HDFC

Moving Average Simple moving Average A simple, or arithmetic, moving average that is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying, while long-term averages are slow to react.

 30SMA, 100SMA and 200SMA has crossed each other many times indicating to many reversing pattern and has maintained volatility in the stock. At present stock is trading below the 30 SMA and above the 100SMA and 200SMA indicating a sell signal in short term and buy signal in long term

 Exponential Moving Average A simple moving average is formed by computing the average price of a security over a specific number of periods. Most moving averages are based on closing prices. A 5-day simple moving average is the five day sum of closing prices divided by five. As its name implies, a moving average is an average that moves. A rising moving average shows that prices are generally increasing. A falling moving average indicates that prices, on average, are falling.

EMA= {Close - EMA (previous day)} x multiplier + EMA (previous day). Multiplier = (2 / (Time periods + 1))

 The stock chart is showing triple crossover on two occasions 29th july2013 and 18th october2013 which resulted in strong reverse pattern in both the occasions. At present stock is trading near its short tern moving average and above its long term averages which indicates a short correction in the stock but bullish for long term.

 Relative Strength Index Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. RSI oscillates between zero and 100. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30 100 RSI = 100 - ------- 1 + RS RS = Average Gain / Average Loss Average Gain = [(previous Average Gain) x 13 + current Gain] / 14. Average Loss = [(previous Average Loss) x 13 + current Loss] / 14.

 On 23rd April 2013 RSI oscillator line moved above to below the overbought line after which stock showed a short correction. on 20th September also RSI oscillator line moved above to below the overbought line which resulted in a major correction. At present HDFC Relative Strength is at middle, which is not indicating any signal.

 PIVOT STUDY When calculating pivot points, the pivot point itself is the primary support/resistance. This means that the largest price movement is expected to occur at this price. The other support and resistance levels are less influential, but may still generate significant price movements. Pivot points can be used in two ways. The first way is for determining overall market trend: if the pivot point price is broken in an upward movement, then the market is bullish, and vice versa. Keep in mind, however, that pivot points are short-term trend indicators, useful for only one day until they need to be recalculated. The second method is to use pivot point price levels to enter and exit the markets. For example, a trader might put in a limit order to buy 100 shares if the price breaks a resistance level. Alternatively, a trader might set a stop-loss for his active trade if a support level is broken.

A support level is a price level where the price tends to find support as it is going down. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely to continue dropping until it finds another support level. A resistance level is the opposite of a support level. It is where the price tends to find resistance as it is going up. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely that it will continue rising until it finds another resistance level. The calculations for the new day are calculated from the High (H), low (L) and close (C) of the previous day. Pivot point = P = (H + L + C)/3 R2 = P + (H - L) = P + (R1 - S1) R1 = (P x 2) - L S1 = (P x 2) - H S2 = P - (H - L) = P - (R1 - S1) Here, "S" represents the support levels, "R" the resistance levels and "P" the pivot point.

 BOLLINGER BANDS Bollinger Bands consist of a center line and two price channels (bands) above and below it. The center line is an exponential moving average; the price channels are the standard deviations of the stock being studied. The bands will expand and contract as the price action of an issue becomes volatile (expansion) or becomes bound into a tight trading pattern (contraction). Bollinger Bands is a versatile tool combining moving averages and standard deviations and is one of the most popular technical analysis tools available for traders. There are three components to the Bollinger Band indicator: Moving Average: By default, a 20-period simple moving average is used. Upper Band: The upper band is usually 2 standard deviations (calculated from 20-periods of closing data) above the moving average. Lower Band: The lower band is usually 2 standard deviations below the moving average. When stock prices continually touch the upper Bollinger Band, the prices are thought to be overbought; conversely, when they continually touch the lower band, prices are thought to be oversold, triggering a buy signal.

 When using Bollinger Bands, designate the upper and lower bands as price targets. If the price deflects off the lower band and crosses above the 20-day average (the middle line), the upper band comes to represent the upper price target. In a strong uptrend, prices usually fluctuate between the upper band and the 20-day moving average. When that happens, a crossing below the 20-day moving average warns of a trend reversal to the downside

 Looking at the chart we see that whenever the stock price goes below the lower band, prices are thought to be oversold, triggering a buy signal. At present stock price is around the middle band which has maintained a neutral signal for the stock.

 Chart Pattern Study

 Inverted Hammer-14th November 2013: they are found at the bottom of the decline is evidence that bulls are stepping in but still sell is going on. The day after the inverted hammer signal opens higher. Bullish Harami-22nd November 2013: In downward trend large red candle is followed by small green candle resulting in price to go down. Morning Star-13th November 2013: it is bullish reverse pattern followed by a tall red body candle and a second candle with small real body and third green candle that closes well with first sessions real body resulting in reverse pattern.

 Pattern Study

 The horizontal red line indicates a resistance of Rs700 in the stock. If its break this level again it might show a upward trend. For the past three months stock is trading between the two parallel red line and if its break lower support line it might form a Bear Flag in a downtrend.