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The companies
for deciding entry and exit points. Many technical investors use
fundamentals to limit their universe of possible stock to 'good' companies
Fundamental analysis
Fundamental analysis of a business involves analyzing its financial
statements and health, its management and competitive advantages, and
its competitors and markets. When applied to futures and forex, it focuses
on the overall state of the economy, interest rates, production, earnings,
and management. When analyzing a stock, futures contract, or currency
using fundamental analysis there are two basic approaches one can use;
bottom up analysis and top down analysis. The term is used to distinguish
such analysis from other types of investment analysis, such as
quantitative analysis and technical analysis.A method of security
valuation which involves examining the company's financials and
operations, especially sales, earnings, growth potential, assets, debt,
management, products, and competition. Fundamental analysis takes into
consideration only those variables that are directly related to the company
itself, rather than the overall state of the market or technical analysis data.
The end goal of performing fundamental analysis is to produce a value
that an investor can compare with the security's current price in hopes of
figuring out what sort of position to take with that security
Fundamental analysis is performed on historical and present data, but
with the goal of making financial forecasts. There are several possible
objectives:
DPS
DPS / EPS
ROE
P/E ratio
MPS / EPS
P/E Average
Current ratio
EBIT / Interest
N/P Margin
TECHNICAL ANALYSIS
Line Chart
Bar Chart
problems
were
often
disregarded,
and
out-of-sample
of a firm and supports the use of capital expenditures for predicting future
earnings or returns.
Thomas Robinson (2002) in their study explained that
Fundamental
10
Ran Canetti & IBM Research (2008) explained that Composable Formal
Security Analysis, a security property of a protocol is composable if it
remains intact even when the protocol runs alongside other protocols in
the same system. We describe a method for asserting composable security
properties, and demonstrate its usefulness. In particular, we show how
this method can be used to provide security analysis that is formal,
relatively simple, and still does not make un-justied abstractions of the
underlying cryptographic algorithms in use. It can also greatly enhance
the feasibility of automated security analysis of systems of realistic size.
Prasanna Chandra (2008) in his study he explained that Motivated by an
obvious gap between the widespread use of Bloomberg terminals in the
finance industry and the scant resources available to an instructor on how
to incorporate the available information through the terminal into a
finance course, we illustrate our experience using the terminal in an
equity-focused security analysis and portfolio management course. Our
goal is to enable students inexperienced with the terminal to prepare an
analyst report. We identify the most significant challenges we face and
provide the corresponding solutions. Our results are also applicable to
other finance courses including financial analysis, investments, and
student managed investment fund.
11
12
13
14
Primary market
The 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.
This is typically done through a syndicate of securities
dealers. The process of selling new issues to investors
is called underwriting. In the case of a new stock issue,
this sale is an initial public offering (IPO). Dealers earn
a commission that is built into the price of the security
offering, though it can be found in the prospectus.
The primary markets are where new stock and bonds
issues are sold (via underwriting) to investors. The
secondary markets are where existing securities are
sold and bought from one investor or trader to another,
usually on a securities exchange, over the counter, or
elsewhere.
Features of primary markets are:
This is the market for new long term equity capital. The primary
market is the market where the securities are sold for the first time.
Therefore it is also called the new issue market (NIM).
15
The new issue market does not include certain other sources of new
long term external finance, such as loans from financial
institutions. Borrowers in the new issue market may be raising
capital for converting private capital into public capital; this is
known as "going public."
16
Secondary market
The secondary market, also known as the aftermarket, is
the
financial
market
where
previously
issued
been
traditionally
used
primarily
for
food
production and feedstock, but a second- or thirdmarket has developed for use in ethanol production).
Under a secondary market offering or seasoned equity offering of shares
to raise money, a company can opt for a rights issue to raise capital. The
rights issue is a special form of shelf offering or shelf registration. With
the issued rights, existing shareholders have the privilege to buy a
specified number of new shares from the firm at a specified price within a
specified time. A rights issue is in contrast to an initial public offering
17
(primary market offering), where shares are issued to the general public
through market exchanges. With primary issuances of securities or
financial instruments, or the primary market, investors purchase these
securities directly from issuers such as corporations issuing shares in an
IPO or private placement, or directly from the federal government in the
case of treasuries.
After the initial issuance, investors can purchase from other investors in
the secondary market.The secondary market for a variety of assets can
vary from fragmented to centralized, and from illiquid to very liquid. The
major stock exchanges are the most visible example of liquid secondary
markets - in this case, for stocks of publicly traded companies. .
Exchanges provide a centralized, liquid secondary market for the
investors who own stocks that trade on those exchanges. Most bonds and
structured products trade over the counter, or by phoning the bond desk
of ones broker-dealer.
Functions of Secondary market
Secondary marketing is vital to an efficient and modern
capital market. In the secondary market, securities are
sold
by
and
transferred
from
one
investor
or
18
economic
condition
of
any
economy.
Stock
stockbrokers
stock
exchange,
(formerly
unit
trusts,
derivatives,
pooled
20
the
return
on
investment
(ROI)
of
various
in
that
market.
To
take
part
in
these
proper
guidance
regarding
business
in
stock
market
carry
out
their
value.
Moreover,
the
vast
majority
of
22
are
entities
of
corporation
or
mutual
dealing,
where
the
stockbroker
23
Equity
In keeping with its tradition of personalized service, Motilal Oswal
25
Derivatives
Futures & options are derivatives, which use equity as their
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Mutual funds
Mutual funds offer the ideal platform to participate in the Equity &
Commodities
Over the years commodities markets have been experiencing
tremendous progress, which is evident from the fact that the trade in this
segment is standing as the boon for the global economy today. The
promising nature of these markets has made them an attractive investment
avenue for investors.
Book Building and Fixed Price Issue are the two types of Initial
Public Offerings (IPOs) through which a public company can raise
money in the capital market.In a book building public issue the bids are
received at different price levels and the demand for the issue is built up
over a period of time.
Marginal funding
Motilal Oswal Financial Services understand needs and help the
trader to meet their liquidity requirements. Company offer Margin
funding to individuals and corporate. Company provide finance for
investment in primary market issues and also possess expertise in
financing for short-term requirements, to buy securities from
secondary markets.
28
3 RESEARCH METHODOLOGY
3.1 Reasearch Type
The segment identified for conducting the study is power Sector in
India.
DPS
Payout ratio
ROE
P/E ratio
Current ratio
29
30
(Cr)
10
13701
70
36
0
0
The Earnings Per Share of Adani Power is 0, their dividend yield ratio is
also 0.
31
2180
3848
6029
-294
-6.35
(%)
Interpretation:
The net worth of Adani Power is Rs.6029. their profit after tax is -294 and
their return on net worth is -6.35.
Table No: 4.1.4
Key Ratios of Adani Power
for the year ended 2011-2012
CURRENT RATIO
DEBT EQUITY RATIO
GROSS PROFIT RATIO
(%)
NET PROFIT RATIO
(%)
INTEREST COVERAGE RATIO
PRICE EARNING RATIO
0.23
3.59
38.68
-9.93
0
Interpretation :
The current ratio of Adani Power is .23 and their debt equity ratio is
3.59. the gross profit ratio is 38.68 percentage and net profit ratio is
-9.93 percentage. Their interest coverage ratio is nil.
Chart No 4.1.1
Line Chart of ADANI POWER
32
Interpretation:
The share price of Adani power is 50 at the beginning of the study. After
that price move upto 68. The share price now showing bullish trend after
the fall from 68 to 40. The upward trend is a good signal to investors
Chart No 4.1.2
Candlestick Chart of ADANI POWER
33
Interpretation:
The chart shows a positive trend of share price of ADANI POWER after
the early fall of share price during the period of study. The share price of
Adani power is 50 at the beginning of the study. After that price move
upto 68.
Chart No 4.1.3
Moving Average Chart of ADANI POWER
34
Interpretation:
5 day moving average of ADANI POWER cut the 50 day moving average
twice during the study period and maintains the critical level. Now it is
above the support line. ADANI POWER shows a positive trend in its
share price.
Chart No 4.1.4
RSI Chart of ADANI POWER
35
Interpretation:
RSI chart of ADANI POWER shows the bullish buying trend of the
stock. Stock is near to the RSI point 70 . it shows the strength of the
stock. This stock touch the 70 level twice during the period of study.
RELIANCE POWER
36
(Cr)
10
21164
111
58
Interpretation:
The face value of Reliance Power is Rs 10 each. Their market
capitalization is Rs 21164 cr. The highest value for 52 week is Rs 111and
the low for the same is Rs 58.
Table No: 4.2.2
Pay Out Ratio of Reliance Power
for the year ended 2011-2012
EPS(Earning per share)
Dividend yield %
0.38
0
Interpretation:
The Earnings Per Share of Reliance Power is .38, their dividend yield
ratio is also 0.
2805
13296
37
NET WORTH
PROFIT AFTER TAX (PAT)
RETURN ON NET WORTH
(%)
16103
310
0.85
Interpretation:
The net worth of Reliance Power is Rs.16103. Their profit after tax is 310
and their return on net worth is .85
Table No: 4.2.4
Key Ratios of Reliance Power
for the year ended 2011-2012
CURRENT RATIO
DEBT EQUITY RATIO
GROSS PROFIT RATIO
(%)
NET PROFIT RATIO
(%)
INTEREST COVERAGE RATIO
PRICE EARNING RATIO
45.26
0.05
3OO.62
204.80
3.25
198.55
Interpretation :
The current ratio of Reliance Power is 45.26 and their debt equity ratio is
0.05. The gross profit ratio is 300.62 percentage and net profit ratio is
204.80 percentage. Their interest coverage ratio is 3.25.
Chart No 4.2.1
Line Chart of RELIANCE POWER
38
Interpretation:
The reliance power stock shows bearish trend in the early stage of study.
Now the movement of stock price shows a recovery trend. Share price of
RELIANCE POWER is 100 at the beginning of the study. After that price
down upto 60 level. Now the stock shows recovery trend from the
massive fall.
Chart No 4.2.2
Candlestick Chart of RELIANCE POWER
39
Interpretation:
The reliance power stock shows down trend in the early stage of study.
The stock price fall from 101 to 60 during the period of study. Now the
stock is in recovery trend.
Chart No 4.2.3
Moving Average Chart of RELIANCE POWER
40
Interpretation:
Reliance power stock shows negative trend in the early stage. The share
price break 50 DAY MOVING AVERAGE only once during the period of
study.Now the stock price is above the 50 DAY MOVING AVERAGE. It
shows positive trend in the end of study period.
Chart No 4.2.4
RSI Chart of RELIANCE POWER
41
Interpretation:
RSI chart of Reliance power shows the bullish buying trend . The Stock
now move to the RSI point of 70 . it shows the buying trend of the stok.
The stock down upto 60 point level twice during the period of study.
42
TATA POWER
Table No: 4.3.1
Share Price details of Tata Power
for the year ended 2011-2012
Face value
Market capitalization
52 week high
52 week low
(Cr)
1
21583
113
87
Interpretation:
The face value of Tata Power is Rs 1 each. Their market capitalization is
Rs 21583 cr. The highest value for 52 week is Rs 113and the low for the
same is Rs 87.
Table No: 4.3.2
Pay Out Ratio of Tata Power
for the year ended 2011-2012
EPS(Earning per share)
Dividend yield %
3.97
1.37
Interpretation:
The Earnings Per Share of Tata Power is 3.97, their dividend yield ratio is
also 1.37.
(%)
237
11720
11957
1169
10.09
Interpretation:
The net worth of Tata Power is Rs.11957. Their profit after tax is 1169
and their return on net worth is 10.09 percentage.
Table No: 4.3.4
Key Ratios of Tata Power for the year ended 2011-2012
CURRENT RATIO
DEBT EQUITY RATIO
GROSS PROFIT RATIO
(%)
NET PROFIT RATIO
(%)
INTEREST COVERAGE RATIO
PRICE EARNING RATIO
0.95
0.64
32.27
13.64
4.27
22.90
Interpretation :
The current ratio of Tata Power is 0.95 and their debt equity ratio is 0.64.
The gross profit ratio is 32.27 percentage and net profit ratio is 13.64
percentage. Their interest coverage ratio is 4.27.
Chart No 4.3.1
Line Chart of TATA POWER
44
Interpretation:
Tata power stock shows bearish trend in its share price. The stock shows
a massive fall in its share price from 112 to 92 during the study period.
First half of study period the stock shows a positive trend. After that the
stock fall upto 90 level. Now stock trading at the maximum low level.
Chart No 4.3.2
Candlestick chart of TATA POWER
45
Interpretation:
First half of study period the stock shows a positive trend. After that the
stock fall upto 90 level. Now stock trading at the maximum low
level.Tata power stock shows bearish trend in its share price. The stock
shows a massive fall in its share price from 112 to 92 during the study
period.
Chart No 4.3.3
Moving Average Chart of TATA POWER
46
Interpretation:
5 day moving average of Tata power is below the 50 day moving average
line. The price of this stock is below the support price .The stock price
will show a good trend only after it resist the 50 day moving average line.
Chart No 4.3.4
RSI Chart of TATA POWER
47
Interpretation:
RSI of TATA POWER is 40 in the last period of study ,it shows the
bearish selling trend of stock. The chart shows negative trend of stock
price during the period of study. The stock only cut 70 point level once
during the period of study.
48
CESC
Table No 4.4.1
Share Price details of CESC for the year ended 2011-2012
Face value
Market capitalization
52 week high
52 week low
(Cr)
10
4202
345
252
Interpretation:
The face value of CESC is Rs 10 each. Their market capitalization is Rs
4202 cr. The highest value for 345 week is Rs 252 and the low for the
same is Rs 58.
Table No 4.4.2
Pay Out Ratio of CESC for the year ended 2011-2012
EPS(Earning per share)
Dividend yield %
49.46
1.48
Interpretation:
The Earnings Per Share of CESC is 49.46, their dividend yield ratio is
also 1.48 percentage.
Table No 4.4.3
49
(%)
125
5806
6011
554
12.10
Interpretation:
The net worth of CESC is Rs.6011. Their profit after tax is 554 and their
return on net worth is 12.10
Table No 4.4.4
Key Ratios of CESC for the year ended 2011-2012
CURRENT RATIO
DEBT EQUITY RATIO
GROSS PROFIT RATIO
(%)
NET PROFIT RATIO
(%)
INTEREST COVERAGE RATIO
PRICE EARNING RATIO
2.12
0.67
27.80
11.65
3.04
6.80
Interpretation :
The current ratio of CESC is 2.12 and their debt equity ratio is 0.67. The
gross profit ratio is 27.80 percentage and net profit ratio is 11.65
percentage. Their interest coverage ratio is 3.04.
Chart No 4.4.1
Line Chart of CESC
50
Interpretation:
CESC stock shows bullish trend in its share price. The chart shows the
strength of the stock in its share price. The CESC stock now trading at
330 level after the recovery from 270.
Chart No 4.4.2
51
Interpretation:
The chart shows the trend of share price CESC. In the last stage, the stock
shows possative trend in its price. Now the stock trading at the maximum
level.
52
Chart No 4.4.3
Moving Average Chart of CESC
Interpretation:
Share price of CESC once cut the support and it lead to a fall in its price.
The support prices for the stock are 315 and 288. Now the share price is
above the 50 day moving average line. The stock shows bullish trend in
its price.
Chart No 4.4.4
RSI Chart of CESC
53
Interpretation:
RSI of CESC shows positive buying trend of stock. RSI of stock is now
above the 70 level, shows the bullish trend in the stock price. The
company only reached 30 point level twice during the period of study.
NHPC
54
Table No 4.5.1
Share Price details of NHPC for the year ended 2011-2012
Face value
Market capitalization
52 week high
52 week low
(Cr)
10
24601
29
14
Interpretation:
The face value of NHPC is Rs 10 each. Their market capitalization is Rs
24601 cr. The highest value for 52 week is Rs 29 and the low for the
same is Rs 14.
Table No 4.5.2
Pay Out Ratio of NHPC for the year ended 2011-2012
EPS(Earning per share)
Dividend yield %
2.09
3.50
Interpretation:
The Earnings Per Share of NHPC is 2.09, their dividend yield ratio is also
3.50.
Table No 4.5.3
Return on Equity of NHPC for the year ended 2011-2012
55
SHARE CAPITAL
RESERVE AND SURPLUS
NET WORTH
PROFIT AFTER TAX (PAT)
RETURN ON NET WORTH
(%)
12300
14052
26353
2771
10.88
Interpretation:
The net worth of NHPC is Rs.26353. Their profit after tax is 2771 and
their return on net worth is 10.88
Table No 4.5.4
Key Ratios of NHPC for the year ended 2011-2012
CURRENT RATIO
DEBT EQUITY RATIO
GROSS PROFIT RATIO
(%)
NET PROFIT RATIO
(%)
INTEREST COVERAGE RATIO
PRICE EARNING RATIO
Interpretation :
1.41
0.63
84.05
49.02
11.28
9.56
The current ratio of NHPC is 1.41 and their debt equity ratio is 0.63. The
gross profit ratio is 84.05 percentage and net profit ratio is 49.02
percentage. Their interest coverage ratio is 11.28.
Chart No 4.5.1
Line Chart of NHPC
56
Interpretation:
During the period of study, the share price trend is downward. The share
price falls from 29 to 18. The first half of the study the stock price shows
upward trend after share price reached Rs 30, the share price down
sharply upto Rs 20. Now the stock trading at Rs 20.
Chart No 4.5.2
Candlestick Chart of NHPC
57
Interpretation
The chart shows the bearish movement of stock during the period of
study. The first half of the study the stock price shows upward trend after
share price reached Rs 30, the share price down sharply upto Rs 20.
Chart No 4.5.3
Moving Average Chart of NHPC
58
Interpretation:
The chart shows the bearish trend of NHPC stock. The stock now moves
below the 50 Day Moving average. The massive fall of share price from
29 to 18 cant recover in short time.
Chart No 4.5.4
RSI Chart of NHPC
59
Interpretation:
RSI chart shows bearish selling trend of stock. RSI point of last period
shows 34 point, it give the clear-cut idea of negative movement of that
particular stock.
POWERGRID
Table No 4.6.1
60
(Cr)
10
52084
124.45
101.2
Interpretation:
The face value of POWERGRID is Rs 10 each. Their market
capitalization is Rs 52084 cr. The highest value for 52 week is Rs 124.45
and the low for the same is Rs 101.2.
Table No 4.6.2
Pay Out Ratio of Powergrid for the year ended 2011-2012
EPS(Earning per share)
Dividend yield %
9
1.87
Interpretation:
The Earnings Per Share of POWERGRID is 9, their dividend yield ratio
is also 1.87.
Table No 4.6.3
Return on Equity of Powergrid for the year ended 2011-2012
SHARE CAPITAL
RESERVE AND SURPLUS
4629
18858
61
NET WORTH
PROFIT AFTER TAX (PAT)
RETURN ON NET WORTH
(%)
23487
3254
14.50
Interpretation:
The net worth of POWERGRID is Rs.23487. Their profit after tax is
3254 and their return on net worth is 14.50
Table No 4.6.1
Key Ratios of Powergrid for the year ended 2011-2012
CURRENT RATIO
DEBT EQUITY RATIO
GROSS PROFIT RATIO
(%)
NET PROFIT RATIO
(%)
INTEREST COVERAGE RATIO
PRICE EARNING RATIO
0.74
2.10
90.81
32.43
3.37
12.5
Interpretation :
The current ratio of POWERGRID is 0.74 and their debt equity ratio is
2.10. The gross profit ratio is 90.81 percentage and net profit ratio is
32.43 percentage. Their interest coverage ratio is 3.37.
Chart No 4.6.1
Line Chart of POWERGRID
62
Interpretation:
The share price of Powergrid shows a bullish trend during the last period
of study. The chart shows negative trend of price in the early period. The
upward trend in last period is good signal to investors.
Chart No 4.6.2
Candlestick Chart of POWERGRID
63
Interpretation:
The price movement of stock shows down trend in the early stage. Now
the trend is positive for POWERGRID stock. The share price of
Powergrid shows a bullish trend during the last period of study. The
upward trend in last period is good signal to investors.
Chart No 4.6.3
Moving Average Chart of POWERGRID
64
Interpretation:
POWERGRIDs 5 day moving average cut the support line only once
during the period of study. Now the share price of company is above the
support line. Support price for the stock is 108. If it loss this strong
support there may be a fall in its price.
Chart No 4.6.4
RSI Chart of POWERGRID
65
Interpretation:
RSI of powergrid stock is 70 above during the 9 th period, after that it
come down into 45 level. 9th period is the idele time to buy
POWERGRID stock.The 10th perid shows 45 point level.that doesnt
show eihter a possative or a negative trend.
66
NTPC
Table No 4.7.1
Share Price details of NTPC for the year ended 2011-2012
Face value
Market capitalization
52 week high
52 week low
(Cr)
10
127763
175
136
Interpretation:
The face value of NTPC is Rs 10 each. Their market capitalization is Rs
127763 cr. The highest value for 52 week is Rs 175 and the low for the
same is Rs 136.
Table No 4.7.2
Pay Out Ratio of NTPC for the year ended 2011-2012
EPS(Earning per share)
Dividend yield %
13.75
2.58
Interpretation:
The Earnings Per Share of NTPC is 13.75, their dividend yield ratio is
also 2.58.
Table No 4.7.3
67
(%)
8245
65054
73291
9223
13.07
Interpretation:
The net worth of NTPC is Rs.73291. Their profit after tax is 9223 and
their return on net worth is 13.07
Table No 4.7.4
Key Ratios of NTPC for the year ended 2011-2012
CURRENT RATIO
DEBT EQUITY RATIO
GROSS PROFIT RATIO
(%)
NET PROFIT RATIO
(%)
INTEREST COVERAGE RATIO
PRICE EARNING RATIO
2.10
0.66
26.94
14.76
8.19
11.26
Interpretation :
The current ratio of NTPC is 2.10 and their debt equity ratio is 0.66. The
gross profit ratio is 29.94 percentage and net profit ratio is 14.76
percentage. Their interest coverage ratio is 8.19.
Chart No 4.7.1
Line chart of NTPC
68
Interpretation:
The stock price NTPC falls in every rise. The stock shows negative trend
in its price in the early stage. The stock price fall from 170 to 140 during
the time of study. Now the stock trading at 150 level.
Chart No 4.7.2
Candlestick chart of NTPC
69
Interpretation:
NTPC stock price shows a down trend in the early stage of study.The
stock shows a recovery trend in the last stage. The stock price NTPC falls
in every rise. Now the stock trading at 150 level.
Chart No 4.7.3
Moving Average chart of NTPC
70
Interpretation:
5 day moving average of NTPC cut twice the resistance line of 50 day
moving average. The stock shows positive trend in its price. The support
price of NTPC is 149. If the stock loss its support price it may lead to a
fall in its price.
Chart No 4.7.4
RSI chart of NTPC
71
Interpretation:
RSI of NTPC stock shows 30 point level in 10 th period of study. It shows
bearish selling trend of that particular stock.RSI of 9th period is above the
70 point level, so 9th period is idle time to buy that particular stock
72
5.1 FINDINGS
Table No 4.2.4 shows that the profitability ratios are high in
RELIANCE POWER while considering other securities selected
for the study.
Table No 4.1.3 shows ADANI POWER have negative return on
equity.
Table No 4.1.1 indicate that the Current share price of ADANI
POWER is affordable one to investors and it is low risk scrip.
Table No 4.3.4 shows the Liquidity ratios are affordable in TATA
POWER than any other stocks under study.
Table No 4.4.2
Chart No 4.4.4 shows the CESC and ADANI POWER stock shows
a bullish trend as per RSI chart.
73
Chart No 4.3.3 and 4.5.3 shows that the TATA POWER, and
NHPC, stocks now trading below the critical line of 50 day moving
average.
74
5.2 SUGGESTIONS
Fundamentals of all power stock are not strong, as per the financial
statement year ended 2012
Movement of TATA POWER, and NHPC shows a weaker trend.
The stocks now trading below the critical line so that an investor
can move from these stocks.
ADANI POWER, RELIANCE and CESC shows bullish trend in
its share price and it is advisory to hold these shares.
Investor can buy CESC stock in a long term prospective.
It is better to book profit on NTPC & POWER GRID stocks even
though they trading above the 50 day moving average.(RSI Chart
shows bearish trend).
It is advisory to an investor, should not depend only on one tool,
rather one has gone for other chart patterns to get confirmation for
buy or sell signal.
The risk is common for all securities. The scrip that is having low
price may also be subject to high risk. The main reason is that
market is unpredictable. So the investor must invest carefully.
Since the risk is involved in every scrip, greater emphasize is given
to return in each investment
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5.3 CONLUSION
The study deals with share and share trading gives a general idea
about the analysis of stocks. The analysis carried on two basis,
Fundamental analysis and technical analysis. Technical analysis shows a
short term trend based on historical data and fundamental analysis helpful
for the decision making for long term investment. From the analysis it is
found that the charts prepared on the basis of the share price, with the
support of technical tools shows all the trends and variations as
interpreted in the theory. In the analysis using moving average it is found
that if the price is lying above the moving average, the scrip is in a
bullish trend if the price lying below the moving average the scrip is in
bearish trend. Technical analysis ignores the actual nature of the
company. Technical analysis is based solely on the chart that is to say
price and volume information. The investor has to invest wisely on the
scrip which gives high return with most possible risk.
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