CREDIT RISK MANAGEMENT

TECHNICAL ANALYSIS

CONTENTSL NOINDEXPAGE NO

PART A

1Executive summery 02

2Industry overview 03 to 07

3Organization Study18 to 20

4STP, SWOT Analysis and Competitors 21 to 28

5Theoretical study of Technical Analysis 29 to 58

6 Need for Study Objectives of Study Scope of Study Tool Used Limitations of the Study59To62

PART B

7Data Analysis and Interpretation 63 to 72

8Findings73 to 74

9Recommendation 75

10Conclusion76

11Bibliography 77

12Annexure78 to 82

EXECUTIVE SUMMARY

The project undergone in RAJCHANDRA CAPITAL SERVICE LTD Bijapur. Rajchandra capital is the financial service company in India. The company rides on its rich experience in the capital market to offers its clients a wide portfolio of savings and investment solution.In this project my aim is understand the use of the technical analysis in capital market and to analyze the basic tools, trends and chart pattern of selected company technical analysis. The study is to know about the price fluctuations taking place in the stock market. and utmost importance because of its usefulness in estimating/predicting the future trends of the stock prices and to make a good profit out of it and to earn a high rate of return on investments .The main objective of the study is to know how the investors can gain more out of their investment by using the tools of technical analysis study the effectiveness of technical analysis while making investment decisions.The study contains the industrial over view, organization profile and Technical analysis of power sector of selected company and service sector of selected company stocks namely NTPC and Tata consultancy service.The sources of data are primary data i.e., collected through of sub broker and investors and collecting the data and information from different personnel by the means of personal interaction with branch manager, employees and clients of the rajchandra capital sub broker and secondary data through internet, books, magazine.This study has been conducted to analyze the equity of the two companies belonging to the power sector and software service sector with an intention to learn the movement of share prices in the market and to analyze the future price movements and take right decisions to avoid the future losses of uncertainty in the market.

INDUSTRY OVERVIEWInvestment is the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in form of interest, income, or appreciation of the value of the instrument. It is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance no matter for households, firms, or governments. An investment involves the choice by an individual or an organization such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility of generating returns over a period of time.An investment is a commitment of funds made in expectation of some positive rate of return in future. An investor makes some sacrifice in the present in the hope of desiring benefits in future. The motive behind investment varies from person to person. Some people invest in order to gain a sense of power or prestige. Often the control of corporate enterprises is a driving motive. For most investor however their interest in investment is largely pecuniary to earn a return on their money. But the return on stock market security is subject to risk. Risk incase refers to the uncertainty surrounding actual realization of the rate of return offered by an investment. The time element refers to period of waiting required to reap the return. Accordingly early investment decision has three key aspects. They are, Return Risk Time/Liquidity

Therefore, investment process must be considered in terms above aspects. One should approach any scheme of investment as a rational decision making process, in which he should attempt to select a package of portfolio securities that meets predetermined set of goals. These investors goal are usually expressed in terms of return. Almost all the cases, the hard fact are that return and risk are inseparable. Further the maximum the return the greater the risk. Therefore the ultimate decisions to be made in the investment are two. What securities to be held How much funds should be allocated to each securities

These decisions are made in three steps.1. Security analysis1. Security evaluation1. Portfolio analysis, selections and management.

Securities are marketable financial instruments that bestow on their owners the right to make specific claims on particular assets. An individual security provides evidence of their creditor ship or ownership depending on whether it is bond or stock, respectively. A bond is loan that is paid off with interest; the investor lends money to the borrowing company that issued bond. In contrast, stock ownership represents a cash investment a future of a corporation; the investor owns a part of a corporation and share in its profits.

SECURITY ANALYSIS1. Traditional investment analysis, when applied to securities, emphasizes projection of prices and dividends. That is, the potential prices of a firms common stock and future dividend stream are forecast, and then discounted back to the present. 1. Basically modern security analysis deeply rooted in the fundamental concept. But the more modern approach to common stock analysis emphasizes risks and return estimate rather than mere price and dividend estimates, of course dependent on share price and accompanying the dividend stream.

SECURITY EVALUATIONIt refers to the act of assessing the true worth of security. Before committing the fund on stock exchange securities, the investor should make thorough comparison of the prices of the security with its true value. The price refers to the price quoted for the security at the stock exchange at a given movement of time. Value refers to the intrinsic worth. Only with the help of such evaluation the investor can decide as to buy hold or sell.

DIFFERENT APPROACHES TO EVALUATIONThere are essentially three approaches or school of thoughts on the matter of security price evaluation, classified as1. FUNDAMENTAL APPROACHFundamental analysis is based on the premise that a security has an intrinsic value at any given time. This value is function of underlying economic values specifically, expected returns and risk. By assessing these fundamental determinants of intrinsic value of a security, it is possible to determine an estimate of its intrinsic value. This estimated intrinsic value can then be compared to the current market price of the security. A basic assumption of fundamental analysis is that market price and intrinsic value can differ from time to time, but eventually investors will recognize the discrepancy and act to bring the two values together. Those investors who can perform good fundamental analysis and spot discrepancies should be able to realize profits by taking a suitable decision before the disparity is eliminated by the market.1. TECHNICAL APPROACH Technical analysis is a security analysis technique that claims the ability to forecast the future direction of prices through the study of past market data, primarily price and volume. In its purest form, technical analysis considers only the actual price and volume behavior of the market or instrument. Technical analysts, sometimes called "chartists", may employ models and trading rules based on price and volume transformations, such as the relative strength index, moving averages or classically, through recognition of chart patterns.Just as there are many investment styles on the fundamental side, there are also many different types of technical traders. Some rely on chart patterns; others use technical indicators and oscillators, and most use some combination of the two.

In any case, technical analysts' exclusive use of historical price and volume data is what separates them from their fundamental counterparts. Unlike fundamental analysts, technical analysts don't care whether a stock is undervalued - the only thing that matters is a security's past trading data and what information this data can provide about where the security might move in the future.1. MODERN APPROACHMarkovitz led down the foundation for this approach in 1951. He studied capital market with the help of fairly sophisticated method of investigation and in general arrived at the following conclusions. Stock markets are reasonably efficient in reacting quickly and rationally to the flow of information. Successive price changes are independent. As a result past price behaviour cannot be used to predict future price behaviour. In the capital market, there is a positive relationship between the risk and return.This indicates, in general, investment in several securities would reduce the variability of return and hence the risk of a portfolio.

ASSUMPTIONS OF TECHNICAL ANALYSIS1. The Market Discounts EverythingA major criticism of technical analysis is that it only considers price movement, ignoring the fundamental factors of the company. However, technical analysis assumes that, at any given time, a stock's price reflects everything that has or could affect the company - including fundamental factors. Technical analysts believe that the company's fundamentals, along with broader economic factors and market psychology, are all priced into the stock, removing the need to actually consider these factors separately. This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market.

2. Price Moves in TrendsIn technical analysis, price movements are believed to follow trends. This means that after a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. Most technical trading strategies are based on this assumption.3. History Tends To Repeat ItselfAnother important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Technical analysis uses chart patterns to analyze market movements and understand trends. Although many of these charts have been used for more than 100 years, they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves.

1. Not Just for StocksTechnical analysis can be used on any security with historical trading data. This includes stocks, futures and commodities, fixed-income securities, forex, etc. In this report, we'll usually analyze stocks in our examples, but keep in mind that these concepts can be applied to any type of security. In fact, technical analysis is more frequently associated with commodities and forex, where the participants are predominantly traders.

OVERVIEW OF FINANCIAL INDUSTRY

The financial sector is in a process of rapid transformation. Reforms are continuing as part of the overall structural reforms aimed at improving the productivity and efficiency of the economy. The role of an integrated financial infrastructure is to stimulate and sustain economic growth.

The financial industry, or financial services industry, includes a wide range of companies and institutions involved with money, including businesses proving money management, lending, investing, insuring, and securities issuance and trading services.

INDIAN FINANCIAL SYSTEM

The economic development of a nation is reflected by the progress of the various economic units,

Broadly classified into corporate sector, government and household sector. While performing their activities these units will be placed in a surplus/deficit/balanced budgetary situations.

There are areas or people with surplus funds and there are those with a deficit. A financial system or financial sector functions as an intermediary and facilitates the flow of funds from the areas of surplus to the areas of deficit. A financial system is a composition of various institutions, markets, regulations and laws, practices, money manager, analysts, transactions and claims and liabilities.

FINANCIAL MARKET DEFINITIONA market for the exchange of capital and credit, including the money markets and the capital markets. A financial market can be defined as the market in which financial assets are created or transferred. As against a real transaction that involves exchange of money for real goods or services, a financial transaction involves creation or transfer of a financial asset. Financial assets or financial instruments represent a claim to the payment of a sum of money sometime in the future and / or periodic payment in the form of interest or dividend.CAPITAL MARKETMarket exits to facilitate the purchase and sale of goods and services. The financial markets exists to facilitate sale and purchase of financial instruments and comprises of two major market, capital market and money market the distinction between capital market and money is that capital market mainly deals in medium and long-term instrument(maturity more than a year) while the money market deals in short-term instruments(maturity up to a year).Capital market is, thus, important for raising funds for capital formation and investments and forms a very vital link for economic development of any country. The capital market provides a means for issuer to raise capital from investors (who as surplus money available from saving for investment).Thus, the savings normally flow from household sector to business or government sector, who normally invests more than they save.

FUNCTIONS OF CAPITAL MARKET To mobilize resources for investments To facilitate efficient use of capital To facilitate buying and selling of securities To facilitate the process of efficient price discovery To facilitate settlement of transactions in accordance with predetermined time schedules.MAJOR ENTITIES INVOLVED IN CAPITAL MARKET: SEBI(Regulator) Stock Exchanges Clearing Corporation / Clearing Houses Depositories and Depository Participants Custodians Stock Brokers and their Sub Brokers Mutual Funds Merchant Bankers Credit Rating Agencies Financial Institutions Foreign Institution Investors Non-Banking Institutions Issuer/Registrar and Transfer Agents Investors Bombay Stock Exchange National Stock Exchange Underwriters and sub underwriters Agents

SEGMETNS OF CAPITAL MARKET:Capital market consists of1. Primary market2. Secondary market

1. PRIMARY MARKET:A market were the issuers access their prospective investors directly for funds required by them generally either for expansion or for meeting the working capital needs this process is called disintermediation where the funds flow directly from investors to issuers. Primary market comprise of market for new issues of shares and debentures, where investors apply directly to the issuer for allotment of shares/debentures and pay application money to the issuer .primary market is one where issuer contacts directly to the public at large in search of capital. It also helps limited companies as well as Government companies to issue their securities to the new/existing share holders making public issue/rights issue. After the public issuer is listed on stock exchanges provided it complies with requirements prescribed by the stock exchanges.ACTIVITIES IN THE PRIMARY MARKET: Appointment of merchant banker Pricing of securities being issued Communication/ marketing of the issue Information on credit risk Making public issues Collection of money Minimum subscription Listing on the stock exchange Allotment of securities in demat / physical mode2. SECONDARY MARKET:In the secondary, market the investors buy/sell securities through stock exchanges. Trading of securities on stock exchange results in exchange of money and securities.Secondary market provides liquidity to the securities on the exchanges and this activity commences subsequent to the original issue. For example, having subscribed securities of a company, if one intends to sell the same, it will have to be done in secondary market. Similarly one can buy the securities of a company from the secondary market.A stock exchange is the single most impotent institution in the secondary market for providing a platform to the investors for buying selling of securities through its members. In other words the stock exchange is place where already issued securities are bought and sold by investors. Thus secondary market activities are different from the primary market in which issuer issue securities directly to the investors

ACTIVITIES THE SECONDRAY MARKET Trading of securities Risk management Clearing and settlement of trades Delivery of securities and funds

ORIGIN OF INDIAN STOCK MARKETThe Origin of the stock exchange in India can be traced back to the latter half of the 19th century. After the American civil war (1860-61) due to the share mania of the public, the number of brokers dealing in shares increased. The brokers organized an informal association in Mumbai named the native stock and share brokers association in 1975. At presently in India there 23 stock exchanges are there and situated in various part of the country. All the stock exchanges in India are controlled by SEBI.

SECURITIES EXCHANGE BOARD OF INDIA (SEBI)SEBI was set up as an autonomous regulatory authority by the government of India in 1988 To protect the interest of the investors in the securities and to promote the development of and to regulate the securities market and the matters connected there with or incidental thereto. It is empowered by two acts namely The SEBI Act, 1992 and The Securities Contract (Regulation) Act, 1956 to perform the function of protection investors rights and regulating the capital markets.STOCK EXCHANGES:Exchanges are the physical locations where stocks are bought and sold. They are the sisters of the over the counter (OTC) market. The OTC refers to a market in which securities transactions are conducted through a telephone and computer network connecting dealers in stocks and bonds, rather than on the floor of an exchange. Together, these two markets form the secondary market. The primary and secondary markets together make up the stock market.The Securities and Exchange Commission (SEC) regulates stock trading and exchanges. The national association of securities dealers (NASD) administers additional regulation. The NASD makes and enforces rules for its members and enforces federal securities acts and the SEC makes rules for its membership. As you read more about investing, you will become more familiar with these organizations and their protective regulations.The main objectives of the stock exchange are: To safeguard the interest of investing public having dealing on the exchanges. To establish and promote honourable and just practices in securities transactions. To promote develop and maintain well regulated market for dealing in securities. To promote industrial development in the country through efficient resources mobilization by way of investment incorporates securities.

BOMBAY STOCK EXCHANGE (BSE):This premier stock exchange is the oldest stock exchange in Asia. The origin of Bombay stock exchange dates back to 1875. It was organized under the name of the native stock and share brokers association as voluntary and non-profit making association. It was recognized on the permanent basis in 1957. In March 1995, the Bombay stock exchange has introduced screen based trading called BOLT (Bombay Online Trading).NATIONAL STOCK EXCHANGE (NSE):The national stock exchange of India started its operation in 1993 at Mumbai. The genesis of the NSE lies in the recommendation of the Pherwani committee (1991). The main promoters of NSE are IDBI, IRCI, LIC, GIC, SBI, Bank of Baroda, Canara Bank, Corporation Bank, Indian Bank, and Union Bank of India Punjab National Bank, IL&FS.THE MAIN OBJECTIVES OF NSE ARE AS FOLLOWS. To establish the nationwide trading facility for equities, debt instruments and hybrids. To ensure equal access to investors all over the country through appropriate communication network. To enable shorter settlement cycle and book entry settlement system. To meet current international standards of securities market.

RAJCHANDRA CAPITAL SERVICE PVT LTD.

CORPORATE PROFILEINDUSTRY :- Financial servicesADDRESS :- Bilquees Mansion, 2nd Floor, North Side, 261/263, D. N. Road, Fort, Mumbai - 400 001.

ABOUT ACTIVITIES :-

Rajchandra capital, today, is a leading retail financial services company in India with a growing presence. The company rides on its rich experience in the capital market to offer its clients a wide portfolio of savings and investment solutions. The gamut of value-added products and services offered ranges from equities and derivatives, retail banking. And multichannel services - a countrywide network of over offices, phone service, dedicated Customer Care Centre and the Internet.

Wealth Management, RetailBroking& Distribution, currencyBroking, Institutional Broking, Private Equity, Investment Banking Services &

PrincipalStrategiesRajchandra capital service pvt ltd was founded in 1978 as a broker-BSE , with just 3 people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an over 50member team.Today rajchandra capital is a well diversified financial services firm offering a range of financial products and services such as Wealth Management Broking & Distribution, Currency Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment Banking Services Depository services And Principal Strategies.Today they have a diversified client base that includes retail customers (including High Net worth Individuals), financial institutions and corporate clients. We are headquartered in Mumbai and as ofMar 31st, 2012, had a network spread over22 cities and townscomprising 60 Business Locations operated by our Business Partners and us. As atMar31st, 2012, we had 35000 registered customers.

Rajchandra Capital Services Pvt. Ltd.Member: - NSE (CM, F&O,CDS) l BSE (CM,F&O) l MCX-SX (CDS) l CDSLBSE Member Code No. 0452 & SEBI Reg. No. INB010993630 / INF010993630

NSE Member Code No. 09936 & SEBI Reg. No. INB230993637 / INF230993637/INE230993637

MCX SX Member Code No. 46800 & |SEBI Reg. No. INE260993630

BOARD OF DIRECTORSMr. M SHAH is the Chairman and Managing Director of rajchandra capital Services pvt Ltd. He is a Chartered Accountant and started the business in 1978.

Mr. N M LAPASIA is a compliance officer of rajchandra capital & he is the man behind the strong research capabilities at Motilal Oswal Financial Services Ltd. He is an Associate of Institute of Chartered Accountants of India Pinkey m lapasia Director dhirish Chief Financial Officer

Vision and values of Rajchandra capital pvt ltd.VisionTo be one of the most, trusted and globally reputed financial distribution companies and Wealth creation for all our customer ValuesCustomer-centric approachAt Rajchandra capital customers come first, and their satisfaction is not just the top priority but also the driving force for Rajchandra capital every single day.TransparencyHonesty is forte. Rajchandra capital believe in dealing on thoroughly ethical grounds ,being fair and transparent with customer

MeritocracyRajchandra capital recognizes and appreciates efforts put in by employees and, as a matter of fact, reward and distinguish each one of them, ceaselessly.SolidarityRajchandra capital believes in sharing a forthright and respectful relationship with business partners and employees. Rajchandra capital consider them both as their associates, who work together .succeed together

Rajchandra capital service pvt ltdCategoryBrokerage Houses, Consumer Financial Services,

Sector

consumer Financial Services

Tagline/ Slogan

When its a question of your money

Segment

Huge capital base and brokerage

Target Group

Urban and Rural Investors

PositioningComplete Investment and Stock trading Solutions

SWOT Analysis

strength1. innovative range of financial services2. Wide E-broking house in the country3. Strong retail broking operations4. Has over 1579 outlets in India and 35000 clients5. Financial products and services such as Wealth Management, Broking & Distribution, Currency Broking, Portfolio Management Services, Institutional broking.

Weakness 1. Lack of awareness among customers because of non aggressive promotional strategies (media, newspapers etc)2. Lesser emphasis on customer retention3. Localized presence due to insufficient investment for country wide expansion

Opportunities1. With the booming capital market it can successfully launch new services and raise its clients base2. It can easily tap the retail investors with small saving through promotional channels like media ,electronic media etc3. Educating people about the benefit of investments to increase target audience

Threats1. Stringent Economic measures by Government and RBI2. Lack of sufficient branch offices speedy delivery of service3. Other players are providing margin funds to investors on easy terms where as there is no such facility in rajchandra capital4. Entry of foreign finance firms in Indian Market

Competitors1. Share khan2. India bulls3. Angel Broking4. Karvy

Why rajchandra capital service pvt ltd? 30 years experience in the Indian Capital MarketRajchandra capital service pvt ltd has 30 years of in-depth brokering experience in the Indian Capital Market. The company also has more than 35000 above clients, a network of over 22 cities and 60 business locations operated by our business partners. A pioneer in Online Trading since the year 1978rajchandra capital pioneered the simple concept of providing individuals with the facility to trade online . The company has since enjoyed a first mover advantage in online trading. As a creative innovator, rajchandra capital uses cutting-edge technology in online trading to meet client requirements such as customized online trading platforms and among other services. Strong Shareholdersrajchandra capital is backed by strong shareholders, such as, majority shareholder Wide range of Productsrajchandra capital offers a wide range of trading and investment products and solutions. Certified financial advisors help clients to arrive at the right financial solution to meet their individual needs..

Learn the craftYou too can develop your trading skills by availing of the effective guidance by our research department. We offer- Daily mails delivered to our clients mailbox on market conditions and recommendations Technical analysis of BSE 200 Index scrips Free monthly investment magazine Services of professionally qualified executives at 60 offices across India. Our strong research ideas have been instrumental in converting our clients into successful traders.

Multichannel service- Internet, Phone, Branch tradingTrade the way that you want to by selecting from multiple channel options- Internet, Phone or Branch etc.

Deep NetworkWe have a PAN-India network of over 60 offices with industry certified executives and a dedicated Call Centre to provide you quality services.

Dharamshi securitiesOWNERSHIP :- Sub brokerOwner :- DharamshiLocation :- Indi road near ganapati chowk ,shahpeth BijapurManager :- DharamshiThis rajchandra capital in Bijapur is sub broker owned branch run by Dharamshi. It was started in the year 1993 ORGANIZATION STRUCTURE

CLIENTSBACK OFFICEDEALERSUB BROKERDEPOSITORY

Products and services Equity Derivatives Online trading Mutual fund distribution Depository services Loan against shares Currency traders Wealth management

INTRODUCTION TO TECHNICAL ANALYSIS

In todays world companies become known or considered big when they are listed on reputed Stock Exchanges namely NSE (NIFTY) & BSE (SENSEX) for India. As per return is concerned Stock Market is treated as the best place to earn higher returns as compared to other means of investment. Once the company is listed everything a company does/doesnt is reacted upon by the public and the prices of the share of the respective company fluctuate. But this uncertainty of the price gives people a chance to make money both in long term & short term. If one wants to make money in this way he/she needs to know the technical side of the stock i.e. charts trends etc.Technical Analysis is the forecasting of future financial price movements based on an examination of past price movements. Like weather forecasting, technical analysis does not result in absolute predictions about the future. Instead, technical analysis can help investors anticipate what is "likely" to happen to prices over time. Technical analysis uses a wide variety of charts that show price over time.

In the process of security analysis, Technical Analysis plays a very crucial role in showing the direction to proceed. Technical Analysis serves the investment decision-maker by pointing the direction that is most likely to produce the desired results and to meet the expectations of the investors. Technical analysis will ever is considered as a structured, consistent and orderly process without rigidity in either concepts or methods.

The Basis of Technical AnalysisAt the turn of the century, the Dow Theory laid the foundations for what was later to become modern technical analysis. Dow Theory was not presented as one complete amalgamation, but rather pieced together from the writings of Charles Dow over several years. Of the many theorems put forth by Dow, three stand out: Price Discounts Everything Price Movements Are Not Totally Random What Is More Important than WhyPrice Discounts EverythingThis theorem is similar to the strong and semi-strong forms of market efficiency. Technical analysts believe that the current price fully reflects all information. Because all information is already reflected in the price, it represents the fair value, and should form the basis for analysis. After all, the market price reflects the sum knowledge of all participants, including traders, investors, portfolio managers, buy-side analysts, sell-side analysts, market strategist, technical analysts, fundamental analysts and many others. It would be folly to disagree with the price set by such an impressive array of people with impeccable credentials. Technical analysis utilizes the information captured by the price to interpret what the market is saying with the purpose of forming a view on the future.

Prices Movements are not totally random:Most technicians agree that prices trend. However, most technicians also acknowledge that there are periods when prices do not trend. If prices were always random, it would be extremely difficult to make money using technical analysis. In his book, Schwager on Futures: Technical Analysis, Jack Schwager states:"One way of viewing it is that markets may witness extended periods of random fluctuation, interspersed with shorter periods of non-random behaviour. The goal of the chartist is to identify those periods (i.e. major trends)."A technician believes that it is possible to identify a trend, invest or trade based on the trend and make money as the trend unfolds. Because technical analysis can be applied to many different time frames, it is possible to spot both short-term and long-term trends. The IBM chart illustrates Schwager's view on the nature of the trend. The broad trend is up, but it is also interspersed with trading ranges. In between the trading ranges are smaller up trends within the larger uptrend. The uptrend is renewed when the stock breaks above the trading range. A downtrend begins when the stock breaks below the low of the previous trading range."What" is more important than "Why"In his book, The Psychology of Technical Analysis, Tony Plummer paraphrases Oscar Wilde by stating, "A technical analyst knows the price of everything, but the value of nothing". Technicians, as technical analysts are called, are only concerned with two things:1. What is the current price?1. What is the history of the price movement?The price is the end result of the battle between the forces of supply and demand for the company's stock. The objective of analysis is to forecast the direction of the future price. By focusing on price and only price, technical analysis represents a direct approach. Fundamentalists are concerned with why the price is what it is. For technicians, the why portion of the equation is too broad and many times the fundamental reasons given are highly suspect. Technicians believe it is best to concentrate on what and never mind why. Why did the price go up? It is simple, more buyers (demand) than sellers (supply). After all, the value of any asset is only what someone is willing to pay for it. Who needs to know why?

General Steps to Technical Evaluation:Many technicians employ a top-down approach that begins with broad-based macro analysis. The larger parts are then broken down to base the final step on a more focused/micro perspective. Such an analysis might involve three steps:1. Broad market analysis through the major indices such as the S&P 500, Dow Industrials, NASDAQ and NYSE Composite.1. Sector analysis to identify the strongest and weakest groups within the broader market.1. Individual stock analysis to identify the strongest and weakest stocks within select groups.The beauty of technical analysis lies in its versatility. Because the principles of technical analysis are universally applicable, each of the analysis steps above can be performed using the same theoretical background. You don't need an economics degree to analyze a market index chart. You don't need to be a CPA to analyze a stock chart. Charts are charts. It does not matter if the time frame is 2 days or 2 years. It does not matter if it is a stock, market index or commodity. The technical principles of support, resistance, trend, trading range and other aspects can be applied to any chart. While this may sound easy, technical analysis is by no means easy. Success requires serious study, dedication and an open mind.

Some of the Important terms used in the Technical AnalysisSupport and resistance are price levels at which movement should stop and reverse direction. Think of support/resistance as levels that act as a floor or a ceiling to future price movements.Supports- A price level below the current market price, at which buying interest should be able to overcome selling pressure and thus keep the price from going any lower.Resistance - A price level above the current market price, at which selling pressure should be strong enough to overcome buying pressure and thus keep the price from going any higher.One of tow things can happen when a stock price approaches a support/resistance level. On the one hand, it can act as a reversal point:In other wards, when a stock price drops to a support level, it will go back up. On the other hand, S/R levels may reveres roles once they are penetrated.For example- when the market price falls below a support level, that farmer support level will then become a resistance level when the market later trades back up to that level.

FIGURE TITLE: SUPPORT AND RESISTANCE

Concepts of trendTrend is nothing but the direction of movement of price. Logically the share price can ether be rising or falling or moving narrowly (flat). Thus there are three directions in which the price can move these three directions give rise to the three types of trend when prices are moving upwards, the trend is said to be rising. When prices are moving downwards it is called a falling trend. And when prices are moving in a narrow range, the trend can be said to be flat or choppy. Thus, the trend itself has three directions.Upward TrendIf the market makes a high and then comes down and after that cuts the previous high makes a new high, it means that the market is in an uptrend and it is making a higher bottom higher top.. Downward TrendIf the market is falling and making a lower bottom lower top it is said to be a downtrend.

Sideways Trend (flat)If the market is just drifting and has no clear move it is laid to be a sideways trend. Trend lineTrend lines are straight lines drawn by connecting either the tops or bottoms. To draw a straight line, one requires two points. Similarly to draw trend lines, one requires at least tow tops or bottoms. This however, does not mean that there cannot be more than tow tops or bottoms that can be connected to draw a trend line, infect the more the number of tops or bottoms that are touched or connected by the trend line, the better or more powerful the trend line.Trend lines are the simplest, yet the most effective way of riding the trend. Just as trend has three directions rising, falling and flat, there are three types of trend lines to represent each of the directions of trend

Upward trend lineAn uptrend line has a positive slope and is formed by connecting two or more low points. The second low must be higher than the first for the line to have a positive slope. Uptrend line act as support and indicate that net-demand (demand less supply) is increasing even as the price rises. A rising price combined with increasing demand is bullish.

Dawn trend linesA downtrend line has a negative slope and is formed by connecting two or more high points. The second high must be lower than the first for the line to have a negative slope. Downtrend lines act as resistance, and indicate that net-supply (supply less demand) is increasing even as the price declines. A declining price combined with increasing supply is very bearish, and shows the strong resolve of the sellers. As long as prices remain below the downtrend line, the downtrend is solid and intact. A break above the downtrend line indicates that net-supply is decreasing and that a change of trend could be imminent.

Role ReversalOnce a resistance or support level is broken, its role is reversed. If the price falls below a support level, that level will become resistance. If the price rises above a resistance level, it will often become support. As the price moves past a level of support or resistance, it is thought that supply and demand has shifted, causing the breached level to reverse its role. For a true reversal to occur, however, it is important that the price make a strong move through either the support or resistance.FIGURE TITLE: ROLE REVERSAL

SOURCE: www.trending123.comFor example, as you can see in above, the dotted line is shown as a level of resistance that has prevented the price from heading higher on two previous occasions (Points 1 and 2). However, once the resistance is broken, it becomes a level of support (shown by Points 3 and 4) by propping up the price and preventing it from heading lower again.Random Walk HypothesisThe random walk hypothesis is a financial theory stating that stock market prices evolve according to a random walk and thus the prices of the stock market cannot be predicted. It has been described as 'jibing' with the efficient market hypothesis. Economists have historically accepted the random walk hypothesis. They have run several tests and continue to believe that stock prices are completely random because of the efficiency of the market. TECHNICAL CHARTSIn technical analysis, charts are similar to the charts that we see in any business setting. A chart is simply a graphical representation of a series of prices over a set time frame. For example, a chart may show a stock's price movement over a one-year period, where each point on the graph represents the closing price for each day the stock is traded.

TYPES OF CHARTSThere are four main types of charts that are used by investors and traders depending on the information that they are seeking and their individual skill levels. The chart types are: the line chart, the bar chart, the candlestick chart and the point and figure chart.

1. Line ChartThe most basic of the four charts is the line chart because it represents only the closing prices over a set period of time. The line is formed by connecting the closing prices over the time frame. Line charts do not provide visual information of the trading range for the individual points such as the high, low and opening prices. However, the closing price is often considered to be the most important price in stock data compared to the high and low for the day and this is why it is the only value used in line charts.FIGURE TITLE: LINE CHART

SOURCE: www.metastock.com

2. Bar ChartsThe bar chart expands on the line chart by adding several more key pieces of information to each data point. The chart is made up of a series of vertical lines that represent each data point. This vertical line represents the high and low for the trading period, along with the closing price. The close and open are represented on the vertical line by a horizontal dash. The opening price on a bar chart is illustrated by the dash that is located on the left side of the vertical bar. Conversely, the close is represented by the dash on the right. Generally, if the left dash (open) is lower than the right dash (close) then the bar will be shaded black, representing an up period for the stock, which means it has gained value. A bar that is colored red signals that the stock has gone down in value over that period. When this is the case, the dash on the right (close) is lower than the dash on the left (open).Following is a bar chart that represents the details:FIGURE TITLE: BAR CHARTSOURCE: www.metastock.com

3. Point-and-Figure Charts:Point-and-figure charts list only significant price information as columns of X's and O's without regard to time, so that trends, resistance and support levels are more apparent. Although time is depicted on the horizontal axis, the units of time are determined by when the trend changes.The construction of point-and-figure charts simplifies the drawing of trend lines, and support and resistance levels, which is why point-and-figure charts are ideal for detecting trends, and determining support and resistance levels. Following is the point-and-figure chart of Intel Corporation. In this chart, the X's are green and the O's are red, which increases their contrast, making patterns more apparent.

FIGURE TITLE: POINT AND FIGURE CHART

4. Candlestick ChartsAnother type of chart used in technical analysis is the candlestick chart, so called because the main component of the chart representing prices looks like a candlestick, with a thick body, called the real body, and usually a line extending above and below it, called the upper shadow and lower shadow, respectively. The top of the upper shadow represents the high price, while the bottom of the lower shadow represents the low price. Patterns are formed both by the real body and the shadows. Candlestick patterns are most useful over short periods of time, and mostly have significance at the top of an uptrend or the bottom of a downtrend, when the patterns most often signify a reversal of the trend.

FIGURE TITLE: CANDLE STICK CHART

CHART PATTERNSA chart pattern is a distinct formation on a stock chart that creates a trading signal, or a sign of future price movements. Chartists use these patterns to identify current trends and trend reversals and to trigger buy and sell signals.There are two types of patterns within this area of technical analysis, reversal and continuation. A reversal pattern signals that a prior trend will reverse upon completion of the pattern. A continuation pattern, on the other hand, signals that a trend will continue once the pattern is complete. These patterns can be found over charts of any timeframe.

1. Head and ShouldersThis is one of the most popular and reliable chart patterns in technical analysis. Head and shoulders is a reversal chart pattern that when formed, signals that the security is likely to move against the previous trend. As you can see in Figure, there are two versions of the head and shoulders chart pattern. Head and shoulders top (shown on the left) is a chart pattern that is formed at the high of an upward movement and signals that the upward trend is about to end. Head and shoulders bottom, also known as inverse head and shoulders (shown on the right) is the lesser known of the two, but is used to signal a reversal in a downtrend.FIGURE TITLE: HEAD AND SHOULDER CHART PATTERN

SOURCE: www.metastock.com

2. Cup and HandleA cup and handle chart is a bullish continuation pattern in which the upward trend has paused but will continue in an upward direction once the pattern is confirmed.

FIGURE TITLE: CUP AND HANDLE CHART PATTERN

SOURCE: www.metastock.comAs it can be seen in the above figure, the price pattern forms what looks like a cup, which is preceded by an upward trend. The handle follows the cup formation and is formed by a generally downward/sideways movement in the security's price. Once the price movement pushes above the resistance lines formed in the handle, the upward trend can continue. There is a wide ranging time frame for this type of pattern, with the span ranging from several months to more than a year.

3. Double Tops and BottomsThis chart pattern is another well-known pattern that signals a trend reversal - it is considered to be one of the most reliable and is commonly used. These patterns are formed after a sustained trend and signal to chartists that the trend is about to reverse. The pattern is created when a price movement tests support or resistance levels twice and is unable to break through. This pattern is often used to signal intermediate and long-term trend reversals.

FIGURE TITLE: DOUBLE TOPS AND BOTTOMS CHART PATTERN

SOURCE: www.metastock.comIn the case of the double top pattern in Figure 3.17, the price movement has twice tried to move above a certain price level. After two unsuccessful attempts at pushing the price higher, the trend reverses and the price heads lower. In the case of a double bottom (shown on the right), the price movement has tried to go lower twice, but has found support each time. After the second bounce off of the support, the security enters a new trend and heads upward.

4. TrianglesTriangles are some of the most well-known chart patterns used in technical analysis. The three types of triangles, which vary in construct and implication, are the symmetrical triangle, ascending and descending triangle. These chart patterns are considered to last anywhere from a couple of weeks to several months. The symmetrical triangle in Figure 4 is a pattern in which two trend line converge toward each other. This pattern is neutral in that a breakout to the upside or downside is a confirmation of a trend in that direction. In an ascending triangle, the upper trend line is flat, while the bottom trend line is upward sloping. This is generally thought of as a bullish pattern in which chartists look for an upside breakout. In a descending triangle, the lower trend line is flat and the upper trend line is descending. This is generally seen as a bearish pattern where chartists look for a downside breakout.FIGURE TITLE: TRIANGLES CHART PATTERN

SOURCE: www.metastock.com

5. Flag and PennantThese two short-term chart patterns are continuation patterns that are formed when there is a sharp movement followed by a generally sideways price movement. This pattern is then completed upon another sharp price movement in the same direction as the move that started the trend. The patterns are generally thought to last from one to three weeks.There is little difference between a pennant and a flag. The main difference between these price movements can be seen in the middle section of the chart pattern. In a pennant, the middle section is characterized by converging trend line, much like what is seen in a symmetrical triangle. The middle section on the flag pattern, on the other hand, shows a channel pattern, with no convergence between the trend line. In both cases, the trend is expected to continue when the price moves above the upper trend line.

FIGURE TITLE: FLAG AND PENNANT CHART PATTERN

SOURCE: www.metastock.com

6. WedgeThe wedge chart pattern can be either a continuation or reversal pattern. It is similar to a symmetrical triangle except that the wedge pattern slants in an upward or downward direction, while the symmetrical triangle generally shows a sideways movement. The other difference is that wedges tend to form over longer periods, usually between three and six months.

FIGURE TITLE: WEDGE CHART PATTERN

SOURCE: www.metastock.com

TECHNICAL INDICATORSIndicators are calculations based on the price and the volume of a security that measure such things as money flow, trends, volatility and momentum. Indicators are used as a secondary measure to the actual price movements and add additional information to the analysis of securities. Indicators are used in two main ways: to confirm price movement and the quality of chart patterns, and to form buy and sell signals.Indicators that are used in technical analysis provide an extremely useful source of additional information. These indicators help identify momentum, trends, volatility and various other aspects in a security to aid in the technical analysis of trends. It is important to note that while some traders use a single indicator solely for buy and sell signals, they are best used in conjunction with price movement, chart patterns and other indicators.MOVING AVERAGESMoving averages are one of the most popular and easy to use tools available to the technical analyst. They smooth a data series and make it easier to spot trends, something that is especially helpful in volatile markets. They also form the building blocks for many other technical indicators and overlays.There are three types of moving averages, namely simple moving average, exponential moving average and weighted moving average. But the most popular types of moving averages are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). They are described below:

Simple Moving Average (SMA)This is the most common method used to calculate the moving average of prices. It simply takes the sum of all of the past closing prices over the time period and divides the result by the number of prices used in the calculation. A simple moving average is formed by computing the average (mean) price of a security over a specified number of periods. While it is possible to create moving averages from the Open, the High, and the Low data points, most moving averages are created using the closing price. For example: a 5-day simple moving average is calculated by adding the closing prices for the last 5 days and dividing the total by 5. 10+ 11 + 12 + 13 + 14 = 60(60 / 5) = 12The calculation is repeated for each price bar on the chart. The averages are then joined to form a smooth curving line - the moving average line. Continuing our example, if the next closing price in the average is 15, then this new period would be added and the oldest day, which is 10, would be dropped. The new 5-day simple moving average would be calculated as follows:

11 + 12 + 13 + 14 +15 = 65(65 / 5) = 13Over the last 2 days, the SMA moved from 12 to 13. As new days are added, the old days will be subtracted and the moving average will continue to move over time.

The chart above is a plot that contains the data sequence in the table. The simple moving average begins on day 10 and continues. Exponential Moving Average (EMA)This moving average calculation uses a smoothing factor to place a higher weight on recent data points and is regarded as much more efficient than the linear weighted average. Having an understanding of the calculation is not generally required for most traders because most charting packages do the calculation for you. The most important thing to remember about the exponential moving average is that it is more responsive to new information relative to the simple moving average. This responsiveness is one of the key factors of why this is the moving average of choice among many technical traders.

In order to reduce the lag in simple moving averages, technicians often use exponential moving averages (also called exponentially weighted moving averages). EMA's reduce the lag by applying more weight to recent prices relative to older prices. The weighting applied to the most recent price depends on the specified period of the moving average. Exponential Moving Averages can be specified in two ways - as a percent-based EMA or as a period-based EMA. A percent-based EMA has a percentage as it's single parameter while a period-based EMA has a parameter that represents the duration of the EMA. The formula for an exponential moving average is:

EMA(current) = ( (Price(current) - EMA(prev) ) x Multiplier) + EMA(prev)For a percentage-based EMA, "Multiplier" is equal to the EMA's specified percentage. For a period-based EMA, "Multiplier" is equal to 2 / (1 + N) where N is the specified number of periods. For example, a 10-period EMA's Multiplier is calculated like this:(2 / (Time periods + 1) ) = (2 / (10 + 1) ) = 0.1818 (18.18%)This means that a 10-period EMA is equivalent to an 18.18% EMA. Below is a table with the results of an exponential moving average calculation for Eastman Kodak. The calculation in period 11 breaks down as follows: (C - P) = (57.15 - 59.439) = -2.289(C - P) x K = -2.289 x .181818 = -0.4162( (C - P) x K) + P = -0.4162 + 59.439 = 59.023

*The 10-period simple moving average is used for the first calculation only. After that the previous period's EMA is used.Relative Strength IndexIt is another one of the most used and well-known momentum indicators in technical analysis. RSI helps to signal overbought and oversold conditions in a security. The indicator is plotted in a range between zero and 100. A reading above 70 is used to suggest that a security is overbought, while a reading below 30 is used to suggest that it is oversold. This indicator helps traders to identify whether a securitys price has been unreasonably pushed to current levels and whether a reversal may be on the way.

Developed by J. Welles Wilder, the Relative Strength Index is an extremely useful and popular momentum oscillator. The RSI compares the magnitude of a stock's recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100. It takes a single parameter, the number of time periods to use in the calculation.

Calculation:RSI = 100 100 / (1+RS)Average gain = (Total gains / n)Average loss = (Total loss / n)Relative Strength = Average gain / Average lossRelative Strength Index = 100 100 / (1+ RS)N = number of RSI periods.

Calculation of the First RS value is straightforward: divide the Average Gain by the Average Loss. All subsequent RS calculations use the previous period's Average Gain and Average Loss for smoothing purposes.

OPERATIONAL DEFINITION OF CONCEPTS Open - This is the price of the first trade for the period (e.g., the first trade of the day). When analyzing daily data, the Open is especially important, as it is the consensus price after all interested parties were able to "sleep on it."

High - This is the highest price that the security traded during the period. It is the point at which there were more sellers than buyers (i.e., there are always sellers willing to sell at higher prices, but the High represents the highest price buyers were willing to pay).

Low - This is the lowest price that the security traded during the period. It is the point at which there were more buyers than sellers (i.e., there are always buyers willing to buy at lower prices, but the Low represents the lowest price sellers were willing to accept).

Close - This is the last price that the security traded during the period. Due to its availability, the Close is the most often used price for analysis. The relationship between the Open (the first price) and the Close (the last price) are considered significant by most technicians. This relationship is emphasized in candlestick charts.

Volume - This is the number of shares (or contracts) that were traded during the period. The relationship between prices and volume (e.g., increasing prices accompanied within creasing volume) is important.

Open Interest - This is the total number of outstanding contracts (i.e., those that have not been exercised, closed, or expired) of a future or option. Open interest is often used as an indicator.

Bid - This is the price a market maker is willing to pay for a security (i.e., the price you will receive if you sell).

Ask - This is the price a market maker is willing to accept (i.e., the price you will pay to buy the security).These simple fields are used to create literacy hundreds of technical tools that study price relationships, trends, patterns, etc.Candlestick chart: - similar to OHLC, but open and close are filled. Often Black and Red candles represent a close lower than the open. While white, Green or Blue candles represent a close higher than the open.

Line chart: - Connects each closing interval together on a line

OHLC: - Open High Low Close charts plot the high and low of the price movement vertically and the open and close horizontally. Used to graph range and outliers.

Channels: The area between two parallel trend lines, the upper trend line connecting most of the important price peaks or closes and the lower trend line connecting the important lows or closes. Price reversals are expected to occur when prices approach either boundary. Continuation Pattern: A consolidation that temporarily interrupts a rally or decline and sets the stage for another move in the same direction.

Double Bottom: A reversal type chart pattern distinguished by two successive declines, both terminating at approximately the same level. When completed, accomplished by a rise on volume above the high between the two lows, the pattern often resembles the letter W.

Double Top: A reversal type chart pattern--the obverse of the Double Bottom--which resembles the letter M.

Indicators: A subset of market measuring tools (indexes) used specifically for monitoring and forecasting, e.g. Confidence Index or Specialists' Short Sales Ratio. Indexes frequently use benchmarks or thresholds as signals of possible impending change in market outlook.

Momentum: The strength or sustainability of a market move as measured by both volume and price. Moving average based indicators are often used, as are comparisons with the levels of previous time period.

Moving Average: A continuous smoothing technique computed by averaging a series of numbers (price, volume, etc.) progressively over a period of time. The series is often a week, a month or a quarter in length and is computed anew as each day or week goes by. It is often then plotted on a chart with the raw data for analysis purposes.

Overbought: A market condition wherein a stock, group or market has recently extended or exceeded its normal range of movement on the upside. Often accompanied by increased volume and/or a string of unbroken up days. The condition implies a near term reversal is imminent.

Oversold: The reverse of overbought. For the market as a whole, these conditions are often identified by a large number of net Declines (or Advances) for the period, high on balance volume and/or large momentum calculations. Extreme situations can continue for extended periods of time before the eventual reversal occurs.

Pattern: A distinctive formation created on a chart by the up and down movement of prices. For example, head and shoulders, triangle, and double top.

Relative Strength: Price performance of a stock or group of stocks compared to a given norm, such as the Standard & Poor's 500 or the Dow Jones industrial average. A stock moving up 20% when the norm moves only 10% is considered to have good relative strength.

Resistance: A supply of stock waiting to be sold at a price above the current level. Significant trading at that level has previously created a pattern which suggests there would be resistance to the price moving significantly above that level without a great deal of stock changing hands.

Reversal: A shift in the direction of price movement caused by a change in demand and/or supply. Generally the longer the reversal pattern takes to develop, the more serious its implications.

Support Level: An area or price level where a price decline may be expected to be halted (or to slow) by an increase in demand.

RESEARCH METHODOLOGY The research design constitutes the blue print for the collection, measurement and analysis of data. A research design is a plan, structure and strategy of investigation convinced so as to obtain answer to research questions and to control variances. A research design specifies the methods and procedures for conducting a particular study.The research has been done on Power sector and service sector. The selected companies for the study are NTPC Ltd and the Tata consultancy service Ltd. The study has been done by utilizing the technical tools of Moving Average and RSI (Relative Strength Index).

Methodology of the study:The method adopted for the study is collection of previous one year data (closing price of stocks) to draw moving average and relative strength index charts to predict the future trend of the stock and taking right decision about buy, sell or hold.

TYPES OF DATA COLLECTION :

1. PRIMARY DATA :The primary data collected through of sub broker and investors and collecting the data and information from different personnel by the means of personal interaction with branch manager, employees and clients of the rajchandra capital sub broker

2. SECONDARY DATA:The secondary data consists of data collected through various articles, books, magazines and internet and company profiles to analyze the study.

STATEMENT OF THE PROBLEM :In order to make investment, the investor needs to assess the potential for an industry group by considering the overall growth rate, market size, and importance to the economy. When stocks move, they usually move as groups. Many times it is more important to be in the right industry than in the right stock.Technical analysis will help in identifying those industries and companies, which are best to invest with an edge by using various methods and also guides the investors when to buy the shares as well as when to sell the shares in order to avoid risk and make huge profits.

NEED AND IMPORTANCE OF THE STUDY :The term Technical Analysis is used to mean fairly wide range of techniques, all based on concept that part information prices and trading volume of stock gives the enlightened investors a picture of what lies ahead. According to technical analysis, the cyclical trend visible in the movement of stock prices is due to the changes in the attitude of investors, reflected in changes in the demand for and supply of securities. The previous turning points are studied with a view to develop some characteristic that would and identification of other needs and importance of technical analysis which are as follows: Technical analysis provides tools and techniques to study part patterns and predict future prices. It attempts to explain and forecast changes in security price by only the market data rather than information about the company. The technical indicators help the investors to make an active investment strategy, constantly evaluating their holdings and reshuffling at the stocks they hold. The methodology of technical analysis can be applied almost identically in any market anywhere and the same techniques can be applied to currencies, commodities, bonds and equities. Technical indicators help to measure how fast, how often, how much and so on and give a measurement of the market, as well as identifying the best and worst constituents at the time.

OBJECTIVES OF THE STUDY1. To know about the price fluctuations in select stocks for the six months period.1. To analyze basic tools, trends and chart patterns of Technical Analysis with respect to the select companies.1. To predict the future movement of selected stock based on different charts. 1. To study the effectiveness of technical analysis while making investment decisions.

SCOPE OF THE STUDY :In order to analyze the use of technical analysis in stock markets, the study takes into consideration the various industries to identify those companies which are best to invest and thereby minimizing the risk factor and maximizing the profits. The time frame of the study consists of a period of six months from 15-01-2013 to 15-07-2013

TOOL USED Simple moving average Relative strength index

LIMITATIONS OF THE STUDY :1. The study is limited to capital markets and does not include investment in others like commodities markets, derivatives markets, currency markets, etc.1. The study is limited only two sectors consisting of a total of fifteen companies.1. An attempt is made to predict the future stock movement in the study. Thus, it contains an element of guess work.1. Confidentiality of information that corporate people and investors were not willing to share.

DATA ANALYSIS AND INTERPRETATION

NTPC LIMITEDNTPC Limited (Formerly National Thermal Power Corporation) is the largest power generation company in India with 23867 employees. Forbes Global 2000For 2009 ranked it 317th in the world. It is an Indian public company listed on the Bombay Stock Exchange although at present the Government of India holds 84.5%(after divestment the stake by Indian government on 19october2009) of its equity. It was founded on November 7, 1975. NTPC's core business is engineering, construction and operation of power generating plants and providing consultancy to power utilities in India and abroad, MR.R.S.SHARMA being the chair person. By 2017, the power generation portfolio is expected to have a diversified fuel mix with coal based capacity of around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about 2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources (RES). NTPC has adopted a multi-pronged growth strategy which includes capacity addition through Greenfield projects, expansion of existing stations, joint ventures, subsidiaries and takeover of stations. NTPC Ltd.Is divided in 6 Head Quarters at Noida, Patna, Bhubaneswar, Lucknow, Hyderabad and Mumbai. The company has also set a serious goal of having 50000 MW of installed capacity by 2012 and 75000 MW by 2017.

TATA CONSULTANCY SERVICES LIMITED

Tata Consultancy Services (TCS) is a software services and consulting company headquartered in Mumbai, India. TCS is the largest provider of information technology and business process outsourcing services in India. The company is listed on the National Stock Exchange and Bombay Stock Exchange of India.TCS is a subsidiary of one of India's largest and oldest conglomerates, the Tata Group, which has interests in areas such as energy, telecommunications, financial services, manufacturing, chemicals, engineering, materials, government and healthcare. Tata Consultancy Services was established in the year 1968 and is a pioneer in the Indian IT industry. Despite unfavorable government regulations like the License Raj the company succeeded in establishing the Indian IT Industry.It began as the "Tata Computer Centre", a division of the Tata Group whose main business was to provide computer services to other group companies. F.C.Kohli was the first general manager. JRD Tata Was the first chairman, followed by NaniPalkhivala.On 9 August 2004, TCS became a publicly listed company. During 2004, TCS ventured into a new area for an Indian IT services company - Bioinformatics.

CHART SHOWING 20 DAYS SMA OF NTPC LIMITED.

Interpretation The above 20 days SMA of NTPC shows the clear picture of short term stock price movement with the moving average price line. In the above chart it can be clearly observed that on 25th Jan 2013 the stock price line crosses the moving average line from above at price of 159.3 and similarly on 26th Feb 2013 the stock price line crosses the moving average line from below at price of 151.00 and this indicates buy signal. And again on 27th Feb. 2013 the stock price line crosses the moving average line from above at price of 150.65 and Further on 15th April 2013 at price of 140.7 the stock price line crosses the moving average line from below. It clearly indicates buy signal and hence show bullish trend. Similarly on 20th May 2013 the stock price line crosses the moving average line from above at price of 159.1 indicating sell signal and shows bearish trend. Again on 29th may 2013 the stock price line crosses the moving average line from below at price of 154.25 and indicates the buy signal. Similarly on 30th may 2013 the stock price line crosses the moving average line from above at price of 156.75 and it indicates the sell signal and similarly on 11th July 2013 the stock price line crosses the moving average line from below price at 143...it indicates buy signal.CHART SHOWING 50 DAYS SMA OF NTPC LIMITED

INTERPRETATION-The above 50 days SMA of NTPC shows the clear picture of midterm stock price movement with the moving average price line. In the above chart it can be identify on 17th Jan 2013 the stock price line crosses the moving average line from below at price of 156.95. Hence it indicates the buy signal. Similarly on 25th Jan 2013 the stock price line crosses the moving average line from above at price of 159.3 and indicates the sell signal and it shows the bearish trend. And again on 18th April 2013 the stock price line crosses the moving average line from below at price of 145.9 and similarly on 05th June 2013 the stock price line crosses the moving average line from above at price of 154.05 it indicates the sell signal.

CHART SHOWING 120 DAYS SMA OF NTPC LIMITED

INTERPRETATION-The above 120 days SMA of NTPC shows the clear picture of longer term stock price movement with the moving average price line. In the above chart it can be observed on 23th April 2013 the stock price line crosses the moving average line from below at price of 149.1 and it indicates the buy signal. Again on 22rd may 2013 the stock price line crosses the moving average line from above at price of 154.65 and indicates the sell signal. Further on 24th may 2013 the stock price line crosses the moving average line from below at price 150.25 and it indicates buy signal. Again on 5th June 2013 the stock price line crosses the moving average line from above at price 154.05 and it indicates sell signal.

CHART SHOWING RSI OF NTPC LIMITED Interpretation- The RSI compares the magnitude of a stocks recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100. It is calculated by using the simple formula RSI = {100-[100/ (1+RS)]}. It states that if RSI is below 30 buy. And if it crosses above 70 then sell it. If the RSI crosses the 70 there may be downturn and is a right time to sell the stocks. If the RSI falls below 30 then, it is right time to buy the stocks.Buy points-In the above RSI chart on 25th march 2013 at price of 27.21, and the RSI shows the trend falls below the 30 range. It indicates buy the stocks.Sell points-In the above RSI chart on 26th April 2013 at price of 72.94 and on 30th April 2013 at price of 73.35 and again on 02nd may 2013 price at 75.13. the RSI shows the trend crosses above the 70 range and it indicates sell the stocks.

CHART SHOWING 20 DAYS SMA OF TCS LIMITED

Interpretation The above 20 days SMA of TCS shows the clear picture of short term stock price movement with the moving average price line. It shows that the stock price line crosses the moving average line from above on 2nd April 2013 at price 1566.65 and it indicates the sell signal and shows the bearish trend. Again on 3rd may 2013 the stock price line crosses the moving average line from below at price 1418.75 and indicates buy signal and it can be seen in graph it shows short term bullish trend. 31st may 2013 the stock price line crosses the moving average line from above at price 1499.6 and Further on 6th June 2013 the stock price crosses the moving average line from below at price 1471.85 and indicate buy signal. Again on 11th june 2013 the stock price line crosses the moving average line from above at price 1468.65 it indicates sell signal. Similarly on 20th june 2013 the stock price line crosses the moving average line from below at price 1433.65and it indicates buy signal

CHART SHOWING 50 DAYS SMA OF TCS LIMITED

INTERPRETATION-The above 50 days SMA of Tata consultancy service shows the clear picture of midterm stock price movement with the moving average price line. In the above chart on 12th April 2013 the stock price line crosses the moving average line from above at price 1511.3 and it indicates the sell signal. Again on 24th may 2013 the stock price line crosses the moving average line from below at price 1470.00 and it shows the buy signal. Similarly on 31st May 2013 the stock price line crosses the moving average line from above at price 1499.6 and it indicates sell signal and again on 6th June 2013 the stock price line crosses the moving average line from below at price 1471.85 it indicates the buy signal and again on 11th June 2013 the stock price crosses the moving average line from above at price 1498.65 it indicates the sell signal and similarly on 26th June 2013 the stock price line crosses the moving average line from below at price 1433.65 it indicates the buy signal.

CHART SHOWING 120 DAYS SMA OF TCS LIMITED

INTERPRETATION- The above 120 days SMA of Tata consultancy service shows the clear picture of long term stock price movement with the moving average price line. In the above chart on 25th April 2013 the stock price line crosses the moving average line from above at price 1402.1 and it indicates the very short term sell signal. Further on 30th Apr 2013 the stock price line crosses the moving average line from below at price 1376.25 and it shows the buy signal. Again on 18th June 2013 the stock price line crosses the moving average line from above at price 1448.4 and it indicates sell signal. Similarly on 26th June 2013 the stock price line crosses the moving average line from below at price 1433.65 and it indicates buy signal..

CHART SHOWING RSI OF TCS LIMITED

Interpretation- the RSI compares the magnitude of a stocks recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100. It is calculated by using the simple formula RSI = {100-[100/ (1+RS)]}. It states that if RSI is below 30 buy. And if it crosses above 70 then sell it. If the RSI crosses the 70 there may be downturn and is a right time to sell the stocks. If the RSI falls below 30 then, it is right time to buy the stocks.Buy points-In the above RSI chart on 30th April 2013 at price of 27.59, and the RSI shows the trend falls below the 30 range. It indicates buy the stocks.Sell points-In the above RSI chart on 11th feb 2013 at price of 77.4and on 14th feb 2013 at price of 74.32 and again on 20th feb 2013 price at 70.41 and again on 27th feb price at 77.65 and on 1 march 2013 price at 77.13 and 5th march 2013 price at 72.75 and again 7th march 2013 the price at 78.59. The RSI shows the trend crosses above the 70 range and it indicates sell the stocks.

FINDINGS

NTPC LIMITED : In the above charts, X-axis indicates months and the Y-axis indicates the prices of scrip. Blue color indicates moving average line, black color indicates Stock price line

In the simple moving average shows the more fluctuation in 20 days short term stock price movement, The 20 days simple moving average shows the short term bullish trend and long term bearish trend. The stock price movement comparison between 50 days and 120 days, there is less fluctuation in 50 days and 120 days. The stock price line shows there is less volatility in this stock while comparing between the 20 days, 50 days and120 days SMA chart shows the same movements with a little bit variation. The future trend of stock price line shows bullish trend. From the above RSI chart it can be identify that the companies stocks crossed 70 three times, and 30 one time, that shows more fluctuation in RSI.

TATA CONSULTANCY SERVICES LIMITED :

In the above charts, X-axis indicates months and the Y-axis indicates the prices of scrip. Blue color indicates moving average line, black color indicates Stock price line The 20 days simple moving average shows the short term bearish trend and long term for bullish trend. There is more fluctuation in 20 days simple moving average of short term stock price movement. The stock price movement of simple moving average comparison between 50 days and 120 days, there is also less fluctuation in 50 days and 120 days. The future trend of stock price line shows bullish trend. From the above RSI chart it can be identify that the companies stocks crossed 70 seven times, and 30 one time, that shows more fluctuation in RSI.

RECOMMENDATIONS From the above analysis it is advised that the investors may buy the shares of TATA CONSULTANCY SEVICE LTD. From the above analysis it is advised that the investors may sell the shares of NTPC Limited, The use of technical analysis will work more efficiently on liquid stock. More benefit can be derived, if one goes along with the technical indicator and avoid human instincts. Technical analysis provides base to understand the stock movement and to avoid risk up to certain extent. It is better to go for Long term Investment rather than the Short term Investment. Because it is less risky and also provides sufficient return. The investor should be fearful when others are greedy and be greedy when others are fearful as technical analysis is based on individual instincts The Bijapur sub broker branch of rajchandra capital is too small with less infrastructure facility so it has to be improved and it not popular and well know so it should focus on promotional activities

CONCLUSIONProject has helped me to understand the practical knowledge of stock market with the help of technical analysis Technical analysis is done by using different tools but in this study SMA and RSI tool is used to analyze the selected stock.Technical analysis focuses directly on the bottom line: What is the price? Where has it been? Where is it going? A simple moving average is easy to calculate, which allows it to be employed fairly quickly and easilyMost of the investors assume that by using charts and patterns, they can earn much by purchasing in low and selling at high prices. But, it is not as easy as they think. So, such believes should be rooted out from mind before looking towards market.Technical in a position to identify the right time at right point to buy/sell/hold the security And the moving average and RSI provide clear picture it is the right time to sell the share or right time to buy the share. And the shares were oversold, so it is right time to buy the share and were overbought so it is right time to sell the share Moving averages can also identifies a level of support or resistance for the security, or act as a simple entry or exit signal. As per the analysis here investor are recommend to invest in TCS stock for long term period. And those who want to invest for short term period they can invest in NTPC.Technical analysis is a best method of evaluating securities by analyzing the statistics generated by market activity so it helps investors to take the investment.

BIBLIOGRAPHYThe following sources were used to get the information and data required for this project.Books: 1. Michael McDonald, Predicting market swing with Technical Analysis, ISBN 0-0471-20596-6 1. Chandra, Prasanna: Investment Analysis and Portfolio Management, Tata McGraw Hill Pub. Co. Ltd.1. Fischer, Donald E. and Jordan, Ronald T.: Security Analysis and Portfolio Management, Pearson, Prentice Hill, 16th Edition, 2006.Journals Asian Journal Of Management Global Journal of Finance and Management, Barberis, N. and Thaler, R. H. (2002) A Survey of Behavioural Finance

Newspapers and Magazines Economics times Business Standards Websites:www.stockcharts.comwww.chartspattern.comwww.investopedia.comwww.wikipedia.comwww.metastock.comwww.moneycontrol.com

ANNEXURENTPC LIMITED

TCS LIMITED

DATE CLOSING PRICEDATECLOSING PRICE

Jul15,20131,641.75Jul15,2013142.25

jul12,20131,609.85jul12,2013146.1

jul11,20131,564.55jul11,2013143.75

jul10,20131,511.95jul10,2013141.45

jul9,20131,504.90jul9,2013142.3

jul8,20131,506.65jul8,2013140.3

jul5,20131,530.20jul5,2013143.5

jul4,20131,538.30jul4,2013143.95

jul3,20131,489.80jul3,2013144.2

jul2,20131,500.55jul2,2013145.75

jul1,20131,492.35jul1,2013147.7

jun28,20131,518.15jun28,2013143.7

jun27,20131,491.90jun27,2013140.45

jun26,20131,437.70jun26,2013141.2

jun25,20131,392.30jun25,2013138.25

jun24,20131,410.70jun24,2013141.95

jun21,20131,422.25jun21,2013143.05

jun20,20131,404.50jun20,2013140.1

jun19,20131,427.70jun19,2013144.95

jun18,20131,443.80jun18,2013147

jun17,20131,452.45jun17,2013150.3

jun14,20131,450.70jun14,2013151.6

jun13,20131,445.65jun13,2013149.75

jun12,20131,468.10jun12,2013151.15

jun11,20131,501.55jun11,2013150.3

jun10,20131,525.05jun10,2013150.3

jun7,20131,518.95jun7,2013148

jun6,20131,470.75jun6,2013151.2

jun6,20131,470.75jun5,2013154.05

jun5,20131,467.80jun4,2013153.95

jun4,20131,465.35jun3,2013152.25

jun3,20131,469.40may31,2013154.4

may31,20131,498.45may30,2013156.75

may30,20131,499.40may29,2013154.25

may29,20131,497.35may28,2013154.95

may28,20131,514.10may27,2013152.5

may27,20131,498.00may24,2013150.25

may24,20131,469.55may23,2013148.65

may23,20131,492.85may22,2013154.65

may22,20131,498.40may21,2013152.4

may21,20131,492.85may20,2013159.1

may20,20131,472.40may17,2013159.8

may17,20131,473.80may16,2013156.3

may16,20131,454.05may15,2013157.1

may15,20131,471.55may14,2013153.8

may14,20131,457.95may13,2013153.9

may13,20131,451.60may10,2013155.15

may10,20131,495.90may9,2013156.45

may9,20131,498.45may8,2013156.35

may8,20131,479.80may7,2013157.85

may7,20131,471.60may6,2013156.9

may6,20131,467.20may3,2013159.25

may3,20131,418.50may2,2013160.2

may2,20131,433.90may1,2013157.4

may1,20131,378.40apr30,2013157.4

apr30,20131,378.40apr29,2013156

apr29,20131,370.75apr26,2013154.8

apr26,20131,369.35apr25,2013155.15

apr25,20131,402.55apr24,2013149.1

apr24,20131,430.55apr23,2013149.1

apr23,20131,430.55apr22,2013148.85

apr22,20131,425.30apr19,2013145.9

apr19,20131,452.75apr18,2013145.9

apr18,20131,452.75apr17,2013144.25

apr17,20131,456.65apr16,2013143.85

apr16,20131,483.15apr15,2013140.7

apr15,20131,472.45apr15,2014141.7

apr12,20131,511.75apr12,2013140.75

apr11,20131,537.75apr11,2013140.25

apr10,20131,530.45apr10,2013142.35

apr9,20131,490.40apr9,2013141.15

apr8,20131,480.75apr8,2013140.8

apr5,20131,498.35apr5,2013140.85

apr4,20131,506.50apr4,2013144.35

apr3,20131,543.40apr3,2013145.25

apr2,20131,567.35apr2,2013143.9

apr1,20131,556.85apr1,2013143.45

mar29,20131,575.75mar29,2013142

mar28,20131,575.75mar28,2013142

mar27,20131,556.35mar27,2013142.5

mar26,20131,556.35mar26,2013142.5

mar25,20131,543.35mar25,2013142.4

mar22,20131,542.15mar22,2013139.55

mar21,20131,559.95mar21,2013138.1

mar20,20131,557.65mar20,2013139.35

mar19,20131,546.75mar19,2013144.3

mar18,20131,566.75mar18,2013145.5

mar15,20131,570.25mar15,2013145.9

mar14,20131,567.70mar14,2013146.8

mar13,20131,551.70mar13,2013146.6

mar12,20131,560.50mar12,2013147.95

mar11,20131,566.20mar11,2013149.4

mar8,20131,583.15mar8,2013149.05

mar7,20131,589.90mar7,2013148.02

mar6,20131,561.20mar6,2013148.5

mar5,20131,540.15mar5,2013149.4

mar4,20131,513.20mar4,2013149.55

mar1,20131,501.85mar1,2013149.7

feb28,20131,517.00mar1,2013149.7

feb27,20131,483.20feb28,2013150.75

feb26,20131,496.40feb27,2013153.9

feb25,20131,473.70feb26,2013151

feb22,20131,455.05feb25,2013149.9

feb21,20131,451.05feb22,2013151.35

feb20,20131,452.80feb21,2013151.65

feb19,20131,443.55feb20,2013152.25

feb18,20131,425.35feb19,2013153.5

feb15,20131,442.15feb18,2013151.05

feb14,20131,447.70feb15,2013150

feb13,20131,435.40feb14,2013149.35

feb12,20131,410.05feb13,2013148.2

feb11,20131,414.70feb12,2013147.45

feb8,20131,422.60feb11,2013147.55

feb7,20131,387.15feb8,2013148

feb6,20131,370.55feb7,2013148.15

feb5,20131,360.05feb6,2013152.3

feb4,20131,356.35feb5,2013155.6

feb1,20131,348.10feb4,2013155.35

jan31,20131,344.15feb1,2013156.75

jan30,20131,346.15jan31,2013156.6

jan29,20131,344.95jan30,2013155.9

jan28,20131,345.05jan29,2013157.2

jan25,20131,340.05jan28,2013157.75

jan24,20131,328.55jan25,2013159.3

jan23,20131,311.95jan24,2013160.1

jan23,20131,311.95jan23,2013162.35

jan22,20131,317.50jan22,2013164.1

jan21,20131,330.00jan21,2013161.75

jan18,20131,362.00jan18,2013164.15

jan17,20131,347.75jan17,2013156.95

jan16,20131,337.45jan16,2013156.05

jan15,20131,337.45jan15,2013155.75

BLDEAs A S Patil college of commerce MBA Bijapur 80