provide an opportunity to the firm to
streamline its sales and production process.

5
 • By rapidly innovating new products. Customers often seek discounts and offerings on
established products so if Discover Financial Services keep on coming up with new
products then it can limit the bargaining power of buyers.

• New products will also reduce the defection of existing customers of Discover Financial
Services to its competitors.

Threats of Substitute Products or Services

When a new product or service meets a similar customer needs in different ways, industry
profitability suffers. For example services like Dropbox and Google Drive are substitute to
storage hardware drives. The threat of a substitute product or service is high if it offers a value
proposition that is uniquely different from present offerings of the industry.

How Discover Financial Services can tackle the Treat of Substitute Products / Services

• By being service oriented rather than just product oriented.

• By understanding the core need of the customer.

• By increasing the switching cost for the customers.

Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down prices
and decrease the overall profitability of the industry. Discover Financial Services operates in a
very competitive in Advisory Services industry. This competition does take toll on the overall
long term profitability of the organization.

How Discover Financial Services can tackle Intense Rivalry among the Existing
Competitors in Credit Services industry

• By building a sustainable differentiation

• By building scale so that it can compete better

• Collaborating with competitors to increase the market size rather than just competing for
small market.

Implications of Porter Five Forces on Discover Financial Services

By analyzing all the five competitive forces Discover Financial Services strategists can gain a
complete picture of what impacts the profitability of the organization in Services industry. They
can identify game changing trends early on and can swiftly respond to exploit the emerging
opportunity. By understanding the Porter Five Forces in great detail Discover Financial Services
's managers can shape those forces in their favor.

6
Chapter 3: Company Analysis

7
Jmarathon Advisory Services Privet limted Company Analysis
Jmarathon Advisory Services Private Limited is an unlisted private company. It was incorporated
on 10 September, 2018 and is located in Belgaum, Karnataka. It is classified as a private limited
company.The company has two directors - Gopal Krishna and Megesh Marappa.

Description: The company provides comprehensive financial planning, intense training, overall
wealth management, and strategic investment advisory services

Products & Services: ADVISORY SERVICES, CONSULTING, INVESTMENT GUIDANCE,

FINANCIAL SERVICES, RISK MANAGEMENT, TRAINING & EDUCATION
Category: Service Provider

The registered office of the company is at NO 960/1, DM COMPLEX, 5TH B CROSS, HRBR
LAYOUT,1ST BLOCK, KALYAN NAGAR POST, BANGALORE, Belgaum, Karnataka.

The total paid-up capital is INR 1.00 lac. The last reported AGM (Annual General Meeting) of
the company, per our records, was held on 30 December, 2019. Also, as per our records, its last
balance sheet was prepared for the period ending on 31 March, 2019.

Advisory Services

The placing of funds into the proper investment vehicles based on the investor’s future goals,
time horizon, and priorities, this also takes into account the safety of the investor as well as
liquidity and level of return, ideally proper investment planning will allow the investor for to
produce financial rewards over time..
Investor Guidance

However you want to invest, we can help

• Do it for me
• Advisor referral services
• Help me to it
• Professional portfolio management
• Do it myself Independent Investors

Financial Services

Plan and evaluate your strategy with our suite of investment research tools, which let you analyse
investment performance and market conditions to see if your next idea can help you reach your

8
goals

• Financial services
• Amplify your idea generation with third party research
• Set your goals define your strategy
• Execute your plan monitor your progress

Training & Education

We Provide a comprehensive and practical investor education for market participants would be
equity investors, and the public in general.

If knowledge is power we can help make you're a superhero.

• Decide what you want to learn.

• When do you want to learn?
• How do you want to learn?
The most important asset an investor can have is knowledge, that's why we provide our clients
with an exceptional education experience using innovative interactive resources. We strive to
help you make more informed investment decisions & have some for while you learning.

SWOT Analysis

Strength:-

• The leadership of Jmarathon is also very good.

• The Research Team is very powerful. PMS is totally dependent on the

research work so it is very beneficial for the PMS.

• The service provided to customers by Jmarathon is also good.

• The return given to customers on their investment is high.

• The company has well and experience dealers also.

• The technology used by Jmarathon advisory is very advanced.

9
Weakness:-

• The time management of company is not proper.

• Lack of proper co-ordination between two departments of the company.

Opportunity:-

• There are only two branches of Jmarathon in Hyderabad and Bangalore the company can enter
other metro cities as they have huge potential.

• In Bangalore city there is only one branch of Jmarathon. Due to this reason the investors of the
other side of Bangalore can not take the more benefit of it. So company can make its other
branch at the other part of Ahmedabad also.

• The growth of clients in company is constant.

• The place where the company is situated is a very famous corporate place so it is beneficial for
the company.

• Company arranges seminars regularly for the increasing awareness about the services and its
new products.

Threats:-

• The company has to face a cut throat competition

• Rules and regulation of government of India are also very tuff

• The increment in new competitors of company with new technology is also very fast.

10
PESTLE Analysis Of Jmarathon Advisory Sevvices

Political Factors

Political factors play a significant role in determining the factors that can impact Jmarathon in
long term profitability in a certain country or market. The achieve success in such a dynamic
Financial Services industry across various countries is to diversify the systematic risks of
political environment. Jmarathon can closely analyze the following factors before entering or
investing in a certain market-

• Political stability and importance of Financial Services sector in the country's economy.

• Risk of military invasion

• Bureaucracy and interference in Financial Services industry by government.

• Trade regulations & tariffs related to Financials

• Anti-trust laws related to Financial Services

• Pricing regulations

• Taxation - tax rates and incentives

• Work week regulations in Financial Services

• Industrial safety regulations in the Financials sector.

• Product labeling and other requirements in Financial Services

Economic Factors

The Macro environment factors such as – inflation rate, savings rate, interest rate, foreign
exchange rate and economic cycle determine the aggregate demand and aggregate investment in
an economy. While micro environment factors such as competition norms impact the
competitive advantage of the firm. Jmarathon Advisory can use country’s economic factor such
as growth rate, inflation & industry’s economic indicators such as Financial Services industry
growth rate, consumer spending etc to forecast the growth trajectory of not only Advisory sector
but also that of the organization. Economic factors that Jmarathon should consider while
conducting PESTEL analysis are -

• Government intervention in the free market and related Financials

• Exchange rates & stability of country currency.

11
 • Efficiency of financial markets – Does Jmarathon needs to raise capital in local market?

• Infrastructure quality in Financial Services industry

• Skill level of workforce in Financial Services industry.

• Education level in the economy

• Labor costs and productivity in the economy

• Business cycle stage (e.g. prosperity, recession, recovery)

• Economic growth rate

• Unemployment rate

• Inflation rate

• Interest rates

Social Factors

Society’s culture and way of doing things impact the culture of an organization in an
environment. Shared beliefs and attitudes of the population play a great role in how marketers at
Jmarathon will understand the customers of a given market and how they design the marketing
message for Financial Services industry consumers. Social factors that leadership of Jmarathon
should analyze for PESTEL analysis are -

• Demographics and skill level of the population

• Class structure, hierarchy and power structure in the society.

• Culture (gender roles, social conventions etc.)

• Entrepreneurial spirit and broader nature of the society. Some societies encourage
entrepreneurship while some don’t.

• Attitudes (health, environmental consciousness, etc.)

• Leisure interests

12
Technological Factors

Technology is fast disrupting various industries across the board. Transportation industry is a
good case to illustrate this point. Over the last 5 years the industry has been transforming really
fast, not even giving chance to the established players to cope with the changes.
A firm should not only do technological analysis of the industry but also the speed at which
technology disrupts that industry. Slow speed will give more time while fast speed of
technological disruption may give a firm little time to cope and be profitable. Technology
analysis involves understanding the following impacts -

• Recent technological developments by Jmarathon Advisory

• Technology's impact on product offering

• Impact on cost structure in Financial Services industry

• Impact on value chain structure in Financials sector

• Rate of technological diffusion

Environmental Factors

Different markets have different norms or environmental standards which can impact the
profitability of an organization in those markets. Even within a country often states can have
different environmental laws and liability laws. Some of the environmental factors that a firm
should consider beforehand are -

• Weather

• Climate change

• Laws regulating environment pollution

• Air and water pollution regulations in Financial Services industry

• Waste management in Financials sector

• Attitudes toward “green” or ecological products

• Attitudes toward and support for renewable energy

13
Legal Factors

. Some of the legal factors that Jmarathon Advisoruy leadership should consider while entering a
new market are -

• Anti-trust law in Financial Services industry and overall in the country.

• Discrimination law

• Copyright, patents / Intellectual property law

• Consumer protection and e-commerce

• Employment law

• Data Protection

14
Chapter 4: News Analysis (w.r.t selected
sector & company)

15
News Analysis
1. India INX to offer more products to investors; seeks Sebi nod to list REITs, InvITs
NEW DELHI: With an aim to offer more products and services to investors, the BSE-
promoted India International Exchange (India INX) on Sunday said it has sought Sebi's
approval for listing emerging investment vehicles -- REITs and InvITs -- and GDR on its
platform.

Currently, equity and commodity derivatives are traded on the exchange. It launched
rupee-dollar futures and options contract in May to enable participants to hedge, trade
and settle in dollar.

2. Sebi asks stock exchanges to resolve investor complaints within 15 days

The Securities and Exchange Board of India (Sebi) has asked stock exchanges to ensure
that investor grievances are resolved within 15 working days after receiving the
complaint.
The regulator said if any additional information is required from the complainant then it
should be sought within seven working days from the date of receipt of the complaint.
Exchanges must also maintain a record of all the complaints addressed and if a complaint
is not resolved within the stipulated time frame then the reason for the same should be
recorded.
If a complainant is not satisfied with the resolution provided by the stock exchange then
the same can be referred to the Investor Grievance Redressal Committee (IGRC).

3. COVID-19: Sebi extends deadline for brokers to submit reports till June 30
Market regulator Sebi on Friday extended the deadline for brokers to submit reports on
client funding and daily margin till June 30 in the wake of the coronavirus pandemic.
This is the second instance when the regulator has extended the deadline for compliance.
The decision comes after receiving a representation from stock exchanges, the Securities
and Exchange Board of India (Sebi) said in a circular.

16
Chapter 5: Review of Literature/
Theoretical Background

17
Review of Literature/ Theoretical Background
In today's world the stock/FX market trading profession is becoming popular day by day.
Anybody with the knowledge in stock/FX market basics and with the help of technical analysis
can earn a lot of money by sitting at home, specially the housewives, students, the retired persons
and the professionals.

You'll be able to do your trade more profitably by studying out different candlestick patterns in
any chart. You'll be able to take a right decision at tough times in your trade. And this will help
to understand that what will be the starting or ending level of a stock market cycle which will
help to take right decision in long term investment.

Now first lets have some basic knowledge of INDIAN STOCK MARKET, The Indian Equity
market is divided in to two parts Primary market - where the share is first issued in the form of
IPO(Intial Public Offering) and after issuing the share it is listed on exchange and share is traded
on exchange where shares can be bought and sold this is secondary market.In India mainly there
are two exchange -NSE(National Stock Exchange) BSE-Bombay Stock Exchange.The BSE is
the oldest exchange in India(started in 1875).NSE started operation on 1994.Before 2000 shares
was held in Physical form But the main difficulty with Physical shares is meathod of transaction
which is open out cry system and process is not transparent to investor also Physical shares were
prone to duplication and fraud.So in 2000 NSE intoduced the electronic screen based trading
system further the introduction of Dematerilization(Conversion of physical share in to electronic
form) and depository(where the electronic form of share is kept) revelutionized the Indian Stock
market.Currently there are mainly two Depository(DP) -NSDL and CDSL and these DP are like
bank of share.Individual/Firm can deal through Broker(who is registered and having membership
in Exchanges and Depository) for buying and selling securities. Today NSE outpaced BSE in
volume of trade. Then what is the purpose of stock market? Stock market serves the company by
providing company the finance for long term needs and for investor an opportunity to park there
savings in corporate world and in turn give their hand in Nation's development so stock exchage
have a very vital role in country's economic development.
To buy the shares investor has to open a trading and demat account. So investor has to approach
a broker/sub broker who has membership in Exchange(where the share is listed mainly NSE and
BSE) and depository(where share is kept in Demat form-Electronic form[mainly CDSL and
NSDL).Then Investor has to give necessary identity proof,Adress proof, Bank proof and fill the
KYC form after reading it carefully. Broker will ask for power of attorney for smooth transaction
but this is not mandatory and if POA is not given investor had to fill the delivery instruction slip
after selling the share. After opening the account the investor can do trading/investing
Directly,Through Phone Internet form broking office and he will contract note(similar to bill that
we got when we purchase something and contract note include all minute detail of transaction
including brokerage[commission of broking house] STT and Other taxes) for the transaction
done by him within 24 hr of transaction and he has to give cheque to Broker in the name of
broking office(no cash transaction is permitted) and current settlement is rolling settlement (The

18
rolling settlement ensures that each day's trade is settled by keeping a fixed gap of a specified
number of working days between a trade and its settlement. At present, this gap is 3 working
days after the trading day. So transaction entered into on Day 1 has to be settled on the Day 1 + 3
working days, when funds pay in or securities pay out takes place.If investor is selling the
security he will get money in 3 working days.If investor failed to deliver the security within time
his share will get auctioned and investor has to borne the penalty.If the investor has old physical
share he can fill the dematerialization form and send it for converting it to demat form.The
reverse can also be done.
Now hope investor had learned about the exchages and demat.Every one had heard about
SENSEX and NIFTY what is this? SENSEX and NIFTY are Index of BSE and NSE Blue chip
share.SENSEX consist of 30 share and NIFTY 50 share(of top most comapnies) what is the
purpose of INDEX? Index is the barometer of stock exchage for ex in NSE there are about 1350
listed comapnies listed and we cannot say in general form market was up or down without fully
looking all companies.INDEX serve this purpose.INDEX is constructed by taking top companies
across different sector in different weightage and INDEX movement will reflect the overall
movement of market.So if NIFTY or SENSEX is up we can generally assume market was
up(does not mean all shares was up) and vice versa.Now there are index in some sectors which
can catch the movement of that sector like CNXIT-IT sector,BANKNIFTY-Banking sector etc.
Generall purpose of Stock Market is for Investment but bulk of activities done in market is day
trading.Day trading means BUYING/SELLING of shares and offsetting the position on same
day.Day traders serves the purpose of bringing the liquidity to market and they help the market
movement and more than 80% of the volume from market is coming from day
trading.Introduction of derivative market had made the day trading to grow more and
introduction of advanced day trading technique.The main tool for Stock market
investment/trading are Fundamental analysis -which studies about the fundamental of companies
and economy and Technical Analysis-which studies the market by analysing the past movement
of share and market.

What is technical analysis?

Technical analysis is a means of examining and predicting price movements in the financial
markets, by using historical price charts and market statistics. It is based on the idea that if a
trader can identify previous market patterns, they can form a fairly accurate prediction of future
price trajectories.

It is one of the two major schools of market analysis, the other being fundamental analysis.
Whereas fundamental analysis focuses on an asset’s ‘true value’, with the meaning of external
factors and intrinsic value both considered, technical analysis is based purely on the price charts

19
of an asset. It is solely the identification of patterns on a chart that is used to predict future
movements.

Here are some research papers that are already published on this topic which will help us during
the project are as follows

1. A STUDY ON THE TECHNICAL ANALYSIS OF NSE TOWARDS IT STOCKS

WITH REFERENCE TO INDIAN STOCK MARKET.
Valarmathi A,
Vivekananda Institute of Management Studies, Coimbatore, India.

In this research paper the researcher had studied technical analysis of five IT companies
using the technical tools RSI and EMA. From the study it is found that after the
Recession the IT companies provided short term investment gain to its investors. It also 0
50 100 150 200 250 01-Dec-14 01-Jan-15 01-Feb-15 01-Mar-15 01-Apr-15 POLARIS-
EMA 12D EMA (a) 48D EMA (b)found that the market trend of IT industry tends up
with gradual price fluctuation. It is concluded that investors can invest in the IT stocks in
future also with the consideration of country’s economic scenario and the short term
investors can rely on the technical charts for their investment decisions. Technical charts
holds goods for short term movement then for the long term investment decisions.

2. TECHNICAL ANALYSIS OF INDIAN FINANCIAL MARKET WITH THE HELP OF

TECHNICAL INDICATORS.
Mohd Naved
Noida International University, School of Business Management, Gautam Buddha Nagar,
UP, India

This study includes the description of indicators which can be used for technical analysis
of Indian market Nifty stocks. The indicators which have been used in this study are
Moving Averages, Moving Averages cross rules and Moving Averages
Convergence/Divergence. Later this study also includes the usage and application of
Moving Average on Nifty stocks. Additionally, the analysis demonstrates that these
indicators are the tools for successful trading and profit generation
Technical analysis is a very subjective way of analysis with various variations available
for the parameters used in Indicators of Technical Analysis. It is a rule based technique
with little scope for personal judgement

20
3. TRADING THROUGH TECHNICAL ANALYSIS: AN EMPIRICAL STUDY FROM
INDIAN STOCK
MARKET
Sudheer, V.
Department of Management Studies, Lords Institute of Engineering and Technology,
Himayathsagar, Hyderabad
Technical analysis is an art or science of planting the stock information like price
movements, trading volume and market scenario in the form of charts for the purpose of
forecasting the future price trends. It can aid the investors to anticipate what is ‘possible’
to happen to prices over the short-run time. And also helps in understanding the intrinsic
value of shares and knowing whether the scripts are undervalued or over valued by
scrutinizing the turning points of the market. This research study attempts to apply
technical analysis tool s& techniques on selective scripts to assist precise investment
decision in Indian equity/stock market. This analytical study is purely based on secondary
data which had been collected from National Stock Exchange (NSE) website, journals
and magazines
Knowledge of the stock markets is key ingredient to the success and emphasis should be
on managing trading risk while technical analysis can help the investors’ to control. And
it provides unbiased solutions in a biased world. “There is only one side to the stock
market and it is not the bull side or bear side but the right side technical analysis can be
used, when to buy and when to sell the scrip.”

4. STUDY ON USE OF TECHNICAL ANALYSIS IN FORECASTING PRICE

MOMENTS OF SELECTED COMPANIES OF NSE & BSE
Rahul Berry & Dr. Sulochna
Research Scholar, School of Management, Bahra University, Waknaghat, Solan.
Associate Professor, School of Management, Bahra University, Waknaghat, Solan
The purpose of this paper is to make a study on the technical analysis on the randomly
selected stocks of eight companies from NSE & BSE. On the basis of analysis of
secondary data collected from website one can develop buy & sell strategy. Exponential
Moving Average, MACD, Relative Strength Index & Rate of Change are the tools used
for analysis. On the basis of analysis one can buy stock of Pharma Company, Bank and
FMCG but have to take short or hold position in scrip of reality sector.
To gain maximum profits from the stock market one has to be well verse with all the
methods and charts of technical analysis. Out of the four methods used Exponential
Moving Average & Moving Average Convergence & Divergence is most accurate
method and give clear results but sometime create confusion due to minor difference in
MACD Line, Signal Line and Long & Short Exponential Moving Average. Investor can
take buy & sell decisions correctly with the help of technical analysis. Therefore investor

21
can rely on techniques of technical analysis before making investment and should not
make any investment decisions blindly

22
Chapter 6: Objectives

23
Objectives
• To understand stock market and gain knowledge.

• To study technical analysis with the help of equity market.

• To study the present scenario and predicting future patterns with the help of different
tools.

• To represent the trend of the stock price through charts of the technical analysis.

24
Chapter 7: Research Methodology

25
Research Methodology
In this Project. we'll introduce you to the subject of technical analysis. It's a broad topic. so we'll
just cover the basis, providing you with the foundation you'll need to understand more advanced
concepts down the road.

Technical analysis is a method of evaluating securities by analyzing the statistics generalized by

market stivky, such as past prices and volume. Technical analysis do not at tempt to measure a
security intrinsic value, but instead use charts and other tools to identify patterns that can suggest
future activity.

• ANALYTICAL RESEARCH:

Research Design was based on analytical research on the other hand, the researcher has to use
facts or information readily available, and analyze these to make these to make a critical
evaluation of the material

• OBJECTIVES OF THE STUDY:

To analyze the price movement of shares and interpret the correction and trends by
usingTechnical Analysis tools

To forecast the future trends and provide suitable suggestions to the investors.

To represent the trend of the stock price through charts of the technical analysis.

SCOPE OF THE STUDY:

» The study covers for a period of one year from 14/05/2020 to14/07/2020

26
Chapter 8: Data Analysis/ Data
visualization, Results and Interpretation

27
Data Analysis/ Data visualization, Results and Interpretation
Introduction -
Technical analysis is the study of historical market data, including price and volume. Using
insights from market psychology, behavioral economics, and quantitative analysis, technical
analysts aim to use past performance to predict future market behavior.

The two most common forms of technical analysis are chart patterns and technical (statistical)
indicators. Technical analysis is the study of how past and present price action in a given
financial market may help determine its future directions. At the same time, however, technical
analysis should not be considered a crystal ball. Rather, the skills of a technical analyst are used
primarily to help determine the highest-probability reactions to past and current price movement,
as well as likely future price movement. Therefore.technical analysis is less about actually
predicting the future and more about finding high-probability potential opportunities to trade in
the financial markets.

Technical analysis is a broad collection of methods and strategies which attempt to forecast
future prices on the basis of past prices of other observable market statistics, such as volume or
open interest Different analysts/traders may choose to use different types of charts at different
times, whether it is a line clart, a bar chart, a candlestick chart, a point- and-figure chart, or any
of a number of other chart types. Technical analysis involves putting stock information like
prices, volumes and open interest on a chart and applying various patterns and indicators to it in
order to assess the future price movements. The time frame in which technical analysis is applied
may range from intraday (1-minute, 5-minutes, 10-minutes, 15-minutes, 30-minutes or hourly),
daily, weekly or monthly price data to many years

Technical analysis really just studies supply and demand in a market in an attempt to determine
what direction, or trend, will continue in the future. In other words, technical analysis attempts to
understand the emotions in the market by studying the market itsellus opposed to its components.
If you understand the benefits and limitations of technical analysis, it can give you a new set of
tools or skills that will enable you to be a better trader or investor

28
Assumptions of Technical Analysis
Technical Analysis is built on some fundamental assumptions in regards to the fashion in which
a market operates.

These assumptions are not only integral to you as an aspiring Technical Analyst, but are also
central to Technical Analysis as a theory.

Price Discounts Everything

This infers that the market price can be heavily influenced by an investor's perception of supply
and demand, as well as the general broad economic overview at the time the price is captured.

Therefore, it can be assumed that Technical Analysts believe that the current market price of a
stock reflects all the relatively important information that Fundamental Analysts are seeking to
provide qualitative and quantitative explanations for.

This is one of the key reasons that Technical Analysts do not focus on the underlying data behind
price variation, but rather focus on what the market is valuing the stock at.

Prices usually always Move in Trends

Technical analysts also maintain that price changes are not random. Instead, they follow a given
trend, which can be either bullish/long or bearish/short, following identifiable patterns that tend
to repeat over time. Whenever a trend is established, the underlying asset is likely to continue
moving in a given direction until a new trend is established.

When it comes to price movements, technical analysts believe that price moves in short,
medium, and long-term trends. For long-term traders who hold trades for days, weeks, or
months, long-term charts such as hourly, daily, and weekly charts become most valuable. Short-
term traders who hold trades for minutes should pay attention to short-term charts, which can be
in five- and 15-minute periods.

History Repeats Itself

The basic idea in technical analysis is that history will always repeat itself, be it in the short term
or long term. For this reason, technical analysts spend most of their time trying to understand
past price movements to try and accurately predict future price movements.

The repetitive nature of price movements makes it possible to predict future price movements.
The repetitive aspect is based on the fact that both human behaviour and human history repeat
themselves.

29
Classic chart patterns, such as channels and trends as well as rectangles, ranges, tops, and
bottoms, are some of the results of predictable human behaviour. Technical analysts look for
these patterns, because most of the time they provide a predictable outcome.

30
Candlestick Charts
Candlestick charts are thought to have been developed in the 18th century by Munehisa Homma,
a Japanese rice trader. They were introduced to the Western world by Steve Nison in his book ,
Japanese Candlestick Charting Techniques. , while there was a link between price and the supply
and demand of rice, the markets were strongly influenced by the emotions of traders.

What is candle stick chart?

A candlestick chart is simply a chart composed of individual candles, which traders use to
understand price action. Candlestick price action involves pinpointing where the price opened for
a period, where the price closed for a period, as well as the price highs and lows for a specific
period.

Price action can give traders of all financial markets clues to trend and reversals. For example,
groups of candlesticks can form patterns which occur throughout forex charts that could indicate
reversals or continuation of trends. Candlesticks can also form individual formations which
could indicate buy or sell entries in the market.

The period that each candle depicts depends on the time-frame chosen by the trader. A popular
time-frame is the daily time-frame, so the candle will depict the open, close, and high and low
for the day. The different components of a candle can help you forecast where the price might
go, for instance if a candle closes far below its open it may indicate further price declines.

31
Understanding Candlestick

Upper Shadow: The vertical line between the high of the day and the close (bullish candle) or
open (bearish candle)

Real Body: The difference between the open and close; colored portion of the candlestick

Lower Shadow: The vertical line between the low of the day and the open (bullish candle) or
close (bearish candle)

A candlestick can be of different time frames suitable to the investor’s logic.It can be of
1min,3min,5min,10min,15min,30mins,1hr,2hr,3hr,4hr,1day,1week,1month.

32
Technical Analysis Using Candlestick Patterns
In technical analysis, a candlestick pattern is a movement in prices shown graphically on
a candlestick chart that some believe can predict a particular market movement. There are
different types of candlestick patterns. Classified under Simple candlestick patterns and Complex
patterns Here we will see most effective and commonly occurring candlestick patterns.

1. EVENING STAR AND MORNING STAR

• The evening and morning star candlestick patterns occur at the end of upwards/downward
trends respectively and tend to indicate reversal patterns.
• The names come from the star shaped formation of the arrangement.
• As you can see from the image below, the first candlestick is in the direction of the trend,
followed by a bullish or bearish candle with a small body. The third candlestick is seen in
the direction of the reversal, ideally closing passed the halfway point of the first
candlestick.
• Trading this candlestick pattern will require a confirmation candle in the direction of the
respective reversal

Morning Star –

• Following is the State bank of India when analysing this stock pattern in 15 mins candle
it was showing a downward trend after some time a when it was rallying between Rs 186-
Rs 190, a morning star candle came and when I was expecting a reversal pattern and the
stock showed bullish trend and achieved a high of Rs.201. So morning star pattern if
effective but you have to look at it very carefully before taking a call as it cannot be
accurate every time.

33
Evening Star –

• Following is the State bank of India when analysing this stock pattern in 15 mins candle
it was showing a upward trend it went at a high of 182 from 168 after some time a when
it was rallying between Rs 180-Rs 182, an evening star candle came as shown in the
picture and when I was expecting a reversal pattern and the stock showed bearish trend
and went to a low of 170, it gave a sell signal and it was effective.

34
 2. BULLISH & BEARISH ENGULFING

• A bullish or bearish engulfing candlestick pattern may indicate reversal patterns.

• A bullish engulfing candlestick formation shows bulls outweigh bears. As the pattern
below shows, the green body (bulls) covers completely the first candlestick (bears).
• A bearish engulfing candlestick pattern is small green (or bullish) candle followed by a
larger red (bearish) candle immersing the small green candle.

Bullish Engulfing shows a upward trend in the market and the trader can go for buy position. In
the above chart of Axis bank stock in NSE two green candles came simultaneously similar to
engulfing and then the stock showed a bullish trend and went a high of rs 441from rs 426.

35
Bearish Engulfing shows a downward trend in the market and the trader can go for sell position.
In the below chart of Axis bank when the market was not giving any signals two candles formed
a bearish engulfing and the prediction was it will now give bearish trend then the stock went to a
low of Rs 433 form Rs 447.

36
 3. DOJI

• The Doji candlestick chart pattern is associated with indecision in the market of the
underlying asset. This could mean potential reversal of the current trend or consolidation.
• This pattern can occur at the top of an uptrend, bottom of a downtrend, or in the middle
of a trend.
• The candlestick itself has an extremely small body centered between a long upper and
lower wick

If a doji comes it is difficult to predict the future pattern then a trader should wait for the
following candle before taking any position in the market.

37
3.1 DRAGONFLY DOJI & GRAVESTONE DOJI -

Dragonfly doji has a long lower shadow and the upper shadow is very very short or some
times the upper shadow is not there and the body is towards the upper shadow and the
open and close is almost same here. This doji is rare and if a drogon fly doji comes after a
bearish trend then it is a reverse signal in the market.
In the below chart of HDFC bank, when observing the stock pattern I found out that a
doji has came after a bearish pattern and my predicted that the stock will show bullish
pattern and the stock wasup by Rs 25 it went up from rs 1610 to rs1635

38
Gravestone doji is exactly opposite to the dragonfly doji. It has a long upper shadow and
a very low lower shadow and the body is towards lowershadow and the body open and
close are same. If this doji comes after a bullish trend then the market can take a reversal
trend.
In the below chart of Bank of India, the stock was shoeing a bullish trend went to high of
Rs 82 and then a gravestone doji formed on top of the pattern and with the prediction of
bearish trend the stock went to a low of Rs 73. A gravestone doji can be a vey strong
signal of a bearish treand.

39
 4. BULLISH & BEARISH HARAMI
A Bullish or Bearish Harami may indicate reversal patterns.
The word “Harami” means “pregnant” in Japanese, and the name has been given to this
candlestick pattern because it resembles a pregnant woman. The second candle in the
pattern must be contained within the body of the first candle as seen in the images below.
This holds true for both bullish and bearish Harami’s.
A downtrend precedes a bullish Harami and an uptrend precedes that of a bearish
Harami.

BULLISH HARAMI

Following is the stock of Federal bank in 15 mins candlestick while observing the stock there
was a down trend the stock came dowm to Rs 51 from Rs 57 and then after a particular candle
the stock started bullish trend , the pattern was harami the predictions was that the stock will gain
Rs 3-4 but the stock went to Rs 57 again increased by Rs 6. Here one shold take buy position.

40
BEARISH HARAMI-

The bearish harami pattern appears at the top end of an uptrend which gives the trader a
opportunity to initiate a short trade.

In the above chart of Bandhan bank stock, while observing a bullish trend from last 5 days the
stock went up from Rs 320 and it touched a high of Rs 402 was thinking which pattern will give
this stoch a bearish trend and in the6 the day a red candle came which was like a bearish harami
and the stoch started falling and it went to a low of Rs 329 and then rallied between Rs 360 and
Rs 340 for next couple of days here one should take sell position.

41
5. THE MARUBOZU –

The word Marubozu means “Bald” in Japanese. We will understand the context of the
terminology soon. There are two types of marubozu – the bullish marubozu and the
bearish marubozu. The text book defines Marubozu as a candlestick with no upper and
lower shadow (therefore appearing bald). A Marubozu has just the real body as shown
below.

5.1 BULLISH MARUBOZU

Bullish Marubozu indicates extreme bullishness The absence of the upper and lower
shadow in a bullish marubozu implies that the low is equal to the open and the high is
equal to the close. Hence whenever the, Open = Low and High = close, a bullish
marubozu is formed.

42
In the chart above (ACC Limited), the encircled candle is a bullish marubozu. Notice the bullish
marubozu candle does not have a visible upper and a lower shadow. The OHLC data for the
candle is: Open = 971.8, High = 1030.2, Low = 970.1, Close = 1028.4. when bullish marubozu it
means the buyers are taking control leading to increase in price. Here one can take buy position.

5.2 BEARISH MARUBOZU

Bearish Marubozu indicates extreme bearishness. Here the open is equal to the high and close the
is equal to low. Open = High, and Close = Low.

In the chart above BPCL Limited, the encircled candle indicates the presence of a bearish
marubozu. Notice the candle does not have an upper and a lower shadow. The OHLC data for
the candle is as follows: Open = 355.4, High = 356.0, Low = 341, Close = 341.7 . when bearish
marubozu it means the sellers are aggressive and taking control leading to decrease in price. Here
one can take short position

43
6. Three white soldiers

The three white soldiers pattern occurs over three days. It consists of consecutive long
green (or white) candles with small wicks, which open and close progressively higher
than the previous day.
It is a very strong bullish signal that occurs after a downtrend, and shows a steady
advance of buying pressure.

In the above image, we can see that Bandhan banks share has gone up significantly after
getting the THREE WHITE SOLDIERS in the trend. The stock went up from Rs 260 and
touched a high of Rs 350 . This patterns gives a very strong Here the trader can take buy
position.

44
7. Three black crows
The three black crows candlestick pattern comprises of three consecutive long red
candles with short or non-existent wicks. Each session opens at a similar price to the
previous day, but selling pressures push the price lower and lower with each close.

Traders interpret this pattern as the start of a bearish downtrend, as the sellers have
overtaken the buyers during three successive trading days.

Here we can see that theBandhan bank has shown significant downtrend after the Three
Black Crows in the trend.the stock fell from Rs 338 to Rs 289.Ans it took couple of days
to recoves it. The trader can take short position after this trend as the seller taking control
of the market

45
TECHNICAL INDICATORS

Technical indicators are chart analysis tools that can help traders better understand and act on
price movement. There is a huge range of technical analysis tools available that analyze trends,
provide price averages, measure volatility and more.

Here, we will explore the different types of technical indicators available. And see how to
respond to technical signals and do effective trading.

46
 1. RELATIVE STRENGTH INDEX (RSI) –

The Relative Strength Index (RSI) is a momentum indicator, composed of a single line scaled
from 0 to 100 that identifies overbought and oversold conditions in the forex market.If the rating
is over 70, that indicates an overbought market whereas readings that are below 30 indicate an
oversold market. Basically, the idea of RSI is to spot the tops and bottoms in order to get into the
market as a trend is reversing. This will bring you an advantage to the whole move. When the
price of a certain instrument reaches the overbought levels (over 70), a trend will reverse and the
prices will start declining. When prices reach underbought levels (below 30), the price will start
increasing.

RSI also showcases when a trend is about to end.

47
Above is the chart if State Bank of India Stock, herewe can predict the future trends with
the help of Relative strength index, which gives us overbought and oversold information
about a stock, here in the black circle you can see that the RSI line is crossing the
oversold mark at the price of Rs 177.50 at this point a trader should take a buy position
when the line comes under the oversold line again and wait to cross the overbaught to
make Profits. In the red circle you can see that the stock is crossing the overbaught line at
Rs 184.65, this point when the stock will start to come under the border line the trader
should take the short position and make the profits.

48
 2. BOLLINGER BANDS

Bollinger Bands is one of the popular technical analysis tools, where three different lines are
drawn, with one below and one above the security price line. Its specific period moving average
is denoted as midline to form an ‘envelope’. These lines show a band or a volatility range in
which a particular security price is moving up or down. Volatility is shown on the basis of
standard deviation for a particular security, which is denoted by upper and lower line/band, as
standard deviation is a measure of volatility. The closer the prices move to the upper band, the
more overbought the market, and the closer the prices move to the lower band, the
more oversold the market.

Bollinger Bands was developed by John Bollinger in the mid 1980s and he trademarked this term
in 2011. Initially, it was called trading bands, but later on, John Bollinger evolved this concept
and called it Bollinger Bands.

The Squeeze

The squeeze is the central concept of Bollinger Bands. When the bands come close together,
constricting the moving average, it is called a squeeze. A squeeze signals a period of low
volatility and is considered by traders to be a potential sign of future increased volatility and
possible trading opportunities. Conversely, the wider apart the bands move, the more likely the
chance of a decrease in volatility and the greater the possibility of exiting a trade. However, these
conditions are not trading signals. The bands give no indication when the change may take place
or which direction price could move.

Breakouts

Approximately 90% of price action occurs between the two bands. Any breakout above or below
the bands is a major event. The breakout is not a trading signal. The mistake most people make is
believing that that price hitting or exceeding one of the bands is a signal to buy or sell. Breakouts
provide no clue as to the direction and extent of future price movement.

49
In the above chart of State Bankof India, I have applied both indicators Bollinger band and
Relative strength index for more accuracy in predictions. As we know that the bolinger bands
does not give any signals, they only tell the overbaught and oversold information of a stock. So
with the help of RSI we will make the predictions.

The black circles shows the overbaught and the Red circles shows the oversold positions of the
stock when the candle cross upper or lower band. In the first black circle stock has crossed the
upper band at a price of Rs 182.5 and in the RSI the line is near to the upper band so here one
can take short position. And again in the red circle it is sgowing oversold position in both
indicators at that time the predictions were reversal of the trend and the stock had a reversal from
Rs 177.80 and went up to Rs 188.

50
 3. MOVING AVERAGES

A moving average is a technical indicator that combines price points of an instrument over a
specified time frame, and divides by the number of data points, to give you a single trend line. It
is popular amongst traders because it can help to determine the direction of the current trend,
while lessening the impact of random price spikes.

A moving average will enable you to examine the levels of support and resistance, by analysing
the previous movement of an asset’s price. It is a measure of change that trails the previous price
action of an asset, assessing the history of market movements to determine possible future
patterns. A moving average is primarily a lagging indicator, which makes it one of the most
popular tools for technical analysis.

Calculating an MA requires a certain amount of data, which can be a large quantity depending on
the length of the moving average. For instance, a ten-day MA will require ten days of data, while
a one-year MA will require 365 days’ worth. A 200-day period is a very commonly used
timeframe for MA.

The indicator is described as ‘moving’ because the introduction of new figures will replace old
data points and ‘move’ the line on the chart.

Examples of a moving average

There are two main forms of moving average: simple moving average and exponential moving
average.

A simple moving average (SMA) is the most basic MA, which is just a straight calculation of
the mean price of a set of values over a given time periods. If you were to calculate the SMA for
a ten-day period, you would take the values of the last ten days and divide the result by ten.

Let’s say that the last ten data points of an asset were: 80, 81, 81, 82, 80, 82, 89, 82, 82 and 83.
The moving average would add these figures together and divide by ten, resulting in an average
of 82.2.

The second type of MA is an exponential moving average, which gives more importance to
recent prices to make the data more responsive to new information.

51
Above is the stock of State bank of India, here I have applied Moving average and Exponential
moving average indicators in One day candlestick chart. Here both the indicators are having last
9 days price point’s average both the indicators go hand in hand. The blue line is showing
Moving average and the red line is showing Exponential moving average.

When the redline cuts the blue line from below it is predicted that there will be a bearish trend
and I did the same prediction and you can see the results in the first circle the red line is crossing
the blue line from below and the stock has shown a bearish trend it came down to rs 152.3 from
Rs 185. And again in the next circle exactely opposite thing has happened, the blue line has
crossed the red line from below a price point of Rs 158 and the predictions were also opposite,
and the stock has shown a bullish trend abd the price went uo to Rs 197.4 from Rs 158.

52
 4. Stochastic Oscillator

A stochastic oscillator is a momentum indicator comparing a particular closing price of a security

to a range of its prices over a certain period of time. The sensitivity of the oscillator to market
movements is reducible by adjusting that time period or by taking a moving average of the result.
It is used to generate overbought and oversold trading signals, utilizing a 0-100 bounded range of
values.

The stochastic oscillator is range-bound, meaning it is always between 0 and 100. This makes it a
useful indicator of overbought and oversold conditions. Traditionally, readings over 80 are
considered in the overbought range, and readings under 20 are considered oversold. However,
these are not always indicative of impending reversal; very strong trends can maintain
overbought or oversold conditions for an extended period. Instead, traders should look to
changes in the stochastic oscillator for clues about future trend shifts.

Above is the chart of state bank of India, the indicator applied here is stochastic oscillator the
readings of it are same as moving average and exponential moving average. As you can see in
the first circle the red line is cutting the blue line from below at a price of Rs 196 and the
prediction were reversal of the bullish trend and you can see that the stock showed a bearish
trend and came down to Rs 184.5. And in the next circle the red line is cutting the blue line from
above at the pirice of Rs 185 and the prediction were ooposite and the stock showed a bullish
trend and the price went up to Rs 198.1. So this indicator a kind of difficult to understand but
effective at same time.

53
Chapter 9: Conclusions / Learnings from
the Project

54
Conclusion and Learning From the Project

Buying and selling of stock is not an easy task if you want to make money doing it Millions of
investors have lost the money in past trying guessing stock price movements. In order to
consistently make money in the stock market, investors have to be right over 70% of the time.

Technical analysis is the study of behaviour of buyer & seller. It is very useful tool to capture
gain with the help of technical analysis. It is very important analysis is the study of investor
behaviour and its effect on the subsequent price action of financial instruments. The main data
that we need to perform our studies are the price histories of the instruments, together with time
and volume information

In today's world, if you rely on fundamental analysis, broker's advice newspaper articles or
business channels for your investing or trading decisions, you are asking for a painful experience
in the markets. So, this study on technical analysis will belp the investors in analyzing the scripts
based on the technical tools and oscillators to eam fruitful investment

Technical analysis is the art and science of chart patterns in order to better analyze and predict
prices of a given security. It is also becoming popular with the younger generation. But further
research has to be conducted to know whether the technical analysis alone will guarantee profits
to the investors. Knowledge of the stock markets is the key to the success and emphasis should
be on managing trading risk while technical analysis can help you to control them.

The investor always kept in the mind we have limited capital but the unlimited opportunity. Once
you lose the capital you cannot opportunity. But if you lose opportunity then hundreds of other
opportunity waiting for us

55
Chapter 10. Limitations of the project

56
Limitations of the Project

• Technical Indicators tend to give mixed signals in some cases if they are used in
isolation. In such a scenario, one indicator could show a buy signal, while the other could
show a sell signal. This could confuse traders. To overcome such issues, traders generally
use a combination of indicators, patterns, volume signals and moving averages to
determine entry and exit signals.
• Technical Analysis is all about probability. For instance, when a possible entry or exit is
determined for a scrip, the signal does not guarantee a successful trade. The trade could
end up in a loss even after thorough analysis.
• Biased view: Two technical analysts may have contradicting views regarding the same
stock; the technical methods used for analysis could vary from one analyst to another.
• Many times, the technical signals generated tend to have a lag, and by the time a clear
signal is generated the price action could already be over.
• As more and more people employ technical analysis and end up having a similar view,
the value of such analysis tends to decline.
• A single trading strategy may not work in all scenarios as markets tend to be extremely
dynamic.

57
Chapter 11. Recommendations

58
Recommendations

• The investors should be trained to use the technical analysis tool. Since it will help them
in their day to day investments returns.
• In the start investors should do lot and lots of practice through Paper trading.
• Fundamental analysis can also be suggested to the investors together corporate, growth of
earings and profitability.

It is important to understand to enter in the transaction & understand the trade management once
you understand this psychology then it is more easy to predict future & earn profit.

Some importants things while investing in stock market are -

1. Don't be greedy: Invest smartly, with some professional help and some study on your own

2. Avoid 'hot lips': Use your own judgement

3. Avoid timing the market: 'timing' leads to huge monetary losses and mental tension. Plan your
own market timings to make money

4. Avoid actions based on sentiments: Don't be emotionally attached to stocks

5. Don't panic if the market drops: Be patient and hold on to the script until some semblance

of sanity prevails in the market. Consult a professional and then act accordingly.

59
Chapter 12 - Bibliography - Appendices

60
Bibliography
https://www.nseindia.com/

https://www.moneycontrol.com/

https://pro.upstox.com/trading

https://www.wikipedia.org/

“Technical Analysis Explained" Author -Martin Pring

Technical Analysis of the Financial Markets" Author - John Murphy

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ix