SUMMER INTERNSHIP REPORT

ON

STOCK MARKET RESEARCH

Submitted in partial fulfilment of the requirements

for the degree of

Master of Business Administration (MBA)

Name - Saswatee Das

Roll No- 320SM1006

SCHOOL OF MANAGEMENT

NATIONAL INSTITUTE OF TECHOLOGY

2020-2022
1
2
 DECLARATION
This declaration is to certify that the summer internship project report named “Stock Market
Research” submitted to School of Management, NIT Rourkela in partial fulfilment for the
requirement of the degree of Master of Business Administration (MBA), is a genuine work
carried out by Ms. Saswatee Das bearing Roll No-320SM1006.

Genuine work is carried out in the project and value adding aspects are included in project
which have not been submitted to any other university or any organization for the completion
of the course of the study.

Submitted by: Saswatee Das

Roll No. - 320SM1006

MBA (2020-2022)

3
 ACKNOWLEDGEMENT
I express my sincere gratitude and indebtedness to our internship guide Mr. Krishna Raju, Sr.
Branch Manager for his encouragement, valuable guidance, expert advice and showing us the
right way of carrying out the internship work.

I offer my most unfathomable thanks to my professor Dr. Sambashiva Rao Kunja, Assistant
Professor, School of Management, National Institute of Technology, Rourkela for his
important ideas and direction delivered in giving shape and cognizance to this undertaking. He
has been directing me on this internship position calmly from the start until the culmination of
this exploration. He had invested her valuable energy to help and guide me at whatever point I
was in question or experienced any issue all through the improvement of the internship
position.

I want to stretch out my appreciation to all resources and my associates of School of

Management, who offered moral help and motivation to finish up the internship position on
the schedule, and unique gratitude to our folks who are an essential part.

Saswatee Das

School of Management

National Institute of Technology, Rourkela

Roll No.-320SM1006

4
 ABSTRACT

This report maintains all the details of the work done during my internship period conducted
at Growth Arrow Services for two months (May 15, 2021 – July 1, 2021) duration, in stock
market. This internship report aims to provide the knowledge I have gained as an Intern in
Growth Arrow Services. In this report, I have tried to add all my learnings at Growth Arrow
Services especially in different stock exchanges as well as stock markets, candle sticks
,fundamental and technical analysis.

Equity Research is the investigation of a business and its current circumstance to settle on a
buy or sell choice with regards to putting resources into its portions. This exploration can
likewise be applied by an acquirer to a forthcoming procurement bargain, to decide the cost at
which to offer for the protections of an objective organization.

This report describes how financial firms uses stock analysis to help their clients in suggesting
which stock to buy to make profits. Stock market is ones of the most profitable industry where
people can earn up to crores by investing smartly and with some patience.

Analysing the financials of the company and finding new scenarios with the aim of making a
Buy/Sell stock recommendation to clients is the main objective.

The Internship main objective was to understand stock market and the ability to make a
Buy/Sell decision of any stock investment so as to find out various companies’ financial
condition in the market.

5
Table of Contents

1. COMPANY PROFILE 8
1.1 INVESTMENT PLANNING- 8
1.2 TRAINING PROGRAMS- 8
1.3 ADVISORY SERVICES- 9
2. INTRODUCTION TO STOCK MARKET 9
2.1 Stock Markets 9
2.2 What are shares and stocks? 10
2.3 How does the stock market perform? 10
2.4 Types of Stock Market 10
2.4.1 Primary market 10
2.4.2 Secondary market 11
2.5 How to invest in shares? 11
2.6 Factors to consider while investing in the share market 12
2.7 Acts as indicator of economy 13
3. STOCK EXCHANGES 13
3.1 What is a Stock Exchange 13
3.2 Why do companies list shares on the stock exchange? 14
3.3 How do stock exchanges work? 15
3.4 Importance of the stock exchange 15
3.4.1 From the perspective of a company 15
3.4.2 From the perspective of investors and traders 16
3.5 Leading stock exchanges of India 17
4. Fundamental Analysis 19
4.1 What is Fundamental Analysis 19
4.2 Why is intrinsic value so crucial in making purchase decisions? 21
4.3 Who uses fundamental analysis? 21
4.4 Types of fundamental analysis 21
4.4.1 Quantitative fundamentals 22
4.4.2 Qualitative fundamentals 22
4.5 Tools used for Quantitative Analysis 24
4.6 Pros/Cons of Fundamental Analysis 27
5.Technical Analysis 27
5.1 What is Technical Analysis 27
5.2 Technical Analysis Tools 28

6
 CANDLE STICKS 29
5.2.1 Components of CandleStick 30
Basic Candlesticks Patterns 30
5.2.2 Types of Candlesticks 31
Engulfing Pattern( Bearish) 31
Engulfing Pattern( Bullish) 31
Evening Star(Bearish) 31
Harami(Bearish) 32
Harami(Bullish) 32
Cross Bearish Harami 32
Bullish Harami Cross 33
Pivot Points 34
Stochastic RSI 35
MACD 36
OHL strategy 37
Trading Strategies 38
5.3 Benefits of technical analysis 40
5.4 Technical analysis & fundamental analysis 41
7. STOCK ANALYSIS 42
Using OHL Strategy 42
TATA CONSULTANCY SERVICES 43
Tata Power 44
INFOSYS 44
WIPRO 45
8.CONCLUSION 46
9.REFERENCES 47

7
 1. COMPANY PROFILE

GROWTH ARROW SERVICES, is an independent financial service domain, located in

Bangalore, India. After several years of experience, we are looking to update and strengthen
our services. Developing a powerful commitment of clients and trainees in a
straightforward manner plays a very important role, to grasp and learn during a better way. We
develop and implement the strategies that are proven and useful to several clients.

They have 1000+ clients throughout the planet which stands the simplest testaments, Growth
Arrow Services is an innovative platform for educating and mentoring the idea towards wealth
and prosperity.
The services provided at Growth Arrow Services are:-

1.1 INVESTMENT PLANNING-

We make systems that arrange with your financial goals and objections of your money related
resources. We plan and cultivate your procedures with our theory research instruments, that
help you with surveying adventure execution and economic situations to separate your next
idea can help you with achieving your financial targets.

➢ Monetary administrations,

➢ Increment your thought age with outsider examination,

➢ Put out your objectives characterize your procedure,

➢ Execute your arrangement screen your advancement.

1.2 TRAINING PROGRAMS-

Supported by research specialists our preparation programs are conveyed by constant guides
who has procured long periods of involvement and ability in financial exchange preparing. We
are known for viable financial backer training for market members would be value financial
backers, and people in general overall. We accept information is heavenly, to secure more,
spread more,

8
 ➢ Choose what you need to realize?

➢ How would you like to learn?

➢ When would you like to learn?

A sharp information is the most essential benefit a financial backer get, that is the reason we
furnish our customers with remarkable training experience utilizing creative intelligent assets.
We endeavor to assist you with settling on more educated venture choices and have some for
while you learning.

1.3 ADVISORY SERVICES-

We gives proficient money by putting your assets in a right venture vehicles dependent on the
financial backers future objectives .We take the time skyline and needs into the thought for
wellbeing of the financial backer just as we care for the liquidity and brings level back. As
known, appropriate venture arranging will assists the financial backers with delivering
monetary rewards extra time Investor Guidance We will help you the desire of your
premium.

➢ Do it for me
➢ Counselor reference administrations
➢ Help me to it
➢ Proficient portfolio the board
➢ Do it without anyone's help Independent Investors

2. INTRODUCTION TO STOCK MARKET

2.1 Stock Markets

Investment refers to obtaining assets in order to generate income or profits. Shares are
investments too. These not only give ownership rights to the investor but also generate returns
over time.

9
The stock market is a platform where shares of companies trade. The buyers and sellers of
different companies’ shares come together and trade in the share market. The stock market
provides the liquidity that you, as an investor, require after purchasing a share of a particular
company.

There are two national-level stock exchanges in India: National Stock Exchange and the
Bombay Stock Exchange. When private companies list their shares in the stock exchanges,
they no longer remain private. They become public companies.

2.2 What are shares and stocks?

Share is part ownership in the company. When a company issue shares, they sell part of their
ownership to investors who buy it. So, when you buy a share, you become a part-owner of the
company. After a company issue shares, the company becomes public, and together, all the
new shareholders, become the company’s actual owner.

The shareholders appoint a Board of Directors, who sees whether the company’s management
is working in its best interest. When the shares of a shareholder are fully paid, the shareholder
can convert its shares into stocks. A group of shares held by a shareholder is called stock.

2.3 How does the stock market perform?

The stock market acts as a trading platform for buyers and sellers of stocks. When a stockholder
wants to sell their ownership to another buyer, that transaction is performed in the stock
exchange. Stock exchange charges a commission for the trade, and the trade gets executed. The
share market provides a transparent platform for trade in any publicly listed company, and it
also helps to add liquidity to the company’s shares.

2.4 Types of Stock Market

There are 2 types of stock markets, namely the Primary Market and Secondary Market.

2.4.1 Primary market

It is a market where shares are issued to the public for the very first time. The first issue of
shares is called the “Initial Public Offering”. Whenever a company plans to issue shares, they

10
reach an underwriter. The underwriter performs all the legal formalities and helps the company
determine the accurate share price based on demand in the market and the right timing for the
issue.

Once the issuing price is fixed, the underwriter opens a window for the investors to subscribe
to the shares. If the issue is oversubscribed, then the subscribers will receive shares on a pro-
rata basis. One essential thing is that the primary market’s money directly goes to the company
for its future operations or expansion.

2.4.2 Secondary market

Once the shares are distributed, the shareholders will have the shares in their accounts.
However, if a shareholder wants to sell their shares, they will need a buyer willing to buy them.
In the absence of a buyer, the shareholders’ investment becomes illiquid, meaning they can’t
sell their shares when needed. To solve this issue and offer liquidity to investors, shares are
traded in the secondary market. In the secondary market, both the buyer and seller place their
bids and shares exchange hands. There is no new security created here. Only the previously
issued shares are traded to provide liquidity.

2.5 How to invest in shares?

There are a few steps that you need to follow to invest in the share market.

Step 1: PAN or Aadhar card

Having a PAN or Aadhar card is mandatory to invest in shares in India. These documents are
required for the KYC (Know Your Customer) purpose. You can open an account with India’s
market regulator, the “Securities and Exchange Board of India”. As per the new regulations,
you need to provide a cancelled cheque and 6months’ bank statement for opening a Demat
account.

Step 2: Hire an intermediary (broker)

Directly buying and selling of shares in the stock exchange by individuals is prohibited. Only
a registered person or a company authorised by the “Security and Exchange Board of India”,

11
who acts as an intermediary can trade shares in a stock exchange on your behalf. Such
intermediaries’ service (broker) is chargeable, and they charge brokerage fees from you.

Step 3: Opening a Demat account

Demat account is used to hold shares and securities in electronic format. Earlier shares were
issued in paper format, but now everything is digitalised, and shares are issued in electronic
form. All the electronic securities and shares that individual purchases are kept in the electronic
form under the Demat account.

Step 4: Buying a share

● Shares can be bought by giving instructions to the brokers. If you want to buy a share,
you will have to provide the broker with price and quantity instructions. Once the price
in the market matches as per the provided price, then the trade is executed. If you are
buying a share and want to take delivery, it will take a few days to reflect the shares in
your Demat account. It is called the settlement period.
● You can directly buy a share in the online trading platform. Current BID/ASK prices
reflect for each share in the trading platform. So you can give buying instruction directly
in the online trading platform provided by the broker.

2.6 Factors to consider while investing in the share market

There are risks involved in the share market. So you must keep a few factors in mind while
investing in the share market.

● Make a diversified investment- Never invest all of your wealth in a single share. This
kind of investment is hazardous. If something happens to the company, then you will
lose your entire wealth. Always diversify your investment. Diversification means
investing in a group of shares that are not correlated. So if the price of one company’s
share falls, the other may rise or remain the same, and your losses will be minimised.
Always build a portfolio of shares.

● Make an informed decision- Don’t respond to noises in the market. You will always
hear predictions that a particular share will double in two months or three months. These

12
 kinds of predictions are mostly wrong. Always do your research and make an informed
decision while investing.

2.7 Acts as indicator of economy

FIG:1 Sensex in the last 30 years

The economic situation is roughly known by how the stock market is performing. If the stock
market is bullish the economy is also growing and vice versa. The situation is dependent on
the market investors, the speculators and what is the perception of investors about the market.
An ascent or fall in the cost of shares addresses what cycle the economy is in like a boom or
recession. There is a symbiotic connection between the condition of the economy and the stock
market performance.

3. STOCK EXCHANGES

3.1 What is a Stock Exchange

Marketplaces bring sellers and buyers together. They allow sellers to sell their offerings and
buyers to buy such offerings. If you need to shop for vegetables, you head to a vegetable market
or your local vegetable seller. For groceries, you shop at the local Kirana store or departmental
stores. Where do you go if you want to buy stock or bonds? Stock exchange is the answer.

A Stock Exchange is a place where stockbrokers and dealers can purchase and sell shares
(equity stock), bonds, and different securities. Many enormous organizations have their stocks

13
recorded on a stock exchange. This makes the stock more fluid and hence more appealing to
numerous financial backers. The exchange may likewise go about as an underwriter of
settlement. These and different stocks may likewise be exchanged "over the counter" (OTC),
that is, through a seller. Some enormous organizations will have their stock recorded on more
than one trade in various nations, in order to draw in worldwide financial backers.

Stock exchanges may likewise cover different kinds of securities, for example, fixed-interest
securities, (bonds) or theit derivatives, which are bound to be exchanged OTC.

Exchange securities exchanges imply the exchange (in return for cash) of a stock or security
from a dealer to a purchaser. This requires these two gatherings to settle on a cost. Values
(stocks or offers) present a proprietorship interest in a specific organization.

Participants in the stock exchange range from little individual stock financial backers to bigger
financial backers, who can be based anyplace on the planet, and may incorporate banks,
insurance agencies, benefits assets and flexible investments. Their purchase or sell requests
might be executed for their sake by a stock trade merchant.

A few trades are actual areas where exchanges are completed on an exchanging floor, by a
strategy known as an open objection. This strategy is utilized in some stock trades and products
trades and includes brokers yelling bid and deal costs. The other kind of stock trade has an
organization of PCs where exchanges are made electronically. An illustration of such a trade
is the NASDAQ.

A potential purchaser offers a bid price for a stock, and a potential seller asks for a particular
cost for a similar stock. Purchasing or selling at the Market implies you will acknowledge any
ask cost or bid cost for the stock. At the point when the offer and ask costs match, a deal
happens, on a first-come, first-served premise in case there are numerous bidders at a given
cost.

The reason for a stock trade is to work with the trading of protections among purchasers and
dealers, subsequently giving a commercial centre. The trades give constant exchanging data on
the recorded protections, working with value revelation.

3.2 Why do companies list shares on the stock exchange?

Money is needed to run any company. There are several ways for them to raise money, but
every source has its advantages and disadvantages. We have discussed two ways below:

14
 ● Raising money through the bank loan will impose a fixed liability on the companies, as
they will have to pay a fixed interest even if they are not making sufficient profits. So
raising money through loans is a burden.
● On the other hand, if a company raises money by issuing shares, there is no fixed burden
on paying regular dividends. Because paying dividends depends on the decision of
management. There is no hard rule that the company will have to pay regular dividends.

3.3 How do stock exchanges work?

Primarily, there are two types of financial markets – the primary market and the secondary
market. The primary market is where companies issue their stock to the public for the first time
through an IPO. Thereafter, once the stock is allotted to interested buyers, it is listed on the
secondary market. The stock exchange is the secondary market where stocks and other
instruments are listed and traded.

So, when you sell or buy shares or other instruments on the stock exchange, you don’t transact
with the company. You transact with existing shareholders. Investors who wish to sell off their
assets look for buyers and buyers looking to invest in such assets look for sellers. The stock
exchange offers a platform where these sellers and buyers can come together to conduct trade.
The instruments are listed on the stock exchange market and buyers and sellers can place buy
and sell orders (respectively).

3.4 Importance of the stock exchange

The meaning of stock exchange also highlights its importance. The stock exchange is an
important platform both for companies that list their stocks and for investors. Let’s understand
why:

3.4.1 From the perspective of a company

If a company wants to list its shares, it needs a stock exchange. So, the exchange is important
for the company for the following reasons:

● A source of raising funds

Equity is the most cost-effective way for a company to raise funds for operations and
growth. Even though the equity stock is issued in the primary market, it ultimately gets

15
 listed on the stock exchange which is the secondary market. Moreover, the company
can issue more shares through the exchange for additional capital. So, the stock
exchange allows companies to raise funds.

● Better visibility and perception

Companies whose stocks are listed and traded on the stock exchange have better
visibility as they are known to investors. Moreover, when the company delivers a good
performance, it is reflected in the value of its shares which boosts a favourable market
perception and helps the company earn goodwill and grow.

● The facility of ESOPs

Companies can attract talented employees with Employee Stock Ownership Plans
(ESOPs) if their stock is listed on the stock exchange. This allows companies to cut
down on their acquisition costs, get good employees and also motivate employees to be
productive.

● Compliance with the legal framework

The Securities and Exchange Board of India (SEBI) is the regulatory authority of the
capital market. As such, companies listed on the stock exchange have to comply
with SEBI’s rules and regulations. It ensures corporate governance and weeds out
unfair practices.
3.4.2 From the perspective of investors and traders

For investors and traders trading on the stock exchange, the importance of the platform is
underlined in the following points:

● Trading opportunities
First and foremost, stock exchanges give traders and investors a platform to trade.
Interested investors can invest in potential assets to generate returns on their
investments. On the other hand, potential sellers can sell their assets to book profits,
realise funds, or cut down on losses. By providing a platform of interaction between
buyers and sellers, stock exchanges provide different trading opportunities.

● Liquidity

16
 Instruments listed on the stock exchange market are highly liquid. You can sell them
and get funds whenever you need them. So, in an emergency, you can sell your holdings
to get liquid funds to meet your financial obligations. Moreover, if your investment
strategy changes, you can easily reshuffle your portfolio by trading your assets on the
exchange.
● Collateral assets
The instruments listed on the stock exchange serve as collateral assets and allow you to
raise funds against their value. This is helpful when you need funds for emergencies or
other financial obligations.

3.5 Leading stock exchanges of India

● Bombay Stock Exchange (BSE)- The Bombay Stock Exchange, or Dalal Street, is the
oldest stock exchange in India. Established in 1875, BSE boasts of being the largest
exchange in India. BSE’s current market cap is Rs 5,981.25 cr as of 20th Jul
2021. Types of securities traded are equity and equity derivatives, currency derivatives,
interest rate derivatives, commodity derivatives, and debt. The main index of the BSE
is the S&P BSE Sensex that tracks the performance of the 30 largest and most active
stocks listed on the exchange. Some of the other popular BSE indices include BSE
MIDCAP, BSE 100, BSE SMALL CAP, BSE 200, BSEMetal, BSEAuto, among
others. The Indian Clearing Corporation Limited (ICCL) is a fully-owned subsidiary of
BSE. It acts as a counterparty for all trades happening on BSE and facilitates trade
settlements. BSE Institute Limited is the educational arm of BSE that aims to educate
investors about the capital markets.

● National Stock Exchange (NSE)- Established in 1992, the National Stock Exchange
of India listed itself as an Indian stock Exchange in 1993 under the provisions of the
Securities Contract Regulations Act. NSE was the one to introduce trading in
dematerialized format. It offered investors the facility of automatic screen-based
trading for ease and convenience. The securities traded are equity and equity
derivatives, currency derivatives, interest rate derivatives, commodity derivatives, and
debt. The benchmark index of NSE is the Nifty-50 which is a very popular parameter
for investors in India as it tracks the top 100 of the market’s best performers –
heavyweights that can influence the course of the market movement. Derivative trading

17
 was introduced by NSE in the year 2000, and today, the Futures and Options market
has wide participation. NSE has also facilitated the establishment of the National
Securities Depository Limited (NSDL) that allows investors to trade electronically, in
Demat form, for ease of buying and selling securities.

● Calcutta Stock Exchange (CSE)- The Calcutta Stock Exchange is the second oldest
stock exchange in India. It was established in the year 1908 in Calcutta, hence the name.
Presently, the Calcutta Stock Exchange operates out of Lyons Range in Calcutta. Types
of securities traded are equity and equity derivatives, currency derivatives, interest rate
derivatives, commodity derivatives, and debt. CSE was recognised as a stock exchange
in the year 1956 under the Securities Contract (Regulations) Act, 1956. Later on, in the
year 1997, the traditional trading system was replaced with the screen-based trading
system introduced by the NSE. Even though the exchange grinded to a halt after it was
rocked by the Ketan Parekh scam, the organization has been revived and sees renewed
investor participation and interest, and is now a professional exchange, much like the
BSE and NSE.

● Indian Commodity Exchange Limited- Securities traded are Commodity derivatives.

It was called ICEX in short, the Indian Commodity Exchange is a platform for trading
in commodity derivatives. The exchange was registered with SEBI in Aug 2017 and is
headquartered in Mumbai. ICEX boasts of being the only exchange in the world that
deals in diamond derivative contracts, introduced with effect from 2017.

● Metropolitan Stock Exchange of India Limited- Types of securities traded are:

equity and equity derivatives, currency derivatives, interest rate futures, commodity
derivatives, and debt. Also called MSE in short, the Metropolitan Stock Exchange was
formed in the year 2008. Headquartered in Mumbai, MSE is involved in the activity of
a clearing house. It helps in the clearance and settlement of trade contracts that involve
multiple types of asset classes. SEBI recognized MSE as a notified exchange in 2012.
In May 2013, MSE launched its index called SX40 which is a free-float index
comprising 40 large-cap stocks from the different segments of the economy.

● Multi Commodity Exchange of India Limited- Types of securities traded:

Commodity derivatives. Another exchange that is primarily meant for trading in

18
 commodity derivatives, MCX began its operations in Nov 2003. MCX is listed on the
BSE and NSE and it offers commodities for trade. Recently, MCX generated a
considerable turnover of Rs 3,732 lakh cr and ranked 7th in the commodity exchanges
globally. MCX has introduced an app called ComRIS that helps in keeping the records
of all the transactions routed through MCX.
● National Commodity and Derivatives Exchange of India Limited- Founded in Apr
2003, NCDEX is an online trading platform for commodity derivatives. Investors can
buy and sell different types of commodities including pulses, agricultural produce,
edible oils, and the like. NCDEX provides a platform for trading in agricultural goods.
Though headquartered in Mumbai, NCDEX allows traders to trade from all across
India. It has a strong network of 50,000 terminals across 1,000 centres. The trading time
starts from 10 AM and goes up to 11.30 PM, five days a week.

With so many stock exchanges available, people might get confused about which one you
should choose. Well, there is no restriction when it comes to selecting a specific exchange
from the list of stock exchanges in India. You can choose any exchange depending on your
investment needs. If you want to invest in stocks, NSE, BSE or CSE would be suitable choices.

When you trade in stocks, it is important to pick the right ones so that you can enhance the
return generating potential of your portfolio. To compare and pick the right stocks, analysis of
the issuing company is important. Primarily, there are two types of analyses used to spot
potential stocks.

⮚ Fundamental analysis: wherein the fundamentals of the issuing company is analysed

⮚ Technical analysis: which involves the use of statistics and charts to predict price
movements based on past prices levels.

4. Fundamental Analysis

4.1 What is Fundamental Analysis

When people are looking to invest in shares on a long-term basis, it is imperative for them to
use multiple lenses to gauge the company and its potential. You cannot depend on the daily
changes in its stock market price. Your purchasing decision must come from something far

19
more concrete. There are several methods that most long-term investors can use in determining
if a particular equity share is worth your purchase. One such method is fundamental analysis.

Fundamental analysis refers to a process that considers several important financial & economic
factors to find out a share’s intrinsic value. Intrinsic value means investors pit it against the
stock’s trading price and then decide if you want to go short or long, that is sell or buy it.

Fundamental Analysis is a technique for estimating a security's actual worth by inspecting

related economic and monetary variables. Fundamental analysts concentrate on whatever can
influence the security's worth, from macroeconomic factors, for example, the condition of the
economy and industry conditions to microeconomic elements like the viability of the
organization's administration.

The ultimate objective is to show up at a number that a financial backer can contrast and a
security's present cost to see whether the security is underestimated or exaggerated. All stock
analysts tries to determine whether a security is correctly valued within the broader market.
Fundamental analysis is usually done from a macro to micro perspective in order to identify
securities that are not correctly priced by the market.

Experts commonly study, all together, the general condition of the economy and afterward the
strength of the particular business prior to focusing on individual organization execution to
show up at an honest assessment for the stock.

The fundamental analysis utilizes public information to assess the worth of a stock or some
other kind of safety. For instance, investors can perform a major investigation on a security's
worth by checking out monetary factors, for example, loan costs and the general condition of
the economy, then, at that point, concentrating on data about the bond guarantor, for example,
possible changes in its credit score.

For stocks, the fundamental analysis utilizes incomes, income, future development, return on
value, overall revenues, and different information to decide an organization's fundamental
worth and potential for future development. Each of this information is accessible in an
organization's budget reports.

20
4.2 Why is intrinsic value so crucial in making purchase decisions?
There are 3 underlying assumptions of fundamental analysis:

⮚ The market prices of stocks fail to reveal an accurate picture of a stock

⮚ The value reflected by quantitative and qualitative analysis portrays a far better image
of the same
⮚ The share market will automatically discover the actual value of the stocks in the long
run

In this case, instead of opting for a series of standard calculations, analysts opt for several
complex models to find the stock’s actual value. In addition to that the assumption of stocks
reaching their true value in the long run, the investor can use fundamental analysis to make
significant gains over time.

4.3 Who uses fundamental analysis?

Even though most investors tend to utilise fundamental analysis, the parties likely to use it are:

⮚ Value or long-term investors since it helps them find out the underlying value of the
stock, growth potential, generate pricing targets, and ascertain whether the stock is
worth the price they are paying
⮚ Corporate managers and accountants for gauging and improving the profit-making
ability of an organization by streamlining its operations. It also helps them understand
where they stand against the competition

4.4 Types of fundamental analysis

Fundamental analysis is all about harnessing data to make an investing decision pertaining to
stocks. When it comes to data, it can grow from a plethora of areas, and you can interpret them
in several ways. Fundamentals Analysis is bifurcated into 2 parts –Qualitative & Quantitative.
The former refers to the information in numerical form, whereas the latter pertains to the
standard or nature of something.

21
4.4.1 Quantitative fundamentals

They are only numbers. The analyst uses financial statements to make informed investment
decisions. Here are the elements that form the base of quantitative fundamentals.

Statement of Cash flow

Cash flow is a kind of statement that includes all the cash position of an entity. It bifurcates the
cash inflows and outflows into 3 major categories:

⮚ Cash flow from operations: It takes into account all the cash influx and outflows
pertaining to the everyday business operations of that company
⮚ Cash flow from investing: A business invests in a lot of assets throughout a financial
year. The cash flow from investing activities is a sum of cash paid for acquiring new
resources and the money acquired from the sales of equipment or other similar assets
➢ Cash flow from financing: All the cash paid and received summary from the securities
& funds borrowed

Profit & loss statement

The profit & loss statement summarises the revenues, expenses, and profit generated by the
company for a specific period.

Balance sheet of the company

The balance sheet of a company indicates the company’s income, expenses, assets & liabilities
on a specific date. It also reveals the status of equity ownership and debt on a given date.

4.4.2 Qualitative fundamentals

Unlike the quantitative fundamentals that are out in the world for everyone to see, the
qualitative aspects are the more subtle characteristics of an organisation. Below are 4 main
qualitative fundamentals to consider:

22
Management

Management is the most critical part of a company. The way they go about their business will
inadvertently decide the success or failure of the idea—the most innovative ideas flounder
when it is given to them in the hands of incapable management.

Corporate governance

The company character and its corporate laws and regulations define the corporate governance
policies. These help the business in establishing its relationships between stakeholders,
management, and directors.

Business model

The business model refers to what a business does and how it does it. A company needs to have
a significant chunk of the inflows from its business model, and if it doesn’t, you are better off
not investing in it.

Competitive advantage

It is what differentiates you from your competition. A competitive advantage can be a brand’s
name, supply network, or ability to hire a quality workforce at a cheaper rate.

For Example, Let's talk about the Coca-Cola Company. No analysis of Coca-Cola is finished
without considering its brand value. Anyone can begin an organization that sells sugar and
water, however, only a couple of organizations are known to billions of individuals. It's difficult
to put a finger on precisely what the Coke brand is worth, however, you can be certain that its
important ingredient is adding to the organization's continuous achievement. Fundamental
Analysis would start by surveying the worth of Coca-Cola's resources, revenue sources,
obligations, and liabilities. CSIMarket, a famous wellspring of monetary examination, starts
by looking at genuine measurements like income, benefits, and development, particularly with
regards to the more extensive drink industry. Noticing that Coca-Cola's income developed by
41% in the second quarter of 2021, while the more extensive refreshment industry saw just
25% income development, a key examiner could derive that the Coca-Cola Company is better

23
situated to make gains in the current market climate than the normal organization in a similar
industry.

Like some other investing methodology or strategy, fundamental analysis isn't generally
fruitful. The way the fundamentals demonstrate a stock to be underestimated doesn't ensure
that its portions will ascend to characteristic worth any time soon. Things are not really basic.
As a general rule, real price is affected by a lot of elements that might subvert the analysis.
Financial backers and analysts will often utilize a mix of fundamental, technical, and
quantitative analysis while assessing a company's potential for development and productivity.

4.5 Tools used for Quantitative Analysis

From earnings and financial reports to financial ratios, there are a number of tools used in the
quantitative analysis as discussed below.

❖ Financial reports

1. The balance sheet

The balance sheet of any organization contains its assets and liabilities. You can likewise allude
to it as a business total asset. Assets are organization-possessed and can incorporate things like
hardware, gear, office space, copyrights, property, and more. Liabilities are what it owes to
others like equity and debt. High equity or debt generally prompts long-haul complexities,
while a developing organization amplifies current resources and secures new ones.

Make sure that the organization has, or is developing towards a monetary record where its
assets continue to develop more than its liabilities.

2. Profit and loss statement

Profit and loss statement comprises of the expenses of the company and revenue generated by
the company. Lets take an example, one of the largest company like Google’s revenues will
be the money that they receive by any advertisements and mobile sales, tax on play store, and
many more. Google’s expenses will have all the outgoing money by all the payments to
employees, tax to the government etc.

24
Profit = Revenue – Expenses

Loss = Expenses- Revenue

You really want to search for organizations whose incomes easily surpass their costs. You
ought to likewise take note that incomes should come from center sources as they have the
more noteworthy solidness. Google acquired more than 70% of its income from promotions
in 2018.

3. Cash flow statements

They are definite reports of money that moved all through a business account in a monetary
year. Income explanations measure the money-based exchanges an organization makes in a
year, including speculations. Search for organizations that finance a larger part of their
prerequisites through non-income exercises as lesser money consumption, as a rule, infers a
generally safe business.

Aside from these, a few organizations likewise remember an assertion of progress for value
and compose notes to the investor on their positions. Watch out for organizations with complete
straightforwardness in all the above reports so you are not deluded by bogus or the absence of
monetary data.

4. Earnings

Basically, earnings are the cash that an organization makes. Notwithstanding, you might know
them as a net gain, primary concern, or benefit; they all mean something similar. Take the
instance of Bata. Take away every one of the expenses needed to create their footwear like
assembling costs, cost of merchandise procured and stock from their pay from deals,
establishments and you will get their income (benefit).

25
Subsequently, you should put resources into organizations that have high profit supported
throughout some stretch of time. Higher benefits are a great business. It is likewise something
similar for speculation and financial matters overall.

❖ Financial ratios

Monetary proportions are one more significant apparatus in the quantitative investigation. They
offer a more clear perspective on the company's financials concerning productivity, costs,
value, etc.

1. Earnings per share (EPS)

These are the profit of an organization isolated by the number of portions of the organization.
Search for organizations with high profit per share so when you choose to sell, the cost of each
offer will be considerable, supporting your profits.

2. Price to earnings ratio (PE ratio)

This is the proportion of the offer cost and the EPS of an organization. Basically, it shows the
amount you want to pay to get Rs 1 of a company’s income. Guaranteeing a low P/E proportion
will mean you spend less of your income for a greater amount of the organization.

3.Return on equity

Return on equity offers to survey the productivity of an organization created by utilizing the
investor's cash. Partition the overall gain/income/benefit by value portions of financial backers
to evaluate this measurement. Ensure you pick organizations with an exceptional yield on value
to amplify your profits.

Other monetary proportions you can investigate incorporate the cost to book proportion, profit
yield proportion, benefit proportions like working net revenues, net, and net revenues, and
liquidity proportions like current, fast, and money proportions.

26
Debt to Equity and return on equity ratios are the ones Warren Buffett depended on as he
amassed tremendous abundance. Perhaps you could apply the quantitative technique just to
break down his income and see the outcomes.

4.6 Pros/Cons of Fundamental Analysis

Advantages of fundamental analysis

Here is why investors prefer fundamental analysis:

⮚ It helps you find the probable long-term propositions to invest in the equity shares of
choice
⮚ It enables you to uncover companies that are underrated but possess valuable assets and
a solid financial standing
⮚ It has limited room for bias
⮚ It helps you in detecting red flags before spending the money on the company
⮚ It helps you get a thorough understanding of the business, including its crucial revenue
and profit-driving aspects and those that need work

Cons of fundamental analysis

Even though being an efficient mechanism for finding the right equity shares, fundamental
analysis has its share of criticisms:

⮚ It ignores the herd mentality and focuses more on the intrinsic value aspect
⮚ It takes into account years of data and can be time-consuming
⮚ There are different techniques and models for each industry, which can feel
cumbersome at times
⮚ Financial statements, the basis of fundamental analysis, often do not present an accurate
picture.

5.Technical Analysis

5.1 What is Technical Analysis

27
TA is the method where price, volume, past trends in price movements, and other statistics are
used to predict how the stock would perform eventually. In other words, Technical Analysis
study the past performance of any particular stock to predict its future movements.

The technical analysis of stocks, along these lines, is a measurable assessment of a stock's
expected execution utilizing past information. Specialized investigation endeavours to foresee
future value developments, giving brokers the data expected to create a gain. Traders apply
technical analysis tools to chart so as to distinguish entry and exit points .

TA works on three major assumptions. These are as follows:

⮚ Markets discount everything: This assumption states that market price of any stock
tells everything about it. The market price is based on the market sentiments of the
stock. It increases if there is a high demand for the stock and falls in a seller’s market.
So, technical analysis uses the price movement of the stock to predict future potential.
⮚ Prices move as per the trend: Another assumption is that the stock prices move as per
the market trend. If the market is in an upswing, the prices would move up. Similarly,
if a downswing trend is established, the prices would fall.
⮚ Past patterns repeat themselves: This is the last assumption of technical analysis
which believes that history repeats itself. So, the past price movements of the stock
would be repeated in future too.
Considering these assumptions and using various charts and indicators, analysts determine the
future performance of the stock. This is how the technical analysis of stocks works.

5.2 Technical Analysis Tools

Different types of tools are used for conducting technical analysis. These include the following:

Charts: Charts are graphical representations showing the price movement of the stock in the
past. These are used together with trendlines to get a more holistic view of the price changes.
Mainly 3 types of charts are used in technical analysis. These are as follows:
➢ Line charts

➢ Bar charts

➢ Japanese candlestick charts

28
CANDLE STICKS
The candlesticks began in Japan. The soonest utilization of candlesticks all the way back to the
eighteenth century by a Japanese rice shipper named Homma Munehisa.

However the candlesticks have been in presence for quite a while in Japan, and are most likely
the most established type of price analysis, the western world merchants were ignorant
regarding it. It is accepted that at some point around the 1980s a dealer named Steve Nison
unintentionally found about candlesticks, and he acquainted the methodology with the
remainder of the world. He created the very first book on candles named Japanese Candlestick
Charting Techniques which is as yet a top pick among numerous brokers.

The vast majority of the candlesticks actually hold Japanese names; accordingly giving an
oriental feel to technical analysis.

A candlestick is a sort of graph utilized in technical analysis that shows the high, low, open,
and close price of security for a particular period. It began from Japanese rice dealers and
merchants to follow market costs and everyday energy for many years prior to becoming
advocated in the United States. The wide piece of the candlestick is known as the "real body"
and lets financial investors know whether the closing price was higher or lower than the open
price.

A candlestick shows everyday low and high & their comparison with open and close. The
candlestick shapes vary depending on the relationship between everyday low and high and
open and close price.

Long white/green candlesticks demonstrate there is solid purchasing pressure; this regularly
shows price is bullish. Nonetheless, they ought to be taken a gander at with regards to the
market structure rather than exclusively. For instance, a long white light is probably going to
have more importance on the off chance that it structures at a significant value support level.

29
Long dark/red candlesticks demonstrate there is huge selling pressure. This recommends the
cost be bearish. A typical bullish candlesticks reversal design, alluded to as a hammer,
structures when value moves considerably lower after the open, then, at that point, rallies to
close approach the high. The same bearish candlesticks are known as a hanging man. These
candles have a comparable appearance to a square lollipop and are frequently utilized by
dealers endeavouring to pick a top or base in a market.

5.2.1 Components of CandleStick

Just like a bar chart, a daily candlestick shows the market's open, high, low, and close price
for the day. The candlestick has a wide part, which is called the "real body."

This real body represents the price range between the open and close of that day's trading.
When the real body is filled in or black, it means the close was lower than the open. If the
real body is empty, it means the close was higher than the open.

Traders can alter these colors in their trading platform. For example, a down candle is often
shaded red instead of black, and up candles are often shaded green instead of white.

Basic Candlesticks Patterns

Candlesticks are created by up and down movements in the price. While these price
movements sometimes appear random, at other times they form patterns that traders use for
analysis or trading purposes. There are many candlestick patterns. Here is a sampling to get
you started.

30
Patterns are separated into bullish and bearish. Bullish patterns indicate that the price is likely
to rise, while bearish patterns indicate that the price is likely to fall. No pattern works all the
time, as candlestick patterns represent tendencies in price movement, not guarantees.

5.2.2 Types of Candlesticks

Engulfing Pattern( Bearish)
A bearish engulfing pattern example creates an upturn when sellers are in more number than
purchasers. This activity is reflected by a long red genuine body overwhelming a little green
genuine body. The example demonstrates that merchants are back in charge and that the cost
could keep on declining.

Engulfing Pattern( Bullish)

Engulfing on the bullish side of the market happens when buyers outperform sellers. This is
reflected in the diagram by a long green genuine body immersing a little red genuine body.
With bulls having set up some control, the cost could head higher.

Evening Star(Bearish)
An evening star is a fixing design. It is recognized by the last candle in the example opening
underneath the earlier day's little real body. The little real body can be either red or green.
The last flame closes profound into the genuine body of the candle two days earlier. The
example shows a slowing down of the buyers and afterward the sellers taking control. More
selling could create.

31
Harami(Bearish)
Bearish harami is a little real body (red) totally inside the earlier day's real body. This isn't
such a lot of an example to follow up on, yet it very well may be one to watch. The example
shows hesitation with respect to the buyers. Assuming the price proceeds higher a short time
later, all might, in any case, be well with the upturn, yet a down candle following this
example shows a further slide.

Harami(Bullish)
The bullish harami is something contrary to the topsy turvy negative harami. A downtrend is
in play, and a little real body (green) happens inside the enormous real body (red) of the
earlier day. This lets the expert know that the pattern is stopping. In the event that it is trailed
by one more up day, more potential gain could be approaching.

Cross Bearish Harami

A bearish harami cross happens in an upswing, where an up candle is trailed by a doji-the
meeting where the candle has a basically equivalent open and close. The doji is inside the real
body of the earlier meeting. The ramifications are as old as negative harami.

32
Bullish Harami Cross
A bullish harami cross happens in a downtrend, where a candlestick is trailed by a Doji. The
Doji is inside the genuine body of the earlier meeting. The ramifications are as old as bullish
harami.

Moving averages: “It is a process in which the average price of the stock is calculated over a
specified number of trading days”. For example, a 5-day moving average would give you the
average of the stock prices over the past five trading days. Moving averages help analysts weed
out sharp price movements and establish an average price that can be compared against the
moving averages of different trading periods.
Moving averages can be of the following two types:

⮚ Simple Moving Average

⮚ Exponential Moving Average
There are 2 kinds of moving averages:

I. Simple moving average- A basic moving average (SMA) is determined by taking the mean
of a progression of qualities throughout a particular timeframe. To put it another way, a
gathering of numbers or, on account of monetary instruments, prices are added together and
afterward partitioned by the quantity of costs in the gathering. It is utilized to know the help
and obstruction of a stock from verifiable information. 20 days moving average, 50 days
moving average, 100 days moving average, 400 days moving average is for the most part

33
utilized by the brokers. Basic moving average is utilized to compute by taking average of
shutting cost of 20days. This is more precise type of taking average so break out signals are
utilized to take position.

II. Exponential moving average-The remarkable moving average is a kind of moving average
that gives current costs more prominent load to make it more delicate to new information. To
register an EMA, first compute the straightforward moving average (SMA) throughout a
given time-frame. The multiplier for weighting the EMA (otherwise called the "smoothing
factor") should then be determined, which regularly follows the equation: [2/(chose time-
frame + 1)]. The multiplier for a 20-day moving average would be [2/(20+1)]=0.0952. The
current worth is then determined by consolidating the smoothing factor with the past EMA.
Accordingly, the EMA gives late costs a higher weighting, though the SMA doesn't

Pivot Points
Day traders utilize pivot points as technical indicators to know probable resistance & support
prices level in a securities exchange. They are calculated using the high, low, and closing
prices from the prior day. Pivot points and the resistance & support levels provided are used
by people to trade to assess potential trade entry, exit, and stop-loss prices. Pivot point was
first devised by traders in the equity & commodities markets who operated in a fast paced
environment. They would determine the pivot for that particular trading day by using the last
day's low, high and close prices at the starting of every trading day. The pivot point is then
utilized to determine two levels of support and resistance for the day.

34
The pivot point and the distinction between the earlier day's high and low costs decide the
support & resistance levels. The pivot point fills in as the critical support or resistance level
when processing pivot points. At the point when the cost is at or close to the pivot point, high
volume trading is normal. The most common pivot point trading strategies: The pivot point
and current pricing

Stochastic RSI
Relative strength Index (RSI) is a pointer that is in important analysis to decide the condition
of oversold or overbought conditions in price of any stock or other resource by estimating
extent of ongoing value developments. The RSI is shown as an oscillator that lies from 0 to
100. This marker has 3 levels, oversold, over purchased, and custom sell. Over 70 shows
overbought sign, under 30 shows oversold sign.

During a downtrend, the RSI would top close half rather than 70%, which might be used by
financial backers to all the more precisely signal negative conditions. At the point when a solid
pattern is set up, numerous financial backers would draw a level pattern line somewhere in the
range of 30% and 70% to assist them with identifying limits. At the point when the cost of a
stock or resource is in a drawn out flat channel, evolving overbought or oversold levels is
normally superfluous. At the situation when the RSI surpasses that flat 30 reference level, it is
taken as bullish, and when it falls down from the even 70 reference level, it is known as bearish.
To put it another way, RSI upsides of 70 or higher sign that a venture is becoming overbought
or exaggerated and is probably going to see a pattern inversion or restorative value decrease.
A perusing of 30 or less on the RSI recommends that the market is oversold or underestimated.
RSI esteems might fall into a band or reach during patterns. During an upswing, the RSI ought
to nearing 70 and more than 30 consistently. The RSI once in a while surpasses 70 during a
downtrend, while the pointer commonly tumbles to 30 or lower. These guidelines can assist
you with measuring the strength of a pattern and recognize possible inversions. If the RSI can't
arrive at 70 on a few progressive value swings during a rise however at that point falls under
30, the pattern has debilitated and might be returning lower. In a decrease, the opposite is valid.
In the event that a downtrend neglects to arrive at 30 or lower and accordingly ascends more
than 70, it has debilitated and might be going to the potential gain. When utilizing the RSI in
this style, pattern lines and moving midpoints are helpful instruments to join. Oversold field
shows the reach which gives sign to purchase,. This implies at oversold position the will be a
market opposition which will lead the cost to rise. Over purchased – the other way around of

35
oversold. Custom sell-these are the places that is taken to sell or purchase when the cost doesn't
reach oversold or overbuy costs yet the example demonstrates so.

MACD

The Moving Average Convergence Divergence (MACD) oscillator is a well known and as
often as possible used specialized examination pointer utilized by merchants and investigators
to decide market energy. Merchants and examiners use a scope of specialized pointers to
perceive market designs, estimate planned exchanging changes, and, at last, to either exchange
effectively themselves or to encourage clients on the most proficient method to exchange
effectively. Union of Moving Averages Divergence takes two distinctive pattern following
pointers moving midpoints and transforms them into an energy oscillator by taking away the
more extended time span's moving normal from the more limited time-frame's moving normal.
Here and there, this makes the MACD a two edged specialized marker, as it permits merchants
and investigators to follow market patterns while additionally deciding the force of value
changes. Accordingly, the determined moving midpoints will join, get north of each other, and
afterward veer, or get away from each other, making the MACD jump over and under the zero
line. Merchants can subsequently watch out for these flagging intersections and divergences to
see changing business sector developments, regardless of whether bullish or negative.

As we've seen, the MACD depends on development the development of moving midpoints
towards (assembly) or away from each other (dissimilarity) (difference). Over and underneath
the zero line, otherwise called the centerline, the Moving Average Convergence Divergence
marker shifts, or wavers. This change is a hybrid, which implies the more limited moving
normal has crossed the way of the more one, cautioning dealers. At the point when the 12-day
moving normal crosses over the 26-day normal, the MACD is viewed as certain. The positive

36
upsides of the Moving Average Convergence Divergence increment when the more limited
term moving normal veers and ventures further away from the more extended term one. This
is an indication that vertical force is expanding. In light of this present, it's not hard to see the
reason why when the 12-day normal falls underneath the 26-day normal, the Oscillator turns
negative, and the more limited term moving normal gets away from the more drawn out term
moving normal, an ascent in negative energy is flagged.

Going too far of Control One of the marker's most normal signs is the Moving Average
Convergence Divergence line crossing the sign line. The sign line is the 9-day moving normal
of the MACD line itself, as we've effectively examined. The sign line is an expected valuation
for the oscillator's development that recognizes bullish and negative MACD turns. A bullish
hybrid happens when the Moving Average Convergence Divergence turns north, getting over
the sign line, and proceeding or remaining above it. This is an indication that the cost of a
security is rising. At the point when the Moving Average Convergence Divergence passes
underneath the sign line, the inverse is valid. This is a negative hybrid, and in the event that the
Oscillator keeps on falling underneath the sign line, the bears are probably going to take
control. Numerous merchants might select to sell prior to losing a lot of significant worth,
contingent upon the steepness of the misfortune and the quantity of days the slide proceeds.
This is additionally an incredible second for educated brokers to purchase modest values that
could transform into gold once the market goes positive.

OHL strategy
A prominent day trading method employed by stock traders is the Open High Low trading
approach. When the opening price is equal to the highest price for that particular trading day,

37
or when the opening price is equal to the lowest value on that particular trading day, potential
OHL trading signals are generated. The OHL trade rules can be summarized as the buy or sell
signal:

• Buy – when the stock has the same value for open and low.

• Sell – when the stock has the same value for open and high.

Within the initial 15 minutes, the markets usually have a lot of activity, which might lead to
better trading possibilities. The extension of the price range and an increase in volume will
result in these trading chances. If the OPEN=Low of the day, for example, this is often a sign
of smart money buying activity. This indicates that the demand side of the market is
exceeding the supply side, resulting in higher prices. OHL is a very simple strategy in which
a selected traded stocks is chosen based on the previous day candlestick, taking the average
of open price, closing price, and last traded days high and low. An average price is calculated
and compared with the average moving price.

Trading Strategies

Day Trading
It is maybe the most notable dynamic trading style. It's regularly viewed as a nom de plume
dynamic trading itself. Day trading, as its name suggests, is the technique for purchasing and
selling protections around the same time. Positions are finished off around the same time they
are taken, and no position is held for the time being. Customarily, day trading is finished by
proficient brokers, for example, subject matter experts or market creators. Notwithstanding,
electronic trading has opened up this training to fledgling merchants.

Position Trading
Some really consider position trading to be a purchase and-hold methodology and not dynamic
trading. Notwithstanding, position trading, when done by a high level broker, can be a type of
dynamic trading. Position trading utilizes longer term diagrams anyplace from every day to
month to month in mix with different techniques to decide the pattern of the current market
course. This sort of exchange might keep going for quite some time to half a month and now
and again longer, contingent upon the pattern.

38
Trends Traders search for progressive higher highs or lower highs to decide the pattern of a
security. By hopping on and riding the "wave," pattern merchants expect to profit from both
the up and drawback of market developments. Pattern brokers hope to decide the bearing of
the market, yet they don't attempt to estimate any value levels. Commonly, pattern brokers hop
on the pattern after it has set up a good foundation for itself, and when the pattern breaks, they
ordinarily leave the position. This implies that in times of high market unpredictability, pattern
trading is more troublesome and its positions are for the most part diminished.

Swing Trading
At the point when a pattern breaks, swing brokers regularly get in the game. Toward the finish
of a pattern, there is normally some value unpredictability as the recent fad attempts to secure
itself. Swing merchants purchase or sell as that value instability sets in. Swing exchanges are
normally held for over a day yet for a more limited time frame than pattern exchanges. Swing
dealers frequently make a bunch of trading rules dependent on specialized or principal
examination.

These trading rules or calculations are intended to recognize when to purchase and sell a
security. While a swing-trading calculation doesn't need to be correct and anticipate the
pinnacle or valley of a value move, it needs a market that moves toward some path. A reach
bound or sideways market is a danger for swing brokers.

Scalping
Scalping is one of the fastest methodologies utilized by dynamic merchants. Basically, it
involves distinguishing and taking advantage of bid-ask spreads that are somewhat more
extensive or smaller than ordinary because of transitory uneven characters in market interest.

A hawker doesn't endeavor to take advantage of enormous moves or execute high volumes.
Rather, they try to gain by little moves that happen habitually, with estimated exchange
volumes. Since the degree of benefit per exchange is little, hawkers search for somewhat fluid
business sectors to build the recurrence of their exchanges. In contrast to swing brokers,
hawkers incline toward calm business sectors that aren't inclined to abrupt value developments.

39
5.3 Benefits of technical analysis

Technical analysis is a great technique for analysing stocks and picking the right ones. Below
are some benefits of the process which make it an indispensable part of stock trading.

⮚ Timing the market: The primary benefit of technical analysis is helping you find
out when to invest and when to sell. By studying technical charts and graphs, you can
spot potential trends in the market and then invest or redeem for the most profitable
trade.
⮚ Analysis of market trends: Technical analysis charts help you check the market trend,
i.e. whether it is a bullish market or a bearish one. Knowing the market trends helps
you to make the right investment decisions.
⮚ A complete picture of the stock price: Technical analysis of stocks gives you four
main price points of the stock – the opening price, the closing price, the day’s high, the
day’s low. This helps you check the price movement of the stock, at one glance.
⮚ Fixing of stop-loss targets: Stop-loss is the point wherein you cut your losses and sell
off stocks whose prices are consistently falling. Depending on your risk appetite and
strategy, you can fix a suitable stop-loss target using technical indicators.
⮚ Prediction of future trends: Lastly, technical analysis helps predict a reversal in
market trends and the future profitability of stocks. That is why it is used by analysts
and traders to identify the right levels in stocks that have the potential to grow.

40
5.4 Technical analysis & fundamental analysis

Technical Analyses Fundamental Analysis

A statistical study of the stock price Involves analysing the fundamentals of the
movements in the past to estimate future company such as the strength and efficiency of
movements. Price and volume form the main the management, the financial position, and
basis of technical analysis economic trends. The stock price is not given
any consideration

Assumes the company’s stock price reflects Analyses company fundamentals to arrive at
fundamentals and predicts its future intrinsic value

The past performance of the stock is The current and future prospect of the
considered to draw up charts and indicators company is considered to make an analysis

Uses stock charts, trends and patterns for Uses balance sheets, income statements and
analysis other financial statements for analysis

Originated in the 1800s Originated in the 1930s

Both these methods have their associated risks, with fundamental analysis primarily used for
long-term investment and technology for short-term investment. It’s better to keep in mind that
the investment game is a constant learning process even for established analysts and prepare
yourself to face layered, and sometimes risky, stock analysis challenges.

41
7. STOCK ANALYSIS

Objective:- The main objective of stock market research is to suggest investors on what
stocks should they buy and what to sell on basis of fundamental and technical analysis so that
they gain the maximum profit. I have worked on the stocks of a few companies for my
research project and did the analysis how the stocks are performing. I have used indicators
and tools to study the market direction of the stocks so as to maximise the profits.

Using OHL Strategy

Investigating a couple of stocks to check if the accompanying procedure are powerful or not.

Some value portions of various kinds of organizations were utilized to dissect. Utilizing OHL

methodology it was made sure that for seven days does the methodology stays successful or

not. The time span was changed in as candle diagram with 5 minutes design, where the

development of the market was followed to comprehend and check for the system. This is a

table which shows how the information is determined, the table comprises of opening value,

shutting cost and exorbitant cost of the candle to ascertain the normal of the OHL

methodology.

In Case of the OHL Strategy, if the low price is same as open then we should buy the stock
and when the open price is same as the high price we should sell the stock. In this situation
the only stock I can sell based on OHL Strategy is Tata Power as the open price and high
price is the same.
Analysing pattern of the few stocks, I have calculated that how many times and what kind of
predictions can be done. For every pattern where intraday shows a positive pattern, and there
is a point where intraday buy and then sell can be done, so as to enter a uptrend to make

42
profit. when there is negative pattern, where market is dropping down as indicated by the
OHL procedure that connotes the stock is tumbling down in the market according to the
beginning of market, then, at that point, the offer can be sold first and purchased when the
offer costs decline, that is named as down pattern.

TATA CONSULTANCY SERVICES

Moving Average Bearish

Pivot Points Bearish

Stochastic RSI Bearish

Bollinger Bands Bullish

MACD Bearish

In TCS indicators shows that it is in downtrend so profit cannot be made in intraday but TCS
is good in terms of long term. Stock with good financial performance alongside good to
expensive valuation, but lacks price momentum as suggested by technical indicators.

43
Tata Power

Moving Average BULLISH

Pivot Points BULLISH
Stochastic RSI BULLISH
Bollinger Bands BULLISH
MACD BULLISH

All the indicator shows that Tata Power is in uptrend now and a lot of profit can be made by
investing money in Tata Power.

INFOSYS

44
 Moving Average BULLISH
Pivot Points BULLISH
Stochastic RSI BULLISH
Bollinger Bands BULLISH
MACD BULLISH

Since Infosys is in the direction of uptrend, the investors get confidence in investing in it.

WIPRO

Moving Average BULLISH

Pivot Points BULLISH
Stochastic RSI BULLISH
Bollinger Bands BEARISH
MACD BEARISH

Since some indicators are in uptrend while few are in downtrend so not much profit can be
made by investing in Wipro.

45
8.CONCLUSION

People usually compare the country’s economic state by looking at its stock market
performance and see how well the economy is doing or what is the condition of the economic
situation by stock market direction. This implies they fill in as a gauge of what cycle the
economy is in and the expectations and fears of the populace who produce development and
abundance.

Stock exchanges exist to serve the more extensive economy. It assists people with procuring
a benefit on their pay when they put resources into the financial exchange and permits firms
to spread their dangers and get huge prizes.

It likewise empowers the public authority to build spending through the assessment income
they procure from enterprises that exchange on the stock trade. The public authority utilizes
the income to build re-speculation and business limit.

The securities exchange assumes a significant part in the economy of a country as far as
spending and venture. Without financial exchanges, numerous nations would not be however
evolved as they seem to be.

Close by this, it has assisted people with becoming affluent and builds the general way of life
in numerous economies.

The internship at Growth Arrow Services was more of a learning internship where I learnt a
lot about the stock markets, various stock exchanges, how to know the financials of a
company, how to decide which company stocks to buy or not, fundamental analysis, technical
analysis etc.

46
9.REFERENCES

1. Acheme, David & Vincent, Olufunke & Folorunso, Olusegun & Isaac, Olusola.
(2014). A Predictive Stock Market Technical Analysis Using Fuzzy Logic. Computer
and Information Science. 7. 10.5539/cis.v7n3p1.
2. Greig, Anthony. (1991). Fundamental Analysis and Subsequent Stock Returns.
Journal of Accounting and Economics. 15. 413-442. 10.1016/0165-4101(92)90026-X.
3. Abarbanell, Jeffery & Bushee, Brian. (1996). Fundamental Analysis, Future Earnings
and Stock Prices. The Journal of Accounting Research. 35. 10.2307/2491464.
4. Dechow, Patricia & Hutton, Amy & Meulbroek, Lisa & Sloan, Richard. (2001). Short
Sellers, Fundamental Analysis and Stock Returns. Journal of Financial Economics.
61. 77-106. 10.1016/S0304-405X(01)00056-3.
5. Gotur Aradhana. (2021). Diving Into the World of Fundamental Analysis of Stocks.
Tickertape.in
6. Adam hayes. (2021). How Does the Stock Market Work. Investopeia.com.
7. Morgan, John & Stocken, Phillip. (2003). An Analysis of Stock Recommendations.
RAND Journal of Economics. 34. 183-203. 10.2139/ssrn.144848.

8. Waldman, John. (1999). The importance of comparative studies in stock analysis.

Fisheries Research. 43. 237-246. 10.1016/S0165-7836(99)00075-2.

47