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A SYNOPSIS ON

“TECHNICAL ANALYSIS AND ITS APPLICATION”

STEEL CITY SECURITIES LTD, VISAKHAPATNAM.

A Synopsis submitted to the Department of Management Studies,

Adikavi Nannaya University, Rajamahendravaram.

In a Partial Fulfilment for the Award Of The Degree Of

BACHELOR OF BUSINESS ADMINISTRATION

BY

KOYYA KAHUL SIVA TEJAA

(Reg.No – 150378300099)

Under the Esteemed guidance of

Mr.P. SATYA BALARAM

M.Com, MBA,M.Phil,PGDFM

(ASSOSCIATE PROFESSOR)

ADITYA DEGREE COLLEGE, KAKINADA

AFFILIATED TO ADIKAVI NANNAYA UNIVERSITY, RAJAMAHENDRAVARAM.

(ACCRDITED BY NAAC WITH B++ GRADE).2015-2018


INTRODUCTION

FINANCIAL MANAGEMENT

Business concern needs finance to meet their requirements in the economic world. Any kind of
business activity depends on the finance. Hence, it is called as lifeblood of business organization.
Whether the business concerns are big or small, they need finance to fulfill their business
activities.

In the modern world, all the activities are concerned with the economic activities and very
particular to earning profit through any venture or activities. The entire business activities are
directly related with making profit. (According to the economics concept of factors of
production, rent given to landlord, wage given to labour, interest given to capital and profit given
to shareholders or proprietors), a business concern needs finance to meet all the requirements.
Hence finance may be called as capital, investment, fund etc., but each term is having different
meanings and unique characters. Increasing the profit is the main aim of any kind of economic
activity.

SCOPE OF FINANCIAL MANAGEMENT

Financial management is one of the important parts of overall management which is directly
related with various functional departments like personnel, marketing and production. Financial
management covers wide area with multidimensional approaches.

The following heads come under the scope of financial management:

1. Financial Management and Economics

Economic concepts like micro and macroeconomics are directly applied with the financial
management approaches. Investment decisions, micro and macro environmental factors are
closely associated with the functions of financial manager. Financial management also uses the
economic equations like time value of money, discount factor, economic order quantity etc.
Financial economics is one of the emerging area, which provides immense opportunities to
finance, and economical areas.

2. Financial Management and Accounting

Accounting records includes the financial information of the business concern. Hence, we can
easily understand the relationship between the financial management and accounting. In the
olden times, both financial management and accounting are treated as a same discipline and then
it has been merged as Management accounting because this part is very much helpful to finance
manager to take decisions. But nowaday’s financial management and accounting discipline are
separate and interrelated.

3. Financial Management and Mathematics

Modern approaches of the financial management applied large number of mathematical and
statistical tools and techniques. They are also called as econometrics. Economic order quantity,
discount factor, time value of money, present value of money, cost of capital, capital structure
theories, dividend theories, ratio analysis and working capital analysis are used as mathematical
and statistical tools and techniques in the field of financial management.

4. Financial Management and Production Management

Production management is the operational part of the business concern, which helps to convert
the money into profit. Profit of the concern depends upon the production performance.
Production performance needs finance, because production department requires raw materials,
machinery, wages, operating expenses etc. These expenditures are decided and estimated by the
financial department and the finance manager allocates the appropriate finance to production
department.The financial manager must be aware of the operational process and finance required
for each process of production activities.

5. Financial Management and Marketing

Produced goods are sold in the market with innovative and modern approaches. For this, the
marketing department needs finance to meet their requirements.The financial manager or finance
department is responsible to allocate the adequate finance to the marketing department. Hence,
marketing and financial management are interrelated and depends on each other.

6. Financial Management and Human Resources

Financial management is also related with human resource department, which provides
manpower to all the functional areas of the management. Financial manager should carefully
evaluate the requirement of manpower to each department and allocate the finance to the human
resource department as wages, salary, remuneration, commission, bonus, pension and other
monetary benefits to the human resource department. Hence, financial management is directly
related with human resource management.

IMPORTANCE OF FINANCIAL MANAGEMENT

Finance is the lifeblood of business organization. It needs to meet the requirement of the business
concern. Each and every business concern must maintain adequate amount of finance for their
smooth running of the business concern and also maintain the business carefully to achieve the
goal of the business concern. The business goal can be achieved only with the help of effective
management of finance. We can’t neglect the importance of finance at any time at and at any
situation. Some of the importance of the financial management is as follows:

Financial Planning

Financial management helps to determine the financial requirement of the business concern and
leads to take financial planning of the concern. Financial planning is an important part of the
business concern, which helps to the promotion of an enterprise.

Financial management involves the acquisition of required finance to the business concern.
Acquiring needed funds play a major part of the financial management, which involve possible
source of finance at minimum cost.
Proper Use of Funds

Proper use and allocation of funds leads to improve the operational efficiency of the business
concern. When the finance manager uses the funds properly, they can reduce the cost of capital
and increase the value of the firm.

Financial Decision

Financial management helps to take sound financial decision in the business concern. Financial
decision will affect the entire business operation of the concern. Because there is a direct
relationship with various department functions such as marketing, production personnel, etc.

Improve Profitability

Profitability of the concern purely depends on the effectiveness and proper utilization of funds by
the business concern. Financial management helps to improve the profitability position of the
concern with the help of strong financial control devices such as budgetary control, ratio analysis
and cost volume profit analysis.

Increase the Value of the Firm

Financial management is very important in the field of increasing the wealth of the investors and
the business concern. Ultimate aim of any business concern will achieve the maximum profit and
higher profitability leads to maximize the wealth of the investors as well as the nation.

Promoting Savings

Savings are possible only when the business concern earns higher profitability and maximizing
wealth. Effective financial management helps in promoting and mobilizing individual and
corporate savings. Nowadays financial management is also popularly known as business finance
or corporate finances. The business concern or corporate sectors cannot function without the
exitence of the financial management.
NEED OF FINANCIAL MANAGEMNT

1. Financial Management Helps Setting Clear Goal


Financial management defines the goal of the firm in clear terms (e.g maximization of the
shareholders wealth).Financial management also direct the efforts of all functional areas of
business towards achieving the goal and facilitates among the functional areas of the firm.

2. Financial Management Helps Efficient Utilization Of Resources


Firms use fixed as well as current assets which involve huge investment. The application of
financial management techniques (such as capital budgeting techniques) helps to answer the
questions like which asset to buy, when to buy and whether to replace the existing asset with new
one or not.
The firm also requires current assets for its operation. Therefore, maintaining proper balance of
these assets and financing them from proper sources is a challenge to a firm. Financial
management helps to decide what level of current assets is to be maintained in a firm and how to
finance them so that these assets are utilized efficiently.

3. Financial Management Helps Deciding Sources Of Financing


Firms collect long-term funds mainly for purchasing permanent assets. The sources of long term
finance may be equity shares, preference shares, bond, term loan etc. The firm needs to decide
the appropriate mix of these sources and amount of long-term funds. Financial management
(capital structure theories) guides in selecting these sources of financing.

4. Financial Management Helps Making Dividend Decision


Dividend is the return to the shareholders. The firm is not legally obliged to pay dividend to the
shareholders.Financial management (dividend policies and theories) helps a firm to decide how
much to pay as dividend and how much to retain in the firm. It also suggests answering questions
such as when and in what form (cash dividend or stock dividend) should the dividend be paid?
INRODUCTION ON TECHNICAL ANALYSIS

INVESTMENT

Investment may be defined as an activity that commits funds in any financial form in the present
with an expectation of receiving additional return in the future. The expectations bring with it a
probability that the quantum of return may vary from a minimum to a maximum. This possibility
of variation in the actual return is known as investment risk. Thus every investment involves a
return and risk. Investment is an activity that is undertaken by those who have savings. Savings
can be defined as the excess of income over expenditure. An investor earns or expects to earn
additional monetary value from the mode of investment that could be in the form of financial
assets.
The three important characteristics of any financial asset are:
I. Return - the potential return possible from an asset.

II. Risk - the variability in returns of the asset form the chances of its value going down/up.

III. Liquidity - the ease with which an asset can be convened into cash.

Investors tend to look at these three characteristics while deciding on their individual preference
pattern of investments. Each financial asset will have a certain level of each of these
characteristics.

INVESTMENT AVENUES

There are a large number of investment avenues for savers in India. Some of them are marketable
and liquid. while others are non marketable. Some of them are highly risky while some others are
almost risk less.

Investment avenues can be broadly categorized under the following heads:

I. Corporate securities

II. Equity shares


III. Preference shares

IV. Debentures/Bonds

V. Derivatives

VI. Others

Corporate Securities
Joint stock companies in the private sector issue corporate securities. These include equity
shares. preference shares, and debentures. Equity shares have variable dividend and hence
belong to the high risk high return category; preference shares and debentures have fixed returns
with lower risk.

The classification of corporate securities that can be chosen as investment avenues can be
depicted as shown below:

I. Equity Shares

II. Preference shares

III. Bonds

IV. Warrants

V. Derivatives

Equity Shares
By investing in shares, investors basically buy the ownership right to the company. When the
company makes profits, shareholders receive their share of the profits in the form of dividends.
In addition. when company performs well and the future expectation from the company is very
high, the price of the company’s shares goes up in the market. This allows shareholders to sell
shares at a profit, leading to capital gains. Investors can invest in shares either through primary
market offerings or in the secondary market The primary market has shown abnormal retums to
investors who subscribed for the public issue and were allotted shares.

CAPITAL MARKET
Capital Market may be defined as a market dealing in medium and long-term funds. It is an
institutional arrangement for borrowing medium and long-term funds and which provides
facilities for marketing and trading of securities. So it constitutes all long-term borrowings from
banks and financial institutions, borrowings from foreign markets and raising of capital by issue
various securities such as shares debentures, bonds, etc. The market where securities are traded
known as Securities market. It consists of two different segments namely primary and secondary
market. The primary market deals with new or fresh issue of securities and is, therefore, also
known as new issue market; whereas the secondary market provides a place for purchase and
sale of existing securities and is often termed as stock market or stock exchange.

PRIMARY MARKET
The Primary Market consists of arrangements, which facilitate the procurement of longterm
funds by companies by making fresh issue of shares and debentures. Companies make fresh
issue of shares and/or debentures at their formation stage and, if necessary, subsequently for the
expansion of business. It is usually done through private placement to friends, relatives and
financial institutions or by making public issue. The companies have to follow a well-established
legal procedure and involve a number of intermediaries such as underwriters, brokers, etc. who
form an integral part of the primary market.

SECONDARY MARKET
The secondary market known as stock market or stock exchange plays an equally important role
in mobilising long-term funds by providing the necessary liquidity to holdings in shares and
debentures. It provides a place where these securities can be encashed without any difficulty and
delay. It is an organised market where shares, and debentures are traded regularly with high
degree of transparency and security. In fact, an active secondary market facilitates the growth of
primary market as the investors in the primary market are assured of a continuous market for
liquidity of their holdings. The major players in the primary market are merchant bankers,
mutual funds, financial institutions, and the individual investors; and in the secondary market
you have all these and the stockbrokers who are members of the stock exchange who facilitate
the trading.

STOCK EXCHANGE

Stock exchange is the term commonly used for a secondary market, which provide a place where
different types of existing securities such as shares, debentures and bonds, government securities
can be bought and sold on a regular basis. A stock exchange is generally organised as an
association, a society or a company with a limited number of members. It is open only to these
members who act as brokers for the buyers and sellers. The Securities Contract (Regulation) Act
has defined stock exchange as an “ association, organisation or body of individuals, whether
incorporated or not, established for the purpose of assisting, regulating and controlling business
of buying, selling and dealing in securities”.

SPECULATION IN STOCK EXCHANGES

The buyers and sellers at the stock exchange undertake two types of operations, one for
speculation and the other for investment. Those who buy securities primarily to earn a regular
income from such investment and possibly make some long-term gain on account of price rise in
future are called investors. They take delivery of the securities and make full payment of the
price. Such transactions are called investment transactions. But, when the securities are bought
with the sole object of selling them in future at higher prices or these are sold now with the
intention of buying at a lower price in future, are called speculation transactions. The main
objective of such transactions is to take advantage of price differential at different times. The
stock exchange also provides for settlement of such transactions even by receiving or paying, as
the case may be, just the difference in prices.

THE REGULATOR

In India the stock market regulator is called The Securities and Exchange board of India often
referred to as SEBI. The objective of SEBI is to promote the development of stock exchanges,
protect the interest of retail investors, regulate the activities of market participants and financial
intermediaries. In general SEBI ensures…

1. The stock exchanges (BSE and NSE) conducts its business fairly
2. Stock brokers and sub brokers conduct their business fairly

3. Participants don’t get involved in unfair practices

4. Corporate’s don’t use the markets to unduly benefit themselves (Example – Satyam
Computers)

5. Small retail investors interest are protected

6. Large investors with huge cash pile should not manipulate the markets

7. Overall development of marketsss

Given the above objectives it becomes imperative for SEBI to regulate the following entities. All
the entities mentioned below are directly involved in the stock markets. A malpractice by anyone
of the following entities can disrupt what is otherwise a harmonious market in India.

SEBI has prescribed a set of rules and regulation to each one of these entities. The entity should
operate within the legal framework as prescribed by SEBI. The specific rules applicable to a
specific entity are made available by SEBI on their website. They are published under the ‘Legal
Framework’ section of their site.

Example of
Entity What do they do? In simpler words
companies
They rate the credit
Credit Rating CRISIL, ICRA, worthiness of If a corporate or Govt entity wants to avail loan, CRA
Agency (CRA) CARE corporate and checks if the entity is worthy of giving a loan
governments
Debenture Almost all banks Act as a trustee to When companies want to raise a loan they can issue
Trustees in India corporate debenture debenture against which they promise to pay an
interest. These debentures can be subscribed by public.
A Debenture Trustee ensures that the
debenture obligation is honored
Acts like a vault for the shares that you buy. The
Safekeeping, depositories hold your shares and facilitate exchange of
reporting and your securities. When you buy shares these shares sit in
Depositories NSDL and CDSL
settlement of clients your Depositary account usually referred to as the
securities DEMAT account. This is maintained electronically by
only two companies in India
Depositary Most of the banks You cannot directly interact with NSDL or CDSL. You
Act as an agent to
Participant and few stock need to liaison with a DP to open and maintain you
the two depositories
(DP) brokers DEMAT account
These are foreign entities with an interest to invest in
Foreign Foreign corporate,
Make investments in India. They usually transact in large amounts of money,
Institutional funds and
India and hence their activity in the markets have an impact
Investors individuals
in terms of market sentiment
Help companies If a company plans to raise money by floating an IPO,
Merchant Karvy, Axis Bank,
raise money in the then merchant bankers are the ones who help
Bankers Edelweiss Capital
primary markets companies with the IPO process
Asset An AMC collects money from the public, puts that
HDFC AMC,
Management Offer Mutual Fund money in a single account and then invest that money
Reliance Capital,
Companies Schemes in markets with an objective of making the investments
SBI Capital
(AMC) grow and thereby generate wealth to its investors.
Portfolio
Managers/
Religare Wealth They work similar to a mutual fund except in a PMS
Portfolio
Management, Offer PMS schemes you have to invest a minimum of Rs.25,00,000
Management
Parag Parikh PMS however there is no such cap in a mutual fund
System
(PMS)
Stock Brokers Zerodha, Steel city Act as a Whenever you want to buy or sell shares from the stock
and Sub securities, ICICI intermediary exchange you have to do so through registered stock
Brokers Direct between an investor brokers. A sub broker is like an agent to a stock broker
and the stock
exchange

STOCK ANALYSIS

INTRODUCTION
Today investing in financial securities such as shares, debentures, bonds and
other financial securities are considered to be the most profitable investment avenues when
compared to other type of investments. However the financial securities not only ensures higher
return but also bears higher risk. Therefore the combination of these two characteristics has
created a challenging task for the investors.

Stock analysis is a term that refers to the evaluation of a particular trading instrument, an
investment sector or the market as a whole. Stock analysts attempt to determine the future
activity of an instrument, sector or market. There are two basic types of stock
analysis: fundamental analysis and technical analysis. Fundamental analysis concentrates on data
from sources including financial records, economic reports, company assets and market
share. Technical analysis focuses on the study of past market action to predict future price
movement.

FUNDAMENTAL ANALYSIS

Fundamental analysis is the process of looking at a business at the basic or fundamental financial
level. This type of analysis examines key ratios of a business to determine its financial health and
gives you an idea of the value its stock.

Many investors use fundamental analysis alone or in combination with other tools to evaluate
stocks for investment purposes. The goal is to determine the current worth and, more
importantly, how the market values the stock.
To forecast future stock prices, fundamental analysis combines economic, industry, and
company analysis to derive a stock's current fair value and forecast future value. If fair value is
not equal to the current stock price, fundamental analysts believe that the stock is either over or
under valued and the market price will ultimately gravitate towards fair value. This value also
called intrinsic value represents the real worth or economic value which is used by the analysts
to identify the under priced and overpriced securities. It means if the intrinsic value of the stock
is more than the market value, it is considered as under priced and included in the portfolio. On
the other hand, if the intrinsic value of a stock is less than the market value then it is considered
as overpriced and excluded from the portfolio. Thus fundamental analysis is mainly concerned
with the determination of intrinsic value of stocks and based on that ontrinsic value, investment
decisions are taken by the fundamental analysts.

Fundamental Analysis Tools


These are the most popular tools of fundamental analysis. They focus on earnings, growth, and
value in the market.

1. Earnings per Share – EPS


2. Price to Earnings Ratio – P/E

3. Projected Earning Growth – PEG

4. Price to Sales – P/S

5. Price to Book – P/B

6. Dividend Payout Ratio

7. Dividend Yield

8. Book Value

9. Return on Equity
TECHNICAL ANALYSIS

Technical Analysis is the forecasting of future financial price movements based on an


examination of past price movements. Like weather forecasting, technical analysis does not
result in absolute predictions about the future. Instead, technical analysis can help investors
anticipate what is “likely” to happen to prices over time. Technical analysis uses a wide variety
of charts that show price over time. Technical analysis is applicable to stocks, indices,
commodities, futures or any tradable instrument where the price is influenced by the forces of
supply and demand. Price refers to any combination of the open, high, low, or close for a given
security over a specific time frame. The time frame can be based on intraday (1-minute, 5-
minutes, 10-minutes, 15-minutes, 30-minutes or hourly), daily, weekly or monthly price data and
last a few hours or many years. In addition, some technical analysts include volume or open
interest figures with their study of price action.

STRENGTHS OF TECHNICAL ANALYSIS

Focus on Price

If the objective is to predict the future price, then it makes sense to focus on price movements.
Price movements usually precede fundamental developments. By focusing on price action,
technicians are automatically focusing on the future. The market is thought of as a leading
indicator and generally leads the economy by 6 to 9 months. To keep pace with the market, it
makes sense to look directly at the price movements. More often than not, change is a subtle
beast. Even though the market is prone to sudden knee-jerk reactions, hints usually develop
before significant moves. Many technicians use the open, high, low and close when analyzing
the price action of a security. There is information to be gleaned from each bit of information.
Separately, these will not be able to tell much. However, taken together, the open, high, low and
close reflect forces of supply and demand..The intraday high reflects the strength of demand
(buyers). The intraday low reflects the availability of supply (sellers). The close represents the
final price agreed upon by the buyers and the sellers.
Support/Resistance

Simple chart analysis can help identify support and resistance levels. These are usually marked
by periods of congestion (trading range) where the prices move within a confined range for an
extended period, telling us that the forces of supply and demand are deadlocked. When prices
move out of the trading range, it signals that either supply or demand has started to get the
upper hand. If prices move above the upper band of the trading range, then demand is
winning. If prices move below the lower band, then supply is winning.

Pictorial Price History

The price chart is an easy to read historical account of a security's price movement over a
period of time. Charts are much easier to read than a table of numbers. On most stock charts,
volume bars are displayed at the bottom. With this historical picture, it is easy to identify the
following:

 Reactions prior to and after important events.


 Past and present volatility.
 Historical volume or trading levels.
 Relative strength of a stock versus the overall market.

Assist with Entry Point

Technical analysis can help with timing a proper entry point. Some analysts use fundamental
analysis to decide what to buy and technical analysis to decide when to buy. It is no secret that
timing can play an important role in performance. Technical analysis can help spot demand
(support) and supply (resistance) levels as well as breakouts. Simply waiting for a breakout
above resistance or buying near support levels can improve returns.

It is also important to know a stock's price history. If a stock you thought was great for the last
2 years has traded flat for those two years, it would appear that Wall Street has a different
opinion. If a stock has already advanced significantly, it may be prudent to wait for a pullback.
Or, if the stock is trending lower, it might pay to wait for buying interest and a trend reversal.
WEAKNESSES OF TECHNICAL ANALYSIS

Analyst Bias

Just as with fundamental analysis, technical analysis is subjective and our personal biases can
be reflected in the analysis. It is important to be aware of these biases when analyzing a chart.
If the analyst is a perpetual bull, then a bullish bias will overshadow the analysis. On the other
hand, if the analyst is a disgruntled eternal bear, then the analysis will probably have a bearish
tilt.

Open to Interpretation

Furthering the bias argument is the fact that technical analysis is open to interpretation. Even
though there are standards, many times two technicians will look at the same chart and paint
two different scenarios or see different patterns. Both will be able to come up with logical
support and resistance levels as well as key breaks to justify their position. While this can be
frustrating, it should be pointed out that technical analysis is more like an art than a science,
somewhat like economics. Is the cup half-empty or half-full? It is in the eye of the beholder.

Too Late

Technical analysis has been criticized for being too late. By the time the trend is identified, a
substantial portion of the move has already taken place. After such a large move, the reward to
risk ratio is not great..

Always Another Level

Even after a new trend has been identified, there is always another “important” level close at
hand. Technicians have been accused of sitting on the fence and never taking an unqualified
stance. Even if they are bullish, there is always some indicator or some level that will qualify
their opinion.
Trader's Remorse

Not all technical signals and patterns work. For instance: A sell signal is given when the
neckline of a head and shoulders pattern is broken. Even though this is a rule, it is not steadfast
and can be subject to other factors such as volume and momentum. In that same vein, what
works for one particular stock may not work for another. A 50-day moving average may work
great to identify support and resistance for Infosys, but a 70-day moving average may work
better for TCS. Even though many principles of technical analysis are universal, each security
will have its own idiosyncrasies.

NEED FOR THE STUDY

Technical analysis provides the only mechanism to measure the “irrational” (emotional)
component present in all markets. Technicals are also an important components of disciplined
trading. Discipline helps mitigate the nemesis of all traders, namely, emotion. They provide a
mechanism to set entry and exit points, to set risk/reward ratios, or stop out levels. By using
them, you foster a risk and money management approach to trading. The price action is the most
direct and easily accessible method of seeing overall supply/demand relationships. There may be
fundamental news not knew to the general public, but you can expect it is already in the price.
Those who have advance knowledge of some market-moving event will most likely buy or sell
until current prices reflect their information. Technical analysis rests on the premise of supply
and demand factors and not on the fundamental characteristics of a company. To decide whether
one should stay with a stock or get out chart patterns are of great help. The trends presented by
the charts help to take notice of the resistance, support and momentum that help the trader to take
a decision. Knowledge about those points where buyers and sellers lie in wait to make money
and exhibit related emotions can be got through technical analysis.
SCOPE OF THE STUDY

Technical analysis is widely used by foreign exchange, equity, and commodity traders, to
determine the short term as well as the long term trends of the market. The scope of technical
analysis is increasing every day, as more and more people are trying to learn the skills of
technical analysis to earn good returns. The scope of the study includes understanding the
history, concept and tools of technical analysis and extends to predicting the future behavior of
stocks. The study has been done on three selected stocks of nifty from three different sectors. The
study has been performed by using two tools of technical analysis namely relative strength index
and moving average.

OBJECTIVES OF THE STUDY


1. To gain the practical knowledge of technical analysis.

2. To know how technical tools are used to predict the future behavior of the stocks.

3. To know how charting techniques are useful to take buy or sell decisions.

4. To know how an investor can take rational investment decisions by the study of market
trends and movements.

5. To know the company profile.

RESEARCH METHODOLOGY

SOURCES OF DATA:

PRIMARY DATA: Primary data can be explained as information collected from sources
such as personal interviews, questionnaires or surveys with a specific intention and on a specific
subject and observation and analysis by the researcher himself. Therefore it is also called as first-
hand information.

SECONARY DATA: Secondary data is information already available somewhere, whether it


is in journals, on the internet, in a company’s records or on a large scale, in corporate or
government archives.

The secondary data for this study has been collected from the internet through the company’s
website, National stock exchange website, Diet Odin website, Moneycontrol and other stock
market related websites.

SAMPLING DESIGN: The samples collected are from the index of nifty belonging to three
different sectors.

Automobiles sector – Hero Motocorp

Pharmaceutical sector – Sun Pharma

FMCG sector – Hindustan Unilever

LIMITATIONS OF THE STUDY

1. The period of the study is limited to only 45 days.


2. It was difficult to interact with the staff conveniently as they were busy in daily
operations.
3. Analysis involves using of only two technical tools – Simple moving average and relative
strength index.
4. The study is restricted to only three selected stocks of NIFTY.
5. We can’t predict the prices of the stocks for long term.
COMPANY PROFILE

STEEL CITY SECURITIES PRIVATE LIMITED


Since 1995 Steel City Securities Limited is leading in retail stock broking in Southern India.
They are the pioneers and prime leaders in introducing the Franchisee model to extend their
business potential in urban and rural areas of Andhra Pradesh. They also have business
operations in Tamil Nadu, Karnataka, Orissa, Chattisgarh and Maharashtra (Mumbai). In 1998
the company has achieved phenomenal growth in all aspects. The workforce has been given top
priority to meet and enhance their endless support and services. In 2004 Steel City Commodities
(P) Ltd. has become the subsidiary of parent company to provide a business platform to trade in
Commodity market segment.

Steel City is having memberships in national level Exchanges of NSE, BSE, MCX, NCDEX and
MCX-SX for Stock, Derivative, Commodity and Currency segments. They are recognized as
POP by PFRDA (Pension Fund Regulatory and Development Authority, Govt. of India) to
promote pension schemes for the well-being of Indian citizens. They have high-end risk
management tools for all market segments to maintain a healthy business relationship with all
our valuable investors and clients.

They have their own Software development team to develop application and implement for the
Back-office operations of all Segments of different Exchanges. Their strong base line of this
business tempo is, they have high-end management solutions for the business promotion and
expansion. They have the best track record of in-time clearing of funds and securities to their
valuable customers everywhere every time. They are ISO 9001:2008 certified company to
maintain the quality and services to the customer satisfaction. The brand “Steel City” means
“confidence as strong as steel”.

Services offered

They are providing a trading platform of Capital Market, Futures & Options, Commodities and
Currency Derivatives of NSE, BSE, MCX, MSE (Formerly known as MCX-SX), and NCDEX.
They are also a depository participant of NDSL and CDSL having their own trading clients more
than 2 lacs to serve more transparently. They have distribution of Mutual funds and IPO with
smart advisory team members to reach every potential investor and to encourage their
investments and growth plans. They promote pension schemes through PFRDA for the
retirement benefits of both employees and business people. They are also a corporate Agent with
SBI Life Insurance and channel partner with other leading insurance companies. They have
NBFC services to provide Personal loans, Gold loans and Loans against securities. They also
serve e-governance products like PAN, TAN, e-TDS, AIR, Form 24G, change requests of PAN,
TAN, through TIN-FC locations across the country. They have their Research and Analysis team
to focus on market movements for investment opportunities towards business growth and also to
minimize the risk. Their online Back-office application is available on 24/7 basis to get the
required information instantly.

Business Network

They have foot print of 420 locations (70 branches and 350 sub-broker) across India with 1600+
terminal licenses being connected to the Central Location. Their business is being extended to
the remote locations where, they have created awareness for all categories of business people to
plan their investments in these growing financial markets of Equity, Derivatives and
Commodities. Apart from this they also have web clients from both Equity and Commodity
market segments. They have well experienced team to market their products and capture more
clients of respective business segments.

Their additional business presence in e-governance services across the country has crossed 22
states within the span of a financial year. They are also planning to spread their brand and
products in remaining states to increase business volumes and clients.

Research and Advisory

They have very competitive analysts to focus on the market trends of all Exchanges/Segments in
both fundamental and technical. Since they have very large scale of retail investors, they
understand their portfolios, investment plans and return of investments (ROI). Their Advisory
team will keep posting the analysis reports to the respective clients based on their requirements.
They also post regular news, reports and other important financial statements of companies as
required by the investors.
Future Plans

They are planning to start their business operations in North and Western parts of India to spread
their brand and services. They also wanted to come up with more financial products like Wealth
Management and Merchant Banking Services. They are looking for tie-ups with leading
corporates to execute software development projects and e-governance. Their aim is to attract
more retail business to gain substantial growth in the coming years.

BOARD OF DIRECTORS

Mr. G. Sree Rama Murthy Mr. K. Satyanarayana Mr. Satish Kumar Arya
Managing Director Executive Director(S) Director Operations

Mr. G Satya Ram Prasad Mr. Ch. Murali Krishna Mr. M.H.Jagannadha Rao
Independent Non- Executive Independent Non- Executive Independent Non- Executive
Director Director Director

Mr. B. Krishna Rao Ms. G. V. Vandana


Independent Non- Executive Non- Executive Director
Director

Milestones

Steel City Securities Limited was established in 1995 with strong platform in providing
Share Broking Facilities through VSATs (Very Small Aperture Terminal) at various
locations in Andhra Pradesh as well as neighboring States. They are the pioneers & prime
leaders in providing retail share broking services in Andhra Pradesh. We have highest no.
of VSAT based connected centers with dedicated trading terminals each for a group of 5
to 6 clients.

In 1998 the company has achieved the phenomenal growth in all aspects. The workforce
has been given top priority to meet and enhance their endless support and services. The
working style of this company is with full of dedication and trustworthy. As of today the
company is having very high-end reputation, good-will and confidence in the financial
markets.

In 2000 they are approved as a Depository Participant of National Security Depository


Limited, subsidiary of National Stock Exchange of India Ltd. Having this facility, they
have greater advantage to their valuable customers. Very few Trading members are
having this facility as a one-stop service provider.

In 2001, they (Steel City Capital Services Private Limited) became the member of the
Bombay Stock Exchange with the support of 25 BOLT terminals across the state. Having
this facility they have great opportunity to trade in low-price scrips, which facility to
trade is not available in other exchanges.

In 2002 they also approved as a Depository Participant of Central Depository Services


Limited, subsidiary of the Bombay Stock Exchange. Having this facility, they have
greater advantage to their valuable customers to avail Intra-depository facility. Very few
Trading members are having this facility as an end-to-end service provider

In 2004, they (Steel City Commodities Private Limited) Subsidiary Company became the
member of the National Commodity & Derivatives Exchange and Multi Commodity
Exchange of India Ltd. with the initial support of 75 terminals across the state. Having
this facility they have great opportunity to trade in Bullion Market as well as Commodity
Markets.

In 2004, they have come up with Private Network to trade in all segments of
NSE/BSE/MCX/NCDEX with a single VSAT Connectivity. In this mode of connectivity
their BP’s (Business Partners) will have greater advantage towards Capital Investment,
Expenditure and Surveillance.

In 2008 they have entered in Currency Derivative Market Segment with the Membership
of NSE and MCX-SX.

In 2010 they become an authorized person of PFRDA to promote NPS (National Pension
Scheme) at all their business potential locations. In 2010 they become an authorized
person of PFRDA to promote NPS (New Pension System) at all their business potential
locations. This is to create an awareness of retirement life benefits for all classes of
Indian Citizens.

In 2012 Steel City Commodities Private Limited subsidiary company has become a
corporate agent with all leading Life, Health and General Insurance companies to
improve their client base and also will give additional strength to their core business.

In 2014 they have been appointed as a TIN-FC of NSDL e-Governance. TIN services of
e-Governance includes e-TDS return statements, TAN, PAN, PAN Change request, TAN
Change request, e-TDS Returns/Statements, Annual Information Return (AIR) and Form
24G.

In 2016 the Company has been authorized to act as an Empanellment Agency of UIDAI .

They also provide support services like Charts, trends of International markets, Bullion
Markets, Weather forecast, and other financial news through their website
(www.steelcitynettrade.com). Apart from this they provide Analysis, Technicals and
Fundamentals of 6000 companies for client future

Their strong base line of this business tempo is, they have high-end management
solutions for the business promotion and expansion. They have the best track record of in
time pay-in of funds and securities to their valuable customers everywhere every time.
They strictly follow the guidelines of SEBI/NSE/BSE/MSE/NCDEX/MCX/NSDL/CDSL
to have healthy and wealthy business environment.