INTRODUCTION OF THE STUDY:

The Indian stock market has gained a new life in the post-liberalization era. It has
experienced a structural change with the setting up of SEBI, opening up to the foreign
investors, establishment of the NSE, initiation of the screen based trading system,
dematerialization of securities and introduction of derivative instruments. The activities of
the market have increased in all respects. Market capitalization has increased spectacularly.
Number of listed companies has gone up. But the most important and amazing phenomena of
all are the movement of secondary market share prices which are reflected in either the
upward or downward trend in the major sharePrice indices in the country. The stock market
reflects the performance of an economy. When the economy does well and the companies
make lucrative profit, people get induced to invest in stocks because they expect higher
return from their stockholding. In the present competitive globalized business scenario, risk
is attached with every dimension. Financial markets are not free from imperfections, which
make results inconsistent with the expectations. The concept of risk management in case of
investment decision assumes greater importance in the modern day financial management.
The objective of financial investing is to earn the largest possible profit or return on
investment. Investing always involves a certain amount of risk, i.e., there is a chance that an
investment will yield not only profit but also loss. Thus investing aims at profit maximization
and risk minimization.

The methods used to analyze securities and make investment decisions fall into two very
broad categories: fundamental analysis and technical analysis. Fundamental analysis involves
analyzing the characteristics of a company in order to estimate its value. Technical analysis
takes a completely different approach; it doesn’t care one bit about the ‘value” of a company
or a commodity. Technicians (sometimes called chartists) are only interested in the price
movements in the market.

Despite all the fancy and exotic tools it employs, technical analysis really just studies supply
and demand in a market in an attempt to determine what direction, or trend, will continue in
the future. In other words, technical analysis attempts to understand the emotions in the
market by studying the market itself, as opposed to its components. If you understand the
benefits and limitations of technical analysis, it can give you a new set or skills that will
enable you to be a better trader or investor.

Technical analysis is a method of evaluating securities by analyzing the statistics generalized

by market activity, such as past prices and volume. Technical analysis does not attempt to
measure a security’s intrinsic value, but instead use charts and other tools to identify patterns
that can suggest future activity.

Just as there are many investment styles on the fundamental side, there are also many
different types of technical traders. Some rely on chart patterns; others use technical
indicators and oscillators, and most use some combination of the two. In any case, technical
analyst’s exclusive use of historical price and volume data is what separates them from their
fundamental counterparts. Unlike fundamental analysis, technical analysts don’t care whether
a stock is undervalued – the only thing that matters is a security’s past trading data and what
information this data can provide about where the society might move in the future.
 The field of technical analysis is based on three assumptions:

• The market discounts everything.

• Price moves in trends.

• History tends to repeat itself.

OBJECTIVES OF THE STUDY:

• To analyze the price movements of shares of SBI, ICICI, and HDFC interpret
the corrections and trends by using equity Analysis tools.

• To forecast the future trends and provide suitable suggestions to the investors.

• To calculate the risk associated with the Investment

• To find out systematic risk of securities

SCOPE OF THE STUDY:

• The study covers a period of six months from January 2013 to June 2018.

• The study helps to find out the future trends in the prices of SBI, ICICI, HDFC equity
shares. Valuable hints can be identified by the investors for their future buying and selling.

LIMITATIONS OF THE STUDY:

• One of the most important limitations for most technical analysis methods is the fact that
there are so many people using the basic technical analysis methods already, and the number
is increasing every day, making it harder for a single trader to make money on the market
with the methods.

• Because of these methods are so widely spread and there is so much money riding on the
methods, some also claim that technical analysis has become self-fulfilling prophecy, as
people trend to enter the market and put their stops on the same places, increasing the
volatility towards the technical analysis method being correct.

• Technical analysis systems usually do not take into account correlation between different
markets. If you are analyzing several markets and they all give similar signals, they may have
close correlations, meaning that the risk profile for each is very similar, and that the prices of
the assets move in close steps with each other.
Research Methodology:

Research methodology is a way to systematically solve the research problem.

It may be understood as a science of studying how research is done scientifically. The
various steps that are generally adopted by a researcher in studying research problem
along with the logic behind them. It is necessary for the researcher to know not only
the research methods/ techniques but also the methodology.

Analytical Research:
Research Design was based on analytical research, on the other hand, the

Researcher has to use facts or information already available, and analyze these

to make these to make a critical evaluation of the material.

Sources of Data:
The main sources of data are collected through website, various

Publication books, magazines, newspaper and reports prepared by research

Scholars etc.

Data Collection:

Data required for the purpose of the study have been collected from the

Websites of the banks concerned.

Data Analysis:

The data required so collected have been analyzed by using MS-EXCEL.

In the process of analysis – Average rate of return, Standard deviation,

Co-efficient of correlation, Covariance and beta values have been collected

Research tools used:

Returns:
A major purpose of investment is to set a return or income on the funds invested. On a
bond an investor expects to receive interest. On a stock, dividends may be anticipated.
The investor may expect capital gains from some investments and rental income from
house property return may take several forms

Returns for the collected data is calculated using the following formula

Pt = current price
Po = previous price

Average of the Returns calculated as follows:

Standard Deviation:
1. A measure of the dispersion of a set of data from its mean. The more spread apart
the data, the higher the deviation. Standard deviation is calculated as the square root
of variance.
2. In finance, standard deviation is applied to the annual rate of return of an
investment to measure the investment's volatility. Standard deviation is also known as
historical volatility and is used by investors as a gauge for the amount of expected
volatility.
Standard deviation is a statistical measurement that sheds light on historical volatility.
For example, a volatile stock will have a high standard deviation while the deviation
of a stable blue chip stock will be lower. A large dispersion tells us how much the
return on the fund is deviating from the expected normal returns.

Risk is calculated as follows:

D = deviation; N =No. of days

Beta:
Measures volatility or systemic risk compared to the market or the benchmark index
Beta Value Calculated as follows:

BETA= COVARIANCE OF MARKET AND SBI / VARIANCE OF MARKET