9.veeresh project

1. Industry Profile:

1.1Overview of Indian Stock Market:

Globalization of the financial market has led to a manifold increase in the investments in new

markets have been opened, new instruments have been developed and new service has been

launched. The primary purpose of the financial market is to promote savings, investment and

efficient allocation of resources among competing uses. Capital markets one of the principal

arms of financial markets, provide the crucial infrastructure for corporate to access community

savings through a mix of debt and equity instruments.

India’s stock market’s capitalization (m-cap) touched US$ 1.04 trillion in June 2009 making it

the ninth largest in the world. According to data from Bloomberg, India’s market cap as a

percentage of world market cap was 2.8 per cent on December 31, 2009.

In 2009, there were 21 IPOs that raised US$ 4.25 billion as compared to 36 IPOs in 2008 that

raised US$ 3.68 billion.

The stock market has essentially three categories of participants, viz.,

The issuer of securities,

The investors in the securities and

The intermediaries.

The issuers are the borrowers or deficit savers, who issue securities to raise funds. The

investors, who are surplus savers, deploy their savings by subscribing to these securities. The

intermediaries’ are the agents who match the needs of users and suppliers of funds for a

commission. These intermediaries pack and unpack securities to help both the issuers and

investors to achieve their respective goals.

Fast Facts:

- India has the third largest investor base with over 20 million shareholders in the world.

Department of Management Studies-DSCE

- India's BSE has the second most number of companies listed in the world after the NYSE.

- India is world's 15th largest equity market.

-Over 9,000 companies are listed on the stock exchanges, which are serviced by nearly 7,500

stockbrokers

1.2 PRIMARY MARKET

The primary market is an intermittent and discrete market where the initially listed shares are

traded first time, changing hands from the listed company to the investors. In other words

primary market is that part of the capital markets that deals with the issuance of new

securities. Companies, governments or public sector institutions can obtain funding through

the sale of a new stock or bond issue. The process of selling new issues to investors is called

underwriting. In the case of a new stock issue, this sale is called an initial public offering

(IPO).

1.3 SECONDARY MARKET

The secondary market is an on-going market, which is equipped and organized with a place,

facilities and other resources required for trading securities after their initial offering. It refers

to a specific place where securities transaction among many and unspecified persons is carried

out through intermediation of the securities firms.

Capital Market Intermediaries:There are several institutions, which facilitate the smooth functioning of the securities market.

They are,

Merchant Bankers Custodians

Mutual Funds Depositories

Depository Participants Credit Rating Agencies

R& T Agents - Registrars to Issue Stock Brokers


Bombay Stock Exchange (BSE)

Bombay Stock Exchange Limited (the Exchange) is the oldest stock exchange in Asia

with a rich heritage. Popularly known as "BSE", it was established as "The Native Share &

Stock Brokers Association" in 1875. The BSE's On Line Trading System (BOLT) is a

proprietary system of the Exchange. The primary index of BSE is BSE SENSEX comprising

30 stocks. The Sensex is the oldest in the country and is tracked worldwide.

National Stock Exchange (NSE)

The National Stock Exchange (NSE), located in Bombay, is India's first debt market. It opened

for trading in mid-1994. NSE has fully automated computerized mode of trading known

NEAT (National Exchange Automated Trading) System. S&P CNX Nifty is a 50 stock index

accounting for 23 sectors of the economy. 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)

Brokers:

As per SEBI (Securities and Exchange Board of India.) regulations, only registered members

can operate in the stock market. One can trade by executing a deal only through a registered

broker of a recognized Stock Exchange or through a SEBI-registered sub-broker. Brokers buy,

sell or otherwise deal in securities for any individual investor, institutional or corporate – who

intends to buy or sell securities through a stock exchange.

Short selling :

Short selling is a legitimate trading strategy. The selling of a security that the seller does not

own, or any sale that is completed by the delivery of a security borrowed by the seller, Short

sellers assume that they will be able to buy the stock at a lower amount than the price at which

they sold short.


The major changes effected in the market:

Book building in primary market

Dematerialization of securities

Regulations for almost all financial intermediaries

Licensing of various intermediaries with rapid standards of entry servicing and

Inspection constant monitoring of market volatility and proactive safeguard to avoid

systemic failure

Commencement of trading in currency futures & interest rate futures.

Extension of market trading hours 9:00 am to 3:30 pm.

Financial Services in India.

The Indian economy is estimated to have grown by 6.7 per cent in 2008-09. The government

has taken a number of steps in recent months to revive the economy, including slashing

interest rates, lowering factory levies and more than doubling the limit on foreign investment

in corporate bonds. The financial services space is a rapidly growing one in India. The country

received US$ 45 billion in foreign currency remittances from non-resident Indians in 2008, the

highest in the world.

As per the Securities and Exchange Board of India (SEBI), number of registered FIIs as on

January 29, 2010 was 1697 and the cumulative investments in equity since November 1992 to

January 29, 2010, was US$ 72.51 billion.

The average assets under management of the mutual fund industry stood at US$ 173.16 billion

for the month of December 2009, an increase of nearly 88 per cent from US$ 91.79 billion in

December 2008, according to the data released by Association of Mutual Funds in India

(AMFI).

Funds raised by the Indian corporate sector via ADRs/ GDRs has jumped over 33 times from

around US$ 101.72 million in 2008 to about US$ 3.50 billion in 2009.


Company profile:

2. a. Background & inception of company:

Anand Rathi Financial Services Ltd (Anand Rathi) is a full service securities firm, established

in 1994 by Mr. Anand Rathi and Mr. Pradeep Gupta. The company operates in all market

segments and holds cash and derivative membership in BSE and NSE. It is also a depository

participant of CDSL and NSDL. The firm offers the entire spectrum of financial services

ranging from brokerage services in equities and commodities, distribution of mutual funds,

IPOs and insurance products, real estate, investment banking, merger and acquisitions,

corporate finance and corporate advisory. It trades in commodities through its associate entity;

Anand Rathi Commodities Ltd that has membership in NCDEX, MCX, NMCE and LME. AR

Middle East DMCC is a Dubai based commodity broking division with membership in

DGCX. It has a wide spread network of 800 offices in 350 cities and 558 sub-brokers. The

firm has international presence with three offices in Dubai, Hong Kong, Newyork, Singapore

and Mauritius. The group today employs over 2,500 professionals throughout India and its

international offices.

The firm’s philosophy is entirely client centric, with a clear focus on providing long term

value addition to clients, while maintaining the highest standards of excellence, ethics and

professionalism.

In year 2007 Citigroup Venture Capital International joined the group as a financial partner. It has daily turnover in excess of Rs. 4billion. It has 1,00,000 plus clients nationwide. It is also leading

Distributor of IPO's.

2. b. Nature of Business:

AR provides a breadth of financial and advisory services including wealth management,

investment banking, corporate advisory, brokerage & distribution of equities, commodities,

mutual funds and insurance, structured products - all of which are supported by powerful

research teams.


Anand Rathi Financial Services Ltd. is a boutique investment bank that offers financial

advisory services to institutions, corporations, high net worth individuals, and families. It

provides mergers and acquisitions, private placements, transaction structuring, pricing,

potential financing, restructuring, capital market, initial public offerings (IPOs), advisory

services. Additionally, the firm offers fairness opinions and valuation analysis, due diligence,

bid evaluation, and negotiation services. Anand Rathi Financial Services caters to industrial

and capital goods, business services, real estate, retail, education, healthcare, transportation,

and telecom sectors and financial institutions.

2. c. Vision

"To be a shining example as leader in innovation and the first choice for clients &

employees"

Mission

“To be India's first multinational providing complete financial services solution across the

globe”.

2. d. Product & service profile:


Equity & derivatives brokerage

Anand Rathi clients can trade through us online on BSE and NSE for both equities and

derivatives. They are supported by dedicated sales & trading teams in our trading desks across

the country. Research and investment ideas can be accessed by clients either through their

designated dealers, email, web or SMS.

Mutual funds

AR is one of India's top mutual fund distribution houses. Its success lies in the philosophy of

providing consistently superior, independent and unbiased advice to our clients backed by in-

depth research. Anand Rathi have a dedicated mutual fund research cell for mutual funds that

consistently provide superior investment ideas, picking best performing funds across asset

classes and providing insights into performances of select funds.

Depository services

AR Depository Services provides you with a secure and convenient way for holding your

securities on both CDSL and NSDL. Our depository services include settlement, clearing and

custody of securities, registration of shares and dematerialization. We offer you daily updated

internet access to your holding statement and transaction summary.

Commodities

Anand Rathi commodities broking services include online futures trading through NCDEX

and MCX. Commodities broking is supported by a dedicated research cell that provides both

technical as well as fundamental research. Anand Rathi research covers a broad range of

traded commodities including precious and base metals, Oils and Oilseeds, agri-commodities

such as wheat, chana, guar, guar gum and spices such as sugar, jeera and cotton.


Insurance broking

As an insurance broker, we provide to our clients comprehensive risk management techniques,

both within the business as well as on the personal front. The firm deals with both life

insurance and general insurance products all insurance companies.

IPO

Anand Rathi is leading primary market distributor across the country. Our strong performance

in IPOs has been a result of our vast experience in the Primary Market, wide network of

branches across India, strong distribution capabilities and a dedicated research team Anand

Rathi have been consistently ranked among the top 10 distributors of IPOs on all major

offerings.

2. E. Area of Operation:

National-In India AnandRathi is present in 21 States:

Andhra Pradesh , Assam, Bihar , Chhattisgarh, Delhi , Goa, Gujarat, Haryana Jammu &

Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab,

Rajasthan, Tamil Nadu, Uttar Pradesh, Uttaranchal, West Bengal.

International- In abroad it has offices in Dubai, Hong Kong & New York.

2. f. Ownership Pattern:Anand Rathi is a private company limited; it has the following ownership pattern:

Anand Rathi family (promoter) - 52.3%

Citigroup venture capital - 19.9%

Financial institutions/ mutual funds - 18.4%

Corporate bodies & HNI’s - 9.4%


2. g. Competitors Information:India Infoline:India Infoline Ltd (India Infoline) was established in 1995. The company is led by Nirmal

Jain. India Infoline became a public limited company in 2000. www.5paise.com is the e-

broking portal of the company. India Infoline Securities Pvt Ltd, a subsidiary of India Infoline

is engaged in the business of equities broking and portfolio management services.

India Bulls:India bulls Securities Ltd (India bulls) is a 100% subsidiary of India bulls Financial Services

Ltd which is one of the leading financial and real estate services firm. India Bulls is a

corporate member of the capital market and derivative segment of the NSE and BSE.

Edelweiss:Edelweiss Securities Ltd (Edelweiss Securities), a wholly owned subsidiary of Edelweiss

Capital Ltd which together with other companies in the group constitutes the Edelweiss Group

(Edelweiss). Edelweiss was established by Rashesh Shah and Venkat Ramaswamy in the year

1995. Over the years, the company has grown exponentially in size, scope and services with

diversified set of products and services catering to the demands of the investors.

Motilal Oswal:It is promoted by Motilal Oswal and Raamdeo Agarwal. Motilal Oswal has a network of 60

branches and 638 sub-brokers spread over 380 cities in India and has staff strength of 2,000. It

has over 4,000 terminals. MOSL is a globally diversified financial services group having

business in securities, commodities, investment banking and venture capital.

2. h. Infrastructure Facilities:Anand Rathi has very good technological sophisticated infrastructure in the industry such as,

Anand Rathi has more than 4000 trading terminals across all over India.

Anand Rathi has 800 fully computerized offices at more than 350 locations in India

which are well connected with telephone, internet & VSAT (Very Small Aperture

Terminal) connections.


Company has centralized back office system in its head office to provide better

services to clients.

Company has recently launched online trading platform to support trading in global

markets.

Company has dedicated research & surveillance systems in head office for risk

management.

2. I. Achievements/Awards:

AR have been ranked in 2009 as the #1 Private Bank – Domestic and #2 Private Bank –

Overall BY OUR CLIENTS in an international poll conducted by Asiamoney magazine.

Achievements made by AnandRathi

AR is the first company to launch gold trading in Dubai

AR becomes Limited company in 2006

Mile stones:

1994: Started activities in consulting and Institutional equity sales with staff of 15.

1995: Set up a research desk and empanelled with major institutional investors.

1997: Introduced investment banking businesses Retail brokerage services launched.

1999: Lead managed first IPO and executed first M & A deal.

2001: Initiated Wealth Management Services.

2002: Retail business expansion recommences with ownership model.

2003: Wealth Management BUSINES cross Rs1500 crores.

2004: Commodities brokerage and real estate services introduced.

2005: Retail Branch network expands across 200 locations within India

2006: AR Middle East, acquires membership of Dubai Gold & Commodity Exchange

(DGCX). Company completes its presence in all States across the country with offices

at 300 plus locations within India.

2007: Retail customer base crosses 100 thousand & established the presence in over

350 locations.


2. j. Work Flow Model:


Tele Marketing Executive

Customers or clients

Company Branches

Sales executives

Wealth Management

Sales executives

Investment Banking

Mutual funds InsuranceEquities & Commodities.

2. k. Future growth & prospectus:

Financial services companies will continue to play a significant role in the country’s financial

sector as the economy gradually grows. With the domestic economy gradually expected to get

back on track, it seems that new opportunities will continue to unfold for the Indian Financial

services industry in the form of new financial products, heightened per capita income and

increasing investor interest in the near future.

During the last few years India has emerged as one of the world’s fastest growing economies.

India’s stock markets grew not only in size but also in terms of product offerings. The

Financial services companies have also diversified to other businesses like investment

banking and wealth management, Advisory services, Portfolio Management Services (PMS),

The Financial services industry is poised for a quantum growth in the medium to long term

because the economy is moderately strong; equity culture is proliferating; new products are

hitting the markets; there is wider integration with global markets, and more thrust on

reforms. The Indian stock markets’ long existence, for over almost one and- a-half centuries,

has enabled the Financial services industry to not only absorb and adopt new opportunities

but also seamlessly improvise their systems, which has paved the way for its growth and

diversification.

Anand Rathi has huge opportunity to grow in Currency futures and in interest rate futures

markets in India. These market segments recently started in India they yet grow significantly.

These currency futures & interest rate futures markets are larger in terms of volume over the

traditional stock markets.


3.-Mckensy’s 7s Frame work

7-S Model - a Systemic Approach to Improving Organizations

The 7-S-Model is better known as McKinsey 7-S. This is because the two persons who

developed this model, Tom Peters and Robert Waterman, have been consultants at McKinsey

& Co at that time. The model starts on the premise that an organization is not just Structure,

but consists of seven elements.

The 7-S diagram illustrates the multiplicity interconnectedness of elements that define an

organization's ability to change. The theory helped to change manager's thinking about how

companies could be improved. It says that it is not just a matter of devising a new strategy and

following it through. Nor is it a matter of setting up new systems and letting them generate

improvements.

To be effective, your organization must have a high degree of fit or internal alignment

among all the seven Ss. Each S must be consistent with and reinforce the other Ss. All Ss are


interrelated, so a change in one has a ripple effect on all the others. It is impossible to make

progress on one without making progress on all.

The seven S’s of the model are distinguished into Hard S’s and Soft S’s. The hard elements

are feasible and easy to identify as they can be found in strategy statements, corporate plans,

organizational charts and other documentations of the company. They include:

Strategy

System

Structure

The soft S’s are hardly feasible because of difficulty involved in describing them as

capabilities, values and elements of corporate culture are frequently developing and changing.

The elements of soft S’s are:

Style

Staff

Skills

Shared values

SYSTEM:

System includes formal and informal procedures that support the strategy and

structure. In other words, it is the process and flows that show how an organization gets its

day-to-day things done. This includes the procedures and routines that characterize how

important work is to be done i.e. financial systems, hiring, promotion and performance

appraisal systems and information systems etc.

Systems refer to the processes used to manage the organization. Systems include:-

Business Process Management System (BPMS)

Performance management system

Financial system

Customer satisfaction monitoring system


Risk Management system

Trading surveillance system

Mark-to-Market (MTM) & Value at Risk (VaR) system.

It is the formal and informal procedures, including Risk Management system, Trading

surveillance system, Mark-to-Market (MTM) & Value at Risk (VaR) system, management

information systems, and financial systems, that govern everyday activity

The system followed in Anand Rathi for performance appraisal system is aimed at

achieving organizational goals through the review of employee performance against individual

or group objectives.

The performance management process at Anand Rathi is designed to:-

1. Track performance

2. Provide effective feedback

3. Talent management

4. Improving plan for poor performers (PIP)

5. Mentoring and coaching employees

STRATERGY:

It refers to the set of decisions and actions at gaining a sustainable competitive advantage.

Strategy is the plan of action on organization prepares in response to, or anticipation of

changes in its external environment. strategy is designed, to transform the firm from the

present position to the new position describes by objectives, subject to constraints of the

capabilities or the potential.

The company has various strategies which are formulated on the basis of the vision, mission of

the company. Anand Rathi strategy is to attain total competence in their quality of products

and services. Anand Rathi has introduced many Strategies to compete with the new upcoming

competitions because of the globalization and such strategies are,


Customers focus strategy: This strategy of Anand Rathi is to provide the products and

services according to the customers’ needs based on their risk taking abilities. Anand Rathi

gives more importance to provide the long term value added services to the customers.

Employee training: This is one important strategy adopted by human resource department

Anand Rathi is to provide the required training to their employees for their development and

better working. Here training is given on communication, business ethics, customer attraction,

knowledge about their products and services.

Price: Anand Rathi caters to marketing of financial products & service which are highly

sensitive, small changes in the prices impact the market significantly in terms of companies

profitability as well as on the market share also. Keeping the all the thing in mind Anand

Rathi has formed and maintained a very competitive pricing structure in the line with the

prevailing trends in the financial services industry.

Product differentiation: Anand Rathi caters to various financial products like Depositary

Participants, Registry, Stock Broking, Distribution of IPO’s, and Insurance, Mutual funds

products, investment banking, portfolio management services, wealth management services,

commodity and currency trading.

Marketing strategy: Being sales oriented organization regular sales promotion events are

conducted with various principles agencies and time to time advertising releases are done

depending upon the requirements. Anand Rathi relies mostly on word of mouth publicity than

advertising which is worked very well to them.

STYLE:Style includes two things i.e. management style and organization culture. Management

style is the way in which the managerial personnel behave and collectively spend their time to

achieve organizational goals. It consists the way of leading, motivating and the style of

leadership in the management. Style of the organization is the evident through the patterns of

actions taken by the member of the top management team over a period of time. Having a


participative kind of leadership style, the top management encourages the initiatives from the

employees and tries to implement them. Brainstorming sessions are conducted at regular

intervals. Company has a free upward communication channel.

Open discussions or open house meetings are a regular feature in Anand Rathi and there is a

‘Coffee Table’ every week end, in which the clients are free to discuss matters, which would

enable the clients and the company to take suggestions which will be beneficial for the

function and for the individual development.

AR work force is Participative in style. Each employee, workers are contributing themselves

at their level best towards the companies’ policies, procedures, programs and growth In every

perspective the company considered all employees, workers in decision making planning and

the company respects the suggestions, opinions, ideas of its human resources.

STRUCTURE:

Structure describes the hierarchy of authority and accountability in an organization

these relationships are frequently diagrammed in organizational charts. Most organizations use

some mix of structures- pyramidal, matrix or structured ones – to accomplish their goals

Management team consists of following members

Mr. Anand Rathi - Group Chairman Dr. S A Dave | Director

Mr. Pradeep Gupta – Voice Chairman Mr. C. D Arha | Director

Mr. Amit Rathi - Managing Director Mr. Ajit Bhushan | Director

Mr. P G Kakodkar | Director


ORGANISATIONAL STRUCTURE


Chairman

Voice-Chairman

Managing Director

Head- RetailHead-Institutional

Equities

Head-Wealth

ManagementHead-Investment

Banking

Institutional

Research &

Trading

Individual

Wealth

Management

Corporate

FinanceBrokerage

Distribution

Managed

Investment

Services

Institutional

Wealth

Management

Corporate

Advisory

services

NRI

Cross

Border

Advisory

STAFF:

Staff refers to the people in the enterprise and their socialization into the organizational

culture. Productive high performing employees are the company’s most valuable assets.

Organization are made up of humans refers to how people are developed, trained, socialized,

integrated, motivated, and how their carriers are managed and it’s the people who makes the

real difference to the success of the organization in the increasingly knowledge based society.

The importance of human resources has thus got the central position in the strategy of the

organization, away from the traditional model of capital and land. Anand Rathi have good

professional staff playing essential role in the success of company.

Acknowledging the importance of ‘intellectual capital’ Anand Rathi promotes a

climate for employee learning and sharing, as well as fosters the business excellence. The

company follows a progressive policy of taking keen interest in its personnel’s well being and

progress, which build a strong sense of belongingness.

Anand Rathi has more than 2500 professional employees at several key position levels. Some

basic key positions at branch level includes the,

Front office executives: These employees deal with customers directly mainly in

trading related services.

Back office executives: These employees maintain all the data related to the customers

accounts.

SKILLS:

Skill is the distinctive capabilities or competences of personnel or of the organization

as a whole. In other words it is what the company does best, in the ways of expanding or

shifting competences. It is what the company does best; the distinctive capabilities and

competencies that reside in the organization. Anand Rathi is acknowledged in the Financial

services sector as one of the major organizations. Anand Rathi have a dedicated team of

experienced people heading the various levels of the organization. The “Board of Directors”

has vast experience in financial markets.


Anand Rathi use Computer Based Training, PowerPoint Presentations in the form of

self-learning and classroom modules, role-plays, mock calls, listening exercises, handouts,

audio and video clippings to train the employees. Training is generally a healthy mix of

classroom sessions and practical exercises and has many added advantages. The branches of

Anand Rathi are distributed uniformly throughout the country. They have fine network of

communication among the various branches of the Company. The company been the

following phases a

Induction Training Process

Project Training Process

On-the-Job Training

SHARED VALUES:These are the values shared by the members of the organization. It is the super ordinate

goal that is centrally responsible for providing a core mission to the organization, used as an

umbrella, which embraces all the other managerial activities. In short it says what the

technology does to exceed their customer expectations.

Client Focus: Anand Rathi believe in enriching their relationships with their clients

through an organization wide culture of customer focus, agility, and knowledge

improvement. Anand Rathi demonstrates unmatched commitment for excellence in

customer satisfaction & uses state of the art technology to exceed their customer

expectations.

Empowerment: They believe in making people self reliant by enabling them to

take effective decisions and be accountable for the same. They deem empowerment

coupled with challenging opportunities encourages and facilitates personal and

professional balance.

Valuing People: They are dedicated to attracting best of the talent and developing,

retaining their valued employees. They believe in committing to the satisfaction and

well being of their employees, which involves flexible and more affable work practices

tailored to the needs of all the employees.


4. SWOT ANLYSIS:

This is an analysis of strengths, Weakness, Opportunity and Threats of Anand Rathi financial

services ltd.

STRENGHTS WEAKNESS

Nationwide Network of branches.

Renowned brand name in financial product distribution.

Multi product activities in financial products.

1 in top 5 broker in the country

Strong brand recall among retail investor reach (mass marketing).

Firm’s philosophy is entirely client centric. Clear focus on providing the long term value addition to clients.

Anand Rathi provides value based research for their products.

All employees have lack of knowledge in multi product skill despites being multi Product Company.

Systems (infrastructure facility) up graduation still not up to the mark of international standards.

Lack of knowledge about market information among the employees.

OPPUTUNITY THREATS

Can make use of sustained growth in retail segment of financial product.

Due to high awareness of financial products among general public business growth could be higher.

Can make of technology to market the product(e-selling).

Increase in investors’ confidence & their active participation in financial markets creates opportunities.

Increased stiff competition from rivals in the market.

Decreasing margins by way of Commission.

Global recession & economic slowdown in world markets.

Increasing inflation.

Lack of liquidity in system.


Strengths of Anand Rathi:

Anand Rathi has Nationwide Network of branches:

AR has a wide spread network of 800 offices in 350 cities and 558 sub-brokers. The

firm has international presence with three offices in Dubai, Hong Kong, Newyork,

Singapore and Mauritius. AR has 4,134 no of terminals across the India.

Renowned brand name in financial product distribution:

AR has good reputation or brand name among the traders, investors, mutual funds,

High net worth individuals (HNI), Financial Institutions, etc.

Multi product activities in financial products:

The firm offers the entire spectrum of financial services ranging from brokerage

services in equities and commodities, distribution of mutual funds, IPOs and insurance

products, real estate, investment banking, merger and acquisitions, corporate finance

and corporate advisory. Anand Rathi Commodities Ltd that has membership in

NCDEX, MCX, and LME.

One in top 5 broker in the country:

Anand Rathi is one of the leading stock broker in India. It has presence in all segments

of the stock market & is most honored stock broker in the broking industry.

Strong brand recall among retail investor reach (mass marketing):

Especially among the retail investors, Anand Rathi has good brand.AR has a wide

spread network of 800 offices in 350 cities and 558 sub-brokers though this company

serves the retailers.

Firm’s philosophy is entirely client centric. Clear focus on providing the long

term value addition to clients:


AR has mainly focused on providing the value added services to its client. It provides

the better value to customers’ requirements though the use of innovative products &

services.

Anand Rathi provides value based research for their products:

It provides the research based value added services & end-to-end solutions to its clients

Weakness of Anand Rathi:

All employees have lack of knowledge in multi product skill despites being multi

Product Company:

Even though the company have multiple products in financial services, there is lack of

information or knowledge among the employees of the company Specially regarding

the usage of these financial products. And there is a significant lack of technical

knowledge or information about the various financial products.

Systems (infrastructure facility) up graduation still not up to the mark of

international standards:

AR has not upgraded their technological infrastructure in providing the many services

to the customer. Specially AR has not upgraded the infrastructural facilities in the field

of retail broking segment.

Lack of knowledge about market information among the employees:

Employees of the AR Company have lack of knowledge or information about the

movement of stock market. Employees are not aware of various trading strategies,

market psychology and recent developments in the financial markets around the world.


Opportunities to Anand Rathi:

Can make use of sustained growth in retail segment of financial product:

Retail investors are now actively participating in the stock market ever before. So there

is huge market is available in retail broking segment. And also now the availability of

financial products are increased significantly which fulfill the various customer needs.

Due to high awareness of financial products to public business growth could be

higher:

Now the people have lot of information and knowledge about the various financial

products & services offered by the financial service companies and also about their

usage or significance in their financial needs. So the demand for better services may

increase in future.

Can make of technology to market the product(e-selling).

Company can use internet & technology for the expansion of their sales and market

share through the use of innovative online & internet marketing techniques.

Increase in investors’ confidence & their active participation in financial markets

creates opportunities

Participation of both the retail and high net worth individuals (HNI’s) in the stock

market increased significantly. After the economic crises in the US, the investors’

confidence was drastically reduced but now the situations are changed and investors

are coming back to the market with huge money.


Treats to Anand Rathi: Increased stiff competition from rivals in the market:

Many newly started companies are entering into the stock broking market day by day

that increased the competition among the existing companies.

Decreasing margins by way of Commission:

Many new players’ entry in the market has created the stiff competition among the

various market players. This leads to the reduction of brokerage commission to the

companies and it has significant negative impact on the companies overall profitability.

Global recession & economic slowdown in world markets:

Economic slowdown & recession in the global financial markets will create negative

impact on the investment related activities. During the recent economic slowdown &

recession in the US market has reduced the participation of the investors significantly

and globally all the stock markets are declined significantly.

Increasing inflation:

Increase in the inflation rate will have negative impact over the stock market. An

increase in the inflation reduces flow money into the stock market there by the stock

market fall because of lack of liquidity in the financial markets.

Lack of liquidity in system:

Reduction in the flow of money into the system leads to the illiquidity in the market

and fall in the stock prices significantly. Availability of money in the country or

system have greater impact over the stock market movements.


5. Analysis of Financial statement: Balance sheet of Anand Rathi for last 5

years:

Sources Of Funds: Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

Total Share Capital 26.65 32.05 384.42 207.55 207.59

Equity Share Capital 26.65 32.05 36.66 50.69 50.73

Share Application Money 0 16.72 13.49 0 34

Preference Share Capital 0 0 347.76 156.87 156.87

Reserves 421.77 1279.39 1462.99 3198.22 3219.14

Revaluation Reserves 0 0 0 0 0

Net worth 448.42 1328.16 1860.9 3405.77 3460.73

Secured Loans 382.18 2.97 335.79 3883.59 4544.09

Unsecured Loans 224.48 669.7 1076.06 7433.01 2388.15

Total Debt 606.66 672.67 1411.85 11316.6 6932.24

Total Liabilities 1055.08 2000.83 3272.75 14722.37 10392.97

Application Of Funds:

Gross Block 44.89 82.59 175.81 58.95 62.19

Less: Accum. Depreciation 6.1 13.35 30.97 11.02 18.39

Net Block 38.79 69.24 144.84 47.93 43.8

Capital Work in Progress 1.65 3.21 9.21 1.84 1.17

Investments 0.72 267.42 584.58 512.74 1195.52

Inventories 0 0.01 0 0 0

Sundry Debtors 1.18 81.9 103.35 14.44 8.41

Cash and Bank Balance 269.86 486.62 313.35 3654.38 128.27

Total Current Assets 271.04 568.53 416.7 3668.82 136.68

Loans and Advances 847.23 1247.85 2444.81 8441.31 7226.27

Fixed Deposits 62.72 404.41 492.1 3555.09 2305.7

Total CA, Loans &

Advances 1180.99 2220.79 3353.61 15665.22 9668.65

Deffered Credit 0 0 0 0 0


Current Liabilities 121.23 389.35 621.49 1038.72 276.08

Provisions 45.84 170.49 198 466.65 240.09

Total CL & Provisions 167.07 559.84 819.49 1505.37 516.17

Net Current Assets 1013.92 1660.95 2534.12 14159.85 9152.48

Miscellaneous Expenses 0 0 0 0 0

Total Assets 1055.08 2000.82 3272.75 14722.36 10392.97

Contingent Liabilities 0.62 1.5 3.08 1.09 0.82

Book Value (Rs) 33.65 81.85 81.82 128.2 128.92

It can be observed from the Balance sheet that company has increased its equity share capital

& reduced its preferential share capital for the last few years. The reserves and surplus of the

company has been increasing year by year. Company’s both secured loans & unsecured loans

increased heavily, company is highly leveraged. Company’s investments, fixed deposits and

loans & advances increased significantly over the years. The debtors have been increasing

year by year and company’s cash balance is fluctuating. We can observe that the total asset is

increased tremendously compared to last two years. It can also be observed that company has

current assets more than twice the current liability which is ideal current ratio for a company.

And book value of the share also increased over a period.

6. Learning experience:

Globalization has made stock market or financial markets very much complex and it is vast

area or field. It requires lot of knowledge, information and experience about the business or

financial markets to trade in markets or predict the market movements. The rules, regulations

& trading strategies are continuously changes with the changing financial or global markets.

This project helped me in several ways, during the project I learned many new things which

are all beyond the theoretical knowledge or bookish/class room knowledge and some of the

such things are,


During the project I came to know about, how exactly work done in stock broking or

financial services companies, how all the employees coordinate each other during the

work in company. And also came to know what are their responsibilities at various

level of work mainly in interaction with the customer & providing the services to them

as front office executives (FOE) & back office executives (BOE).

This project helps me to apply the technical analysis to stock market to predict the

market behavior and to make best analysis about the future movements of stock

market.

This project helped me in understanding the how actually stock market works in

practically. And it provided the opportunities to apply the theoretical aspects to real

stock market situations.

During the project I have learned how to identify the trends in stock markets whether it

is primary trend, intermediatery (medium term) trend or short term trend. Identifying

these trends are very important to form the right trading strategies for various types of

investors such as short term investors or traders or medium term to long term investors.

This project provided the lot of information about how actually trading takes place and

about the usage of various trading strategies by various types of investors.

This project helped me to study various chart patterns of technical analysis to gain

inside knowledge about market movements and forecast about market direction based

on the market psychology.

The study of technical analysis helps me in identifying the stocks and decides when to

buy a particular stock, at what price. And what should be the stop loss as well as target

for that particular stock.


1. a. General Introduction:


PART-B

Introduction of Technical Analysis:

Technical analysis is the study of past or historical price & volume movements so as to

predict the future stock price movements or behaviour. The rationale behind technical analysis

is that share price behavior repeats itself over time & an analysts attempts to derive methods to

predict this repetition. The past share prices are the major data used by technical analysts,

other statistics such as volume of trading & stock market indices are also utilized to some

extent. The basic premise of technical analysis is that price move in trends or waves which

may be upward or downward. Technical analysts believe that the historical performance of

stocks and markets are indications of future performance.

Technical analysis is applicable to stocks, indices, commodities, futures or any

tradable instrument where the price is influenced by the forces of supply and demand. Price

refers to any combination of the open, high, low or close for a given security over a specific

timeframe. The time frame can be based on intraday (tick, 5-minute, 15-minute or hourly),

daily, weekly or monthly price data and last a few hours or many years.

Assumptions in technical analysis

The market discounts everything – All known information about a market is reflected in the

price. In other words, all the present political, economic, psychological and any other type of

information pertinent to the market price is already discounted or priced in.

Prices move in trends - When a price moves in a particular direction, be it up or down, it will

continue to trend in that direction till some news changes market perception of future direction

sand reverses the trend itself. To sum up the markets move in the path of least resistance.

History repeats itself - This assumption arises from the fact that mass psychology does not

change. Markets overextend because of the herd instinct leading to panic and euphoria time

and again.

Basic Premises


The basic premises underlying technical analysis are as follows.

Market prices are determined by the interaction of supply and demand forces.

Supply and Demand are influenced by a variety of factors, both rational and irrational.

These include Fundamental factors and psychological factors.

Barring minor deviations, stock prices tend to move in fairly persistent trends.

Shifts in demand and supply bring about changes in trends.

Irrespective of why they occur, shifts in demand and supply can be detected with the

help of charts of market action.

Because of the persistence of trends and patterns, analysis of past market data be used

to predict future price behavior.

Chart Types:

A price chart is a sequence of prices plotted over a specific time frame. In statistical terms,

charts are referred to as time series plots. On the chart, the y-axis (vertical axis) represents

the price scale and the x-axis (horizontal axis) represents the time scale. Prices are plotted

from left to right across the x-axis with the most recent plot being the furthest right.

Technicians, technical analysts and chartists use variety of charts to analyze a wide array of

securities and forecast future price movements. Some of the important charts are discussed

here.

Bar Chart:

Perhaps the most popular charting method is the bar chart the high, low and close are

required to form the price plot for each period of a bar chart. The high and low are represented

by the top and bottom of the vertical bar and the close is the short horizontal line crossing the

vertical bar. On a daily chart each bar represents the high, low and close for a particular day.

Weekly charts would have a bar for each week based on Friday's close and the high and low

for that week


Candlestick charting:Originating in Japan over 300 years ago, candlestick charts have become quite popular in

recent years. For a candlestick chart, the open, high, low and close are all required. A daily

candlestick is based on the open price, the intraday high and low, and the close. A weekly

candlestick is based on Monday's open, the weekly high-low range and Friday's close.


Many traders and investors believe that candlestick charts are easy to read, especially the

relationship between the open and the close. White (clear) candlesticks form when the close is

higher than the open and black (solid) candlesticks form when the close is lower than the

open. The white and black portion formed from the open and close is called the body (white

body or black body). The lines above and below are called shadows and represent the high and

low.

Point and Figure Chart:The charting methods shown above, all, plot one data point for each period of time. No

matter how much price movement, each day or week represented is one point, bar, or

candlestick along the time scale. Even if the price is unchanged from day to day or week to

week, a dot, bar, or candlestick is plotted to mark the price action. Contrary to this

methodology, point & figure charts are based solely on price movement, and do not take

time into consideration.


Chart Pattern:

A chart pattern is a distinct formation on a stock chart that creates a trading signal, or a sign

of future price movements. Chartists use these patterns to identify current trends and trend

reversals and to trigger buy and sell signals. There are several types of patterns within this

area of technical analysis, which are explained as follows.

Rising Trend:

A rising trend is an upward zigzag of price movement that results when the bulls are

in control. We define the trend, as well as postulate future price movement, by drawing a

line across the rising bottoms. To further clarify the boundaries of the price activity, we can

also draw a line, which is parallel to the rising bottoms line, across the rising tops. This

forms the trend channel, which allows us to set targets for future tops and bottoms in the

trend by estimating where the price index will intercept the top and bottom of the channel. A

rising trend is not "official" until there is a bottom above a bottom and a top above a top.

In this chart we can see a fairly well-defined rising trend channel. Also, within the

channel we can see shorter-term rising trend lines.


Declining trend

A declining trend is a downward zigzag of price movement that results when the bears

are in control. We define the trend, as well as postulate future price movement, by drawing a

line across the declining tops. To further clarify the boundaries of the price activity, we can

also draw a line, which is parallel to the declining tops line, across the declining bottoms. This

form the trend channel, which allows us to set targets for future tops and bottoms in the trend

by estimating where the price index will intercept the top and bottom of the channel.

A declining trend is not "official" until there is a top below a top and a bottom below a

bottom. In this chart we can see a fairly well-defined declining trend channel. Also, within the

channel we can see shorter-term declining trend lines. When the declining trend line is

violated (the price index crosses up through the line), we consider the trend to have ended.

Support and Resistance:

Once a price index forms a significant top or bottom, we can draw a horizontal line

through it to project future levels of support and resistance. When the price index is above

such levels, they are considered to be areas of support. If the price index is below the line, it is

considered to be resistance. Support is caused by underlying demand from buyers who finally


see an attractive price, while resistance is the result of overhead supply from sellers wishing to

exit. When prices trend sideways, we will often see a channel formed by the resistance above

and the support below. (Not surprisingly, we also think of rising and falling trend channels as

being bounded by support and resistance.)

One of the great consolidations of all time took place in the 1960s and 1970s, a 20-year

period needed to digest the bull market rise from the 1932 low.

Double Top:

The double top formation is bearish and often follows an initial sell Signal resulting from the

penetration of the third and steepest rising trend line in an accelerated growth phase. After the

breakdown from the initial top, price struggles back for a second top, then breaks down again,


failing to overcome the overhead resistance. It is best to get out at the first sell Signal, as it

may be the only warning you get. It is a bad idea to wait for the second top, because it may not

happen; however, the move toward the second top can provide another opportunity for the

recalcitrant stockholder to exit the position with most of his profits intact.

Head and Shoulders Top:

The bearish HEAD AND SHOULDERS pattern is often talked about, but seldom seen. The

"neckline" is drawn under the two bottoms that separate the head from the shoulders. A SELL

Signal is given when the neckline is penetrated downward. From that point the estimated

downside target is equal to the distance between the top of the head and the neckline.

In late 1994 SNPL became a buyout target with an offering price of about $14, indicating the

excess of overvalue ($32) to which investors in a buying frenzy had driven the stock.


Statistical Tools:

Simple Moving Average:

The market indices do not rise or fall in straight line. The upward and downward are

interrupted by counter moves. The underlying trend can be studied by smoothening of the

data. To smooth the data moving average technique is used.

The word moving means that the body of data moves ahead to include the recent

observation. If it is five day moving average, on the sixth day the body of data moves to

include the sixth day observation eliminating the first day’s observation. Likewise it continues.

In the moving average calculation, closing price of the stock is used

Types of Moving Average:

There are a number of different types of moving averages that vary in the way they

are calculated, but how each average is interpreted remains the same. The calculations only

differ in regards to the weighting that they place on the price data, shifting from equal

weighting of each price point to more weight being placed on recent data. The three most

common types of moving averages are simple, linear and exponential.

In this study Simple moving average is used. 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 average are created using the closing price. For example: a 5-day

simple moving average is calculated by adding the closing prices for the last 5 days and

dividing the total by 5.

10 + 11 + 12 + 13 + 14 = 60

(60 / 5) = 12

The calculation is repeated for each price bar on the chart. The averages are then

joined to form a smooth curving line - the moving average line. Continuing our example, if


the next closing price in the average is 15, then this new period would be added and the

oldest day, which is 10, would be dropped. The new 5-day simple moving average would be

calculated as follows:

11 + 12 + 13 + 14 + 15 = 65

(65 / 5) = 13

Over the last 2 days, the SMA moved from 12 to 13. As new days are added, the old days

will be subtracted and the moving average will continue to move over time.

Stock Price and Moving Averages of Stock Prices:

Buy and sell signals are provided by the moving averages. Moving averages are used along

with the price of the scrip. The stock price may intersect the moving average at a particular

point. Downward penetration of the rising average indicates the possibility of a further fall.

Upward penetration of a falling average would indicate the possibility of the further rise and

gives the buy signal.

Comparison of The Two Moving Averages:

When long term and short term moving averages are drawn, the intersection of two

moving averages generates buy or sell signal. When the scrip price is falling and if the short

term average intersects the long term moving average from above and falls below it, the sell

signal is generated.

If the scrip price is rising, the short term average would be above the long term

average. The short term average intersects the long term average from below indicating a

further rise in price, gives a buy signal.


Oscillators:

Oscillators indicate the market momentum or scrip momentum. Oscillator shows the

share price movement across a reference point from one extreme to another. The momentum

indicates:

Overbought and oversold conditions of the scrip or the market.

Signaling the possible trend reversal.

Rise or decline in the momentum.

Oscillators are analyzed along with the price chart. Oscillators indicate trend reversals

that have to be confirmed with the price movement of the scrip. Changes in the price should

be correlated to changes in the momentum, and then only buy and sell signals can be

generated. With the daily, weekly or monthly closing prices oscillators are built. For short

term trading, daily price oscillators are useful.

Relative Strength Index:

RSI is an oscillator used to identify the inherent technical strength and weakness of a

particular scrip or market. RSI can be calculated for scrip by adopting the following formula.

RSI = {100 – [100/ (1 + RS)]}

RS =Average Gain per Day/ Average Loss per Day

The RSI can be calculated for any number of days depending on the wish of the

technical analyst and the time frame of trading adopted in a particular stock market. RSI is

calculated for 5, 7, 9 and 14 days. If the period taken for calculation is more, the possibility

of getting wrong signals is reduced.

The broad rule is, if the RSI crosses seventy there may be downturn and it is

time to sell. If the RSI falls below thirty it is time to pick up the script. If the RSI is rising in

the overbought zone, it would indicate the downfall of the price. If RSI falls in the

overbought zone, it gives a clear signal of sell. This condition occurs after a sharp rise in

price during a period of heavy buying. When the RSI is in the oversold region, it generates


the buy signal. The term oversold is used to describe a security or market that has declined

to an unreasonably low level.

Rate of Change:

ROC measures the rate of change between the current price and the price ‘n’ number

of days in the past. ROC helps to find out the overbought and oversold positions in scrip.

Closing prices are used to calculate the ROC. Daily closing prices are used for the daily

ROC and weekly closing prices for weekly ROC. In this study I have used weekly closing

prices for calculation.

The Rate of Change (ROC) indicator is a very simple yet effective 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.

ROC = ((Today’s close – Close n periods ago) / (Close n periods ago)) * 100

The main advantage of ROC is the identification of overbought and oversold region. The

historic high and low values of the ROC should be identified at first to locate the overbought

and oversold region. If the scrip’s ROC reaches the historic high values, the scrip is in the

overbought region. If the scrip’s ROC reaches the historic low value, the scrip is in the

oversold region.


Statement of the Problem:Considering presents conditions of the stock market it is necessary to know that how the share

prices of a company changes and what are the factors that affects the price movements of

shares. This study has been conducted to solve the problem of identifying the prevailing trend

in the stock market & to forecast the stock price movements to gain maximum profits with

minimum loss.

Another problem is here is taken in account is, when the shares are over bought and over sold.

This problem is analyzed with the help of technical analysis tool i.e. Rate of change and

Relative Strength Index

The problem is identified in consideration to present situation of stock market, where the

market is highly volatile.

Objectives of the study:

The objective refers to the reasons behind the any study. The objective is often divided as

Primary objective

Secondary objective

Primary objective: The primary objective refers to the basic reason the study is conducted. In

this study primary objective is as follows:

To determine the various strategies to be adopted by retail investors based on the

technical analysis.

To determine the prevailing trend & future share price movements in the stock market

for selected stock using technical analysis.

The Secondary objective of this study is as follows:

To identify the scripts when they are trading in the overbought & oversold position.

To comparison of short term moving average to long term moving average.

To guide the investor when to buy the shares and sell the shares of the selected

companies considering the last one year’s closing share prices.


Scope of the Research: This study is done in the Anand Rathi Financial Services company, Bijapur branch.

& it is limited to only financial service sector stocks.

This study will try to explore the various tools available for forecasting of stock prices

with application of technical analysis to helps the investors in better understanding the

markets and gauges the direction in which their investments to be made to make a

decent profit out of it.

The analysis is done with the help of last one year’s stock prices of Edelweiss, India

Infoline, India Bulls, Motilal Oswal & Religare securities. Stock prices are collected

from the NSE website for the period of 1st April 2009 to 31st March 2010.

Research Methodology Type of Research:

The study is of descriptive in nature. Various tools for Technical Analysis are mentioned

along with their interpretation and charts for better analysis. The tools are analyzed based on the

past data and charts have been drawn for better interpretation.

This study is based on the analytical research approach. The researcher used the

information already released by the NSE that should be taken into further critical evaluation.

Statistical Tools used

Simple Moving Average

Rate of Change

Relative Strength Index

Candlestick Charting.

Secondary Data includes:

Market Price

Books

Internet Sources.


Limitations of study:

There were many limitations that are identified and tackled during the course of this study.

The limitations can be listed as:

The project is only for 10 weeks, due to time constrain it is not possible for the detailed

analysis of the topic.

The share prices are taken only from National Stock Exchange. The companies may

have registered in many stock exchanges.

Only cash market rate are considered, the other markets like derivative market is

excluded from the study.

Company’s corporate actions like rights issue, bonuses by the companies are

considered not affecting factors for share prices movements.

In this study only three parameters are considered. These parameters may not be

enough to predict the future price movements.


Data Analysis and Interpretation:

Short Term(10 day) & Long Term(200 day) simple Moving Average of

EDELWEISS:

The above chart consisting of closing price, 10 days moving average and also 200days

moving average. The chart is having 3 curves, the blue curve is showing that each

day’s closing price.

The red colored curve shows a 10 days moving average. This is starting from 20th April

2010. The short term curve i.e. 10 days moving average is moving along with closing

price curve.

The closing price line has intersected by the short term moving average from the below

which indicates further rise and gives buy signal during May with average value

Rs.285.

The closing price line has intersected the short term moving average from the above that

indicates the possibility of further fall, so it shows sell signal during mid June 2009 with

the average price Rs.490.And near 500, it acted as a resistance in November & January.

The 200 day long term average is below than short term and closing price till January

2010 after that it’s higher than that of other curves. In mid January closing price & short

term moving average moves below the long term moving averages that indicates the

bearishness in market & that gives sell signal for long term investors.

Rate of Change (ROC) of EDELWEISS:


Red line is the rate of change for 10 days and blue line is of closing price.

If the scrip’s ROC reaches the historic high values, the scrip is in overbought region &

in oversold region if it reaches historic low value.

Here in above chart the scrip is in overbought region during May mid 2009, & in

January 2010, then it generated the sell signal.

During May, July 2009 mid and February end, it is in oversold region and the stock

price has touched to low & there generated the buy signal.

The chart is showing that the ROC is moving towards the oversold region from

June2009 to July 2009 and closing price line is also decreasing.

Relative Strength Index (RSI)of EDELWEISS:


In the above chart RSI is calculated for 14 days which has been shown in red

line and the closing price of the stock has been shown in blue line.

The broad rule, if RSI crosses 70,that indicates overbought position there may

be downturn ahead & it gives the sell signal. If RSI falls below 30,that

indicates the oversold position & gives buy signal.

During June-09 and January-2010 the RSI line is in oversold region, and the

stock prices are at high, which has generated the sell signal.

During July-09 mid, and March-2010 the RSI is in oversold region so it is

time to buy and stock price is at low which is given bullish trend signal.

In the month of June to July the RSI is declining and the stock price is also

declining.



INDIA INFOLINE:

.






price curve.

The closing price line has intersected the short term moving average from the below

which indicates further rise and gives buy signal during April with average value

Rs.75.


indicates the possibility of further fall, so it shows sell signal during mid June 2009 with

the average price Rs.160.And near 160, it acted as a resistance in June & October.

The 200 day long term average is below than short term and closing price till January

2010 after that it’s higher than that of other curves. In mid January closing price & short

term moving average moves below the long term moving averages at Rs, 130 level, that

indicates the bearishness in market & that gives sell signal for long term investors.


Rate of Change(ROC) of INDIA INFOLINE:




Here in above chart the scrip is in overbought region during May mid 2009, & in

October 2009, then it generated the sell signal.

During , June 2009 mid and February end, it is in oversold region and the stock price

has touched to low & there generated the buy signal.

The chart is showing that the ROC is moving towards the oversold region from October

2009 to February 2010 and closing price line is also decreasing.


Relative Strength Index (RSI)of INDIA INFOLINE:






During May-09,October mid and January-2010 the RSI line is in oversold

region, and the stock prices are at high, which has generated the sell signal.

During June-09 mid, November and feburary-2010 the RSI is in oversold

region so it is time to buy and stock price is at low which is given bullish

trend signal.


declining.



INDIA BULLS:






price curve.

The closing price line has intersected the short term moving average from the below

which indicates further rise and gives buy signal during May with average value

Rs.115.

The closing price line has intersected the short term moving average from the above

which indicates the possibility of further fall, so it shows sell signal during mid June

2009 with the average price Rs.210.And near 200, it acted as a resistance in June &

September.

The 200 day long term average is below than short term and closing price line till

January 2010 after that it’s higher than that of other curves. In mid January closing price

& short term moving average moves below the long term moving averages at 160 level,

that indicates the bearishness in market & that gives sell signal for long term investors.

Rate of Change(ROC) of INDIA BULLS:





Here in above chart the scrip is in overbought region during May 2009, July & in

September 2009, then it generated the sell signal.

During May, 2009 mid and February end, it is in oversold region and the stock price


The chart is showing that the ROC is moving towards the oversold region from

June2009 to July 2009 and closing price line is also decreasing.

Rs 200 acted as overbought position several times.

Relative Strength Index (RSI)of INDIA BULLS:







During May end, August and Septmber-2009 the RSI line is in oversold


During June-09 mid, and August mid-2009 the RSI is in oversold region so it

is time to buy and stock price is at low which is given bullish trend signal.

In the month of June to November the RSI is declining and the stock price is

also declining.

Rs, 200 acted as strong resistance & RSI indicating oversold territory.


MOTILAL OSWAL:







price curve.

The closing price line has intersected by the short term moving average from the below

that indicates further rise and gives buy signal during April with average value Rs.85.

The closing price line has intersected the short term moving average from the above

which indicates the possibility of further fall, so it shows sell signal during mid June

2009 with the average price Rs.170.And near 180, it acted as a resistance in November

& March.

The 200 day long term average is below than short term and closing price line thought

the entire year. If the long term moving averages is below the closing price line & short

term moving averages that indicates the bullishness in market & that gives sell signal

for long term investors & indicates primary trend is up.

Rate of Change(ROC) of MOTILAL OSWAL:





Here in above chart the scrip is in overbought region during May mid 2009,October-09

& in January 2010, March end, then it generated the sell signal.

During June 2009 mid and November end, it is in oversold region and the stock price


The chart is showing that the ROC is moving towards the oversold region from October

2009 to March 2010 and closing price line is also decreasing.

Relative Strength Index (RSI)of MOTILAL OSWAL:




The broad rule, if RSI crosses 70, which indicates overbought position there

may be downturn ahead & it gives the sell signal. If RSI falls below 30, that


During June-09 and March-2010 the RSI line is in oversold region, and the

stock prices are at high, which has generated the sell signal.

During May-09, June end, and February-2010 the RSI is in oversold region

so it is time to buy and stock price is at low which is given bullish trend

signal.


declining.


RELIGARE:







price curve.

The closing price has intersected the short term moving average from the below that

indicates further rise and gives buy signal during May mid with average value Rs.325.


indicates it may fall further, so it shows sell signal during mid June 2009 with the

average price Rs.480.And near 400, it acted as a strong support thought the year.

The 200 day long term average is below than short term and closing price line till

January 2010 after that it’s higher than that of other curves. In mid January closing price

& short term moving average moves below the long term moving averages that indicate

the bearishness in market & that gives sell signal for long term investors.

Rate of Change(ROC) of RELIGARE:





Here in above chart the scrip is in overbought region during early June 2009, & in

January 2010, then it generated the sell signal.

During May 2009 mid and November end, it is in oversold region and the stock price


The chart is showing that the ROC is moving towards the oversold region from July

2009 to March 2010 and closing price line is also decreasing.

Rs 400 acted as a strong Resistance for stock.


Relative Strength Index (RSI)of RELIGARE:



The broad rule, if RSI crosses 70, which indicates overbought position there

may be downturn ahead & it gives the sell signal. If RSI falls below 30, that


During May end, June-09 early, and January-2010 the RSI line is in oversold


During July-09 mid, and November-2010 the RSI is in oversold region so it is

time to buy and stock price is at low which is given bullish trend signal.


declining.

From June 2009 to March 2010 stock facing resistance at Rs 400 levels.


FINDINGS:

EDELWEISS Limited:

The closing price line has indicated further rise and gives buy signal during

May with average value 285 and sell signal during June mid with average

value 490.

The 200 day long term average is above the closing price line and the short

term moving average indicating the sell signal for long term investors.

On January 12th 2010 the closing price line has intersected the short term

moving average which indicates the sell signal.

In RSI chart the scrip is in overbought region during June, October & January

on these months the stock prices were at a new high and in July the ROC line

is in overbought region and the stock price was declining.

The chart is showing that the ROC is moving towards the oversold region in

the November and closing price line is also decreasing.

In the RSI chart the RSI level is in oversold region, and the stock prices are at

low, which has generated the buy signal and during May, July and February

& it indicated the bullish trend.

INDIA INFOLINE:

On June 18th 2009 the closing price line has intersected the short term moving

average which indicates the sell signal.




April with average value 75 and sell signal during early June with average

value 160.

The chart is showing that the ROC is moving towards the overbought region

in the June and closing price line is also decreasing.


In RSI chart the scrip is in overbought region during June, November,

January & March on these months the stock prices were at a new high and in

May the ROC line is in overbought region and the stock price was declining.


low, which has generated the buy signal and during June and February & it

indicated the bullish trend.

INDIA BULLS:





value 210.

On September 7th 2009 the closing price line has intersected the short term



low, which has generated the buy signal and during July and February & it


In RSI chart the scrip is in overbought region during June, September &

January on these months the stock prices were at a new high and in May the

ROC line is in overbought region and the stock price was declining.


the February and closing price line is also decreasing.


MOTILAL OSWAL:


April with average value 85 and sell signal during June mid with average

value 170.

The 200 day long term average is along with the closing price line and the

short term moving average indicating the neutral/ buy signal for long term

investors.

In early June 2009 the closing price line has intersected the short term


In RSI chart the scrip is in overbought region during June, October, January

& March on these months the stock prices were at a new high and in July the

ROC line is in overbought region and the stock price was declining.


the September and closing price line is also decreasing.


low, which has generated the buy signal and during July, November and

February & it indicated the bullish trend.

RELIGARE:



value 480.

The 200 day long term average is slightly above the closing price line and the

short term moving average indicating the Neutral signal for long term

investors.

On June 26th 2009 the closing price line has intersected the short term moving

average which indicates the sell signal.


In RSI chart the scrip is in overbought region during May, & January on these

months the stock prices were at a new high and in June the ROC line is in

overbought region and the stock price was declining.


the March and closing price line is also decreasing.


low, which has generated the buy signal and during May, and November & it



Recommendations & suggestions:

EDELWEISS:

Considering the technical analysis it is better to buy the shares at this moment, and

the buyers who are interested in investing in this shares they can buy keeping Rs. 400

stop loss & with target of Rs 500. If this stop loss breaks or breaches then sell stocks

or go short on this stock.

According to short term moving averages the closing price is rising from May

e mid to June mid that is from around 340 to 500, as the closing price has

rising above the short term moving average, it indicates in future it may rise,

and the long term moving average is along with the closing price line, so it is

better to buy the shares.

The ROC is rising from the oversold region that is from -26.01 to 3.49; in

future it may rise up to 41.87 so it is better to buy shares.

The RSI is rising from the oversold region that is from 37 which now lies

between 50 to 60, so it is better to buy shares.

INDIA INFOLINE:

Considering the technical analysis it is better to sell the shares at this moment, and

the buyers who are interested in investing in this shares they have to wait and watch

but at this( i.e. at Rs 120) moment one can take the short position by keeping Rs. 130

stop loss & with target of Rs 85. If this stop loss breaks or breaches then buy stocks

or go long on this stock.

According to short term moving averages the closing price is declining from

June mid to July mid that is from around 160 to 120, as the closing price has

fell below the short term moving average, it indicates in future it may decline,

and the long term moving average is along with the closing price line, so it is

better to sell the shares.


The ROC is declining from the overbought region that is from 18 to -9, in

future it may decline up to -35 so it is better to sell shares.

The RSI is declining from the overbought region that is from 72 which now

lies between 40 to 35, so it is better to sell shares.

INDIA BULLS:

Considering the technical analysis it is better to sell the shares at this moment, and

the buyers who are interested in investing in this shares they have to wait and watch,

but at this( i.e. at Rs 110) moment one can take the short position by keeping Rs. 130

stop loss & with target of Rs 60. If this stop loss breaks or breaches then buy stocks

or go long on this stock.

According to short term moving averages the closing price is declining from

June mid to November that is from around 220 to 130, as the closing price

has fell below the short term moving average, it indicates in future it may

decline, and the long term moving average is along with the closing price

line, so it is better to sell the shares.

The ROC is declining from the overbought region that is from 14 to -6, in

future it may decline up to -3 so it is better to sell shares.

The RSI is declining from the overbought region that is from 65 which now

lies between 45 to 40, so it is better to sell shares.


MOTILAL OSWAL:Considering the technical analysis it is better to buy the shares at this moment, and

the buyers who are interested in investing in this shares they can buy keeping Rs. 148

stop loss & with target of Rs 185. If this stop loss breaks or breaches then sell stocks

or go short on this stock.

The ROC is rising from the oversold region that is from -12 to 3.49; in future

it may rise up to 70 so it is better to buy shares.



According to short term moving averages the closing price is rising from

April to June mid that is from around 90 to 180, as the closing price has rising

above the short term moving average, it indicates in future it may rise, and

the long term moving average is along with the closing price line, so it is


RELIGARE:Considering the technical analysis it is better to buy the shares at this moment, and the buyers

who are interested in investing in this shares they can buy keeping Rs. 360 stop loss & with

target of Rs 510. If this stop loss breaks or breaches then sell stocks or go short on this stock.

According to short term moving averages the closing price is rising from June

to July mid that is from around 320 to 500, as the closing price has rising

above the short term moving average, it indicates in future it may rise, and

the long term moving average is along with the closing price line, so it is




The ROC is neither rising nor declining its moving in the neutral region that

is from -5 to 5, in future it may rise up to 43 so it is better to buy shares.


Conclusion:

The securities market operations promote the economic growth of the country. More efficient

is the securities market, the greater is the promotion effect on economic growth. It is therefore,

necessary to guide the investor to take right action as and when it required. As the investment

avenues are on the rise, it is necessary to know how the investor shall get their return on their

investment. It is advisable to investor to have idea on the various investment avenues and to

risk involved the investments

.

To conclude the study here some of the key findings are mentioned below.

The other factors may include market sentiments, political factors, demographic

factors etc.

Investor should consider the technical analysis before investing.

Technical analysis can be used as a reliable tool for investing.

For Short term investment technical analysis is enough to predict the next possible

price movements.

Finally according to the technical analysis the investors should sell/buy their shares.


BIBLIOGRAPHY

Books Referred:

Securities Analysis and Portfolio Management by Punithavathy Pandian ( Vikas

Publishing House pvt ltd )

Technical Analysis of the Financial Markets-by John j. Murphy (Newyork Institute of

Finance).

Research Methodology by Rajendra Nargundkar

Fundamental of Statistics by S C Gupta

Internet Sources:

www.nseindia.com

www.moneycontrol.com

www.rathi.com

www.rathionline.com

http://premiumsecurity.anandrathi.com


9.veeresh project

Documents

securities market

discrete market

new stock issue

capital market intermediaries

indias market cap

largest equity market

words primary market

new markets