This action might not be possible to undo. Are you sure you want to continue?
Topics to be covered Introduction of Commodity Market Commodity Exchanges in India Company profile Major compactor’s profile
Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts. The modern commodity markets have their roots in the trading of agricultural products. While wheat and corn, cattle and pigs, were widely traded using standard instruments in the 19th century in the United States, other basic foodstuffs such as soybeans were only added quite recently in most markets. The economic impact of the development of commodity markets is hard to overestimate. Through the 19th century "the exchanges became effective spokesmen for, and innovators of, improvements in transportation, warehousing, and financing, which paved the way to expanded interstate and international trade.
Early history of commodity markets
Historically, dating from ancient Sumerian use of sheep or goats, other peoples using pigs, rare seashells, or other items as commodity money, people have sought ways to standardize and trade contracts in the delivery of such items, to render trade itself more smooth and predictable. Commodity money and commodity markets in a crude early form are believed to have originated in Sumer where small baked clay tokens in the shape of sheep or goats were used in trade. Sealed in clay vessels with a certain number of such tokens, with that number written on the outside, they represented a promise to deliver that number. This made them a form of commodity money - more than an I.O.U. but less than a guarantee by a nation-state or bank. However, they were also known to contain promises of time and date of delivery - this made them like a modern futures contract. Regardless of the details, it was only possible to verify the number of tokens inside by shaking the vessel or by breaking it, at which point the number or terms written on the outside became subject to doubt. Eventually the tokens disappeared, but the contracts remained on flat tablets. This represented the first system of commodity accounting. However, the commodity status of living things is always subject to doubt - it was hard to validate the health or existence of sheep or goats. Excuses for non-delivery were not unknown, and there are recovered Sumerian letters that complain of sickly goats, sheep that had already been fleeced, etc.
If a seller's reputation was good, individual backers or bankers could decide to take the risk of clearing a trade. The observation that trust is always required between markets participants later led to credit money. But until relatively modern times, communication and credit were primitive. Classical civilizations built complex global markets trading gold or silver for spices, cloth, wood and weapons, most of which had standards of quality and timeliness. Considering the many hazards of climate, piracy, theft and abuse of military fiat by rulers of kingdoms along the trade routes, it was a major focus of these civilizations to keep markets open and trading in these scarce commodities. Reputation and clearing became central concerns, and the states which could handle them most effectively became very powerful empires, trusted by many peoples to manage and mediate trade and commerce.
Size of the market
The trading of commodities consists of direct physical trading and derivatives trading. The commodities markets have seen an upturn in the volume of trading in recent years. In the five years up to 2007, the value of global physical exports of commodities increased by 17% while the notional value outstanding of commodity OTC (over the counter) derivatives increased more than 500% and commodity derivative trading on exchanges more than 200%. The notional value outstanding of banks’ OTC commodities’ derivatives contracts increased 27% in 2007 to $9.0 trillion. OTC trading accounts for the majority of trading in gold and silver. Overall, precious metals accounted for 8% of OTC commodities derivatives trading in 2007, down from their 55% share a decade earlier as trading in energy derivatives rose. Global physical and derivative trading of commodities on exchanges increased more than a third in 2007 to reach 1,684 million contracts. Agricultural contracts trading grew by 32% in 2007, energy 29% and industrial metals by 30%. Precious metals trading grew by 3%, with higher volume in New York being partially offset by declining volume in Tokyo. Over 40% of commodities trading on exchanges was conducted on US exchanges and a quarter in China. Trading on exchanges in China and India has gained in importance in recent years due to their emergence as significant commodities consumers and producers.
Some of largest Exchange in term of trade volume
Exchange New York Mercantile Exchange Tokyo Commodity Exchange NYSE Euronext Dalian Commodity Exchange Multi Commodity Exchange New York Mercantile Exchange (NYMEX) The New York Mercantile Exchange (NYMEX) is world largest physical commodity futures exchange, located in New York City. Its two principal divisions are the New York Mercantile Exchange and Commodity Exchange, Inc (COMEX) which were once separate but are now merged. The New York Mercantile Exchange handles billions of dollars worth of energy products, metals, and other commodities being bought and sold on the trading floor and the overnight electronic trading computer systems for future delivery. The prices quoted for transactions on the exchange are the basis for prices that people pay for various commodities throughout the world. The floor of the NYMEX is regulated by the Commodity Futures Trading Commission, an independent agency of the United States government. Country USA Japan EU China India
Tokyo Commodity Exchange (TOCOM) The Tokyo Commodity Exchange (TOCOM) is a non-profit organization, and regulates trading of futures contracts and option products of all commodities in Japan. The Tokyo Gold Exchange, the Tokyo Rubber Exchange, and the Tokyo Textile Exchange merged in 1984 to form TOCOM.
NYSE Euronext A stock exchange based in New York City, which is considered the largest equities-based exchange in the world based on total market capitalization of its listed securities. Formerly run as a private organization, the NYSE became a public entity in 2005 following the acquisition of electronic trading exchange Archipelago. The parent company of the New York Stock Exchange is now called NYSE Euronext, following a merger with the European exchange in 2007.
The exchange is ranked as the second-largest trader of agricultural futures in the world. MCX has also set up in joint venture the National Spot Exchange. corn.Also known as the "Big Board". Dalian Commodities Exchange The Dalian Exchange was established on February 28. self-regulating entity with about 200 members and over 160. palm oil. It also has the largest volume of any commodities exchange in China. 5|Page . ferrous and non-ferrous metals. spices and other soft commodities. Oils & Oilseeds. It is a non-profit. MCX offers futures trading in agricultural commodities. energy.000 investors. The turnover of the exchange for the period April–Dec 2008 was INR 32 trillion. 1993. using the open outcry system. Multi Commodity Exchange (MCX) Multi Commodity Exchange (MCX) is an independent commodity exchange based in India. Plantations. soy meal and LLDPE (a petroleum product). a purely agricultural commodity exchange and National Bulk Handling Corporation (NBHC) which provides bulk storage and handling of agricultural products. Pulses. the NYSE relied for many years on floor trading only. Today. The Dalian Commodities Exchange trades futures contracts on soybeans and soybean oil. although floor traders are still used to set pricing and deal in high volume institutional trading. more than half of all NYSE trades are conducted electronically. It was established in 2003 and is based in Mumbai. and has the deepest pool of liquidity of any commodities exchange in China. bullion.
and clearing and settlement operations for commodity futures across the country. today. Having started operations in November 2003. and has more than 2000 registered members operating through over 100. in terms of the number of contracts traded in 2009. ferrous and non-ferrous metals. across India. The Exchange has also emerged as the sixth largest and amongst the fastest growing commodity futures exchange in the world. MCX holds a market share of over 80% of the Indian commodity futures market. The demutualised Exchange set up by Financial Technologies (India) Ltd (FTIL) has permanent recognition from the Government of India to facilitate online trading. The Exchange 6|Page .Multi Commodity Exchange of India Ltd (MCX) is a state-of-the-art electronic commodity futures exchange. MCX offers more than 40 commodities across various segments such as bullion.000 trader work stations. and a number of agri-commodities on its platform.Commodity Exchange in India Multi Commodity Exchange: .
Its domestic alliances aid in improving ethical standards and providing services and facilities for overall improvement of the commodity futures market. Wheat and Maize. There are following commodities are listed in MCX: • • • • • • • • Bullions : . Silver and Platinum Metals : . Heating Oil. The Exchange strives to be at the forefront of developments in the commodities futures industry and has forged strategic alliances with various leading International Exchanges. ISO 14001:2004 Environmental Management System standard and ISO 27001:2005 Information Security Management System standard. Copper and Natural Gas and the third largest in Crude Oil futures.Chana Weather : . For MCX. Mild Steel Ingot. the second largest in Gold. Crude Oil. staying connected to the grassroots is imperative. leading to efficient price discovery. MCX’s platform enables domestic participants to trade in Indian currency. MCX has been certified to three ISO standards including ISO 9001:2000 Quality Management System standard. among others.Crude Palm Oil. Tin and Zink Energy : .Feed / Industrial Grade Plantations : .ATF. Copper. London Metal Exchange (LME). Gasoline. The Exchange’s platform enables anonymous trades. The Agricultural Futures Exchange of Thailand (AFET). Sydney Futures Exchange. Moreover.Rubber Pulses : . Imported Thermal Coal and Natural Gas Oil & Oil Seeds : . Lead. with respect to the number of futures contracts traded. including Euronext-LIFFE. Electricity Monthly & Weekly.is the world's largest exchange in Silver. Billets. for globally-traded commodities.Aluminium. Refined Soya Oil and Soya Bean Cereals : . Shanghai Futures Exchange (SHFE). Nickel.Barley.Gold. Kapasia Khalli. Brent Crude Oil.Carbon (CER) and Carbon (CFI) 7|Page . New York Mercantile Exchange.
Companies Act. It obtained its Certificate for Commencement of Business on May 9. NCDEX is subjected to various laws of the land like the Forward Contracts (Regulation) Act. 2003 under the Companies Act. Stamp Act. NCDEX headquarters are located in Mumbai and offers facilities to its members from the centers located throughout India.Kapas Spices : . It commenced its operations on December 15.Cardamom. NCDEX is a public limited company incorporated on April 23. 1956. 2003. 2003. NCDEX is regulated by Forward Markets Commission.Almond.NCDEX is a professionally managed on-line multi commodity exchange. It is committed to provide a world-class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by best global practices. large public sector bank and companies. The shareholders of NCDEX comprises of large national level institutions. NCDEX is a nation-level. There are following commodities are listed in NCDEX: • Agricultural commodities: 8|Page . technology driven de-matualised on-line commodity exchange with an independent Board of Directors and professional management .• • • Fiber : . professionalism and transparency.both not having any vested interest in commodity markets. Contract Act and various other legislations. Melted Menthol Flakes. Mentha Oil and Potato (Agra) National Commodity & Derivatives Exchange Limited (NCDEX): . Coriander and Turmeric Others : . Gaur Seed.
Coriander. Karobaar Commodities Private Limited (KCPL) was initiated to spearhead Exchange based Commodity Trading. Maize (Yellow/Red). Thermal Coal. Soybean meal (Export).Gold. Soy bean. Jeera.5 mm cotton and V-797 kapas Cereals: .Commodities Business KCPL is the right partner for you if you are keen on tapping opportunities being presented by this nascent commodities futures market. Turmeric. Cotton seed oilcake. KCPL caters Arbitrage desk for catering the needs of the clients who are sitting at commodity Hubs and Corporate Desk for the HNIs / Corporate catering to special trading strategies as per their business interests. Potato. Gasoline and Heating Oil Precious Metals: . Ltd. Crude Palm Oil and RBD Palmolein Others: .Feed /Industrial Grade. Pulses. In terms of the business structure.Crude Oil. Chilli. Nickel and Lead Energy: . Maize . Almond and Mentha Oil • Non agricultural commodities: Metals: . Barley. Grounded in the Karobaar philosophy. Chana and Yellow peas Fibres: .Guar Seeds. Oil and Oil seeds. Castor seeds. 9|Page . As a member of MCX & NCDEX.Pepper. Gur. The Operating Fabric . Kachhi Ghani Mustard Oil. Copper. Silver and Platinum Others: . highly skilled and dedicated professionals strive to offer the client best investment solutions across the country. Natural Gas. Aluminium. KCPL is a trade facilitator providing the platform to trade in commodities.Rubber Spices: .CER Company Profile Karobaar Commodities Pvt. Mustard Seed. Guar Gum. Brent Crude Oil.Indian 28.Steel. Refined soy oil. Zinc.Plantation Products: . Sugar M and S.Wheat.
Our distribution network is backed by in-house back office support to serve our customers promptly. Our tailor-made customized solutions are perfect match to different financial objectives. The specialized services provided by our research team include daily intraday reports. Karobaar's Business Equity Trading Commodities Trading Investment Advisory Portfolio Management Services Life Insurance IPO Mission Statement Our business is people and their financial well-being. we provide full access to all our products and services through multiple channels. To provide the highest possible quality of service. We are propelled by our the best within this category. The Karobaar edge • • • • • Pan India footprint Ethical business practices Nationwide presence including Mandi Locations for in-depth and firsthand information Offline/Online models Powerful research and analytics supported by a pool of highly skilled Research Analyst We also give personalized services on Insurance (Life & General) & Investments (Mutual Funds & IPO's) needs. each client situation as unique. Our list of corporate clients have been successful in providing requirements. weekly & medium term market outlook and arbitrage strategies KCPL offers dedicated Relationship Manager to cater to all your trading related requirements.Our business philosophy is to treat solutions. we will conduct ourselves in accordance with the following precepts: 10 | P a g e . Therefore. through our Insurance & Investment distribution arm. requiring customized reads like a Who’s Who of the Indian Industry and we them with practical customized solutions for their group vision and desire to strive tirelessly and aim to be Our commodities research team has a rich research experience in the commodities markets. reports on Agri-commodities & Metals. in the pursuit of our goals.
is fundamental to sustaining a quality work environment that nurtures opportunities for unparalleled service. investments and services must be of superior quality and without any biases • Teamwork .• • Our clients always come first We must provide the highest level of personalized service with integrity • Assisting our clients in the attainment of their financial objectives is our most worthy enterprise • We must communicate with our clients clearly and frequently • Our advice.cooperating with and providing assistance and support to our fellow colleagues & business partners . personal growth and job satisfaction Services Offered 11 | P a g e .
Our trading ideas are based on technical.Equity In keeping with its tradition of personalized service. 12 | P a g e . Equity Research is an inherent strength of KCPL. We believe in picking investment opportunities where the underlying value is higher than the market price. news flow and events where risk reward ratio is favorable. Karobaar has set up KCPL EAG to provide customized and integrated equity solutions to our Investors.
medium or aggressive investment risk appetite. It helps you ascertain your risk profile & guide investors with the right product mix which reduce their tax liability increase your savings & enhance their wealth. Most Commodity Advisor proactively helps you take informed commodity investment decisions and build a healthy portfolio. Karobaar offering following services in commodity trading in MCX & NCDEX to investors: • • Portfolio Management Services Investment advisory Mutual Fund Karobaar Provides expert advice to its clients for their investments in equity & debt markets through Mutual Funds. Most Equity Advisor proactively helps you take informed equity investment decisions and build a healthy portfolio. who act as your Equity Advisor. Weather investors have a conservative. news flow and events where risk reward ratio is favorable. our experts would guide you to build a portfolio to optimize the return of interest 13 | P a g e . who act as your Commodity Advisor. We believe in picking investment opportunities where the underlying value is higher than the market price.Most EAG team has highly trained equity professionals. Most EAG team has highly trained equity professionals. Commodity Research is an inherent strength of KCPL. Our experts advise investors the best investment solutions that suit you and help you to reach their financial goals. Karobaar has set up KCPL EAG to provide customized and integrated commodity investment solutions to our Investors. Our trading ideas are based on technical. Karobaar offering following services in equity trading in NSE & BSE to investors: • • • • Intraday trading and trading on delivery Future & Option trading Portfolio Management Services Investment advisory Commodity In keeping with its tradition of personalized service.
Karobaar offers you a Peace of Mind by offering various life insurance plans for your unique & specific needs.Insurance Karobaar offers all products of Life & General Insurance under one umbrella. based on the results of these evaluations. Karobaar comprises of a team of distinguished professionals from insurance. Its philosophy is that for every financial problem. integrated insurance package that is perfectly suited to the client's risk profile. finance and other management disciplines who have vast business & managerial experience. Following is the glimpse of Life Insurance Plans • • • • • • • Protection Plans Protection Plans Child Plans Retirement/Pension Plans Saving Plans NRI Plans Health Plans Major competitors 14 | P a g e . At the same time we offer you very Prompt & Reliable Policy related service for enduring relationship. there is a solution also. Karobaar team then suggests the most cost effective. Karobaar team evaluates the client's business environment and studies the risk profile. And they are here to give you complete financial solutions.
Since then. Commodities Broking. Distribution of financial products . The birth of Karvy was on a modest scale in 1981. ICICI direct.com ICICI Bank Demat Services boasts of an ever-growing customer base of over 11. Personal Finance Advisory Services. Karvy has a professional management team and ranks among the best in technology. bonds. placement of equity. 15 | P a g e . Insurance Broking. equities. Depository Participants. Merchant Banking & Corporate Finance. and carved inroads into the field ofregistry and share accounting by 1985. you can also transfer or pledge instructions through our customer care officer.to better our services.. comprising the who is who of Corporate India.. to provide new ones. services over 16 million individual investors in various capacities. 7 days a week through Internet & Interactive Voice Response (IVR) at a lower cost. We started with consulting and financial accounting automation. we have utilized our experience and superlative expertise to go from strength to strength. is a premier integrated financial services provider.Karvy Broking KARVY. evolved Karvy as one of India's premier integrated financial service enterprise. diversify and in the process. KARVY covers the entire spectrum of financial services such as Stock broking. and provides investor services to over 300 corporate. IPOs. and ranked among the top five in the country in all its business segments. among others. Karvy Consultants Limited. fixed deposit. In our continuous endeavor to offer best of the class services to our customers we offer the following features: E-Instructions: You can transfer securities 24 hours a day. Consolidation Demat Account: Dematerialise your physical shares in various holding patterns and consolidate all such scattered holdings into your primary demat account at reduced cost. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company . Now with "Speak to transfer".mutual funds. to innovate.5 lacs account holders. operations and research of various industrial segments.
5paisa. We were the only website from India to be featured in any category. India Infoline Ltd. Bill & ISIN details.com is India's leading and most comprehensive business and financial information website. absolutely free! The site has met with an overwhelming response and has been reviewed as the most comprehensive financial content website in India by BBC World . "www. Business Line and others.indiainfoline.earlier restricted to a few people . Forbes editors have said. Corporate Benefit Tracking: Track your dividend.com. across India.indiainfoline.. In its last review. Mobile Alerts: Receive SMS alerts for all debits/credits as well as for any request which cannot be processed. Launched on 11 May 1999. It also undertakes research. India Infoline Ltd owns and manages the web properties www. Business World. As on date. the Group employs 4000 plus employees. customized and off-the-shelf. Mobile Request: Access your demat account by sending SMS to enquire about Holdings. The corporate structure has evolved to comply with oddities of the regulatory framework but still beautifully help attain synergy and allow flexibility to adapt to dynamics of different businesses. Digitally Signed Statement: Receive your account statement and bill by email. " 16 | P a g e . interest. The company also won the Golden Mouse Award in India Internet World 2000 for the "Best Finance" site. Transactions. The site provides quality information and analysis . Since then it has been nominated twice to this list.. which has 4 wholly-owned subsidiaries engaged in distinct yet complementary businesses which together offer a whole bouquet of products and services to make your money grow.com and www. In May 2001.indiainfoline. The parent company. our website was included in the Top 200 Best of the Web list by Forbes Global under the Asia Investing category. India Infoline The India Infoline Group comprises the holding company.com is a must read for the investors in South Asia.Money Watch. in over 60 locations. bonus through your account statement. www.to the common man.
commodities trading on the MCX and NCDEX and most importantly. It bring investment advice tempered by eighty years of broking experience. Reliance Securities endeavors to change the way investors transact in equities markets and avails services. Derivatives. Indiabulls Indiabulls Financial Services Ltd is listed on the National Stock Exchange. and the consolidated net worth of the company is around USD 500 million. It provides customers with access to Equity. Bombay Stock Exchange. Merrill Lynch. Ltd. It also offers secured online share trading platform and investment activities in secure. To enable wider participation.Sharekhan Sharekhan is a India's leading stock broker of the retail arm SSKI (Sri Shantilal Kantiwal. Indiabulls and its group companies have attracted USD 300 million of equity capital in Foreign Direct Investment (FDI) since March 2000. 17 | P a g e . and India's premier online trading destination. Branch dealing Desk and its network of affiliates. Luxembourg Stock Exchange and London Stock Exchange. and Matual Funds & IPOs. on the BSE and the NSE. Portfolio Management Services. Lloyd George and Farallon Capital.Ishwarlal Pvt. Capital International. “Reliance Money” is a brand owned by Reliance Capital Limited. Sharekhan's customer enjoy multi channel access to the stock market. including Call & Trade. an organization with over eighty years of experience in the stock market. cost effective and convenient manner. Goldman Sachs. Reliance Money Reliance Securities Limited is a Reliance Capital company and part of the Reliance Anil Dhirubhai Ambani Group. depository services. Investment Banking.). Reliance Securities with the permission of Reliance Capital Limited uses the “Reliance Money” brand to market its various services. The market capitalization of Indiabulls is around USD 800 million. it also provides the convenience of trading offline through variety of means. Some of the large shareholders of Indiabulls are the largest financial institutions of the world such as Fidelity Funds. With more than 240 share shops in 110 cities. and it offers you trade execution facilities for each as well as derivatives.
and ranks among the top 3 private sector financial services and banking groups. in terms of net worth.Reliance Money through its pan India presence with 6. Reliance Capital is one of India's leading and fastest growing private sector financial services companies. HDFC Securities HDFC Securities. HDFCsec. 18 | P a g e . convenience and hassle-free trading tools. a trusted financial service provider promoted by HDFC Bank and JP Morgan Partners and their associates. is a leading stock broking company in the country. and derivatives in NSE. Our website will support you with the highest standards of service.5 million customers.com provides investors a robust platform to trade in Equities in NSE and BSE.233 outlets has more than 3. serving a diverse customer base of institutional and retail investors.
Literature Review 19 | P a g e .
It uses charts and computer programs to study the stock's trading volume and price movements in the hope of identifying a trend. It also provides the base for decision-making in investment. History of Technical Analysis Technical Analysis as a tool of investment for the average investor thrived in the late nineteenth century when Charles Dow.Technical analysis "Technical analysis refers to the study of market generated data like prices & volume to determine the future direction of prices movements. Technical analysts do not attempt to measure a security's intrinsic value. others use technical indicators and oscillators. This Technical analysis is helpful to general investor in many ways. It provides important & vital information regarding the current price position of the commodity. Technical analysis involves the use of various methods for charting. Just as there are many investment styles on the fundamental side. The focus of technical analysis is mainly on the internal market data. proposed the Dow Theory. but instead use charts and other tools to identify patterns that can suggest future activity. Technical Analysis assumes that the market is efficient and the price has already taken into consideration the other factors related to the company and the industry. It is the tool of financial analysis. In fact the decision made on the basis of technical analysis is done only after inferring a trend and judging the future movement of the stock on the basis of the trend. It is important criteria for selecting the company to invest. The one of the most frequently used yardstick to check & analyze underlying price progress.e. which is effective for short-term investing. Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity. For that matter a verity of tools was consider. and most use some 20 | P a g e . calculating & interpreting graph & chart to assess the performances & status of the price. which not only studies but also reflecting the numerical & graphical relationship between the important financial factors. i. there are also many different types of technical traders. such as past prices and volume. It is because of this assumption that many think technical analysis is a tool." Technical analysis mainly seeks to predict the short term price travels. Some rely on chart patterns. prices & volume data. He recognized that the movement is caused by the action/reaction of the people dealing in stocks rather than the news in itself. then editor of the Wall Street Journal. It appeals mainly to short term traders.
However. Most technical trading strategies are based on this assumption. the future price movement is more likely to be in the same direction as the trend than to be against it. Unlike fundamental analysts. Technical analysis is based on three assumptions: The Market Discounts Everything A major criticism of technical analysis is that it only considers price movement. In any case. This shift s can be detected with the help of charts of manual & computerized action. at any given time. which technical theory views as a product of the supply and demand for a particular stock in the market. Barring minor deviations stock prices tend to move in fairly persistent trends. a stock's price reflects everything that has or could affect the company including fundamental factors. These include fundamental factors as well as psychological factors. History Tends To Repeat Itself 21 | P a g e . This only leaves the analysis of price movement. Shifts in demand & supply bring about change in trends. This means that after a trend has been established. technical analysts' exclusive use of historical price and volume data is what separates them from their fundamental counterparts. ignoring the fundamental factors of the company. are all priced into the stock. Supply & demand are influenced by variety of supply & demand affiliated factors both rational & irrational. along with broader economic factors and market psychology. removing the need to actually consider these factors separately. technical analysis assumes that. Technical analysts believe that the company's fundamentals. Price Moves in Trends In technical analysis. technical analysts don't care whether a commodity is undervalued the only thing that matters is a security's past trading data and what information this data can provide about where the Security might move in the future.combination of the two. because of the persistence of trends & patterns analysis of past market data can be used to predict future prices behaviors. Basic premises of technical analysis Market prices are determined by the interaction of supply & demand forces. price movements are believed to follow trends.
Is Technical Analysis difficult? Technical analysis is not difficult. technical analysis looks at the price movement of a security and uses this data to predict its future price movements. mainly in terms of price movement. As more & more people use. most traders will focus on using technical indicators to find and place their trades. looks at economic factors. Although many of these charts have been used for more than 100 years. the trader can see where momentum is rising. Why we use Technical Analysis? Technical analysis provides information on the best entry and exit points for a trade. on the other hand. a price is dipping or other events are developing that show the best entry point and time for the most profitable trade. 22 | P a g e . The technical analysis must be a self defeating proposition. The repetitive nature of price movements is attributed to market psychology. market participants tend to provide a consistent reaction to similar market stimuli over time. but it requires studying different types of charts such as the hourly or daily charts. Fundamental analysis. Drawbacks / limitations of technical analysis Technical analysis does not able to explain the rezones behind the employment or selection of specific tool of Technical analysis. in other words. known as fundamentals. colors.Another important idea in technical analysis is that history tends to repeat itself. One way to avoid getting frustrated by all the lines. Technical analysis uses chart patterns to analyze market movements and understand trends. Technical Analysis Technical analysis and fundamental analysis are the two main schools of thought in the financial markets. On a chart. they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves. Computers and the Internet have made this process much easier. Most brokers provide basic charts and technical indicators for free or at a very low cost. As we've mentioned. Try not to clutter your chart with too much information. and graphics is to focus on using only a few indicators that will provide you with the information needed. knowing which technical indicators to use and how to use them. With the constant movement of various currencies against each other in the Forex market. a trend is forming. The technical analysis failed to signal an uptrend or downtrend in time. employ it the value of such analysis trends to reduce. Fundamental vs.
This is the lowest price that the security traded during the period. Due to its availability.Technical analysis is based almost entirely on the analysis of price and volume. then knowing what a security should sell for (i.e. This is done by comparing current price action (i. That's not to say that knowing what a security should sell for isn't important—it is.Fundamental analysis takes a relatively long-term approach to analyzing the market compared to technical analysis.e. Usually the following tools & instruments are used to do the technical analysis: Price Fields: . The fields which define a security's price and volume are explained below.e. Low: . But there is usually a fairly strong consensus of a stock's future earnings that the average investor cannot disprove. there are always buyers willing to buy at lower prices. The relationship between the Open (the first price) and the Close (the last price) are considered 23 | P a g e . but the Low represents the lowest price sellers were willing to accept). there are always sellers willing to sell at higher prices. fundamental analysis often looks at data over a number of years. It is the point at which there were more sellers than buyers (i. current expectations) with comparable historical price action to predict a reasonable outcome. The devout technician might define this process as the fact that history repeats itself while others would suffice to say that we should learn from the past.This is the highest price that the security traded during the period.. Close: . Technical analysis is the process of analyzing a security's historical prices in an effort to determine probable future prices. The future can be found in the past If prices are based on investor expectations. the Close is the most often used price for analysis. fundamental analysis) becomes less important than knowing what other investors expect it to sell for.This is the last price that the security traded during the period.g.This is the price of the first trade for the period (e. Open: . the Open is especially important as it is the consensus price after all interested parties were able to "sleep on it." High: . While technical analysis can be used on a timeframe of weeks. but the High represents the highest price buyers were willing to pay).. days or even minutes.. When analyzing daily data.. the first trade of the day). It is the point at which there were more buyers than sellers (i..e.
e. the price you will pay to buy the security).significant by most technicians.e. increasing prices accompanied with increasing volume) is important. charts are similar to the charts that you see in any business setting. Ask . Bid . This relationship is emphasized in candlestick charts. For example. The relationship between prices and volume (e.. Technical chat In technical analysis..This is the price a market maker is willing to accept (i.This is the price a market maker is willing to pay for a security (i. closed..g.This is the total number of outstanding contracts (i. or expired) of a future or option. those that have not been exercised. Volume: .. the price you will receive if you sell). Open Interest .e. A chart is simply a graphical representation of a series of prices over a set time frame.This is the number of contracts that were traded during the period. a 24 | P a g e . Open interest is often used as an indicator. Tools for Technical Analysis 1.
chart may show a stock's price movement over a one-year period, where each point on the graph represents the closing price for each day the stock is traded:
Figure 1 provides an example of a basic chart. It is a representation of the price movements of a stock over a 1.5 year period. The bottom of the graph, running horizontally (x-axis), is the date or time scale. On the right hand side, running vertically (y-axis), the price of the security is shown. By looking at the graph we see that in October 2004 (Point 1), the price of this stock was around $245, whereas in June 2005 (Point 2), the stock's price is around $265. This tells us that the stock has risen between October 2004 and June 2005. Chart Properties There are several things that you should be aware of when looking at a chart, as these factors can affect the information that is provided. They include the time scale, the price scale and the price point properties used.
The Time Scale: - The time scale refers to the range of dates at the bottom of the chart, which can vary from decades to seconds. The most frequently used time scales are intraday, daily, weekly, monthly, quarterly and annually. The shorter the time frame, the more detailed the chart. Each data point can represent the closing price of the period or show the open, the high, the low and the close depending on the chart used.
25 | P a g e
Intraday charts plot price movement within the period of one day. This means that the time scale could be as short as five minutes or could cover the whole trading day from the opening bell to the closing bell. Daily charts are comprised of a series of price movements in which each price point on the chart is a full day’s trading condensed into one point. Again, each point on the graph can be simply the closing price or can entail the open, high, low and close for the stock over the day. These data points are spread out over weekly, monthly and even yearly time scales to monitor both short-term and intermediate trends in price movement. Weekly, monthly, quarterly and yearly charts are used to analyze longer term trends in the movement of a stock's price. Each data point in these graphs will be a condensed version of what happened over the specified period. So for a weekly chart, each data point will be a representation of the price movement of the week. For example, if you are looking at a chart of weekly data spread over a five-year period and each data point is the closing price for the week, the price that is plotted will be the closing price on the last trading day of the week, which is usually a Friday.
The Price Scale and Price Point Properties: - The price scale is on the right-hand side of the chart. It shows a stock's current price and compares it to past data points. This may seem like a simple concept in that the price scale goes from lower prices to higher prices as you move along the scale from the bottom to the top. The problem, however, is in the structure of the scale itself. A scale can either be constructed in a linear (arithmetic) or logarithmic way, and both of these options are available on most charting services. If a price scale is constructed using a linear scale, the space between each price point (10, 20, 30, 40) is separated by an equal amount. A price move from 10 to 20 on a linear scale is the same distance on the chart as a move from 40 to 50. In other words, the price scale measures moves in absolute terms and does not show the effects of percent change.
26 | P a g e
If a price scale is in logarithmic terms, then the distance between points will be equal in term of percent change. A price change from 10 to 20 is a 100% increase in the price while a move from 40 to 50 is only a 25% change, even though they are represented by the same distance on a linear scale. On a logarithmic scale, the distance of the 100% price change from 10 to 20 will not be the same as the 25% change from 40 to 50. In this case, the move from 10 to 20 is represented by a larger space one the chart, while the move from 40 to 50, is represented by a smaller space because, percentage-wise, it indicates a smaller move. In Figure 2, the logarithmic price scale on the right leaves the same amount of space between 10 and 20 as it does between 20 and 40 because these both represent 100% increases.
Types of chart
There are four main types of charts that are used by investors and traders depending on the information that they are seeking and their individual skill levels. The chart types are: the line chart, the bar chart, the candlestick chart and the point and figure chart.
27 | P a g e
1) Bar Charts The highs and lows of a foreign currency are plotted in a diagram and the points are joined with vertical lines (bars). A small horizontal tick to the left denotes the opening level while a small horizontal tick to the right represents the closing price of each interval.
2) Line Chart. It gives the detailed information about every aspect. The exchange rates for each time period are plotted in a diagram and the points are joined. Prices on the y-axis, time on the x-axis. The line chart chooses for example the closing price of consecutive time periods, but can also work with daily, official fixings. The relatively easy handling of line charts is a great advantage. Line charts do not show price movements within a time period. This can be a problem because important information for exchange rate analysis can be lost. This problem was remedied with the development of bar charts that represent a more sophisticated form of line chart.
28 | P a g e
they don't involve any calculations.3) Candlestick Chart. but in a manner that extenuates the relationship between the opening and closing prices. Candlestick charts display the open. A candlestick is black if the closing price is lower than the opening price. A candlestick is white if the closing price is higher than the opening price. Candlestick charts are simply a new way of looking at prices. nor were they intended to be displayed on securities that lack opening prices. The interpretation of candlestick charts is based primarily on patterns. Because candlesticks display the relationship between the open. low. high. This technique is called candlestick charting. the Japanese developed a method of technical analysis to analyze the price of rice contracts. Japanese Candlestick: In the 1600s. The most popular patterns are explained below. and closing prices in a format similar to a modern-day bar chart. low. high. they cannot be displayed on securities that only have closing prices. 29 | P a g e . Steven Nison is credited with popularizing candlestick charting and has become recognized as the leading expert on their interpretation. and closing prices.
30 | P a g e .e. This pattern is strongly bullish if it occurs after a significant downtrend (i. it acts as a reversal pattern).. The body can be empty or filled-in. Piercing line. The first line is a long black line and the second line is a long white line. If the line occurs after a significant up-trend. It occurs when a small bearish (filled-in) line is engulfed by a large bullish (empty) line. but it closes more than halfway above the first line's real body.. Bullish Patterns Long white (empty) line. This is a bullish pattern and the opposite of a dark cloud cover. Bullish engulfing lines. the low is significantly lower than the open. Hammer. This is a bullish line. it is called a Hanging Man.e. high.. This is a bullish line if it occurs after a significant downtrend. The second line opens lower than the first line's low. a small range between the open and closing prices) and a long lower shadow (i. It occurs when prices open near the low and close significantly higher near the period's high.e. and lose). A Hammer is identified by a small real body (i.
This is a bearish line. A "star" indicates a reversal and a doji indicates indecision. Morning star.g. The "star" indicates a possible reversal and the bullish (empty) line confirms this. The star can be empty or filled-in. Thus. The first line can be empty or filled in.. as in the morning star. Bullish doji star. This is a bullish pattern signifying a potential bottom. 31 | P a g e . You should wait for a confirmation (e. this pattern usually indicates a reversal following an indecisive period. Bearish Patterns Long black (filled-in) line. It occurs when prices open near the high and close significantly lower near the period's low. above) before trading a doji star.
. high and close).e. They are identified by small real bodies (i.e.e. Bearish engulfing lines. a small range was between the open and closing prices) and a long lower shadow (i.. This pattern is strongly bearish if it occurs after a significant uptrend (i. it acts as a reversal pattern). It occurs when a small bullish (empty) line is engulfed by a large bearish (filled-in) line. the low was significantly lower than the open. it is called a Hammer.. 32 | P a g e . Dark cloud cover. This is a bearish pattern. The bodies can be empty or filled-in. If this pattern occurs after a significant downtrend. Hanging Man. The pattern is more significant if the second line's body is below the center of the previous line's body (as illustrated). These lines are bearish if they occur after a significant uptrend.
this pattern usually indicates a reversal following an indecisive period. The star can be empty or filledin. This pattern suggests a minor reversal when it appears after a rally.. as in the evening star illustration) before trading a doji star. The "star" indicates a possible reversal and the bearish (filled-in) line confirms this. Evening star.g. Shooting star. The star's body must appear near the low price and the line should have a long upper shadow. 33 | P a g e . Doji star. Thus. A star indicates a reversal and a doji indicates indecision. This is a bearish pattern signifying a potential top. You should wait for a confirmation (e.
It occurs when the open and close are the same. Star. Gravestone doji. It occurs when the open and close are the same. and closing prices. low. This line often signifies a turning point. where the real bodies do not overlap. This line also signifies a turning point. Stars indicate reversals. The shadows may overlap. and closing prices. high. 34 | P a g e . and low are the same. and the range between the high and low is relatively large. Dragon-fly doji. and the high is significantly higher than the open. close. A star is a line with a small real body that occurs after a line with a much larger real body. Reversal Patterns Long-legged doji. and the low is significantly lower than the open. This line also signifies a turning point. It occurs when the open.
Doji star. They occur when the distance between the high and low. Neutral Patterns Spinning tops. Double doji lines (two 35 | P a g e .. The security opened and closed at the same price. are relatively small. Thus. These are neutral lines. this pattern usually indicates a reversal following an indecisive period. and the distance between the open and close. You should wait for a confirmation (e. These lines can appear in several different patterns. Doji. as in the evening star illustration) before trading a doji star.g. A star indicates a reversal and a doji indicates indecision. This line implies indecision.
It occurs when a line with a small body falls within the area of a larger body. This implies a decrease in the bullish momentum. except the second line is a doji (signifying indecision). In this example. This pattern indicates a decrease in momentum. Harami ("pregnant" in English). This pattern also indicates a decrease in momentum. The pattern is similar to a harami. a bullish (empty) line with a long body is followed by a weak bearish (filledin) line. Example 36 | P a g e .adjacent doji lines) imply that a forceful move will follow a breakout from the current indecision. Harami cross.
This type of chart reflects price movements and is not as concerned about time and volume in the formulation of the points.4) Point and Figure Charts The point and figure chart is not well known or used by the average investor but it has had a long history of use dating back to the first technical traders. which can distort traders' views of the price trends. 37 | P a g e . in the stock. The point and figure chart removes the noise. These types of charts also try to neutralize the skewing effect that time has on chart analysis. or insignificant price movements.
or 1 point for the stock. Take a look at the chart below: Isn't it hard to see that the trend is upward. There are also numbers and letters in the chart. it shifts to the right. these represent months. how much the price has to move in order for a column of Xs to become a column of Os. and give investors an idea of the date. a box represents $1.When first looking at a point and figure chart. or vice versa. in other words. The Xs represent upward price trends and the Os represent downward price trends.a trend is really nothing more than the general direction in which a security or market is headed. However. This is usually set at three but it can also be set according to the chartist's discretion. Trends in Technical Analysis One of the most important concepts in technical analysis is that of trend. it's not always this easy to see a trend: 38 | P a g e . The other critical point of a point and figure chart is the reversal criteria. On most charts where the price is between $20 and $100. The reversal criteria set how much the price has to move away from the high or low in the price trend to create a new trend or. signaling a trend change. Each box on the chart represents the price scale. When the price trend has moved from one trend to another. you will notice a series of Xs and Os. The meaning in finance isn't all that different from the general definition of the term . which adjusts depending on the price of the stock: the higher the stock's price the more each box represents.
There are lots of ups and downs in this chart. In other words. while a downtrend is one of lower lows and lower highs. For example. but there isn't a clear indication of which direction this security is headed. an uptrend is classified as a series of higher highs and higher lows. Chart by MetaStock lnvertopedia. trends are not always easy to see. defining a trend goes well beyond the obvious. In technical analysis. you will probably notice that prices do not tend to move in a straight line in any direction. but rather in a series of highs and lows. 39 | P a g e . In any given chart.com Copyright ® 2006  A More Formal Definition Unfortunately. it is the movement of the highs and lows that constitutes a trend.
the correction is considered to be an intermediate trend. a major trend is generally categorized as one lasting longer than a year. when each successive peak and trough is higher. Point 3 is the low that is established as the price falls from the high. which often move against the direction of the major trend. it's a sideways or horizontal trend. the market can really only trend in these three ways: up. Point 2 in the chart is the first high. An intermediate trend is considered to last between one and three months and a near-term trend is anything less than a month. A trend of any direction can be classified as a long-term trend. In terms of the stock market. which is determined after the price falls from this point. down or nowhere. If the peaks and troughs are getting lower. intermediate trend or a short-term trend. there are three trend classifications. A long-term trend is composed of several intermediate trends. 40 | P a g e . but a lack of a well-defined trend in either direction. Trend Lengths Along with these three trend directions. The short-term trends are components of both major and intermediate trends. For this to remain an uptrend each successive low must not fall below the previous lowest point or the trend is deemed a reversal.It is an example of an uptrend. If the major trend is upward and there is a downward correction in price movement followed by a continuation of the uptrend. you might even say that a sideways trend is actually not a trend on its own. If you want to get really technical. it's referred to as an upward trend. it's a downtrend. In any case. When there is little movement up or down in the peaks and troughs. Take a look a Figure 4 to get a sense of how these three trend lengths might look. Types of Trend There are three types of trend: Uptrend Downtrend Sideways/Horizontal Trends As the names imply.
It is also important to remember that the longer the trend. weekly charts or daily charts spanning a five-year period are used by chartists to get a better idea of the long-term trend.Chart by M eta Stock Copyright © 2006 lnvestopedia. Drawing a trend line is as simple as drawing a straight line that follows a general trend. for example. An upward trend line is drawn at the lows of an upward trend. This line represents the resistance level that a stock faces every time the price moves from a low to a high. a downward trend line is drawn at the highs of the downward trend. This type of trend line helps traders to anticipate the point at which a stock's price will begin moving upwards again. To help identify long-term trends. Daily data charts are best used when analyzing both intermediate and short-term trends.com When analyzing trends. 41 | P a g e . These lines are used to clearly show the trend and are also used in the identification of trend reversals. This line represents the support the stock has every time it moves from a high to a low. the more important it is. it is important that the chart is constructed to best reflect the type of trend being analyzed. Trend Lines A trend line is a simple charting technique that adds a line to a chart to represent the trend in the market or a stock. Similarly. Notice how the price is propped up by this support. a one-month trend is not as significant as a five-year trend.
while the lower trend line connects a series of lows. Traders will expect a given security to trade between the two levels of support and resistance until it breaks beyond one of the levels. 42 | P a g e . The upper trend line connects a series of highs. or channel lines. the interpretation remains the same. downward or sideways but. regardless of the direction. in which case traders can expect a sharp move in the direction of the break. is the addition of two parallel trend lines that act as strong areas of support and resistance. Along with clearly displaying the trend.Channels A channel. channels are mainly used to illustrate important areas of support and resistance. A channel can slope upward.
A descending channel on a stock chart. As long as the price does not fall below the lower line or move beyond the upper resistance. the more active the security. The higher the volume. the upper trend line has been placed on the highs and the lower trend line is on the lows. 43 | P a g e . To determine the movement of the volume (up or down). The price has bounced off of these lines several times. Volume bars illustrate how many shares have traded per period and show trends in the same way that prices do. chartists look at the volume bars that can usually be found at the bottom of any chart. and has remained range-bound for several months. usually a day. Two important sayings in technical analysis are "the trend is your friend" and "don't buck the trend." illustrating how important trend analysis is for technical traders Importance of Volume Volume is simply the number of shares or contracts that trade over a given period of time. The Importance of Trend It is important to be able to understand and identify trends so that you can trade with rather than against them. the range-bound downtrend is expected to continue.
it is a sign that the trend is starting to lose its legs and may soon end. that a stock jumps 5% in one trading day after being in a long downtrend. the quality of the signal formed by the pattern is weakened. On the other hand. triangles. 44 | P a g e . if the volume is not there to confirm the pivotal moments of a chart pattern. When volume tells a different story. volume should increase (and vice versa). it is usually a sign of weakness in the trend. If volume is high during the day relative to the average daily volume. it is a sign that the reversal is probably for real. Volume should move with the trend. Any price movement up or down with relatively high volume is seen as a stronger. For example.Why Volume Is Important? Volume is an important aspect of technical analysis because it is used to confirm trends and chart patterns. In most chart patterns. For example. Patterns such as head and shoulders. Basically. more relevant move than a similar move with weak volume. it is a case of divergence. which refers to a contradiction between two different indicators. if the volume is below average. flags and other price patterns can be confirmed with volume. Volume and Chart Patterns The other use of volume is to confirm chart patterns. If prices are moving in an upward trend. a process which we'll describe in more detail later in this tutorial. there may not be enough conviction to support a true trend reversal. Is this a sign of a trend reversal? This is where volume helps traders. there are several pivotal points that are vital to what the chart is able to convey to chartists. The simplest example of divergence is a clear upward trend on declining volume. If the previous relationship between volume and price movements starts to deteriorate. if the stock is in an uptrend but the up trading days are marked with lower volume.
Chartists use these patterns to identify current trends and trend reversals and to trigger buy and sell signals. In the first section of this tutorial. there are two versions of the head and shoulders chart pattern. In this section. There are two types of patterns within this area of technical analysis. The idea is that certain patterns are seen many times. which help to identify trading opportunities in prices movements. we can move on to charts. or a sign of future price movements. Chart patterns A chart pattern is a distinct formation on a stock chart that creates a trading signal. signals that a trend will continue once the pattern is complete. Head and shoulders bottom. Volume is closely monitored by technicians and chartists to form ideas on upcoming trend reversals. Head and Shoulders This is one of the most popular and reliable chart patterns in technical analysis. the third of which was that in technical analysis. and is a major reason why charting is often seen as more of an art than a science. The theory behind chart patterns is based on this assumption. there is no chart pattern that will tell you with 100% certainty where a security is headed. While there are general ideas and components to every chart pattern. on the other hand. These patterns can be found over charts of any timeframe. Now that we have a better understanding of some of the important factors of technical analysis. 45 | P a g e .Volume Precedes Price Another important idea in technical analysis is that price is preceded by volume. reversal and continuation. but is used to signal a reversal in a downtrend. A continuation pattern. If volume is starting to decrease in an uptrend. we will review some of the more popular chart patterns. Head and shoulders is a reversal chart pattern that when formed. it is usually a sign that the upward run is about to end. and that these patterns signal a certain high probability move in a stock. signals that the security is likely to move against the previous trend. history repeats itself. we talked about the three assumptions of technical analysis. also known as inverse head and shoulders (shown on the right) is the lesser known of the two. This creates some leeway and debate as to what a good pattern looks like. Head and shoulders top (shown on the left) is a chart pattern that is formed at the high of an upward movement and signals that the upward trend is about to end. A reversal pattern signals that a prior trend will reverse upon completion of the pattern. As you can see. Based on the historic trend of a chart pattern setting up a certain price movement. chartists look for these Patterns to identify trading opportunities.
Both of these head and shoulders patterns are similar in that there are four main parts: two shoulders. is on the right. in the head and shoulders top image shown on the left side.Head and shoulders top is shown on the left. The price pattern forms what looks like a cup. Head and shoulders bottom. Remember that an upward trend is a period of successive rising highs and rising lows. therefore. the neckline is a level of support or resistance. each individual head and shoulder is comprised of a high and a low. or inverse head and shoulders. Once the price movement 46 | P a g e . Also. the left shoulder is made up of a high followed by a low. The handle follows the cup formation and is formed by a generally downward/sideways movement in the security's price. For example. In this pattern. a head and a neckline. Cup and Handle A cup and handle chart is a bullish continuation pattern in which the upward trend has paused but will continue in an upward direction once the pattern is confirmed. illustrates a weakening in a trend by showing the deterioration in the successive movements of the highs and lows. which is preceded by an upward trend. The head and shoulders chart pattern.
which vary in construct and implication. In the case of a double bottom (shown on the right). A double top pattern is shown on the left. These patterns are formed after a sustained trend and signal to chartists that the trend is about to reverse. but has found support each time. Triangles Triangles are some of the most well-known chart patterns used in technical analysis. are the symmetrical triangle. After the second bounce off of the support. the trend reverses and the price heads lower. the price movement has twice tried to move above a certain price level. ascending and descending triangle.pushes above the resistance lines formed in the handle. 47 | P a g e . the price movement has tried to go lower twice. After two unsuccessful attempts at pushing the price higher. Double Tops And Bottoms This chart pattern is another well-known pattern that signals a trend reversal -it is considered to be one of the most reliable and is commonly used. the upward trend can continue. The three types of triangles. These chart patterns are considered to last anywhere from a couple of weeks to several months. The pattern is created when a price movement tests support or resistance levels twice and is unable to break through. while a double bottom pattern is shown on the right. In the case of the double top pattern. the security enters a new trend and heads upward. This pattern is often used to signal intermediate and long-term trend reversals.
while the bottom trend line is upward sloping. 48 | P a g e . This pattern is then completed upon another sharp price movement in the same direction as the move that started the trend. the upper trend line is flat. This pattern is neutral in that a breakout to the upside or downside is a confirmation of a trend in that direction. This is generally thought of as a bullish pattern in which chartists look for an upside breakout. This is generally seen as a bearish pattern where chartists look for a downside breakout. The patterns are generally thought to last from one to three weeks. In an ascending triangle.The symmetrical is a pattern in which two trend lines converge toward each other. In a descending triangle. Flag And Pennants These two short-term chart patterns are continuation patterns that are formed when there is a sharp price movement followed by a generally sideways price movement. the lower trend line is flat and the upper trend line is descending.
with no convergence between the trend lines. If the price was to rise above 49 | P a g e . usually between three and six months. However. The main difference between these price movements can be seen in the middle section of the chart pattern. the middle section is characterized by converging trend lines. The other difference is that wedges tend to form over longer periods. the trend is expected to continue when the price moves above the upper trend line Wedge The wedge chart pattern can be either a continuation or reversal pattern. We have a falling wedge in which two trend lines are converging in a downward direction. The fact that wedges are classified as both continuation and reversal patterns can make reading signals confusing. a falling wedge is bullish and a rising wedge is bearish. In a pennant. The middle section on the flag pattern. on the other hand. at the most basic level. much like what is seen in a symmetrical triangle. while the symmetrical triangle generally shows a sideways movement. It is similar to a symmetrical triangle except that the wedge pattern slants in an upward or downward direction.There is little difference between a pennant and a flag. In both cases. shows a channel pattern.
it would form a continuation pattern. 50 | P a g e . but they act in a similar fashion. These two chart patterns are formed when the price movement tests a level of support or resistance three times and is unable to break through. These are not as prevalent in charts as head and shoulders and double tops and bottoms. After the first two support/resistance tests are formed in the price movement. while a move below the lower trend line would signal a reversal pattern Triple Tops And Bottoms Triple tops and triple bottoms are another type of reversal chart pattern in chart analysis. is a long-term reversal pattern that signals a shift from a downward trend to an upward trend. this signals a reversal of the prior trend.the upper trend line. Rounding Bottom A rounding bottom. Confusion can form with triple tops and bottoms during the formation of the pattern because they can look similar to other chart patterns. also referred to as a saucer bottom. which could lead a chartist to enter a reversal position too soon. This pattern is traditionally thought to last anywhere from several Months to several years. the pattern will look like a double top or bottom.
This is revealed by the prices a security seldom moves above (resistance) or below (support). the next major concept is that of support and resistance.A rounding bottom chart pattern looks similar to a cup and handle pattern but without the handle. such as the handle in the cup and handle. You'll often hear technical analysts talk about the ongoing battle between the bulls and the bears. SUPPORT AND RESISTANCE Once you understand the concept of a trend. or the struggle between buyers (demand) and sellers (supply). 51 | P a g e . make it a difficult pattern. The long-term nature of this pattern and the lack of a confirmation trigger.
It is the increased buying and selling pressure at these levels that makes them important points of support and resistance and.Support is the price level through which a stock or market seldom falls (illustrated by the blue arrows). Resistance. in which case new levels of support and resistance likely be established. making it difficult to move past this upper level as well.000 tend be important in support and resistance levels because they often represent the major psychological turning points at which many traders will make buy or sell decisions. Role Reversal 52 | P a g e . Round numbers like 10. When these trend lines are broken. These support and resistance levels are seen as important in terms of market psychology and supply and demand. the supply and demand and the psychology behind the stock's movements is thought to have shifted. in many cases. On the other hand. 35. Buyers will often purchase large amounts of stock once the price starts to fall toward a major round number such as $50. major psychological points as well. Support and resistance levels are the levels at which a lot of traders are willing to buy the stock (in the case of a support) or sell it (in the case of resistance). Round Numbers and Support and Resistance One type of universal support and resistance that tends to be seen across a large number of securities is round numbers. on the other hand. is the price level that a stock or market seldom surpasses (illustrated by the Red Arrows). 20. which makes it more difficult for shares to fall below the level. 50. sellers start to sell off a stock as it moves toward a round number peak. 100 and 1.
causing the breached level to reverse its role. as you can see. As the price moves past a level of support or resistance. If the price falls below a support level. it is important that the price make a strong move through either the support or resistance. If the price rises above a resistance level. this phenomenon is evident on the Wal-Mart Stores Inc. Many traders who begin using technical analysis find this concept hard to believe and don't realize that this phenomenon occurs rather frequently. the dotted line is shown as a level of resistance that has prevented the price from heading higher on two previous occasions (Points 1 and 2). it is thought that supply and demand has shifted. once the resistance is broken. however. even with some of the most well-known companies. For example. For example. Notice how the role of the $51 level changes from a strong level of support to a level of resistance. (WMT) chart between 2003 and 2006. For a true reversal to occur. that level will become resistance. 53 | P a g e .Once a resistance or support level is broken. it becomes a level of support (shown by Points 3 and 4) by propping up the price and preventing it from heading lower again. However. its role is reversed. it will often become support.
It is important to note. as the area around them is usually marked by a lot of volatility. On the other hand. but flirts with it instead. Support and resistance levels both test and confirm trends and need to be monitored by anyone who uses technical analysis. the price never actually reaches the whole number. however. The Importance of Support and Resistance Support and resistance analysis is an important part of trends because it can be used to make trading decisions and identify when a trend is reversing. it is important that you follow this simple rule: do not place orders directly at the support or resistance level. the trend have accelerated. the trend is likely to continue. As long as the price of the share remains between these levels of support and resistance. if you are placing stops or short selling. Being aware of these important support and resistance points should affect the way that you trade a stock. For example. Summary of charts 54 | P a g e . place it above the support level. not reversed. Instead. If you feel confident about making a trade near a support or resistance level. a stock will have both a level of support and a level of resistance and will trade in this range as it bounces between these levels. but within a few points. if prices moved above the resistance levels of an upward trending channel. So if you're bullish on a stock that is moving toward an important support level. set up your trade price at or below the level of support. Traders should avoid placing orders at these major points.In almost every case. This is because in many cases. This means that the price appreciation is expected to be faster than it was in the channel. that a break beyond a level of support or resistance does not always have to be a reversal. do not place the trade at the support level.
Indicators Accumulation Distribution Accumulative Swing Index Advance Decline Line Adaptive Moving Average Average Directional Movement Index (ADX) Andrews Pitchfork Arms Index (TRIN) Aroon Indicator and Oscillator Bollinger Bands Chaikin Oscillator Commodity Channel Index (CCI) Commodity Select Index Detrended Price Oscillator Directional Movement Index (DMI) Ease of Movement Elliott Wave Exponential Moving Average (EMA) Exponential Ribbons Fibonacci Retracements Fibonacci Arcs Fibonacci Fans Fibonacci Time Extensions Gann Theory Herrick Payoff Index Keltner Channel Linear Regression Channel Linear Regression Curve 55 | P a g e . opening and dosing prices are denoted by horizontal ticks Price differences between opening and closing prices are marked by differently colored candle-bars Crosses and circles are plotted in the chart as soon as prices changed by a pre-defined amount Candle-Chart Point-&Figure-Chart.Method Chart analysis Mode/ Line chart Bar chart Principle Individual prices are joined by a line Highs and lows of an interval are joined by a vertical line.
Volume has two major premises: 56 | P a g e . Linear Regression Line Moving Average Convergence Divergence (MACD) Moving Averages Market Thrust Mass Index McClellan Oscillator Momentum Money Flow Index (MFI) Moving Average Envelopes On Balance Volume (OBV) Open Interest Parabolic SAR Point and Figure Charting Price Channels Price Oscillator Price Volume Trend Rate of Change Relative Strength Index (RSI) Simple Moving Average Standard Error Bands Stochastic RSI Stochastics Fast and Slow Swing Index Time Series Forecast Triangular Moving Average Triple Exponential Average (TRIX) Typical Price (Pivot Point) Moving Average Ulcer Index Ultimate Oscillator VIX & VXN Volatility Index Volatility Indicator Volume Volume Accumulation Volume Oscillator Volume Rate of Change Weighted Moving Average Williams %R Zig Zag o Volume Volume is one of the most important technical analysis tools to learn and understand how to apply to price movements. If a buyer buys one share of stock from a seller. Volume increases every time a buyer and seller transact their stock or futures contract. then that one share is added to the total volume of that particular stock.
volume increased. 24. An example of a Simple Moving Average is presented below: The prices for the last 5 days were 25. if prices are heading downward and are making new lows and volume increases.the mean. then this is interpreted as being a weak price move. The average would be (25+28+26+26+27)/5 = 25. 25. 2. The chart below of Gold futures shows a strong trend being confirmed by a strong increase in volume: The chart above of Gold shows that when prices began making new highs. The SMA is an average. As the price of Gold increased. the sellers are becoming more and more interested as price falls (increased selling pressure).6. 28. more and more buyers (buying pressure) jumped on board. o Moving Average The Simple Moving Average is arguably the most popular technical analysis tool used by traders. The Simple Moving Average (SMA) is used mainly to identify trend direction. an increase in volume is strong confirmation that the rise or fall in price is real and that the price movement had strength. When prices rise or fall. or in statistical speak . but is commonly used to generate buy and sell signals. 26.1. because the price move had very little strength and interest from traders. the SMA line below the last days price of 27 would 57 | P a g e . When prices rise or fall and there is a decrease in volume. Likewise. Therefore.
the SMA line of 26. and the moving average has been tested by price and price has bounced off the moving average a few times (i. Figger: Moving Average Acting as Support .Buy Signal When price is in an uptrend and subsequently. since prices are generally moving higher. The chart below of the Dow Jones Industrial Average exchange traded fund (DIA) shows a 20-day Simple Moving Average acting as support for prices. the moving average is serving as a support line). then buy on the next pullbacks back to the Simple Moving Average.4 would be acting as support (see: Support & Resistance).e. In this case.4. A Simple Moving Average can serve as a line of resistance as the chart of the DIA shows: 58 | P a g e . the moving average is in an uptrend.be 26.
The examples above have been only using one Simple Moving Average.Moving Average Acting as Resistance Sell Signal At times when price is in a downtrend and the moving average is in a downtrend as well. a longer period Moving Average) which is considered a bullish crossover or below which is considered a bearish crossover. and price tests the SMA above and is rejected a few consecutive times (i. Moving Average Crossovers Moving average crossovers are a common way traders use Moving Averages.e. the moving average is serving as a resistance line). this Moving Average pair is often looked at by big financial institutions as a long range indicator of market direction: 59 | P a g e .e.e. a shorter period Moving Average) crosses either above a slower Moving Average (i. The chart below of the S&P Depository Receipts Exchange Traded Fund (SPY) shows the 50-day Simple Moving Average and the 200-day Simple Moving Average. A crossover occurs when a faster Moving Average (i. however. traders often use two or even three Simple Moving Averages. then buy on the next rally up to the Simple Moving Average.
a sell signal is indicated when the 50day SMA crosses below the 200-day SMA. Keep in mind. this is a signal that the market is quite strong. For those traders that want more confirmation when they use Moving Average crossovers.How the long-term 200-day Simple Moving Average is in an uptrend. but the one sell signal would have caused a small loss. that the 50-day. In the chart above of the S&P 500. An example of this is shown in the chart below of Wal-Mart (WMT) stock: 60 | P a g e . both buy signals would have been extremely profitable. a buy signal is established when the shorter-term 50-day SMA crosses above the 200-day SMA and contrastly. the 3 Simple Moving Average crossover techniques could be used. Generally. 200day Simple Moving Average crossover is a very long-term strategy.
61 | P a g e . Instead of halves. another third when the quick SMA crosses over the slow SMA. The second crossover of the quickest SMA (10-day) and the slowest SMA (50-day) finally triggers the buy or sell signal. A money management technique of buying a half size when the quick SMA crosses over the next quickest SMA and then the other half when the quick SMA crosses over the slower SMA. not a three SMA technique. however. buy or sell one-third of a position when the quick SMA crosses over the next quickest SMA. A Moving Average crossover technique that uses 8+ Moving Averages (exponential) is the Moving Average Exponential Ribbon Indicator. some are provided below: A more conservative approach is to wait until the middle SMA (20-day) crosses over the slower SMA (50-day). the 10-day SMA) across the next quickest SMA (20-day SMA) acts as a warning that prices are reversing trend. but this is basically a two SMA crossover technique. usually a buy or sell order is not placed yet. There are numerous variants and methodologies for using the 3 Simple Moving Average crossover method. and the last third when the second quickest SMA crosses over the slow SMA.The 3 Simple Moving Average method is usually interpreted as follows: The first crossover of the quickest SMA (in the example above.
e. This gives the Exponential Moving Average the advantage of being quicker to respond to price fluctuations than a Simple Moving Average. The chart below of the Nasdaq 100 exchange traded fund (QQQQ) shows the difference between moving average crossovers (see: Moving Average Crossovers) buy and sell signals with a EMA and a SMA: 62 | P a g e . however. that can also be viewed as a disadvantage because the EMA is more prone to whipsaws (i.Moving Average crossovers are important tools in a trader’s toolbox. In fact crossovers are included in the most popular technical indicators including the Moving Average Convergence Divergence (MACD) indicator (see: MACD). whereas the SMA lags during periods of reversal. false signals). The chart below of eBay (EBAY) stock shows the difference between a 10-day Exponential Moving Average (EMA) and the 10-day regular Simple Moving Average (SMA): The main thing to notice is how much quicker the EMA responds to price reversals. Other moving averages deserve careful consideration in a trading plan: Exponential Moving Average (EMA) The Exponential Moving Average (EMA) weighs current prices more heavily than past prices.
EMA's are not necessarily faster to give buy and sell signals when using moving average crossovers. however. Moving Averages remain the most popular and arguably the most effective technical analysis indicator out on the market today. and $8. 63 | P a g e . therefore. Since Exponential Moving Averages weigh current prices more heavily than past prices. the EMA is viewed by many traders as quite superior to the Simple Moving Average. Nevertheless. the Weighted Moving Average reacts more quickly to price changes than the regular Simple Moving Average (see: Simple Moving Average). (see: MACD). $4. Weighted Moving Average The Weighted Moving Average places more importance on recent price moves. A basic example (3-period) of how the Weighted Moving Average is calculated is presented below: Prices for the past 3 days have been $5. even though EMA's are quicker to respond to price movement. Also note that the concept illustrated in the chart above with Exponential Moving Average crossovers is the concept behind the wildly popular Moving Average Convergence Divergence (MACD) indicator.As the chart above of the QQQQ's illustrates. every trader should weigh the pros and the cons of the EMA and decide in which manner they will be using moving averages.
The chart below of Wal-Mart stock illustrates the visual difference between a 10-day Weighted Moving Average and a 10-day Simple Moving Average: Adaptive Moving Average Adaptive Moving Averages changes its sensitivity to price fluctuations.17 The Weighted Moving Average value of 6. the second recent day ($4) receives a weight of 2. and the last day of the 3-periods ($5) receives a weight of just one. The Adaptive Moving Average becomes more sensitive during periods when price is moving in a certain direction and becomes less sensitive to price movement when price is volatile.17 compares to the Simple Moving Average calculation of 5. the most recent day ($8) gets a weight of 3.Since there are 3 periods. The calculation is as follows: [(3 x $8) + (2 x $4) + (1 x $5)] / 6 = $6.67. The chart below of the E-mini Nasdaq 100 Futures contract shows the difference between an Exponential Moving Average which weights current prices more heavily than past prices and the Adaptive Moving Average which changes sensitivity based on price volatility: 64 | P a g e . Note how the large price increase of 8 that occured on the most recent day was better reflected in the Weighted Moving Average calculation.
Typical Price Moving Average The Typical Price Moving Average combines the Pivot Point concept and the Simple Moving Average. However. The chart below of the mini-Dow Jones Industrial Average Futures contract shows the slight difference between a 10-day Simple Moving Average and a 10-day Typical Price Moving Average: 65 | P a g e .The advantage of the Adaptive Moving Average is show above in the e-mini chart in the center where price became directionless and choppy. the Exponential Moving Average moved with the choppiness of prices. whereas. The Pivot Point calculation is shown below: Pivot Point = (High + Low + Close) / 3 The calculated Pivot Point number is then inputted into the regular Simple Moving Average equation. rather than the input of the closing price. the Pivot Point calculation is used. the Adaptive Moving Average kept up with the Exponential Moving Average. like on the far right of the e-mini chart above. During that period the Adaptive Moving Average maintained a straight line appearance. when price trended.
Buy and sell signals for the Typical Price Moving Average indicator are discussed in depth on the Simple Moving Average indicator pages (see: Simple Moving Average). The Typical Price is consequently seen as a more pure Simple Moving Average. this creates an extra smooth Moving Average line.e. The chart below of the E-mini Nasdaq 100 Futures contract shows the relation between a 10day Simple Moving Average and a 10-day Triangular Moving Average: 66 | P a g e . there is not much difference between either Moving Average.The Typical Price attempts to give a more real representation of where price has been by incorporating the high and low price into the most often used closing price. Triangular Moving Average The Triangular Moving Average is a Simple Moving Average that has been averaged again (i. nevertheless. as can be referenced by the chart above of the mini-Dow Future. averaging the average).
Generally. but the re-averaging makes the Triangular Moving Average even smoother and more wavelike. future. or currency pair is trending or is in a trading range. When combined with the DMI+ plus and DMIminus the ADX can generate buy and sell signals. Determining which mode a market is in is helpful because it can guide a trader to which other technical analysis indicators to use. However. The chart of the E-mini Russell 2000 Index Futures contract below shows an excellent example of the ADX in action: 67 | P a g e . the main purpose of the ADX is to determine whether a stock. simple moving averages are smooth. o Average Directional Index The Average Directional Movement Index (ADX) technical analysis indicator describes when a market is trending or not trending.
or currency market is trending or not trending can help a trader avoid the pitfalls of some indicators. the ADX decreased. futures. Interpreting the ADX It is important to re-emphasize that the direction of price doesn't affect the ADX. Strong upward trend of stock = Increasing ADX Strong downward trend = Increasing ADX As can be referenced from the chart of the E-mini Russell 2000 Index Futures contract above. 68 | P a g e . it is the strength of the stock. All the ADX shows is the trend strength. When the e-mini futures contract moved into a non-directional consolidation phase. or currency's trend that matters. ADX is a Great Complement to Other Technical Indicators The ADX is so popular because determining whether a stock. commodity.ADX Shows Trend Strength The direction that the ADX moves doesn't depend upon the direction of the underlying stock. when the e-mini future was rising in a strong upward trend. the ADX indicator was rising.
Above 40: Very strong trend.The E-mini Russell 2000 Futures contract. Interpreting the ADX Below 20: Non-trending market. Crosses above 50: Extremely strong trend. Between 20 & 40: If ADX is increasing between 20 and 40. The ADX is rising even though the price of the e-mini future is falling. Buy or short sell in the direction of the current market direction. and clearing and settlement operations for commodity futures across the country. a strong downtrend. future. The demutualised Exchange set up by Financial Technologies (India) Ltd (FTIL) has permanent recognition from the Government of India to facilitate online trading. consider initiating buy or sell short in direction of prevailing stock. 69 | P a g e . very rare occurrence Multi Commodity Exchange of India (MCX) Multi Commodity Exchange of India Ltd (MCX) is a state-of-the-art electronic commodity futures exchange. then it is further confirmation of emerging trend. Crosses above 20: Signal that a trend might be emerging. or currency price movement. Crosses above 70: "Power Trend". but here the e-mini future is in a downtrend.
today. Copper and Natural Gas and the third largest in Crude Oil futures. Moreover. Gold Gold is the oldest precious metal known to man and for thousands of years it has been valued as a global currency. and has more than 2000 registered members operating through over 100. MCX offers more than 40 commodities across various segments such as bullion. The Exchange is the world's largest exchange in Silver. a commodity. ferrous and non-ferrous metals. MCX’s platform enables domestic participants to trade in Indian currency. Contracts available for trading: February 2010 contract Immediately after approval of the Commission to 5th February of the contract year April 2010 contract June 2010 contract August 2010 contract October 2010 contract December 2010 contract Immediately after approval of the Commission to 5th April of the contract year 16th June of the previous year to 5th June of the contract year 16th August of the previous year to 5th August of the contract year 16th October of the previous year to 5th October of the contract year 16th December of the previous year to 5th December of the contract year Trading unit Quotation / Base value 1 kg 10 grams 70 | P a g e . MCX holds a market share of over 80% of the Indian commodity futures market. an investment and simply an object of beauty. ISO 14001:2004 Environmental Management System standard and ISO 27001:2005 Information Security Management System standard. across India.Having started operations in November 2003. leading to efficient price discovery. and a number of agri-commodities on its platform. The Exchange’s platform enables anonymous trades. with respect to the number of futures contracts traded. in terms of the number of contracts traded in 2009.000 trader work stations. The Exchange has also emerged as the sixth largest and amongst the fastest growing commodity futures exchange in the world. for globally-traded commodities. the second largest in Gold. MCX has been certified to three ISO standards including ISO 9001:2000 Quality Management System standard.
Silver Contracts available for trading March 2010 contract May 2010 contract July 2010 contract September 2010 contract December 2010 contract Trading unit Quotation/Base Value Immediately after the approval of the Commission to 5th March of the contract year 16th May of the previous year to 5th May of the contract year 16th July of the previous year to 5th July of the contract year 16th September of the previous year to 5th September of the contract year 16th December of the previous year to 5th December of the contract year 30 kg 1 kg 71 | P a g e .
Chapter 3: Research Methodology & Design 72 | P a g e .
The support and resistance are calculated by using following formulas: o Pivot Point = (High + Low + Closing Price) / 3 o Resistance 1 = (2 X Pivot Point) . The secondary data is collected form website of MCX i.The study is descriptive in nature. To make intraday and positional trading profitable.Low o Resistance 3 = High + 2 X (Pivot Point .e.Pivot point is used to calculate the supports and resistances by using previous day high. low. closing price and current day’s opening price.High o Support 2 = Pivot Point . The primary data is collected by direct observation of Trading Terminal during training period. It is descriptive as it aimed to describe the trend of gold and silver in MCX Exchange.Low o Resistance 2 = Pivot Point + High . Scope of research: Nature of Research: .com. To predict the future movement of Gold and Silver. Data collection: There are used both type of data primary as well as secondary.2 X (High – Pivot Point) 73 | P a g e .mcxindia.Low) o Support 1 = (2 X Pivot Point) . www. To maximize the gain and minimize the loss in trading of Gold and Silver in MCX. Interpretation of data: There are following tools are used to interpretation of data: Pivot point: . To identify the entry and exit point from Gold and Silver trading.High + Low o Support 3 = Low .Research Methodology Objectives of study: To observe the trend of Gold and Silver of MCX.
ADX is used to determine whether a stock.Moving Average is used to identify the trend and buying & selling signals. Drafting on chart: Drafting is to be done to identify the trend. There are two moving averages are used. Limitation of the study High volatility of market. double top or bottom. Moving average: .There are various trend pattern are identified and described by many technical analyst such as ‘head and shoulder’. Average Directional Index (ADX): . future. chart trend pattern and to set movement channel. are used with their interpretation explained by them. 74 | P a g e . Shortage of time. Identify the pattern of trend movement: . Candlestick Chart: . rounding bottom and triangle etc. These moving average are also used as support and resistance. These are: - o Simple moving average of 20 periods o Exponential Moving Average of 50 Periods The crossover of Simple Moving Average (20) and Exponential Moving Average (50) are used to identify buying & selling signals. the support and resistance. to identify the trend. or currency pair is trending or is in a trading range and to know whether the current trend of commodity is either strong or weak or a new trend is emerging.Candlestick Chart is used with other indicators such as moving averages and ADX etc.
Absence of software for intraday chat of MCX: I have to use COMEX software (GCI with live support which is easily available on internet) because MCX commodity rates movement follows the movement in COMEX. High impact of volatility of Indian Rupees against US Dollar. ‘The Value of Indian Rupees against US Dollar’ limits the impact of movement in COMEX on movement in MCX scripts. Chapter 4: Data Analysis & Interpretation 75 | P a g e .
Gold (5 Oct 2010) 76 | P a g e .
417.67 18.690.33 WEEKLY For Week Ending (06-Aug-10) 18. DAILY For Next Day RESISTANCE 1 RESISTANCE 2 18.296.020.67 18.33 MONTHLY For Month Ending (30-Aug-10) 18.33 77 | P a g e .077.629.SUPPORTS AND RESISTANCES FOR GOLD(05-Oct-10) The Supports and Resistances are obtained by PIVOT POINT ANALYSIS.67 19.
884.0 18359.33 17.33 17.67 17.67 17.029.0 (26-072010) 18480.4 16392 10 18168.67 17.0 High Low Average Volume 28828 1 17979.67 19.0 (13-072010) 19058 (28-062010) 19285 (08-062010) 17824.0 (29-072010) 17756.0 (29-072010) 17556.9 5869 30 18433.0 (29-072010) 17756.423.67 17.0 (29-072010) 5 17953.2 18206.33 16.2 18029.710.67 17.67 18.090.RESISTANCE 3 SUPPORT 1 SUPPORT 2 SUPPORT 3 18.175.8 18463.302.06 3327 78 | P a g e .496.67 17.865.693.25 18332.899.0 (21-072010) 18591.86 18603.767.0 17756.67 MOVING AVG.6 9826 20 18308.97 4492 50 18591.0 (29-072010) 17756.0 Exponenti al Moving Average 17964. DETAILS FOR GOLD(05-Oct-10) Date 30-072010 26-072010 20-072010 08-072010 26-062010 04-062010 Days Simple Moving Average 17964.
Silver (5 Sep 2010) SUPPORTS AND RESISTANCES FOR SILVER(04-Sep-10) The Supports and Resistances are obtained by PIVOT POINT ANALYSIS. DAILY For Next Day WEEKLY For Week Ending MONTHLY For Month Ending 79 | P a g e .
0 (28-072010) 5 28561.0 31.832.1 1316 30 28918.0 29225.0 1403 20 28815.0 29467.0 (23-072010) 29340.0 (28-072010) 28026.58 29119.913.240.05 28828.0 High Low Average Volume 1750 1 28790.0 (28-062010) 30228.0 (28-072010) 28026.0 29128.0 MOVING AVG.0 28958.0 (28-072010) 28026.0 Exponenti al Moving Average 28649.0 28026. DETAILS FOR SILVER(04-Sep-10) Date 30-072010 26-072010 20-072010 08-072010 26-062010 04-062010 Days Simple Moving Average 28649.177.0 26.33 30.03 1232 50 29115.(06-Aug-10) RESISTANCE 1 RESISTANCE 2 RESISTANCE 3 SUPPORT 1 SUPPORT 2 SUPPORT 3 28882.439.434.67 29.328.0 27712.498.0 (28-072010) 28026.083.6 28745.0 30.0 28659.0 29.33 26.0 27.0 (15-072010) 30115.842.0 27.0 (26-072010) 29254.8 1633 10 28752.0 28297.0 (21-062010) 28205.041.67 27.34 787 80 | P a g e .347.0 27958.67 (30-Aug-10) 29.67 28.
Chapter 5: Major Findings & Discussion 81 | P a g e .
17865/ 10gm and 2ed support at Rs. Gold might breakout the channel resistance line and give recovery.17710 /10gm.27712/Kg. o In chart Silver price is moving in a downward channel and at closing of 31-07-2010. o Gold price have 1st support at Rs. 18077/10gm and 3ed resistance at Rs.28882/Kg and 2ed resistance at Rs. 29128/Kg and 3ed resistance at Rs.18175/10gm. it is standing close to support line plotted on chart. Silver (05 Sep 2010): o Till now Silver have down trend. At that level traders will go for fresh sale and due to this selling pressure.Major findings Gold (05 Oct 2010): o Till now Gold have down trend. o Gold price have 1st resistance at Rs. 82 | P a g e . o In chart Gold price is moving in a downward channel and at closing of 31-07-2010. it is standing close to support line plotted on chart.27958/Kg and 3ed support at Rs.28297/Kg and 2ed support at Rs.29467/Kg. Silver might breakout the channel resistance line and give recovery. o Silver price have 1st support at Rs. At that level traders will go for fresh sale and due to this selling pressure.18020/10gm and 2ed resistance at Rs.17767/10gm and 3ed support at Rs. o Silver price have 1st resistance at Rs.
Chapter 6: Conclusion & Recommendations 83 | P a g e .
Annexure 84 | P a g e .
Price of Gold (5 Oct) during June & July Date 1-Jun-10 2-Jun-10 3-Jun-10 4-Jun-10 5-Jun-10 7-Jun-10 8-Jun-10 9-Jun-10 10-Jun-10 11-Jun-10 12-Jun-10 14-Jun-10 15-Jun-10 16-Jun-10 17-Jun-10 18-Jun-10 19-Jun-10 21-Jun-10 22-Jun-10 23-Jun-10 24-Jun-10 25-Jun-10 26-Jun-10 28-Jun-10 29-Jun-10 30-Jun-10 1-Jul-10 2-Jul-10 3-Jul-10 5-Jul-10 6-Jul-10 7-Jul-10 8-Jul-10 9-Jul-10 10-Jul-10 12-Jul-10 Open(Rs) High(Rs) Low(Rs Close(Rs) ) 18580 18883 18523 18784 18628 18914 18628 18705 18650 18652 18469 18524 18456 18837 18342 18815 18873 18889 18838 18876 18891 19069 18701 19039 18981 19285 18981 19069 18982 19077 18785 18869 18800 18975 18640 18677 18651 18880 18642 18848 18830 18837 18811 18822 18780 18833 18543 18643 18631 18785 18631 18747 18750 18870 18682 18712 18820 18905 18749 18866 18850 18975 18790 18927 18881 18940 18881 18926 18865 18945 18602 18638 18666 18760 18630 18720 18767 18830 18675 18780 18756 18928 18675 18867 18918 18949 18852 18869 18829 18893 18829 18891 18939 19058 18736 18791 18808 18960 18768 18933 18941 18964 18851 18926 18919 18950 18603 18621 18610 18633 18493 18590 18621 18626 18600 18619 18651 18651 18565 18591 18554 18620 18358 18430 18460 18485 18362 18457 18499 18550 18304 18396 18395 18507 18360 18478 18495 18504 18485 18500 18500 18532 18420 18450 85 | P a g e .
Date 1-Jun-10 2-Jun-10 3-Jun-10 13-Jul-10 4-Jun-10 14-Jul-10 5-Jun-10 15-Jul-10 7-Jun-10 16-Jul-10 8-Jun-10 17-Jul-10 9-Jun-10 19-Jul-10 10-Jun-10 20-Jul-10 11-Jun-10 21-Jul-10 12-Jun-10 22-Jul-10 14-Jun-10 23-Jul-10 15-Jun-10 24-Jul-10 16-Jun-10 26-Jul-10 17-Jun-10 27-Jul-10 18-Jun-10 28-Jul-10 19-Jun-10 29-Jul-10 21-Jun-10 30-Jul-10 22-Jun-10 31-Jul-10 23-Jun-10 24-Jun-10 25-Jun-10 26-Jun-10 28-Jun-10 29-Jun-10 30-Jun-10 1-Jul-10 2-Jul-10 3-Jul-10 5-Jul-10 6-Jul-10 7-Jul-10 8-Jul-10 9-Jul-10 10-Jul-10 12-Jul-10 13-Jul-10 14-Jul-10 15-Jul-10 16-Jul-10 17-Jul-10 19-Jul-10 20-Jul-10 21-Jul-10 22-Jul-10 23-Jul-10 24-Jul-10 26-Jul-10 27-Jul-10 28-Jul-10 29-Jul-10 Open(Rs) High(Rs) Low(Rs Close(Rs) ) 29464 29827 29423 29689 29633 29810 29181 29327 29343 29345 28724 28837 18443 18591 18438 18533 28790 28796 28273 28355 18515 18588 18425 18471 28364 28600 28362 28582 18515 18566 18465 18488 28621 29326 28189 29269 18484 18509 18350 18404 29302 29660 29167 29520 18414 18430 18406 18415 29520 29520 29112 29219 18391 18428 18293 18348 29199 29498 28867 29299 18375 18435 18285 18423 29250 29583 29075 29323 18412 18480 18396 18437 29280 29305 29254 29281 18403 18436 18301 18368 29232 29490 29185 29233 18392 18462 18313 18343 29199 29555 29188 29445 18309 18348 18309 18345 29464 29558 29261 29309 18343 18359 18207 18229 29341 29700 29230 29577 18210 18240 17853 17865 29516 30106 29516 30002 17882 17904 17777 17854 30009 30031 29975 29996 17835 17905 17756 17854 29950 30228 29400 29504 17849 17979 17824 17964 29624 29794 29424 29685 17940 17973 17931 17937 29633 29825 29250 29376 29441 29675 29104 29564 29655 29900 29505 29850 29867 29898 29800 29822 29933 30115 29505 29611 29580 29650 29380 29573 29587 29703 29475 29607 29518 29611 28756 28795 28805 28950 28514 28673 28750 28816 28745 28773 28800 28862 28654 28711 28680 28919 28505 28764 28758 28945 28525 28910 28950 29049 28582 28734 28770 28950 28622 28830 28898 28920 28851 28899 28882 28905 28654 28811 28800 29156 28748 29044 29031 29299 28962 29135 29186 29340 29065 29170 29130 29200 28666 28786 28800 28810 28766 28793 28739 28829 28486 28573 28620 28668 28461 28630 28626 28840 28595 28797 28777 29120 28625 29022 29060 29254 29060 29129 29175 29175 29094 29143 29160 29225 28950 29169 29149 29149 28393 28458 28452 28477 28026 28258 28300 28354 28134 28271 Price of Silver (5 Sep) during June & July 86 | P a g e .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.