fundamental and technical full report mba

A Study of selected stocks of IT, Pharmaceutical and FMCG Using Technical and Fundamental analysis

CHAPTER 1

INTRODUCTION ABOUT THE INTERNSHIP:

Internship is the integral part of the academics of VTU (MBA). It provides the

opportunity to test the interest in a particular career.

The 12 week internship has been positioned during 4 th semester of the MBA program

as it serves the twin purposes of providing critical business insights to students as well

providing industry with graduates of a higher caliber who are ready to get ahead in the

world from day one.

This study has been done to minimize the risk using technical analysis and also to

understand if technical can guide in making effective selling and buying decision.

TITLE OF THE STUDY:

“A study of selected stocks of IT, Pharmaceutical and FMCG using technical and

fundamental analysis

NEED FOR THE STUDY:

It helps the investors/traders to make the buy or sell decision of the stocks.

It helps to predict the stock prices in near future.

It helps the investors/traders to know the company performances.

It helps the investors/traders to make long and short term profit.

The financial ratios help the investors to make an active investment strategy.

OBJECTIVE OF THE STUDY:

To study the fluctuations in the market values of the different stocks using the

technical analysis.

To determine the timing of investments and selling of stocks.

To know the future movement of selected companies shares through fundamental

and technical analysis.

SCOPE OF THE STUDY:

BMS College of Engineering, Bangalore


This study is based on the historical data of IT, Pharmaceuticals and FMCG

stocks.

The time span is five years.

Relative Strength Index, Rate of Change and Moving Average Convergence /

Divergence indicators used for Technical Analysis.

Financial Ratios are used for the Fundamental Analysis.

RESEARCH DESIGN:

Methodology

Descriptive Research: The main purpose of Descriptive Research is to

describe the state of view as it exists at present. Simply stated, it is fact finding

investigation. In Descriptive Research definite conclusion can be arrived at,

but it doesn’t establish a cause and effect relationship.

Sources

The data collected for the research purpose are secondary data. Index prices

were collected through National Stock Exchange website and through prowess

website. The data employed in this study comprises of 5 year observations on

the NIFTY stock index closing price. Monthly data are preferred in this study.

The choice of monthly closing price is realistic and helpful to calculate and

testing the results in technical analysis.

The data regarding index share price was also taken from website:

www.nseindia.com

www.yahoofinance.com

www.stockcharts.com

www.moneycontrol.com

www.investopedia.com

The supplementary sources of data

Technical analysis of stock trends, 9th Edition, Robert D. Edwards, and

John Magee.

Technical analysis of stock trends by Martin Pring.


http://www.investopedia.com/

http://www.moneycontrol.com/

http://www.stockcharts.com/

http://www.yahoofinance.com/

http://www.nseindia.com/


Financial journals, dailies like capital market, Dalal Street, and

Economic Times are also used.

Sample Size

Five year monthly closing prices of nifty index have taken for testing the relevance

of technical analysis.

Statistical Tools Used

There are five main indicators in technical analysis that helps to predict the market.

a) Exponential Moving Average = (Price * (2/(1+N)) + (previous EMA * (1 –

(2/(1+N)))

b) Relative Strength Index (RSI) = 100 – 100 ( 1+ RS)

c) Rate of Change (ROC) = [(Close – Close ‘n’ periods ago) / Close ‘n’ periods

ago)] *100

There are four kinds of financial ratios that a financial analyst will use most

frequently.

a) Liquidity Ratios

i. Current Ratio = Current Assets / Current Liabilities

ii. Acid Test Ratio = Current Assets – Inventories / Current Liabilities

b) Profitability Ratios

i. Gross Profit Margin (%) = Gross Profit / Sales *100

ii. Net Profit Margin (%) = EAT / Net Sales *100

iii. Return on Net Worth (%) = EAT – Pref. Div / Net Worth *100

iv. Return on Capital Employed = EBT / Total Capital Employed *100

c) Leverage Ratios

i. Debt to Equity Ratio = Total Debt / Net Worth

ii. Debt to Asset Ratio = Total Debt / Total Assets

d) Activity Ratios

i. Inventory Turnover Ratio = Cost of Goods Sold / Inventory

ii. Debtors Turnover Ratio = Net Sales / Debtors

iii. Fixed Asset Turnover Ratio = Net Sales / Fixed Assets

iv. Total Asset Turnover Ratio = Net Sales / Total Assets



LITERATURE REVIEW:

1. According to Grewal S.S and Navjot Grewall (1984) technical analysis is

mainly concern with the study of historical past price movement of the stock in the

market to predict the future behavior of the stock. However, it does not consider any

fundamental factor of the company like earnings, growth rare, etc.

2. Kavajecz and Odders-White (2004) show that support and resistance levels

coincide with peaks in depth on the limits order book and moves average forecasts

reveal information about the relative position of depth on the book. They also show

that these relationship stem from technical rules locating depth already in place on the

limit order book.

3. Sharma and Robet E. Kennedy (1977) Tested the applicability of random walk

hypothesis to the stock market in developed country namely India, and compare

this to that of stock market in developed countries named USA, and England. For

this purpose the price behavior of Bombay stock examined both for randomness

and independence. The test of random walk hypothesis. The test covers 132

monthly observation for each stock market index of common stock listed in

Bombay exchange for eleven years from 1968-1973. The study indicate that price

dependence while statistically significant, is comparable stock obeys a random

walk and is equivalent to developed countries stock exchange.

4. Bessembinder, H. Chan, K. (1995) assumed whether some simple forms of

technical analysis can predict stock price movement in Asian market. We find the

rules to be quite successful in the emerging market of Malaysia, Thailand and

Taiwan. The rules have less explanatory power in more developed markets such

as Hong Kong and Japan. We also find that technical signal emitted by U.S.

market have substantial forecast power for Asian stock returns beyond that of

own-market signals.

5. According to farmer and joshi (2002: 149-171) a stock trading strategy could

base on the chart pattern. The chart pattern was formed from the movement of the



historic price from the certain stock. The movement of the price of the stock could

be complied in the graph statistic with the exact model.

6. According to R Chitra .today the health of stock exchange is solely dependent on

the pattern of investment by the investor. As the financial market goes through

brisk changes, investor should look for right opportunities keeping in tune with

the dynamics of market environment. Technical analysis gives investor a better

understanding of the stock and gives them right direction to go on further to buy

or sell the stock.

7. Fern´andez-Rodr´ıguez, Gonz´alez-Martel and Sosvilla-Rivero (2000)apply an

artificial neural network to the Madrid Stock Market and find that, in the absence

of trading costs, the technical trading rule is always superior to a buy- and-hold

strategy for both ‘bear’ market and ‘stable’ market episodes, but not in a ‘bull’

market. One criticism I have is that beating the market in the absence of costs

seems of little significance unless one is interested in finding a signal which will

later be incorporated into a full system. Secondly, it is perhaps naive to work on

the premise that ‘bull’ and ‘bear’ markets exist.

8. Neftci (1991)showed that a few of the rules used in technical analysis gen- erate

well-defined techniques of forecasting, but even well-defined rules were shown to

be useless in prediction if the economic time series is Gaussian. How- ever, if the

processes under consideration are non-linear, then the rules might capture some

information. Tests showed that this may indeed be the case for the moving average

rule.

9. Lo, Mamaysky and Wang (2000) examines the effectiveness of technical analysis

on US stocks from 1962 to 1996 and finds that over the 31-year sample period,

several technical indicators do provide incremental information and may have

some practical value.

10. Brown and Jennings (1989) showed that technical analysis has value in a model

in which prices are not fully revealing and traders have rational conjectures about

the relation between prices and signals.



LIMITATIONS OF THE STUDY:

The study is restricted to selected companies.

Only five years data is taken for the study.

The study is mainly based on the secondary data. As such it is subject to the

limitations of the secondary data.

Lack of expensive software was constrained for this study.

The study has been done on the past data and does not guarantee future

accuracy and reliability.

CHAPTER 2

INDUSTRY PROFILE:

INDIAN STOCK BROKING INDUSTRY



The Indian Broking Industry is one of the oldest trading industries that have been

around even before the establishment of the BSE in 1875. Despite passing through a

number of changes in the post liberalization period, the industry has found its way

towards sustainable growth.

In 1860, the exchange flourished with 60 brokers. In fact the ‘Share Mania’ in India

began when the American civil war broke and the cotton supply from the US to

Europe stopped. Further the brokers increased to 250. At the end of the war in 1874,

the market found a place in a street (now called Dalal Street)

• The Union Budget 2013: Introduced CTT (commodities transaction tax), on non-

agriculture commodities futures trading and reduced STT (Securities Transaction

Tax) on equity futures contracts to 0.01% from 0.017%

• In the next few years, even if the Indian market improves, the market share of

foreign players will increase to 80% because they have technology and clients on

their side.

• Changing technology and competition from foreigners is forcing most Indian

broking firms to look for other revenue sources

• Apart from MotilalOswal, there is not a single listed broking company where the

bulk of revenue comes from pure broking. MotilalOswal is the only exception.

Around 70% of its revenues come from core broking,

• There are six listed broking firms, of which three (Edelweiss, IIFL and India-bulls)

known as (NBFCs), where only 20% of the business comes from broking activities

and the rest from lending, private equity or other fee-based businesses like

investment banking.

BSE (BOMBAY STOCK EXCHANGE)

For the premier stock exchange that pioneered the stock broking activity in India, 128

years of experience seems to be a proud milestone. A lot has changed since 1875

when 318 persons became members of what today is called “The Stock Exchange,

Mumbai” by paying a princely amount of Re 1. Since then, the country’s capital

markets have passed through both good and bad periods. The journey in the 20 th



century has not been as easy one. Till the decade of eighties, there was no scale to

measure the ups and downs in the Indian stock market. The Stock Exchange, Mumbai

(BSE) in 1986 came out with a stock index that subsequently became the barometer of

the Indian stock market.

SENSEX

It is not only scientifically designed but also based on globally accepted construction

and review methodology. First compiled in 1986, SENSEX is a basket of 30

constituent stocks representing a sample of large, liquid and representing a sample of

large, liquid and representative companies. The base year of SENSEX is 1978-79 and

the base value is 100. The index is widely reported in both domestic and international

markets through print as well as electronic media. The index initially calculated based

on the “The Free-float Market Capitalization” methodology of index construction is

regarded as an industry based practice globally. All major index providers like MSCI,

FTSE, STOXX, S&P and Dow Jones use the Free-float methodology.

NSE (NATIONAL STOCK EXCHANGE)

The National Stock Exchange of India Limited has genesis in the report of the High

Powered Study Group on Establishment of New Stock Exchange by financial

institutions (FIs) to provide access to investors from all across the country on an equal

footing. Based on the recommendations, NSE was promoted by leading Financial

Institutions at the behest of the Government of India and was incorporated in

November 1992 as a tax paying company unlike other stock exchanges in the country.

On its recognition as a stock exchange under the Securities Contracts (Regulation)

Act, 1956 in April 1993, NSE commenced operations in the wholesale Debt Market

(WDM) segment in June 1994. The Capital Market (Equities) segment commenced

operations in Derivatives segment commenced in June 2000.

NIFTY

The Nifty is relatively a new comer in the Indian Market. S&P CNX Nifty is a 50

stock index accounting for 23 sectors of the economy. It is used for purposes such as

benchmarking fund portfolios; index based derivatives and index funds. The base

period selected for Nifty is the close of prices on November 3, 1995 which marked the



completion of one year of operations of NSE’s capital market segment. The base

value of index was set at 1000.

S&P CNX Nifty is owned and managed by India Index Services and Products Ltd.

(IISL), which is a joint venture between NSE and CRISIL. IISL is a specialized

company focused upon the index as a core product. IISL have a consulting and

licensing agreement with Standard & Poor’s (S&P), who are world leaders in index

services.

COMPANY PROFILE:

BACKGROUND AND INCEPTION

The Nirmal Bang group of companies was founded by Nirmal Bang, Dilip Bang and

Kishore Bang. The group always believed in developing retail client network and had

wide network of clients all over India. It started up the DP services and also added

broking into commodities and insurance advisory services to diversify into allied

activities. Thus Nirmal Bang became a corporate member of BSE with three

membership rights. The company, besides broking is a depository participant with

NSDL and CSDL. Bang Equity Broking Private Limited was formed in the year 1997.

The company also became the corporate member of the BSE with three membership

rights in the year 1999. The Group was thus the first in the history of the Bombay

Stock Exchange to acquire six membership rights of the Exchange.

Throughout their history, they have fostered overriding purpose to provide each client

with personal service and quality work. By adhering to this principle, they have

grown to become a successful and well-respected firm of highly qualified

professionals. The Group is headed by Mr. Dilip Bang and Mr. Kishore Bang who

bring forward industry expertise, insight and most importantly, create an environment

of unmatched commitment to clients.

They are registered members of the Bombay Stock Exchange Limited (BSE),

National Stock Exchange of India Limited (NSE), Multi Commodity Exchange of

India Limited (MCX), National Commodity and Derivatives Exchange Limited

(NCDEX), National Multi Commodity Exchange of India Limited (NMCE) and MCX

Stock Exchange Limited and are also depository participants of NSDL and CDSL.



NATURE OF BUSINESS

Nirmal Bang Securities was founded in 1986 and is based in Mumbai, India. Nirmal

Bang Securities Pvt Ltd is amongst the top full service broking firm established in the

year 1989. It started as a small localized player and ultimately transformed into a

diverse group in a span of 20 years. The company offers comprehensive range of

products and services to meet the financial needs of its investors. It is solidly

capitalized to meet the demands of retail clients and sufficiently caring to ensure that

service is not compromised. Nirmal Bang Group is recognized as one of the largest

retail broking houses in India, providing an array of financial products and services.

Our retail and institutional clients have access to products such as equities,

derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance,

depository services and PMS. Nirmal Bang Securities Private Limited provides an

online share trading platform to customers to trade on its products. The company

offers daily company reports, stock ideas and sector updates. It also provides

franchising opportunities to individual to use its infrastructure by being its channel

partners.

VISION:

“To create valuable relationship and provide the best financial services most

professionally”.

MISSION:

“To work together with integrity and make our customer feel valued”

CORE VALUE:

“Respect our colleagues and the business itself”

TAG LINE:

“A relationship beyond broking”

QUALITY POLICY:



Talented, efficient and competent team of youngsters rolling out high profile

applications for the global business community, keeping in mind true quality,

total customer satisfaction, delivering on time, right time, every time.

Always striving for continued improvement and betterment of own set

standards in achieving total quality management.

The quality of the products and services delivered by Nirmal Bang to

customers is the concern of every personnel in the organization. All are

creatively involved in providing high quality products and services through:

Responsiveness to customer needs; Provision of work satisfaction and

promising careers; constant measurement and monitoring of all operations;

Continuous improvements of procedures, products and services; and

performance of operations in a responsible manner.

PRODUCTS / SERVICES:

Equities, Bonds, Derivatives

Managed Investment Services / PMS

Commodities

FX Trading

Life Insurance

General Insurance

Alternative Assets

Private Equity Funds

Structured Products

Real Estate Opportunities Fund

Special Situation Opportunities

Offshore Structures & Global Investments

Their major offerings to customer

Nirmal Bang currently offers the full stock brokerage services in line with the overall

strategy of the group. Some of the major offerings include the following:

Trading in Equities & Derivatives



Equity trading is offered to retail clients through multiple channels

including online trading in the BSE and the NSE, for cash & derivatives

segments. Live quotes, market commentary and major news are also

offered through its website. This segment contributes a major portion of its

revenue.

Trading in CommoditiesThe group company is a member of India's premier commodity exchanges,

namely, the Multi Commodity Exchange of India Ltd (MCX), the

National Commodity & Derivatives Exchange Ltd (NCDEX).

Online Trading

The company offers an online trading portal which is developed and

maintained by Financial Technologies (India) Ltd.

Depository

Nirmal Bang is a depository participant of NSDL and CDS(I)L. It offers

depository services through an online platform provided by Apex Soft cell.

IPO

Nirmal Bang is also involved in the marketing of IPO's. It even offers

information about forthcoming IPO's, open issues, new listing etc.

Margin Funding Service

Margin funding allows the investors to take leverage positions in

the stock market, client has to pay margin of 35 % to 50%

depending upon the scrip and rest is funded by us. To put it simply,

for example in case of scrip prescribed for 35% margin, if client pays

cash margin of Rs.35,000/- he can buy shares of Rs.100000/- and

funding by us would be of Rs.65000/-.Margin can be provided in

cash as well as approved securities.

Portfolio Management Service

PMS, as a product category, is designed to help clients navigate the

increasingly tough and uncertain terrain of the investment world with

total ease and equanimity. Concentrated calls taken by professionals,

who have the experience of negotiating a number of market cycles over

the years, help investors both defend their investments/savings and

consistently perform better than the markets. Thus, Nirmal Bang PMS



offers the vehicles for a comfortable and smooth journey to wealth

creation in the investment arena.

Organizational Hierarchy:

The organizational structure of Nirmal Bang is tall and hierarchical; the flow

of work, activities and communication is from top to bottom. The head office

located in Mumbai gets information and data from the various regional

branches located throughout India. The regional branches get the information



and data from various sub branches, franchises and sub brokers which are

located in the respective region.

AREAS OF OPERATION:

GLOBAL

Dubai

Bangkok

Singapore

Hong Kong


Directors (Main Office)

CEO (Main Office) CCO (Main Office)

Regional Head 1Regional Head 2

Regional Head 3

Vice Head

Vice Head

Vice Head

KYC Manager Risk Management System Manager

Staff/Employee

Accounts/Finance Manager

Staff/Employee

Staff/Employee


NATIONAL

Andhra Pradesh

Karnataka

Kerala

West Bengal

Madhya Pradesh

Assam

Maharashtra

Bihar

Orissa

Chhattisgarh

Punjab

Delhi

Rajasthan

Goa

Tamil Nadu

Gujarat

Uttar Pradesh

Haryana

Uttaranchal

Jammu & Kashmir

Jharkhand

INFRASTRUCTURE FACILITIES:

Nirmal Bang with over 50000 sq ft of built infrastructure they have used technology

to enable their business and delivery services with cutting edge technology. They

have established a dedicated technology data at Mumbai with built-in all purpose

redundancies to support their clients in Mumbai.

Nirmal Bang got a network infrastructure solution that integrated their trading

application, connectivity, network security, manageability in one platform.



100% branch trading uptime

Nirmal Bang uses ADSL or cable broadband – from any ISP – to create a VPN to

their HQ Elina Network’s auto-failover works between any combinations of network

connections even if they are from different ISPs and different technologies. When the

primary VSAT or leased line fails, trading traffic moves to the VPN over broadband.

Simultaneously an SMS or email alert is triggered to the Nirmal Bang network

administrator, letting them quickly escalate the issue to the ISP. On the secondary link

only trading traffic is allowed with traffic shaping for non-trading traffic.

LAN Segregation

Nirmal Bang segregates trading, back office, and internet traffic into different

network groups with policy based routing. On VSAT, leased line and VPN, trading

traffic is given highest priority, with back office, or Internet traffic getting only best

effort service on broadband.

Nirmal Bang is satisfied with the simple and robust centralized management features

along with strong network security. Since May 2008, 180 branches of Nirmal Bang

have had the ENPAQ Unified Gateway installed. Trading downtime has been

eliminated, and the IT team has become more efficient.

There are air conditioners, proper lighting and ventilation and

Telecommunication facilities.

Accommodation: Employees has been provided with better seating facility

for their work, along with the better desktop to trade.

Excellent back office software: Back office software is the most required

for a broking house to provide service efficiently. Nirmal Bang is well

equipped by best back office software to comfort their employees and

clients.

Research Centre: There is a separate research team for conducting

researches. The research is in Mumbai Headquarters.

Cafeteria: Employees are provided with cafeteria to refresh themselves

and the organization gives utmost importance to preserve the interests of

their employees.



Televisions: Televisions are screened all around the office to facilitate

situation of different stocks and country.

Seating Facilities: Seating facilities have been done for their clients, and

they are also provided with magazines, and newspapers.

COMPETITIOR’S INFORMATION:

COMPANY SERVICE OFFERINGSMotilal Oswal Financial Services Equity, Derivatives, Portfolio Management, Online Trading,

Insurance, Commodity Trading, Mutual Funds and Margin

Funding

ICICI Direct Online Trading, Market and Research, Personal Finance and

Corporate Services, Equity, Futures and Options, IPO and

Life Insurance

HDFC Securities Online Trading, Call and Trade, IPO, Equity and

Derivatives

Religare Enterprises Ltd Equities, Commodity Trading, Wealth Management, Asset

Management, Portfolio Management Services and

Insurance Solutions

Sharekhan Equities, Commodity Trading, Portfolio Management,

Mutual Fund Distribution and Derivatives

Indiabulls Securities Services Ltd Equities, Research, Commodities, Mutual Fund Distribution

and Derivatives

Edelweiss Capital Ltd Equities, Future and Option, Research, Asset Management,

and Investment Banking

Emkay Global Finance Ltd Wealth Management, e-broking, Research, Commodity

Trading, Equities and Derivatives

BNP Paribas Financial Services Ltd

Online Trading, Mutual Fund distribution, Insurance, IPO

and Property services

India Infoline Investment Services Ltd

Online Trading, Equities, derivatives, Commodity trading,

IPO, Mutual Fund, Research, Personal Finance, Investment

Banking and Wealth Management

SWOT ANALYSIS:



STRENGTH

23 years of research and broking experience.

Understandings of the market.

Good financial planner.

Good relationship with customers.

Well deserved company.

WEAKNESS

Low advertisement.

Less scope for performance appraisal of workers.

OPPORTUNITIES

Customer growth.

Employee growth.

Creativity.

Research.

THREATS:

Market fluctuation / Volatility.

Risk involvement.

FUTURE GROWTH AND PROSPECTS:

The Indian economy is growing at a fast pace. It is officially world’s second fastest

growing economy. The Indian economy is likely to change a lot in the developing

country.

Offering shares to the public in near future years.

Creating at most good faith with the clients than any other.

Over 145000+ retain customers being serviced through central call centre or

web solutions.

To establish 15 new branches serving affluent and aggressive traders through

highly skilled financial advisors.

Strong advisory role through fundamental and technical analysis.



New initiatives in portfolio management services and commodities trading.

To be a lead manager for many forth coming IPO issues.

To extend the wings of customer care desk.

To increase the client base from existing 145000 to more than 200000.

To render best financial services by upgrading the servicing process.

Developing a target investor group and effectively positioning the company’s

story to investor community.

Financial Ratios:

Ratios Jun 2012 Jun 2011 Jun 2010Return on Asset (%) 18.26 12.86 13.33

Return on Capital Employed (%) 34.27 21.18 24.27

Return on Equity 33.06 23.26 26.39

Return on Investment -- -- --

Earnings Per Share 28.13 17.40 15.57

Net Profit Ratio 21.90 17.64 20.80

Gross Profit Ratio (%) 27.60 20.48 24.69

Price-Earnings Ratio -- -- --

Operating Profit Ratio -- -- --

Interpretation:

EPS is increasing every year from 2010 to 2012 2. Net operating incomes are

inconsistent in past 3 years but it increased in year 2012 as compared to year

2011. Return on Capital Employed is also inconsistent but it increased in 2012.

Return on Equity is increased from 26.39 in 2010 to 33.06 in 2012. There is no

debt for TCS in current year.



CHAPTER 3

INTRODUCTION TO TECHNICAL ANALYSIS:

Technical analysis is the use of numerical series generated by market activity, such as

price and volume, to predict future trends. The techniques applied to any market with

a comprehensive price history.

Technical analysis mainly seeks to predict the short term price levels, it is important

criteria for selecting the companies to invest, it also provides the base for decision-

making in investment. The one of the most frequently used yardstick to check and

analyze the underlying price progress. For that matter variety of tools was considered.

This technical analysis is helpful to general investors in many ways. It provides

important and vital information regarding the current price position of the company.

Technical analysis involves the use of various methods for charting, calculating &

interpreting graph & chart to assess the performances and status of the price. It is the

tool of financial analysis, which not only studies but also reflecting the numerical and

graphical relationship between the important financial factors.

The focus of technical analysis is mainly on the internal market data, i.e. prices and

volume data. It appeals mainly to short term traders. It is oldest approach to equity

investment dating back to the late 19th century.

ASSUMPTIONS

The Market discounts Everything

Technical analysis holds that because every possible bit of information is

immediately included in the price of a security, it is not necessary to

explicitly analyze the fundamental, economic, political, etc. factors that might

influence that price. Because all possible information is reflected in the price,

only a study of the price movement is required.

Price Moves in Trends

In 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.

History Tends To Repeat Itself

Another 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 charge 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 than often repeat themselves.

TOOLS AND TECHNIQUES USED IN TECHNICAL ANALYSIS:

Moving Averages

Introduction

Moving averages are one of the most popular and easy to use tools available to the

technical analysts. 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.

Simple Moving Average (SMA)

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.

Exponential Moving Average (EMA)

A type of moving average that is similar to a simple moving average, except that more

weight is given to the latest data. The exponential moving average is also known as

exponentially weighted moving average.



This type of moving average reacts faster to recent price changes than a simple

moving average. The 12- and 26-day EMAs are the most popular short-term averages,

and they are used to create indicators like the moving average convergence

divergence (MACD) and the percentage price oscillator (PPO). In general, the 50- and

200-day EMAs are used as signals of long-term trends.

Support and Resistance

Support and resistance represent key junctures where the forces of supply and demand

meet. In the financial markets, prices are driven by excessive supply (down) and

demand (up). Supply is synonymous with bearish, bears and selling. Demand is

synonymous with bullish, bulls and buying. These terms are used interchangeably

throughout this and other articles. As demand increases, prices go up and as supply

increases, price decline. WhenSupply and demand are equal, prices move sideways as

bulls and bears slug it out for control.

What is Support?

Support is the price level at which demand is thought to be strong enough to prevent

the price from declining further. The logic dictates that as the price declines towards

support and gets cheaper, buyers become more inclined to buy and sellers become less

inclined to sell. By the time the price reaches the support level, it is believed that

demand will overcome supply and prevent the price from falling below support.

What is Resistance?

Resistance is the price level at which selling is thought to be strong enough to prevent

the price from rising further. The logic dictates that as the price advances towards

resistance, sellers become more inclined to sell and buyers become less inclined to

buy. By the time, the price reaches the resistance level, it is believed that supply will

overcome demand and prevent the price from rising above resistance.



Relative strength Index (RSI)

The Relative Strength Index (RSI) 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.

Trend lines

In the preceding section, we saw how support and resistance levels can be penetrated

by a change in investor expectations (which results in shifts of the supply/demand

lines). This type of a change is often abrupt and “news based”. In this section, we will

review “trends”. A trend represents a consistent change in prices (i.e., a change in

investor expectations). Trends differ from support/resistance levels in that trends

represent change, where as support/resistance levels represent barriers to change.

As shown in the following chart, a rising trend is defined by successively higher low-

prices. A rising trend can be thought of as a rising support level, the bulls are in

control and are pushing prices higher.

As shown in the next chart, a falling trend is defined by successively lower high-

prices. A falling trend can be thought of as a falling resistance level; the bears are in

control and are pushing prices lower.



RATE OF CHANGE (ROC)

The Rate-of-Change (ROC) indicator, which is also referred to as simply Momentum,

is a pure momentum oscillator that measures the percent change in price from

one period to the next. The ROC calculation compares the current price with the

price "n" periods ago. The plot forms an oscillator that fluctuates above and below the

zero line as the Rate-of-Change moves from positive to negative. As a momentum

oscillator, ROC signals include centerline crossovers, divergences and overbought-

oversold readings. Divergences fail to foreshadow reversals more often than not so

this article will forgo a discussion on divergences. Even though centerline crossovers

are prone to whipsaw, especially short-term, these crossovers can be used to identify

the overall trend. Identifying overbought or oversold extremes comes natural to the

Rate-of-Change oscillator.

STOCHASTIC OSCILLATOR

A technical momentum indicator that compares a security's closing price to its price

range over a given time period. The oscillator's sensitivity to market movements can

be reduced by adjusting the time period or by taking a moving average of the result.

CHARTS



Price in a chart can be displayed in four styles:

1. Bar Chart

2. Line Chart

3. Candlestick Chart

4. Point and Figure Charts

BAR CHART

The highs and lows of a foreign currency are plotted in a diagram and the points are

joined with vertical lines (bars). A small horizontal tick to the left denotes the opening

level while a small horizontal tick to the right represents the closing price of each

interval.

The advantage of using a bar chart over a straight-line graph is that it shows the high,

low, open and close for each particular day.

LINE CHART

It gives the detailed information about every aspect. The exchange rates for each time

period are plotted in a diagram and the points are joined. Prices on the y-axis, time on

the x-axis. The line chart chooses for example the closing price of consecutive time

periods, but can also work with daily, officials fixings.

CANDLE STICK CHART



A candle stick is black if the closing price is lower than the opening price. A candle

stick is white if the closing price is higher than the opening price.

In the 1600s, the Japanese developed a method of technical analysis to analyze the

price of rice contracts. This technique is called candlestick charting. Steven Nison is

credited with popularizing candlestick charting and has become recognized as the

leading expert on their interpretation. Candlestick charts display the open, high, low,

and closing prices in a format similar to a modern day bar chart, but in a manner that

extenuates the relationship between the opening and closing prices. Candlestick charts

are simply a new way of looking at prices, they don’t involve any calculations,

because candlesticks display the relationship between the open, high, low and closing

prices, they cannot be displayed on securities that only have closing prices, nor were

they intended to be displayed on securities that lack opening prices.

POINT AND FIGURE CHART

The point and figure chart is not well known or used by the average investor but it has

had a long history of use dating back to the first technical traders. This type of chart

reflects price movements and is not as concerned about time and volume in the

formulation of the points. The point and figure chart removes the noise, or

insignificant price movements, in the stock, which can distort traders' views of the

price trends. These types of charts also try to neutralize the skewing effect that time

has on chart analysis.


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When first looking at a point and figure chart, you will notice a series of Xs and Os.

The Xs represent upward price trends and the Os represent downward price trends.

There are also numbers and letters in the chart; these represent months, and give

investors an idea of the date. Each box on the chart represents the price scale, which

adjusts depending on the price of the stock: the higher the stock's price the more each

box represents. On most charts where the price is between $20 and $100, a box

represents $1, or 1 point for the stock. The other critical point of a point and figure

chart is the reversal criteria. This is usually set at three but it can also be set according

to the chartist's discretion. When the price trend has moved from one trend to another,

it shifts to the right, signaling a trend change.

POPULAR CHARTING PATTERNS

Technical analysts often use proven successful price patterns from great stocks as

tools to find new great stocks. Let’s look at a few examples.

Head and Shoulders

This 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 1, 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.

Both of these head and shoulders patterns are similar in that there are four main

parts: two shoulders, a head and a neckline. Also, each individual head and


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shoulder is comprised of a high and a low. For example, in the head and shoulders

top image shown on the left side in figure, the left shoulder is made up of a high

followed by a low. In this pattern, the neckline is a level of support or resistance.

Remember that an upward trend is a period of successive rising highs and rising

lows. The head and shoulders chart pattern, therefore, illustrates a weakening in a

trend by showing the deterioration in the successive movements of the highs and

lows.

Double Tops And Bottom

This 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.

In the case of the double top pattern in figure, 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.

Flag and Pennant


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These two short-term chart patterns are continuation patterns that are formed

when there is a sharp price 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.

Triangles

Triangles 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.

INTRODUCTION TO FUNDAMENTAL ANALYSIS:


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Fundamental analysis involves examining the economic, financial and other

qualitative and quantitative factors related to a security in order to determine its

intrinsic value. It attempts to study everything that can affect the security’s value,

including macroeconomic factors (like the overall economy and industry conditions)

and individually specific factors (like the financial condition and management of

companies).

Fundamental analysis, which is also known as quantitative analysis, involves delving

into a company’s financial statements (such as profit and loss account and balance

sheet) in order to study various financial indicators (such as revenues, earnings,

liabilities, expenses and assets). Such analysis is usually carried out by analysts,

brokers and savvy investors.

Fundamental analysis is carried out with the aim of predicting the future performance

of a company. It is based on the theory that the market price of a security tends to

move towards its ‘real value’ and ‘intrinsic value’. Thus, the intrinsic value of a

security being higher than the security’s market value represents a time to buy. If the

value of a security is lower than its market price, investors should sell it.

To forecast future stock prices, fundamental analysis combines economic, industry,

and company analysis to derive a stock’s current fair value and forecast future value.

1) ECONOMIC ANALYSIS

The level of economic activity has an impact on investment in many ways. If the

economic grows rapidly, the industry can also be expected to show rapid growth and

vice versa. When the level of economic activity is low, stock prices are low, and when

the level of economic activity is high, stock prices are reflecting the prosperous

outlook for sales and profits of the firms. The analysis of macroeconomics

environment is essential to understand the behavior of the stock prices. The

commonly analyzed macroeconomic factors are as follow:-

a) Gross Domestic product (GDP):

GDP indicates the rate of growth of the economy. GDP represents the aggregate

value of the goods and services produced in the economy. GDP consists of

personal consumption expenditure, gross private domestic investment and



government expenditure on goods and services and net export of goods and

services.

b) Savings and investment:

It is obvious that growth requires investment which in turn requires substantial

amount of domestic savings. Stock is a channel through which the savings of the

investors are made available to the corporate bodies. Savings are distributed over

various assets like equity shares, deposits, mutual fund units, real estate and

bullion.

c) Inflation:

Along with the growth of GDP, if the inflation rate also increases, then the real

rate of growth would be very little. The demand in the consumer product

industry is significantly affected. The industries which come under the

government price control policy may lose the market, for example Sugar. The

government control over this industry, affects the price of the sugar and thereby

the profitability of the industry itself. If there is a mild level of inflation, it is

good to the stock market but high rate of inflation is harmful to the stock market.

d) Interest rates:

The interest rate affects the cost of financing to the firms. A decrease in interest

rate implies lower cost of finance for firms and more profitability. More money

is available at lower interest rate for the brokers who are doing business with

borrowed money. Available of cheap fund, encourages speculation and rise in

the price of shares.

e) The tax structure:

Every year in March, the business community eagerly awaits the government’s

announcement regarding the tax policy. Concessions and incentives given to a

certain industry encourage investment in that particular industry. Tax reliefs

given to savings encourage savings. The type of tax exemption has impact on the

profitability of the industries.

f) The balance of payment:



The balance of payment is the record of a country’s money receipts from and

payments abroad. The difference between receipts and payments may be surplus

or deficit. Balance of payment is a measure of the strength of rupee on external

account. If the deficit increases, the rupee may depreciate against other

currencies, thereby, affecting the cost of imports. The industries involved in the

export and import are considerably affected by the changes in foreign exchange

rate. The volatility of the foreign exchange rate affects the investment of the

foreign institutional investors in the Indian stock market.

g) Demographic factors:

The demographic data provides details about the population by age, occupation,

literacy and geographic location. This is needed to forecast the demand for the

consumer goods. The population by age indicates the availability of able work

force. The cheap labor force in India has encouraged many multinationals to start

their ventures. Indian labor is cheaper compared to the Western labor force.

Population, by providing labor and demand for products, affects the industry and

stock market.

2) INDUSTRY ANALYSIS

An industry is a group of firms that have similar technological structure of production

and produce similar products. The stock prices are depend on the types of the industry

and industry life cycle. It depends whether the industry is defensive, aggressive or

cyclic. Some of the industry factors that have to be analyzed are as follows:-

a) Growth of the industry:

The historical performance of the industry in terms of growth and profitability

should be analyzed. Industry wise growth is published periodically by the

Centre for Monitoring Indian Economy. The past variability in return and growth

in reaction to macro economic factors provide an insight into the future. Even

though history may not repeat in the exact manner, looking into the past growth

of the industry, the analyst can predict the future.

b) Cost structure and profitability:



The cost structure, that is the fixed and variable cost, affects the cost of

production and profitability of the firm. In the case of oil and natural gas industry

and iron and steel industry the fixed cost portion is high and the gestation period

is also lengthy. Higher the fixed cost component, greater sales volume is required

to reach the firm’s breakeven point. Once the breakeven point is reached and the

production is on the track, the profitability can be increased by utilizing the

capacity to full. Once the maximum capacity is reached, again capital has to be

invested in the fixed equipment. Hence, lower the fixed cost, adjustability to the

changing demand and reaching the breakeven points are comparatively easier.

c) Nature of the product:

The products produced by the industries are demanded by the consumers and

other industries. If industrial goods like pig iron, iron sheet and coils are

produced, the demand for them depends on the construction industry. Likewise,

textile machine tools industry produces tools for the textile industry and the

entire demand depends upon the health of the textile industry. Several such

examples can be cited. The investor has to analyze the condition of related goods

producing industry and the end user industry to find out the demand for industrial

goods.

d) Government policy:

The government policies affect the very nerve of the industry and the effects

differ from industry to industry. Tax subsidies and tax holidays are provided for

export oriented products. Government regulates the size of the production and the

pricing of certain products. The sugar, fertilizer and pharmaceutical industries are

often affected by the inconsistent government policies. Control and decontrol of

sugar price affect the profitability of the sugar industry. In some cases entry

barriers are placed by the government.

e) Labour:

The analysis of labour scenario in a particular industry is of great importance.

The number of trade unions and their operating mode has impact on the labour

productivity and modernization of the industry. Skilled labour is needed for



certain industries. In the case of Indian labour market, even in computer

technology or in any other industry skilled and well qualified labour is available

at a cheaper rate. This is one of the many reasons attracting the multinationals to

set up companies in India.

f) Research and development:

For any industry to survive the competition in the national and international

markets, product and production process have to be technically competitive. This

depends on the R & D in the particular company or industry. Economies of

scale and new market can be obtained only through R & D. The percentage of

expenditure made on R & D should be studied diligently before making an

investment.

3) COMPANY ANALYSIS

In the company analysis the investor have to invest several bits of information related

to the company and evaluate the present and future values of the stock. The risk and

return associated with the purchase of the stock is to be analyzed to take better

investment decisions. The valuation process depends upon the investor’s ability to

elicit information from the relationship and inter-relationship among the company

related variable. The present and future values are affected by a number of factors

like:-

a) The competitive edge of the company:

Major industries in India are composed of hundreds of individual companies. In

the information technology industry even though the number of companies is

large, few companies like Tata Infotech, Infosys, NIIT etc., control the major

market share. The competitiveness of the company can be studied with the help

of the market share, the growth of annual sales, and the stability of annual sales.

b) Earnings of the company:

Sales alone do not increase the earnings but the costs and expenses of the

company also influence the earnings of the company. Further, earnings do not

always increase with the increase in sales. The company’s sales might have



increased but its earnings per share may decline due to the rise in costs. The rate

of change in earnings differs from the rate of sales.

c) Capital structure:

The equity holder’s return can be increased manifold with the help of financial

leverage, i.e. using debt financing along with equity financing. The effect of

financial leverage is measured by computing leverage ratios. The debt ratio

indicates the position of the long term and short term debts in the company

finance. The debt may be in the form of debentures and term loans from financial

institutions.

d) Management:

Good and capable management generates profit to the investors. The

management of the firm should efficiently plan, organize, actuate and control the

activities of the company. The basic objective of management is to attain the

stated objectives of company for the good of the equity holders, the public and

the employees. If the objectives of the company are achieved, investors will have

a profit. A management that ignores profit does more harm to the investors than

one that over emphasizes it.

e) Operating efficiency:

The operating efficiency of a company directly affects the earnings of a

company. An expanding company that maintains high operating efficiency with a

low breakeven point earns more than the company with high breakeven point. If

a firm has stable operating ratio, the revenues also would be stable. Efficient use

of fixed assets with raw materials, labour, and management would lead to more

income from sales. This leads to internal fund generation for the expansion of the

firm. A growing company should have low operating ratio to meet the growing

demand for its product.

f) Financial analysis:

The best source of financial information about a company is its own financial

statements. This is a primary source of information for evaluating the investment



prospects in the particular company’s stock. Financial statement analysis is the

study of a company’s financial statement from various viewpoints. The statement

gives the historical and current information about the company’s operations.

Historical financial statements help to predict the future. The current information

aids to analyze the present status of the company. The two main statements used

in the analysis are balance sheet and profit and loss account.

Financial ratios are tools for interpreting financial statements to provide a basis for

valuing securities and appraising financial and management performance.

A good financial analyst will build in financial ratio calculations extensively in a

financial modeling exercise to enable robust analysis. Financial ratios allow a

financial analyst to:

Standardize information from financial statements across multiple financial years to

allow comparison of a firm’s performance over time in a financial model.

In general, there are 4 kinds of financial ratios that a financial analyst will use most

frequently, these are:

Performance ratios

Working capital ratios

Liquidity ratios

Solvency ratios

These 4 financial ratios allow a good financial analyst to quickly and efficiently

address the following questions or concerns:

Performance ratios

What return is the company making on its capital investment?

What are its profit margins?

Working capital ratios



How quickly are debts paid?

How many times is inventory turned?

Liquidity ratios

Can the company continue to pay its liabilities and debts?

Solvency ratios (Longer term)

What is the level of debt in relation to other assets and to equity?

Is the level of interest payable out of profits?

Reason for selecting Fundamental analysis:

Long Term Trends:

Fundamental analysis is good for long-term investments based on long-term trends,

very long-term. The ability to identify and predict long-term economic, demographic,

technological or consumer trends can benefit patient investors who pick the right

industry groups or companies.

Value Spotting:

Sound fundamental analysis will help identify companies that represent a good value.

Some of the most legendary investors think long-term and value. Graham and Dodd,

Warren Buffett and John Neff are seen as the champions of value investing.

Fundamental analysis can help uncover companies with valuable assets, a strong

balance sheet, stable earnings, and staying power.

Business Insights:

A good understanding can help investors avoid companies that are prone to shortfalls

and identify those that continue to deliver. In addition to understanding the business,

fundamental analysis allows investors to develop an understanding of the key value

drivers and companies within an industry. A stock's price is heavily influenced by its

industry group. By studying these groups, investors can better position themselves to

identify opportunities that are high-risk (tech), low-risk (utilities), growth oriented



(computer), value driven (oil), non-cyclical (consumer staples), cyclical

(transportation) or income-oriented (high yield).

Knowing Who’s who:

Stocks move as a group. By understanding a company's business, investors can better

position themselves to categorize stocks within their relevant industry group. Business

can change rapidly and with it the revenue mix of a company. This has happened with

many of the pure internet retailers, which were not really internet companies, but

plain retailers. Knowing a company's business and being able to place it in a group

can make a huge difference in relative valuations. The charts of the technical analyst

may give all kinds of profit alerts, signals and alarms, but there is little in the charts

that tell us why a group of people make the choices that create the price patterns.

CHAPTER 4

Table 1.1 Hindustan Unilever

Date Close MACD EMA (9 months) ROC (14 months)

RSI (14 months)

Jan-09 261.65 Nil nil nil NilFeb-09 253.5 Nil nil nil NilMar-09 237.5 Nil nil nil NilApr-09 234.75 Nil nil nil NilMay-09 230.8 Nil nil nil NilJun-09 267.5 Nil nil nil NilJul-09 291.5 Nil nil nil NilAug-09 259.95 Nil nil nil NilSep-09 262.6 Nil nil nil NilOct-09 283.5 Nil nil nil NilNov-09 285.2 Nil nil nil NilDec-09 264.8 Nil nil nil NilJan-10 242.3 Nil nil nil NilFeb-10 236.2 Nil nil -9.726734187 NilMar-10 239.55 Nil nil -5.50295858 44.49427005Apr-10 239.8 Nil nil 0.968421053 44.56862895May-10 237.2 Nil nil 1.043663472 43.90979712Jun-10 267.55 Nil nil 15.92287695 52.69961722Jul-10 251.45 Nil nil -6 48.3693464Aug-10 264.5 Nil nil -9.262435678 51.82476569Sep-10 309.05 Nil nil 18.88824774 61.33749254Oct-10 294.7 Nil nil 12.2239147 57.40540776Nov-10 298.25 Nil nil 5.202821869 58.12065772Dec-10 312.9 Nil nil 9.712482468 61.02895866Jan-11 271.15 Nil nil 2.398036254 50.30705453



Feb-11 282 13.21646924 nil 16.38464713 52.63591287Mar-11 287.1 12.97727104 nil 21.54953429 53.73350271Apr-11 285.2 12.49040896 nil 19.05656439 53.23852569May-11 304.55 13.51021321 nil 27.00166806 57.52935098Jun-11 343.65 17.27433092 nil 44.8777403 64.59833223Jul-11 324 18.45904615 nil 21.09886003 59.26006245Aug-11 320.4 18.88970286 nil 27.42095844 58.30936538Sep-11 340.6 20.6232407 nil 28.77126654 61.99377833Oct-11 375.8 24.55438014 16.88834036 21.59844685 67.40031524Nov-11 397.15 29.0576446 19.32220121 34.76416695 70.17191051Dec-11 407.4 33.07236582 22.07223413 36.59681475 71.42785356Jan-12 378.95 33.57139395 24.37206609 21.1089805 63.44292889Feb-12 380.2 33.67950551 26.23355398 40.21759174 63.63528053Mar-12 410.05 35.76159286 28.13916175 45.40780142 67.96946768Apr-12 417.6 37.58759756 30.02884891 45.45454545 68.97663948May-12 428 39.41950896 31.90698092 50.07012623 70.3592494Jun-12 454.5 42.51950211 34.02948516 49.23657856 73.58915841Jul-12 467.35 45.48879018 36.32134616 35.99592609 75.01112605Aug-12 515.1 51.10588151 39.27825323 58.98148148 79.44077362Sep-12 545.85 57.37732478 42.89806754 70.36516854 81.69154144Oct-12 546.6 61.69680513 46.65781506 60.48150323 81.74403783Nov-12 538.1 63.69985321 50.06622269 43.18786589 78.98004186Dec-12 524.85 63.48628856 52.75023586 32.15409795 74.73772753Jan-13 473.95 58.5350765 53.90720399 16.33529701 61.14944441Feb-13 443.05 51.52389809 53.43054281 16.91516031 54.65315563Mar-13 466.95 47.35019537 52.21447332 22.81693845 58.33969875Apr-13 583.8 52.86196451 52.34397156 42.37288136 70.82700502May-13 592.5 57.27190371 53.32955799 41.88218391 71.51168609Jun-13 585.15 59.48798822 54.56124403 36.71728972 70.01661722Jul-13 612.55 62.73206596 56.19540842 34.77447745 72.33833983Aug-13 631.45 66.06651928 58.16963059 35.11287044 73.84291853Sep-13 627.45 67.60699958 60.05710439 21.81129878 72.93869146Oct-13 609.85 66.63948985 61.37358148 11.72483283 68.9386126Nov-13 594.75 63.91748662 61.88236251 8.809001098 65.61389059Dec-13 570.65 59.13395147 61.3326803 6.049061513 60.59129925

Fig-1.1.1Rate of Change of HUL

Jan-09

May-09

Sep-09

Jan-10

May-10

Sep-10

Jan-11

May-11

Sep-11

Jan-12

May-12

Sep-12

Jan-13

May-13

Sep-13-20

0

20

40

60

80

ROC (14 mnths)

ROC (14 mnths)

Interpretation:



In ROC, the overbought zone is above the zero line and oversold is below the zero line. Many analysts use the zero line for identifying buying and selling opportunities. Upside crossing indicates a buying opportunity, while a downside crossing indicates selling opportunity.

Generally when the ROC values are positive selling decision can be made. Also, when the ROC values are negative buying decision can be made.

The indicator gives selling signal.

Fig 1.1.2 Relative Strength Index of HUL

Jan-09

Apr-09Jul-0

9

Oct-09

Jan-10

Apr-10Jul-1

0

Oct-10

Jan-11

Apr-11Jul-1

1

Oct-11

Jan-12

Apr-12Jul-1

2

Oct-12

Jan-13

Apr-13Jul-1

3

Oct-13

0102030405060708090

RSI (14 mnths)

RSI (14 mnths)

Interpretation:

When the RSI value crosses 70, the prices were high. It indicates an overbought condition. There was a high selling pressure at this point and started falling. At this point, investors can make decision to sell.

When the RSI value crosses 35, the prices were low. It indicates an oversold condition. There was a high buying pressure at this point and started rising. At this point, investors can make decision to buy.


Fig 1.1.3 MACD of HUL



Jan-09

Apr-09Jul-0

9Oct-

09Jan

-10

Apr-10Jul-1

0Oct-

10Jan

-11

Apr-11Jul-1

1Oct-

11Jan

-12

Apr-12Jul-1

2Oct-

12Jan

-13

Apr-13Jul-1

3Oct-

130

1020304050607080

MACDEMA (9 mnths)

Interpretation:

When the lines are below the zero line, if the MACD line crosses the average line from below to above, it indicates a buying opportunity. At this point, prices were low and the investor can make buying decision.

When the lines are above the zero line, if the MACD line crosses the average line from above to below, it indicates a selling opportunity. At this point, prices were high and the investor can make selling decision.

Date Close MACD EMA (9 months) ROC (14 months) RSI (14 months)

Jan-10 2533 nil nil nil NilFeb-10 2626.9 nil nil nil NilMar-10 2670.6 nil nil nil NilApr-10 2763.1 nil nil nil NilMay-10 2879.2 nil nil nil NilJun-10 2879.55 nil nil nil NilJul-10 3020.65 nil nil nil NilAug-10 3078.8 nil nil nil NilSep-10 3382.15 nil nil nil NilOct-10 3484.45 nil nil nil NilNov-10 3625.35 nil nil nil NilDec-10 3813.75 nil nil nil NilJan-11 3327.55 nil nil nil NilFeb-11 3548.7 nil nil 40.0986972 NilMar-11 3696.55 nil nil 40.71909856 77.23729488Apr-11 3992.9 nil nil 49.513218 80.19629499May-11 4059.3 nil nil 46.91107814 80.79858031Jun-11 4108.1 nil nil 42.681995 81.24991174Jul-11 4360.1 nil nil 51.41601986 83.41750376Aug-11 4389.1 nil nil 45.30316323 83.65172608Sep-11 4252.1 nil nil 38.10900351 78.04353802Oct-11 4243.85 nil nil 25.4778765 77.70569219



Nov-11 4222.55 nil nil 21.18268306 76.78152892Dec-11 4094.85 nil nil 12.95047375 71.30609548Jan-12 4236 nil nil 11.07177974 73.55122776Feb-12 4413.2 484.0319825 nil 32.62610629 76.08142883Mar-12 4630.6 491.4646032 nil 30.48722067 78.7653795Apr-12 4674.15 495.1612194 nil 26.44628099 79.26727013May-12 4505.2 478.9370729 nil 12.83027374 72.14340123Jun-12 4539.05 463.4681595 nil 11.81854014 72.67330175Jul-12 4478.65 441.2487185 nil 9.019984908 70.11051565Aug-12 4635.3 431.3081454 nil 6.31178184 72.79052199Sep-12 4401.95 399.9899397 nil 0.292770727 63.63698237Oct-12 4700.1 394.6786397 453.3653868 10.53597046 69.00082534Nov-12 4767.4 391.3882634 440.9699621 12.33667542 70.07390299Dec-12 4992.3 402.2908089 433.2341314 18.22950587 73.38903427Jan-13 4745.55 386.564418 423.9001888 15.89069197 64.89499535Feb-13 4761.8 371.1341753 413.3469861 12.41265345 65.18080879Mar-13 4588.2 340.9670715 398.8710031 3.965376597 59.59831057Apr-13 4981.35 344.8086047 388.0585235 7.574612361 66.57930867May-13 5302.25 369.4877706 384.3443729 13.43773734 70.98608007Jun-13 4854 348.8547778 377.2464539 7.74216461 59.23633287Jul-13 5293.5 363.7736036 374.5518838 16.62131944 65.30086429Aug-13 4896.7 339.663013 367.5741097 9.334286001 57.04871066Sep-13 5219.55 342.6565615 362.5906 12.60436218 61.33054834Oct-13 5596.95 371.2029991 364.3130798 27.14705983 65.64238933Nov-13 5145.05 353.2892052 362.1083049 9.466819855 57.39039259Dec-13 5289.25 346.7312276 359.0328895 10.94621806 59.15489512


Table 1.2 Nestle India

Fig 1.2.1 Rate of Change of Nestle India

Jan-10

Apr-10Jul-1

0

Oct-10

Jan-11

Apr-11Jul-1

1

Oct-11

Jan-12

Apr-12Jul-1

2

Oct-12

Jan-13

Apr-13Jul-1

3

Oct-13

0102030405060

ROC (14 months)

ROC (14 months)



Interpretation:




Fig 1.2.2 Relative Strength Index of Nestle India

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

Jan-13

Apr-13

Jul-13

Oct-13

0102030405060708090

RSI (14 months)

RSI (14 months)

Interpretation:




Fig 1.2.3 MACD of Nestle India



Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

Jan-13

Apr-13

Jul-13

Oct-13

0

100

200

300

400

500

600

MACDEMA (9 months)

Interpretation:




Table 1.3 Glaxosmithkline

Date Close MACD EMA(9 months) ROC (14 months)

RSI (14 Months)

Dec-13 2998.3 Nil nil nil NilNov-13 2495.7 Nil nil nil NilOct-13 2431.35 Nil nil nil NilSep-13 2468.05 Nil nil nil NilAug-13 2350.9 Nil nil nil NilJul-13 2368.15 Nil nil nil NilJun-13 2334.4 Nil nil nil NilMay-13 2498.05 Nil nil nil NilApr-13 2262.3 Nil nil nil NilMar-13 2205.25 Nil nil nil NilFeb-13 2110.95 Nil nil nil NilJan-13 2048.8 Nil nil nil NilDec-12 2168.05 Nil nil nil NilNov-12 2050.1 Nil nil -31.62458727 NilOct-12 2005 Nil nil -19.66181833 20.20695861Sep-12 1981.05 Nil nil -18.52057499 19.89907436Aug-12 2099.95 Nil nil -14.9146087 25.93264472Jul-12 2109.95 Nil nil -10.24926624 26.4345406Jun-12 2019.3 Nil nil -14.73090809 24.79435818May-12 2010 Nil nil -13.89650446 24.62554511Apr-12 2144.05 Nil nil -14.17105342 31.83020872Mar-12 2316.55 Nil nil 2.398002033 39.80398798Feb-12 2074.85 Nil nil -5.913161773 33.83254667Jan-12 1940.05 Nil nil -8.095881001 31.03603438Dec-11 1945.15 Nil nil -5.059058961 31.26751204Nov-11 1917.1 -141.1837652 nil -11.57491755 30.65800585



Oct-11 2057.6 -131.293232 nil 0.365835813 37.25563179Sep-11 2091 -119.3836321 nil 4.289276808 38.74763263Aug-11 2119.6 -106.4107702 nil 6.993765932 40.06195275Jul-11 2344.9 -77.06153922 nil 11.66456344 49.29255158Jun-11 2350.15 -52.77012986 nil 11.38415602 49.48776366May-11 2321.5 -35.42249996 nil 14.96558213 48.39288389Apr-11 2257.65 -26.52082412 nil 12.32089552 45.95281716Mar-11 2062.95 -34.77596898 2169.161111 -3.782561041 39.42482395Feb-11 2208.55 -29.23255291 1729.482378 -4.662105286 45.64351556Jan-11 2284.65 -18.48563089 1379.888776 10.11157433 48.61289988Dec-10 2337.5 -5.639060862 1102.783209 20.4865854 50.629981Nov-10 2130.6 -12.01466485 879.8236342 9.533969103 43.44097282Oct-10 2222.45 -9.545811391 701.9497451 15.9277033 47.03633462Sep-10 2209.95 -8.499891317 559.8598178 7.404257387 46.60216216Aug-10 1860.7 -35.44397227 440.7990598 -11.01386896 36.47230911Jul-10 2010.8 -44.17629812 343.8039882 -5.133043971 42.27937877Jun-10 2183.95 -36.70189474 267.7028116 -6.863832146 48.16562371May-10 2107.95 -36.49030356 206.8641886 -10.30572517 45.95061985Apr-10 1912.95 -51.46423863 155.1985031 -17.59853543 40.76997897Mar-10 1778 -73.37470925 109.4838607 -21.24554293 37.60977032Feb-10 1709.9 -95.137332 68.55962213 -17.11384183 36.0895194Jan-10 1520.45 -126.2164543 29.60440685 -31.15618845 32.19114779Dec-09 1611.95 -141.8286845 -4.682211432 -29.44433502 35.79826355Nov-09 1664.1 -148.2840936 -33.40258787 -28.80855615 37.82821171Oct-09 1564.95 -159.5613048 -58.63433125 -26.54885948 35.52817801Sep-09 1552.05 -167.607424 -80.42894979 -30.1649081 35.22806224Aug-09 1433 -181.4981735 -100.6427945 -35.156904 32.49959813Jul-09 1368.15 -195.4861035 -119.6114563 -26.47122051 31.08714019Jun-09 1199.7 -217.6551529 -139.2201957 -40.33717923 27.71740466May-09 1169.05 -234.9886799 -158.3738925 -46.47084411 27.1409252Apr-09 1172.45 -245.6199198 -175.823098 -44.37961052 27.32150548Mar-09 1092.45 -257.5319178 -192.1648619 -42.89186858 25.70701995Feb-09 1200.25 -255.3304129 -204.7979721 -32.4943757 31.5746163Jan-09 1165.2 -253.4918502 -214.5367477 -31.85566407 30.72493251

Fig 1.3.1 Rate of Change of Glaxosmithkline

Jan-09

Apr-09Jul-0

9

Oct-09

Jan-10

Apr-10Jul-1

0

Oct-10

Jan-11

Apr-11Jul-1

1

Oct-11

Jan-12

Apr-12Jul-1

2

Oct-12

Jan-13

Apr-13Jul-1

3

Oct-13

-50-40-30-20-10

0102030

ROC (14 months)

ROC (14 months)

Interpretation:





The indicator gives buying signal.

Fig 1.3.2 Relative Strength Index of Glaxosmithkline

Jan-09

Apr-09Jul-0

9

Oct-09

Jan-10

Apr-10Jul-1

0

Oct-10

Jan-11

Apr-11Jul-1

1

Oct-11

Jan-12

Apr-12Jul-1

2

Oct-12

Jan-13

Apr-13Jul-1

3

Oct-13

0102030405060

RSI (14 Months)

RSI (14 Months)

Interpretation:




Fig 1.3.3 MACD of Glaxosmithkline



Jan-09

Apr-09Jul-0

9Oct-

09Jan

-10

Apr-10Jul-1

0Oct-

10Jan

-11

Apr-11Jul-1

1Oct-

11Jan

-12

Apr-12Jul-1

2Oct-

12Jan

-13

Apr-13Jul-1

3Oct-

13-500

0

500

1000

1500

2000

2500

MACDEMA(9 months)

Interpretation:




Table 1.4 Wockhardt Limited

Date Close MACD EMA (9 Months)

ROC (14 Months)

RSI (14 Months)

Jan-09 103.35 Nil nil Nil NilFeb-09 80.35 Nil nil Nil NilMar-09 85.35 Nil nil Nil NilApr-09 89.3 Nil nil Nil NilMay-09 120.85 Nil nil Nil NilJun-09 136.25 Nil nil Nil NilJul-09 141.75 Nil nil Nil NilAug-09 161.45 Nil nil Nil NilSep-09 194.15 Nil nil Nil NilOct-09 171.2 Nil nil Nil NilNov-09 175.75 Nil nil Nil NilDec-09 172.6 Nil nil Nil NilJan-10 171.35 Nil nil Nil NilFeb-10 141.7 Nil nil 65.79583938Mar-10 138.7 Nil nil 76.35345364 4.377880184Apr-10 134.1 Nil nil 62.50732279 4.157549234May-10 122.55 Nil nil 50.16797312 3.659530336Jun-10 134.45 Nil nil 1.406702524 3.659530336



Jul-10 138.05 Nil nil -1.321100917 3.659530336Aug-10 219.55 Nil nil -2.610229277 16.52649477Sep-10 293.85 Nil nil 35.98637349 20.00713255Oct-10 296.3 Nil nil 51.35204739 60.33279775Nov-10 368.9 Nil nil 73.07242991 73.46556016Dec-10 366.05 Nil nil 109.9004267 72.78997132Jan-11 371.45 Nil nil 112.0799537 80.078704Feb-11 345.05 86.6026943 nil 116.7785235 72.47598183Mar-11 323.5 3.942366705 nil 143.50741 67.52000943Apr-11 342.6 4.859495474 nil 133.2372026 67.52000943May-11 351.25 4.801909276 nil 155.4809843 67.52000943Jun-11 366.45 5.275689615 nil 186.6177071 70.02743507Jul-11 449.1 11.05720745 nil 172.5548531 71.1149922Aug-11 386.45 4.358377816 nil 225.3169142 57.69206502Sep-11 383.25 3.432587496 nil 76.01913004 66.79910131Oct-11 443.55 7.714753523 14.67167574 30.42368555 66.79910131Nov-11 412.25 4.031002268 12.54354105 49.6962538 60.73683845Dec-11 276.45 -7.42220036 8.550392764 11.75115207 49.34836066Jan-12 378.45 1.856428755 7.211599963 -24.47753039 49.34836066Feb-12 482.65 9.883075044 7.745894979 1.884506663 49.34836066Mar-12 598.65 17.61616321 9.719948626 39.87827851 59.37211293Apr-12 728.85 25.29230904 12.83442071 85.05409583 66.63597361May-12 796.45 26.79377717 15.626292 112.7408056 72.52513873Jun-12 934.4 33.67621601 19.2362768 126.747331 77.35638078Jul-12 975.75 31.7938352 21.74778848 154.9870378 79.38341216Aug-12 1229.65 47.15660699 26.82955218 117.2678691 82.77258969Sep-12 1294.9 45.10687258 30.48501626 218.1912278 83.64071106Oct-12 1499.4 54.48074404 35.28416182 237.8734508 87.72949919Nov-12 1602.15 54.2956723 39.08646392 238.0453162 88.52336526Dec-12 1572.75 43.5971928 39.98860969 288.6355367 88.3049667Jan-13 1743.15 50.48309477 42.08750671 468.9093869 89.31514568Feb-13 1944.5 58.77857306 45.42571998 360.6024574 89.31514568Mar-13 2005.3 54.58585812 47.25774761 302.8799337 90.83735643Apr-13 1906.35 38.2945865 45.46511539 234.97035 85.77449905May-13 1223.3 -22.08520743 31.95505082 161.5558757 57.67189013Jun-13 1000.85 -36.43278236 18.27748419 53.5940737 51.64814175Jul-13 468.4 -73.30238279 -0.03848921 7.111515411 40.69229545Aug-13 469.45 -61.94133245 -12.41905786 -51.99590059 40.69229545Sep-13 523.5 -48.10021578 -19.55528944 -61.82246981 40.69229545Oct-13 444.55 -46.99818828 -25.04386921 -59.57216773 39.1847262Nov-13 425.4 -41.2953331 -28.29416199 -70.35147392 40.44447019



Fig 1.4.1 Rate of Change of Wockhardt Limited

Jan-09

Apr-09Jul-0

9Oct-

09Jan

-10

Apr-10Jul-1

0Oct-

10Jan

-11

Apr-11Jul-1

1Oct-

11Jan

-12

Apr-12Jul-1

2Oct-

12Jan

-13

Apr-13Jul-1

3Oct-

13-200-100

0100200300400500600

ROC (14 MONTHS)

ROC (14 MONTHS)

Interpretation:




Fig 1.4.2 Relative Strength Index of Wockhardt Limited

Jan-09

Apr-09Jul-0

9

Oct-09

Jan-10

Apr-10Jul-1

0

Oct-10

Jan-11

Apr-11Jul-1

1

Oct-11

Jan-12

Apr-12Jul-1

2

Oct-12

Jan-13

Apr-13Jul-1

3

Oct-13

0

20

40

60

80

100

RSI (14 Months)

RSI (14 Months)

Interpretation:





The RSI line of Wockhardt is oscillating between 40 to 50 which indicate that the investor should buy their stocks.


Fig 1.4.3 MACD of Wockhardt India

Jan-09

Apr-09Jul-0

9Oct-

09Jan

-10

Apr-10Jul-1

0Oct-

10Jan

-11

Apr-11Jul-1

1Oct-

11Jan

-12

Apr-12Jul-1

2Oct-

12Jan

-13

Apr-13Jul-1

3Oct-

13

-100-80-60-40-20

020406080

100

MACDEMA (9 Months)

Interpretation:




Table 1.5Infosys

Date Close MACD EMA 9 DAY ROC (14 DAYS)

RSI (14DAYS)

Jan-09 1306.65 nil nil Nil Nil

Feb-09 1231.25 nil nil Nil Nil

Mar-09

1323.9 nil nil Nil Nil

Apr-09 1509.25 nil nil Nil Nil

May-09


Jun-09 1776.5 nil nil Nil Nil

Jul-09 2064.35 nil nil Nil Nil

Aug- 2131.15 nil nil Nil Nil



09Sep-09 2306.4 nil nil Nil Nil

Oct-09 2206.2 nil nil Nil Nil

Nov-09


Dec-09 2601.1 nil nil Nil Nil

Jan-10 2475.5 nil nil Nil Nil

Feb-10 2601.95 nil nil 99.13136647 Nil

Mar-10

2615.95 nil nil 112.4629442 84.24438981

Apr-10 2738.15 nil nil 106.8245336 85.25913963

May-10

2658 nil nil 76.11396389 81.54925212

Jun-10 2791 nil nil 73.88324715 82.8804566

Jul-10 2788.4 nil nil 56.96031523 82.75475808

Aug-10

2713.85 nil nil 31.46268801 79.0526146

Sep-10 3050.5 nil nil 43.13868099 82.79558107

Oct-10 2971.7 nil nil 28.84582033 79.22703114

Nov-10

3051 nil nil 38.29208594 80.15404918

Dec-10 3442.75 nil nil 44.69287831 83.96178029

Jan-11 3117.7 nil nil 19.86082811 71.67379674

Feb-11 2997.1 2238.64124 nil 21.07049081 67.71411733

Mar-11

3241.3 2714.595663 nil 24.57195565 71.18543756

Apr-11 2906.25 2652.983712 nil 11.09730691 61.42681234

May-11

2785.65 2531.746742 nil 1.734747914 58.32731116

Jun-11 2910.45 2400.488316 nil 9.497742664 60.54590534

Jul-11 2775.9 2280.822821 nil -0.541024722 57.02124829

Aug-11

2342.95 2161.288499 nil -15.97511117 47.44929484

Sep-11 2533.05 1971.621172 nil -6.662122077 51.3138404

Oct-11 2877.55 1823.42151 2308.401075 -5.669562367 57.42429504

Nov-11

2606.85 1744.978409 2195.716542 -12.27748427 51.91100138

Dec-11 2767.65 1589.960394 2074.565312 -9.287118977 54.69364174

Jan-12 2746 1479.589166 1955.570083 -20.23818169 54.2385739

Feb-12 2883.45 1363.986462 1837.253359 -7.513551657 56.70167334

Mar-12

2866.3 1225.529652 1714.908618 -4.364218745 56.29452504

Apr-12 2462.1 1137.200083 1599.366911 -24.03973714 47.61632791

May-12

2429.35 1013.534506 1482.20043 -16.40946237 46.98432939

Jun-12 2509.2 862.5747511 1358.275294 -9.924075171 48.76972773



Jul-12 2226.95 777.7878202 1242.177799 -23.48434091 43.22806177

Aug-12

2361.65 674.7742582 1128.697091 -14.92308801 46.36057187

Sep-12 2534.95 582.3332108 1019.424315 8.194797157 50.17004491

Oct-12 2363 538.9416427 923.3277806 -6.713250824 46.63132021

Nov-12

2436.85 530.6303179 844.788288 -15.31511181 48.31740572

Dec-12 2318.7 508.7078442 777.5721993 -11.0535704 45.82312271

Jan-13 2789.5 426.7326193 707.4042833 0.789478438 55.64828902

Feb-13 2907 453.1342135 656.5502693 5.863073562 57.70964668

Mar-13

2889.35 473.3854815 619.9173118 0.204615998 57.27899132

Apr-13 2235.45 492.4407538 594.4220002 -22.00921048 44.13759714

May-13

2411.7 399.0434768 555.3462955 -2.047033021 47.62553058

Jun-13 2498.85 339.9038986 512.2578161 2.860847552 49.31086618

Jul-13 2969.65 350.1773114 479.8417152 18.35047027 57.30385445

Aug-13

3105.85 431.0185712 470.0770864 39.46653495 59.30316509

Sep-13 3013 514.8786245 479.037394 27.58029344 57.33219664

Oct-13 3309.9 616.0429297 506.4385011 30.57062269 61.71401705

Nov-13

3354.55 734.4721188 552.0452247 41.96148963 62.34038015

Dec-13 3485.65 827.9294109 607.2220619 43.03916942 64.19273194

Fig 1.5.1 Rate of Change of Infosys

Jan-09

Apr-09Jul-0

9

Oct-09

Jan-10

Apr-10Jul-1

0

Oct-10

Jan-11

Apr-11Jul-1

1

Oct-11

Jan-12

Apr-12Jul-1

2

Oct-12

Jan-13

Apr-13Jul-1

3

Oct-13

-50

0

50

100

150

ROC (14 DAYS)

ROC (14 DAYS)

Interpretation:






Fig 1.5.2 Relative Strength Index of Infosys

Jan-09

Apr-09Jul-0

9

Oct-09

Jan-10

Apr-10Jul-1

0

Oct-10

Jan-11

Apr-11Jul-1

1

Oct-11

Jan-12

Apr-12Jul-1

2

Oct-12

Jan-13

Apr-13Jul-1

3

Oct-13

0102030405060708090

RSI (14DAYS)

RSI (14DAYS)

Interpretation:



The RSI line of Infosys is oscillating between 60 and 70 which indicate that the investor should sell their stocks.


Fig 1.5.3 MACD of Infosys

Jan-09

Apr-09Jul-0

9

Oct-09

Jan-10

Apr-10Jul-1

0

Oct-10

Jan-11

Apr-11Jul-1

1

Oct-11

Jan-12

Apr-12Jul-1

2

Oct-12

Jan-13

Apr-13Jul-1

3

Oct-13

0

500

1000

1500

2000

2500

3000

MACDEMA 9 DAY



Interpretation:




Table 1.6Tata Consultancy Services

Date Close MACD EMA (9 Months)

ROC (14 Months)

RSI (14 Months)

Jan-09 255.8 nil Nil Nil NilFeb-09 241.55 nil Nil Nil NilMar-09 269.28 nil Nil Nil NilApr-09 311.8 nil Nil Nil NilMay-09 352.3 nil Nil Nil NilJun-09 389.85 nil Nil Nil NilJul-09 525.95 nil Nil Nil NilAug-09 527.05 nil Nil Nil NilSep-09 621 nil Nil Nil NilOct-09 628.3 nil Nil Nil NilNov-09 688.4 nil Nil Nil NilDec-09 750.25 nil Nil Nil NilJan-10 736.2 nil Nil Nil NilFeb-10 761.8 nil Nil 197.8107897 NilMar-10 780.65 nil Nil 223.1836059 95.13285751Apr-10 765.4 nil Nil 184.2394534 92.51963692May-10 743.05 nil Nil 138.309814 88.67513777Jun-10 751 nil Nil 113.1705932 88.852579Jul-10 839.8 nil Nil 115.4161857 90.6203937Aug-10 843.75 nil Nil 60.42399468 90.69111153Sep-10 926.95 nil Nil 75.87515416 92.0506377Oct-10 1052.9 nil Nil 69.54911433 93.57935714Nov-10 1076 nil Nil 71.25576954 93.81431073Dec-10 1165.65 nil Nil 69.32742592 94.63486486Jan-11 1159.5 nil Nil 54.54848384 93.71643834Feb-11 1110.25 250.6827661 Nil 50.80820429 86.47846428Mar-11 1183.9 250.4895332 Nil 55.40824363 87.9742354Apr-11 1165.65 246.0277179 Nil 49.31787613 85.45171488May-11 1157.15 239.0501962 Nil 51.18238829 84.24017089Jun-11 1184.2 233.017093 Nil 59.37016352 84.97046368Jul-11 1137 221.8695951 Nil 51.39813582 78.16414175Aug-11 1042.4 203.0609333 Nil 24.12479162 66.64215545Sep-11 1037.3 185.6038799 Nil 22.93925926 66.07665679Oct-11 1115.8 176.0736657 222.8750423 20.37326717 70.25986634Nov-11 1115.55 166.5804931 211.6161324 5.950232691 70.23016407Dec-11 1160.65 160.8421899 201.4613439 7.867100372 72.48960223Jan-12 1132.4 152.2598476 191.6210447 -2.852485738 68.95905587Feb-12 1221.95 150.944225 183.4856807 5.385942216 73.38428848



Mar-12 1168.8 143.9534184 175.5792283 5.27358703 67.25580112Apr-12 1246.6 143.0420638 169.0717954 5.29605541 71.0650082May-12 1245.35 140.5982154 163.3770794 6.837386866 70.92225106Jun-12 1277.45 139.6419442 158.6300523 10.39623212 72.45263961Jul-12 1243.65 134.6050715 153.8250562 5.020266847 68.37211244Aug-12 1343.75 137.1100279 150.4820505 18.18381706 73.18815975Sep-12 1295.9 133.6929991 147.1242402 24.31887951 67.86807402Oct-12 1315.5 131.0558057 143.9105533 26.81962788 68.86638571Nov-12 1314 127.3764569 140.603734 17.76303997 68.69049378Dec-12 1255.85 118.4034462 136.1636765 12.57675586 62.07174749Jan-13 1344.15 117.0678573 132.3445126 15.81010641 67.23460533Feb-13 1517 128.475953 131.5708007 33.96326386 74.54046289Mar-13 1575.75 140.6364161 133.3839238 28.95372151 76.46158995Apr-13 1378.4 132.8181302 133.2707651 17.93292266 60.06537142May-13 1498.45 134.7557338 133.5677588 20.20295203 64.9843237Jun-13 1518.15 136.3096315 134.1161334 21.90548842 65.73029492Jul-13 1815.5 159.6939144 139.2316896 42.11906533 74.54516988Aug-13 2033.2 193.5614419 150.09764 63.48651148 78.83712873Sep-13 1927.8 209.482024 161.9745168 43.46418605 72.46640289Oct-13 2112.05 234.2661606 176.4328456 62.97939656 76.10196726Nov-13 2004.35 242.4227787 189.6308322 52.36412011 70.26185263Dec-13 2172.05 259.4284164 203.590349 65.30060883 73.65239153

Fig 1.6.1 Rate of Change of TCS

Jan-09

May-09

Sep-09

Jan-10

May-10

Sep-10

Jan-11

May-11

Sep-11

Jan-12

May-12

Sep-12

Jan-13

May-13

Sep-13-50

050

100150200250

ROC (14 Months)

ROC (14 Months)

Interpretation:




Fig 1.6.2 Relative Strength Index of TCS



Jan-09

May-09

Sep-09

Jan-10

May-10

Sep-10

Jan-11

May-11

Sep-11

Jan-12

May-12

Sep-12

Jan-13

May-13

Sep-13

0

40

80

RSI (14 Months)

RSI (14 Months)

Interpretation:

When the RSI value crosses 70, the prices were high. At this point, investors can make decision to sell.

When the RSI value crosses 35, the prices were low. At this point, investors can make decision to buy.


Fig 1.6.3 MACD of TCS

Jan-09

May-09

Sep-09

Jan-10

May-10

Sep-10

Jan-11

May-11

Sep-11

Jan-12

May-12

Sep-12

Jan-13

May-13

Sep-13

050

100150200250300

MACDEMA (9 Months)

Interpretation:






Company Profile:

Wockhardt Ltd. is a pharmaceutical and biotechnology company headquartered in Mumbai, India. The company has manufacturing plants in India, UK, Ireland, France and US, and subsidiaries in US, UK, Ireland and France. It is a global company with more than half of its revenue coming from Europe.

In 2011–2012 its UK and USA sales alone were US$475 million. It has market presence in emerging markets such as Russia, Brazil, Mexico, Vietnam, Philippines, Nigeria, Kenya, Ghana, Tanzania, Uganda, Nepal, Myanmar, Sri Lanka, Mauritius, Lebanon and Kuwait.

The Company has a market capitalization of over 211 billion (US$3.5 billion) and an annual turnover of 36 billion (US$600 million). It produces formulations, biopharmaceuticals, nutrition products, vaccines and active pharmaceutical ingredients (APIs). The company employs over 7,900 people globally. Wockhardt Hospitals is a subsidiary of the Wockhardt Group.

Wockhardt was found by Habil Khorakiwala in the early 1960s. His father Fakhruddin T. Khorakiwala had acquired Worli Chemical Works in 1959. This was incorporated as Wockhardt Pvt. Ltd., in 1973. Wockhardt Ltd. was incorporated on July 8.1999.Wockhardt is often confused as a multinational because of its German sounding name.

Wockhardt is the first company outside of the US and Europe to manufacture recombinant human insulin.

Description DetailsIndustry Pharmaceuticals & DrugsRegistered Office Wockhardt Towers, Bandra-Kurla complex, Bandra

East, Mumbai, Maharashtra-4000051E-mail [email protected]

Chairman H F Khorakiwala

Managing Director Murtaza Khorakiwala

Company Secretary V R Khetan

Table 2.1 Financial Ratios:

Ratios Mar 2013

Mar 2012

Mar 2011

Mar 2010

Mar 2009

Per share ratios:Dividend per share 5.00 0.00 0.00 0.00 0.00


mailto:[email protected]

http://en.wikipedia.org/wiki/Recombinant_DNA#Synthetic_insulin_production_using_recombinant_DNA

http://en.wikipedia.org/wiki/Multinational_corporation

http://en.wikipedia.org/wiki/Fakhruddin_T._Khorakiwala

http://en.wikipedia.org/wiki/Wockhardt_Hospitals

http://en.wikipedia.org/wiki/Active_pharmaceutical_ingredient

http://en.wikipedia.org/wiki/Active_pharmaceutical_ingredient

http://en.wikipedia.org/wiki/Biopharmaceutical

http://en.wikipedia.org/wiki/Formulation

http://en.wikipedia.org/wiki/Myanmar

http://en.wikipedia.org/wiki/Mumbai

http://en.wikipedia.org/wiki/Biotechnology

http://en.wikipedia.org/wiki/Pharmaceutical

http://en.wikipedia.org/wiki/Indian_rupee

http://en.wikipedia.org/wiki/Indian_rupee


Operating profit per share 53.95 81.11 38.42 40.24 32.45

Book value per share 74.76 10.98 -6.74 -10.69 61.89

Net Operating income/share

225.51 233.94 160.38 170.76 137.51

Earnings Per Share 56.90 16.79 -12.07 -72.57 -31.87

Profitability Ratios:Gross Profit Margin (%) 20.65 32.07 20.44 19.76 20.53

Net Profit Margin (%) 24.74 7.13 -7.45 -41.81 -22.55

Return on Net Worth (%) 76.10 152.88 179.10 679.11 -51.49

Return on Capital Employed

43.11 42.51 13.78 15.39 13.73

Leverage Ratio:Debt to Equity Ratio 0.58 14.35 -- -- 2.69

Debt to Asset Ratio 0.13 0.52 0.74 0.78 0.73

Payout Ratio:D/P Ratio 8.79 -- -- --

--

Earning Retention Ratio 82.81 100.00 -- -- --

Liquidity Ratio:Current Ratio 0.65 0.67 0.75 0.85 1.02

Acid Test Ratio 0.49 0.54 1.33 1.79 1.86



Activity RatioInventory Turnover Ratio 4.68 5.89 6.69 7.05 7.00

Debtors Turnover Ratio 10.57 8.94 4.53 4.05 3.73

Fixed Asset Turnover Ratio

1.90 2.14 1.65 1.91 1.64

Total Asset Turnover Ratio

2.01 1.80 0.70 0.75 0.60

Interpretation:

EPS is inconsistent but increased every year from 2009 to 2013 so shareholder can

expect better in future. Net operating incomes are increasing from past 5 years.

Dividend payout ratio is increasing in the last 5 years. According to Debt Equity ratio,

this company is decreasing their debts every year to past 5 years.

As per investor point of view, this company is recommended for the investment.

COMPANY PROFILE:

GlaxoSmithKline Pharmaceuticals Ltd is an Indian subsidiary of GlaxoSmithKline plc, one of the world's leading research based pharmaceutical and healthcare companies.

It is one of the oldest pharmaceuticals companies in India. It product portfolio includes prescription medicines and vaccines. Its prescription medicines range across therapeutic areas such as anti-infectives, dermatology, gynaecology, diabetes, oncology, cardiovascular disease and respiratory diseases.

It also offers a range of vaccines, for the prevention of hepatitis A, hepatitis B, invasive disease caused by H, influenzae, chickenpox, diphtheria, pertussis, tetanus, rotavirus, cervical cancer and others.

It was founded 13 November 1924 in India under the name of H.J.Foster & Co. Limited as an Agency House for distributing Baby Food Glaxo, Joseph Nathan & Co. In 1950, it changed its name to Glaxo Laboratories (I) Ltd.

Description DetailsIndustry Pharmaceuticals & DrugsRegistered Office Dr. Annie Besant Road,

Worli, Mumbai,Maharashtra-400030

E-mail [email protected]



http://en.wikipedia.org/wiki/Tetanus

http://en.wikipedia.org/wiki/Pertussis

http://en.wikipedia.org/wiki/Diphtheria

http://en.wikipedia.org/wiki/Cardiovascular

http://en.wikipedia.org/wiki/Oncology

http://en.wikipedia.org/wiki/Diabetes

http://en.wikipedia.org/wiki/Gynaecology

http://en.wikipedia.org/wiki/Dermatology

http://en.wikipedia.org/wiki/GlaxoSmithKline

http://en.wikipedia.org/wiki/GlaxoSmithKline


Chairman D S Parekh

Managing Director H B Joshipura

Company Secretary


Ratios Dec 2013 Dec 2012 Dec 2011 Dec 2010 Dec 2009Per share ratiosDividend per share 50.00 50.00 45.00 40.00 30.00


Book value per share 238.15 237.30 226.67 227.95 207.68


300.60 310.53 276.95 250.90 222.44

Earnings Per Share 59.25 68.15 50.84 66.55 60.48

Profitability RatiosGross Profit Margin (%) -- -- 32.74 35.44 35.67

Net Profit Margin (%) 18.26 20.44 17.11 25.05 25.74

Return on Net Worth (%) -- -- 22.42 29.19 29.12


-- -- 48.75 45.35 44.09

Leverage RatioDebt to Equity Ratio -- -- -- -- --Debt to Asset Ratio 0.18 0.20 0.25 0.27 0.31

Payout RatioD/P Ratio 84.39 73.37 88.51 60.10 49.60Earning Retention Ratio 10.98 41.63 40.51 33.74 43.87

Current Ratio 2.60 2.65 2.46 2.94 3.06

Acid Test Ratio 2.21 2.31 2.11 2.53 2.63

Activity RatioInventory Turnover Ratio -- -- 7.33 7.82 7.71Debtors Turnover Ratio 23.99 26.14 35.45 42.18 33.74

Fixed Asset Turnover -- -- 8.64 6.67 6.52



Ratio


-- -- 1.22 1.10 1.07

Interpretation:

EPS is inconsistent and decreasing as compared to last 2 years so shareholder

can’t expect better in future. Net operating incomes are increasing from past 5

years. Dividend payout ratio is inconsistent but increased in past 2 years. This

company maintains the current ratio and Quick ratio is also ideal. There is no debt

for this company.

As per investor point of view, this company is not recommended for the

investment.

Company Profile:

Tata Consultancy Services Limited (TCSL) is a multinational information technology (IT) service, consulting and business solutions company headquartered in India.

TCS operates in 46 countries. It is a subsidiary of the Tata Group and is listed on the Bombay Stock Exchange and the National Stock Exchange of India.

TCS is the largest Indian company by market capitalization and is the largest India-based IT services company by 2013 revenues. TCS is now placed among the ‘Big 4’ most valuable IT services brands worldwide.

TCS is ranked 40th overall in the Forbes World's Most Innovative Companies ranking, making it both the highest-ranked IT services company and the top Indian company. It is the world's 10th largest IT services provider, measured by revenues.

Tata Consultancy Services Ltd (TCS) was founded in 1968 by a division of Tata Sons Limited.

In the 2011/12 fiscal year, TCS achieved annual revenues of over US$10 billion for

the first time. In May 2013, TCS was awarded a six-year contract worth over 1100

crores to provide services to the Indian Department of Posts. In 2013 TCS moved

from the 13th position to 10th position in the League of top 10 global IT services

companies.

Description DetailsIndustry IT Services, IT Consulting


http://en.wikipedia.org/wiki/Indian_Postal_Service

http://en.wikipedia.org/wiki/Tata_Sons

http://en.wikipedia.org/wiki/Tata_Sons

http://en.wikipedia.org/wiki/Top_software_companies_in_India


http://en.wikipedia.org/wiki/Market_capitalization

http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India

http://en.wikipedia.org/wiki/Bombay_Stock_Exchange

http://en.wikipedia.org/wiki/Tata_Group



Registered Office 9th Floor, Nirmal Building,Nariman Point, Mumbai, Maharashtra -400021


Chairman Cyrus Mistry

Managing Director N Chandrasekaran

Company Secretary


Ratios Mar 2014

Mar 2013

Mar 2012

Mar 2011

Mar 2010

Per share ratiosDividend per share 32.00 22.00 25.00 14.00 20.00




330.18 247.42 198.54 149.58 117.74


Profitability RatiosGross Profit Margin (%) 31.62 27.88 27.52 28.12 26.89Net Profit Margin (%) 27.25 25.24 26.42 25.42 24.13

Return on Net Worth (%) 41.87 39.32 44.24 38.80 37.30


53.39 48.07 55.31 44.38 42.46

Leverage RatioDebt to Equity Ratio -- 0.01 0.01 0.01 0.01

Debt to Asset Ratio 0.2 0.5 0.4 0.2 0.2

Payout RatioD/P Ratio 33.98 33.73 44.67 36.25 69.88

Earning Retention Ratio 66.03 66.28 48.06 57.79 19.37

Current Ratio 3.18 2.85 2.48 2.45 1.49




Acid Test Ratio 3.16 2.88 2.47 2.44 1.48




5.79 5.32 5.39 4.91 4.74


1.47 1.48 1.56 1.50 1.52

Interpretation:

EPS is increasing every year from 2010 to 2014 so shareholder can expect better

in future. Net operating incomes are also increasing from past 5 years. Dividend

payout ratio is inconsistent but increased in last 2 years. Current Ratio is ideal.

Quick ratio is also ideal. There is no debt for TCS in current year.

As per investor point of view, this company is recommended to invest.

Company Profile:

Infosys (formerly Infosys Technologies) is an Indian multinational that provides business consulting, information technology, software engineering and outsourcing services. It is headquartered in Bangalore, Karnataka.

Infosys is the third-largest India-based IT services company by 2014 revenues, and the fifth largest employer of H-1B visa professionals in the United States in FY 2013. On 31 March 2014, its market capitalization was INR 188,510crores ($31.11 billion), making it India's fifth largest publicly traded company.

Infosys was co-founded in 1981 by N. R. Narayana Murthy, Nandan Nilekani, N. S. Raghavan, S. Gopalakrishnan, S. D. Shibulal, K. Dinesh and Ashok Arora after they resigned from Patni Computer Systems.

On 1 June 2013, Mr. Narayana Murthy, one of the founding members of Infosys and its long time CEO, returned from his retirement to assume office in Infosys as its Executive Chairman.

Description DetailsIndustry IT SoftwareRegistered Office Plot No. 44 & 97A, Hosur Road,

Electronic City, Bangalore, Karnataka-500100




http://en.wikipedia.org/wiki/Executive_Chairman

http://en.wikipedia.org/wiki/N._R._Narayana_Murthy

http://en.wikipedia.org/wiki/Patni_Computer_Systems

http://en.wikipedia.org/wiki/S._D._Shibulal

http://en.wikipedia.org/wiki/S._Gopalakrishnan

http://en.wikipedia.org/wiki/N._S._Raghavan

http://en.wikipedia.org/wiki/N._S._Raghavan

http://en.wikipedia.org/wiki/Nandan_Nilekani

http://en.wikipedia.org/wiki/N._R._Narayana_Murthy

http://en.wikipedia.org/wiki/Market_capitalisation

http://en.wikipedia.org/wiki/H-1B_visa


http://en.wikipedia.org/wiki/Karnataka

http://en.wikipedia.org/wiki/Bengaluru

http://en.wikipedia.org/wiki/Outsourcing

http://en.wikipedia.org/wiki/Software_engineering

http://en.wikipedia.org/wiki/Software_engineering

http://en.wikipedia.org/wiki/Information_technology

http://en.wikipedia.org/wiki/Business_consulting



Chairman Narayan Murthy

Managing Director Vishal Sikka

Company Secretary Parvatheesam k


Ratios Mar 2014

Mar 2013

Mar 2012

Mar 2011

Mar 2010





776.00 640.24 544.28 442.13 368.40


Profitability RatiosGross Profit Margin (%) -- -- -- -- --Net Profit Margin (%) 21.72 23.38 25.60 24.28 26.36

Return on Net Worth (%) -- -- -- -- --


-- -- -- -- --

Leverage RatioDebt to Equity Ratio -- -- -- -- --

Debt to Asset Ratio -- -- -- -- --

Payout RatioD/P Ratio 35.31 26.46 31.86 53.47 24.72

Earning Retention Ratio 64.51 73.30 66.21 46.54 70.67

Current Ratio 3.70 4.75 4.91 5.34 4.28

Acid Test Ratio 3.65 4.69 4.88 5.28 4.20

Activity RatioInventory Turnover Ratio -- -- -- -- --Debtors Turnover Ratio 6.47 6.25 6.50 6.81 6.37




-- -- -- -- --


-- -- -- -- --

Interpretation:

EPS is increasing every year from 2010 to 2014 so shareholder can expect better

in future. Net operating incomes are increasing from past 5 years. Dividend

payout ratio is inconsistent but has increased in last 2 years. Current Ratio and

Quick ratio are ideal. There is no debt for Infosys.

As per investor point of view, this company is recommended to invest.

Company Profile:

Nestle S.A. is a Swiss multinational food and beverage company headquartered

in Vevey, Switzerland. It is the largest food company in the world measured by

revenues.

Nestle's products include baby food, bottled water, breakfast cereals, coffee and tea,

confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. 29 of

Nestle's brands have annual sales of over 1 billion Swiss francs (about

$1.1billion) , including Nespresso, Nescafe, Kit

Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. Nestle has 447 factories,

operates in 194 countries, and employs around 333,000 people.

Nestle was formed in 1905 by the merger of the Anglo-Swiss Milk Company,

established in 1866 by brothers George Page and Charles Page, and Farine Lactée

Henri Nestle, founded in 1866 by Henri Nestlé.

In 2011, Nestlé was listed No. 1 in the Fortune Global 500 as the world's most

profitable corporation. With a market capitalization of $233 billion, Nestle ranked No.

9 in the FT Global 500 2013.

Description DetailsIndustry Consumer Food

Registered Office M-5 A, Connaught circus, New Delhi,Delhi-110001




http://en.wikipedia.org/wiki/Financial_Times_Global_500

http://en.wikipedia.org/wiki/Fortune_Global_500

http://en.wikipedia.org/wiki/Henri_Nestl%C3%A9

http://en.wikipedia.org/wiki/Maggi

http://en.wikipedia.org/wiki/Vittel_(water)

http://en.wikipedia.org/wiki/Stouffer's

http://en.wikipedia.org/wiki/Nesquik

http://en.wikipedia.org/wiki/Smarties

http://en.wikipedia.org/wiki/Kit_Kat

http://en.wikipedia.org/wiki/Kit_Kat

http://en.wikipedia.org/wiki/Nescaf%C3%A9

http://en.wikipedia.org/wiki/Nespresso

http://en.wikipedia.org/wiki/Pet_foods

http://en.wikipedia.org/wiki/Frozen_food

http://en.wikipedia.org/wiki/Ice_cream

http://en.wikipedia.org/wiki/Dairy_products

http://en.wikipedia.org/wiki/Breakfast_cereals

http://en.wikipedia.org/wiki/Bottled_water

http://en.wikipedia.org/wiki/Baby_food

http://en.wikipedia.org/wiki/Vevey



Chairman

Managing Director Etienne Szivo

Company Secretary B Murli


Ratios Dec 2013 Dec 2012 Dec 2011 Dec 2010 Dec 2009Per share ratiosDividend per share 48.50 48.50 48.50 48.50 48.50




943.94 864.44 776.93 649.29 533.31


Profitability RatiosGross Profit Margin (%) 17.77 18.59 18.48 17.87 17.58




47.79 55.43 63.73 135.06 160.29

Leverage RatioDebt to Equity Ratio 0.50 0.58 0.76 -- --

Debt to Asset Ratio 0.33 0.37 0.43 -- --

Payout RatioD/P Ratio 41.86 43.79 48.63 57.12 71.39Earning Retention Ratio 57.62 57.52 53.03 34.20 18.15

Current Ratio 0.65 0.54 0.42 0.62 0.60

Acid Test Ratio 0.39 0.22 0.24 0.27 0.24




1.88 1.91 3.00 3.49 3.24




2.56 2.92 3.43 7.86 9.75

Interpretation:

EPS is increasing every year from 2009 to 2013; hence the shareholders can

expect better returns in the future. Net operating income is increasing for the past

5 years. Dividend payout ratio is decreasing consistently from past 5 years. It

means the company is retaining its earnings. According to Debt Equity ratio, this

company is reducing its debt every year for the last 5 years.

As per investor point of view, this company is recommended for investment.

Company Profile:

Hindustan Unilever Limited (HUL) is an Indian consumer goods company based

in Mumbai, Maharashtra. It is owned by Anglo-Dutch company Unilever which owns

a 52% controlling share in HUL. HUL's products include foods, beverages, cleaning

agents and personal care products.

HUL was established in 1933 as Lever Brothers India Limited and, in 1956, became

known as Hindustan Lever Limited, as a result of a merger between Lever Brothers,

Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered

in Mumbai, India and employs over 16,500 workers. The company was renamed in

June 2007 as "Hindustan Unilever Limited".

Lever Brothers first commenced operations in India in the summer of 1888, when

crates full of Sunlight soap bars, embossed with the words "Made in England by

Lever Brothers" were shipped to the Kolkata harbour and it began an era of marketing

branded Fast Moving Consumer Goods (FMCG).

Hindustan Unilever's distribution covers over 2 million retail outlets across India

directly and its products are available in over 6.4 million outlets in the country. As per

Nielsen market research data, two out of three Indians use HUL products.

The company has a distribution channel of 6.3 million outlets and owns 35 major

Indian brands.

Description DetailsIndustry Consumer Food

Registered Office Unilever House, B D Sawant Marg, Chakala, Mumbai Maharashtra -400099


http://en.wikipedia.org/wiki/Mumbai

http://en.wikipedia.org/wiki/Lever_Brothers

http://en.wikipedia.org/wiki/Personal_care_products

http://en.wikipedia.org/wiki/Cleaning_agent

http://en.wikipedia.org/wiki/Cleaning_agent

http://en.wikipedia.org/wiki/Unilever

http://en.wikipedia.org/wiki/Mumbai,_Maharashtra

http://en.wikipedia.org/wiki/Fast_moving_consumer_goods



Chairman Harish Manwani

Managing Director Sanjiv Mehta

Company Secretary


Ratios Mar 2014

Mar 2013

Mar 2012

Mar 2011

Mar 2010





129.56 119.36 102.32 91.39 81.45


Profitability RatiosGross Profit Margin (%) 15.04 14.59 13.89 12.45 14.70




147.56 163.59 95.40 102.66 106.78

Leverage RatioDebt to Equity Ratio -- -- -- -- --

Debt to Asset Ratio -- -- -- -- --

Payout RatioD/P Ratio 72.71 105.35 60.24 60.86 64.42Earning Retention Ratio 22.74 -25.45 26.77 21.79 21.25Current Ratio 0.74 0.76 0.83 0.86 0.84

Acid Test Ratio

0.44 0.45 0.46 0.46 0.46

Activity RatioInventory Turnover Ratio

10.20 10.21 8.79 7.02 8.99




Debtors Turnover Ratio

33.96 34.13 27.27 24.34 29.24


6.77 6.73 6.26 5.65 5.35


8.61 9.78 6.35 7.52 7.66

Interpretation:

The above analysis shows that the EPS is steadily increasing every year from

2010 to 2014. This infers that the shareholders can expect better earnings in the

future. It can be further observed that the Net operating income is increasing for 5

years i.e., from 2009 to 2013, implying that it is better to invest. The company

shows positive profits in the last 5 year. Dividend payout ratio is inconsistent but

it has decreased in the last 2 years. There are no debts for Hindustan Unilever.

As per investor point of view, this company is recommended for investment.



CHAPTER 5

FINDINGS:

From this study it was found that technical analysis indicators and

fundamental analysis ratios can be used for making buying and selling

decisions in the stock market.

It was also found that a combination of technical analysis indicators will give

the accurate indication about the trend in future prices rather than a single

indicator.

From this fundamental study it is clear that, before investing in any security

investor should know industry growth and company performance in that

industry.

From the study it is clear that, if there is a better performance there will be

increase in share price of the company.

From the study it is clear that before investing in any security , for the safer

side of investor it is better to have knowledge about the economic growth of

the country.



SUGGESTIONS:

Technical Analysis will improve the investment decisions. It is simple and more

understandable than fundamental analysis because the information required for

technical analysis is rely available as compared to fundamental analysis.

To become a perfect trader one must know that some stocks sometimes are

declining while others are advancing and they are called cross current. Only

by study of these individual stock and the different groups, one can determine

which stock is supposed to decline at the time when another stock is going to

advance.

A single indicator is not enough for arriving at a selling or buying decision. A

combination of Technical Analysis indicators is required for more accurate

decisions.

Even though Technical Analysis itself is enough for making decisions in stock

market, simultaneous usage of both fundamental and technical analysis will

reduce errors in forecasting future prices.

The complete dependence on technical analysis is not good sign for

investment as Fundamental Analysis gives accurate and specific information

regarding the investments made by the investor.

The investor should consider the performance of the company in considering

sales growth, stability of sales before investing.

CONCLUSION:



In general, it can be concluded from the results that the Technical indicator can play

useful role in the timing of stock market entry and exit. Fundamental Analysis helps

the investor to know the present condition of economic, industry and company before

investing to maximize the income.

The study shows that technical Analysis indicators can give a fair idea about future

price movements in stock market. It is necessary to use more than 2-3 indicators for

reaching a conclusion regarding the share price movement. Whereas in Fundamental

Analysis the safe return is ensured and there is less amount of risk in gaining the

return.

This study shows that all technical indicators cannot give an accurate decision and

historical prices have an impact on future share prices. So past trend can be used for

predicting the trend of the future price.

BIBLIOGRAPHY:



“Security Analysis and Portfolio Management”- Punithavathy Pandian –

Vikas Publication – 2/e 2005

“Financial Management” – M.Y. Khan and P.K Jain – 5 th edition – TATA

Mcgraw HILL

www.nseindia.com

www.investopedia.com

www.moneycontrol.com

www.financeyahoo.com

www.economicstimes.com


http://www.economicstimes.com/

http://www.financeyahoo.com/

http://www.moneycontrol.com/

http://www.investopedia.com/

http://www.nseindia.com/

fundamental and technical full report mba

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