Industry Internship Project ReportPresentation

on “TECHNICAL ANALYSIS OF NIFTY”

BY:-

Debashish Sahoo

Institute For Technology And Management( Warangal)

PGDM( 2013-15 )

Roll No.:- 201311917

Faculty Guide:- Dr. S. Sirisha And Prof. Mubasher Ahmed

Company:- India Infoline Ld.

Technical Analysis

Technical analysis is a method of predicting price movements and future

market trends by studying charts of historical data. The initial data for atechnical analysis are prices: the highest and the lowest prices, the price ofopening and closing within a certain period of time, and the volume oftransactions.

The Pillars of Technical Analysis:

1) Price

2) Time

3) Volume

4) Sentiments

Objective of Study

• To understand the trends in the stock prices

• when to enter the market and when to exit.

• Developing suitable model comprising ofvarious technical indicators.

Collection of data:-Secondary Data ( From NIFTY Index)

Steps involved in technical analysis

• Look for quick results.

• Read charts to spot price trends

• Understanding the concepts of support and

resistance.

• Pay attention to the volume of trading.

• Use moving averages to smooth out minor price

fluctuations

• Use oscillators and indicators to support what the

price movements are telling

Advantage of Technical Analysis

• Short Term trends of a stock can be easilyidentifiable.

• Good for short term investors.

• Provide suggestions regarding selection onas script.

• Results are very much accurate.

Limitations of Technical Analysis

• Analyst Bias

• Open to Interpretation

• Too Late

• Always Another Level

• Trader's Remorse:- When trader thinks that asupport or resistance level have been broken.

DOW THEORY

1. The market has three movements

• The "main movement", primary movement for1year and more, It can be bullish or bearish.

• The "medium swing", secondary reaction orintermediate reaction may last from ten days tothree months.

• The "short swing" or minor movement varieswith opinion from hours to a month or more.

2. Market trends have three phases have

three phases

• The accumulation phase (phase 1)

• Rapid price change occurs (phase 2)

• Investor distributes its wealth in marketmarket (phase 3)

3. The stock market discounts all news.

4. Stock market averages must confirm each other.

5. Trends are confirmed by volume.

6. Trends exist until definitive signals prove thatthey have ended

Company Profile

• IIFL was founded in 1995 by Mr. Nirmal Jain (Chairmanand Managing Director) as an independent businessresearch and information provider.

• A network of 4000 business locations.

• spread over more than 900 cities and towns acrossIndia.

• Global Reach:- Singapore, Dubai, New York, Mauritius,Hong Kong, United Kingdom, Switzerland.

• Date of listing 17th May 2005.

Organizational Structure of IIFL

Chairman

President- Retail Brokering

Vice President

Assistant Vice President

Senior Manager

Branch Manager (Ramesh Joseph)

Relationship Manager

Charts Patterns

Double Top chart

Cup And Handel

Head and Shoulder

Comparison of NIFTY and SENSEX

An overview of 4 months performance of

NIFTY

Date Last Open High Low Vol. Change %

Sep 01, 2014 7964.80 7990.35 8180.20 7841.80 2.93M 0.13%

Aug 01, 2014 7954.35 7662.50 7968.25 7540.10 2.48M 3.02%

Jul 01, 2014 7721.30 7629.00 7840.95 7422.15 3.32M 1.44%

Jun 01, 2014 7611.35 7264.05 7700.05 7239.50 3.62M 5.28%

Highest: 8180.20 Lowest: 7239.50 Difference: 940.70 Average: 7812.95 Change %: 10.16

Technical Strength:

• MOVING AVERAGE CONVERGENCE DIVERGENCE

Indicator Analysis Signal Chart

MACD MACD: 183.0 and Signal Line: 169.0. According to

MACD analysis, nifty is technically strong.

8.0 NIFTY MACD

Chart

SimpleMoving

Average

According to simple moving average analysis, nifty is in a

strong uptrend. Major support levels are 7396.83,

7031.15, 6345.559.

10.0 NIFTY Simple

Moving Average

Chart

Exponential

Moving

Average

According to exponential moving average analysis, nifty is

in a

strong uptrend. Major support levels are 7389.795,

7088.41, 6483.634.

10.0 NIFTY Exponential

Moving

Average Chart

CONCLUSIONS

• Technical analysis is a method of evaluating securities by analyzing thestatistics generated by market activity. It is based on three assumptions:

• 1) Market discounts everything, 2) Price moves in trends and 3) Historytends to repeat itself.

• Technical traders take a short-term approach to analyzing the market.

• A trend line is a simple charting technique that adds a line to a chart torepresent the trend in the market or a stock.

• Volume is the number of shares or contracts that trade over a given periodof time, usually a day. The higher the volume, the more active the security.

RECOMMENDATIONS for investors

• Stock markets are highly volatile. so before investingpeople should take a close look of technicalsoundness of the stock.

• Technical Analysis is a very effective tool indetermining profit levels as well as stop-losses and itshould ideally be used along with FundamentalAnalysis.

• A word of caution-Technical Analysis is not infallible,as it is linked to the approach of the analyst.