SUMMER TRAINING PROJECT REPORT

ON

“TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR’S STOCKS

AT BAJAJ ALLIANZ LIFE INSURANCE, MADANGIRI (SAKET,
DELHI)

SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE MASTER’S DEGREE IN BUSINESS
ADMINISTRATION

SUBMITTED TO:

INTERNAL GUIDE EXTERNAL GUIDE

DR. SOMNATH PAUL MR. SAURAV
PROFESSOR HR EXECUTIVE
GRAPHIC ERA HILL UNIVERSITY BAJAJ ALLIANZ
DEHRADUN SAKET, DELHI

SUBMITTED BY:

GAURAV

PANWAR

(2002071)

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GRAPHIC ERA HILL UNIVERSITY, DEHRADUN
BATCH 2020-2022

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 GUIDE CERTIFICATE

I have the pleasure in certifying that Mr. Gaurav Panwar is a

bonafide student of 3th Semester of the Master’s Degree in Business
Administration (Batch 2020-2022), of Graphic Era Hill University,
Dehradun, Roll No. 2002071

He has completed his project work entitled “Technical analysis of

Automobile sector’s stocks” under my guidance.

I certify that this is his original effort & has not been copied from any
other source. This project has also not been submitted in any other
Institute / University for the purpose of award of any Degree.

This project fulfils the requirement of the curriculum prescribed by

this University for the said course. I recommend this project work for
evaluation & consideration for the award of Degree to the student.

Signature :
Name of the Guide : Dr. Somnath Paul
Designation : Professor
Date :

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 ACKNOWLEDGEMENT

Firstly I would like to thank BAJAJ ALLIANZ for giving the opportunity to

complete my project in the organization. I put on record my sincere thanks

to my college, GRAPHIC ERA HILL UNIVERSITY DEHRADUN, for giving me

such an opportunity. I am extremely grateful to Dr. SOMNATH PAUL for

the encouragement, discussions and critical assessment of the project. It

was a good experience for me to work at BAJAJ ALLIANZ. I am greatly

obliged to Mr. SAURAV my industry guide, who have shared his expertise

and knowledge with me without which the completion of project would

not have been possible. I express my gratitude towards staff of BAJAJ

ALLIANZ, those who have helped me directly or indirectly in completing

the project

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 EXECUTIVE SUMMARY

 To develop the understanding about how live stock-trading works.

 To maintain the index of AUTOMOBILE Sector with selected stocks

as per their market capitalization.

 To create an index of AUTOMOBILE companies and analyse its

performance.

 To understand how to use various technical tools and technical

charts on stocks.

 To develop the forecasting skills with the help of price action.

During the internship following concepts were learned:

1. Preparation of INDEX of companies.

2. Technical Analysis on AUTOMOBILE sector stocks (Taken as main

project)
Using such things as:-

 Oscillators
 Candle stick patterns
 Price action
 Strategies

 Analysis of the sector stocks

 Picking at least 5 as per their market capitalization

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3. Trading

 Trade in Share Market (Intra-day basis).

 Trade on Zerodha.

4. Technical Analysis (Taken as main project)

 Trade on Demand & Supply basis.

 Use of technical tools to analyse stocks.

5. Professional Learning Outcomes

• Dressing appropriately.

• Developing appropriate workplace attitude participating as a

member of a team.

• Working in cross-culture.

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 OBJECTIVES

1) To understand live stock trading.

2) To create an index of the stocks of AUTOMOBILE Sector.

3) To create an index of top AUTOMOBILE companies and

analyse their performance to use various technical tools and

technical charts on stock trading

4) To understand how to observe the rate of stock fluctuation of

selected companies.

5) To make comparative study of risk and return in portfolio.

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8
 TABLE OF CONTENTS

SR PAGE
NO.
HEADING NO.
01 TITLE PAGE 01
02 GUIDE CERTIFICATE 02
03 ACKNOWLEDGEMENT 03
04 EXECUTIVE SUMMARY 04-05
05 OBJECTIVE 06
06 INTRODUCTION
6.1- COMPANY INTRODUCTION 11-13
6.2- PRODUCT & SERVICES OFFERED 14-17
6.3- SWOT ANALYSIS 17
6.4- ANALYSIS ON AUTOMOBILE 17-22
SECTOR

07 LIVE TRADING 23
7.1- TYPES OF TRADING 23
7.1.1 SCALPING 24
7.1.2 DAY TRADING 24
7.1.3 SWING TRADING 25
7.1.4 POSITION TRADING 26
7.2- INTRA DAY STRATEGIES
7.2.1- BULL 180 27
7.2.2- BEAR 180 28
7.2.3- ORB 45 29

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08 TECHNICAL ANALYSIS 30
8.1- CANDLESTICK PATTERNS 31
8.2- SUPPORT & RESISTANCE 32-35
8.3- TECHNICAL OSCILLATORS
8.3.1-BOLLINGER BANDS 36-37
8.3.2-MACD 38
8.3.3-RSI 39
8.3.4-SUPER TREND 40
8.3.5- AROON 41
8.3.6-FIBONACCI 42
8.3.7-STOCHASTIC RSI 43
8.3.8-CPR 44
8.3.9-PIVOT POINT STANDARDS 45
9.3.10-VWAP 46
8.4- PRICE ACTION 47
8.4.1-UP & DOWN TRENDLINE 48-49
8.4.2- ROUNDING BOTTOM 50
8.4.3- HEAD AND SHOULDERS 51
8.4.4- BUMP AND RUN REVERSAL 52
8.4.5- DOWNWARD TRENDLINE 53
8.4.6-DOUBLE BOTTOM 54
8.4.7-INVERSE HEAD & SHOULDERS 55
8.4.8-TRIPLE TOP 56
8.4.9-TRIPLE BOTTOM 57
8.4.10-CUP AND HANDLE 58
8.4.11-ASCENDING TRIANGLE 59
8.4.12-DESCENDING TRIANGLE 60
8.4.13-SYMMETRICAL TRIANGLE 61
09 METHODOLOGY 62
10 DATA ANALYSIS

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 10.1- INDEXING 63-64
10.2- BACK TESTING 65-67
11 FINDINGS 68-69
12 CONCLUSIONS 70
13 RECOMMENDATIONS 71-72
14 REFERENCE 73

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 INTRODUCTION
ABOUT BAJAJ ALLIANZ
Bajaj Allianz Life Insurance Company Limited is one of India’s leading

private life insurance companies. It is a joint venture between Bajaj

Finserv Limited, the holding company for the businesses dealing with

financial services of the Bajaj Group, and Allianz SE, the world’s leading

insurance conglomerate and one of the largest asset managers in the

world.Bajaj Allianz Life Insurance Company Limited began its operations in

2001, and today has a pan-India presence with 582 branches as on 31

August 2019. The company offers life insurance solutions through its

strong product portfolio, which includes traditional insurance products

and ULIPs for enabling customers fulfill their LifeGoals. The company also

offers group insurance and health insurance plans.

Bajaj Allianz Life Insurance Company

Type Private

Industry Insurance Services

Founded 2001

Headquarters Pune, India

Products Life

Insurance Total Assets INR

56,620 Cr

Parent Bajaj Finserv, Allianz SE

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Website www.bajajallianzlife.com

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MISSION

The company offers life insurance solutions through its strong product

portfolio, which includes traditional insurance products and ULIPs for

enabling customers fulfill their LifeGoals.

VISION

To become undisputed leader amongst non-bank promoted life insurance

companies in Top-line and Profitability. The 3 pillar of our vision that will

help us achieve it are:

1. To be the first choice insurer for customers

2. To be the preferred employer for staff in the insurance industry

3. To be the number one insurer for creating shareholder value

VALUES

CUSTOMER FIRST ALWAYS:-

 Treat all customers with warmth and respect.

 Understand and manage customer expectations.

 Listen and are empathetic to the customer.

 Engage with the customer in the long term.

SPIRIT OF ADVENTURE:-

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  Lead change

 Look for opportunities to innovate at every level

 Empower others to take responsible decisions

 Show tolerance for failure

TRUST:-

 Are accessible to all

 Are fair and transparent

 Are open to feedback

 Keep commitments

 Trust each other to do a good job and give due credit

 Own up to mistakes

SHARED OWNERSHIP:-

 Take collective ownership for success and failure

 Respect divergent views and own the decisions taken

 Put organizational interest above team and individual interests

 Consciously include and respect people from different backgrounds

HIGH STANDARDS:-

 Set new benchmarks of excellence

 Are open to new ideas for raising the bar

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  Take pride in our work and excel in what we do

KEY PEOPLE

 Tarun Chugh as Managing Director and CEO

 Kayzad Hiramanek as Chief Operations & Customer Experience

 Sameer Joshi as Chief Agency Officer

PRODUCTS AND SERVICES

 LIFE INSURANCE & GENERAL INSURANCE

 TREM INSURANCE

 ENDOWNMENT PLANS

1. POS GOAL SURAKSHA

2. GUARANTEED INCOME GOAL

 ULIP

 INVESTMENTS PLANS

 RETIREMENT PLANS

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 HOME INSURANCE

They offer home insurance to secure your home and its contents against
natural calamities, burglary, theft, etc. When it comes to home insurance,
India has traditionally lagged behind. However, buying a home insurance
policy is something that should be on top of your list as soon as you have

settled into your new home.

HEALTH INSURANCE

They offer best health Insurance and medical insurance plans at affordable
premium rates. Health insurance plans are like an investment that you
make so that you can safeguard your hard-earned funds from being spent
on expenses related to hospitalization, medicines, ambulance, doctor’s
consultation and more.

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TRAVEL INSURANCE

They offer travel insurance policy online for domestic &

International travel. Travel Insurance offers coverage against
various types of emergencies like medical expenses. The
medical expenses involve medical evaluation and repatriation,
detaining checked-in baggage or absolute loss of checked-in
baggage, forgotten connections, financial emergency assistance,
and so on.

CAR INSURANCE

They offer buy or renew car insurance policy online and save up to

70%. Car Insurance is a contract you and your insurer enter into, to
protect you from financial damages caused by unforeseeable

circumstances like accidents, theft, and even natural calamities.

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TWO WHEELER INSURANCE

Now buy two wheeler insurance for 1, 2 or 3 years. Bike Insurance is a

safety plan that protects bike owners from any liability to third parties,
arising due to the usage of two-wheelers.

REVENUE

₹12,430 crore (US$1.7 billion) (2020) and Net Income is ₹998

crore (US$130 million) (2020).

BAJAJ ALLIANZ SWOT ANALYSIS

STRENGTHS

1. Global exposure in Insurance through Allianz SE and Strong Local

Implementation by Bajaj

2. Has network across 200 towns

3. Fundamentally Strong with good paying Capabilities

4. Allianz AG is an insurance conglomerate globally and one of the largest

asset managers in the world, managing assets worth worldwide with 115

years of financial experience in over 70 countries

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5. Received the prestigious “Business Leader in General Insurance”, award

by NDTV Profit.

WEAKNESSES

1. Lack of penetration in rural areas.

2. Smaller Infrastructure as compared to established players.

OPPORTUNITIES

1. Growing rural market potential

2. Urban Youth with growing income.

THREATS

1. Economic crisis and economic instability

2. Entry of new NBFCs in the sector

3. Increasing awareness amongst people about securing their future.

Competitors of Bajaj Allianz

1. SBI Life Insurance

2. Sahara Life Insurance

3. HDFC Standard Life

USP

Expertise in global market with global exposure.

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 ANALYSIS OF AUTOMOBILE SECTOR’S SHARE

 To analyse the index movement on a daily basis

 To analysing graph charts like candle sticks charts

 Analysis of bullish and bearish stocks

 Analysis of candle sticks

 Determining the financial statements of different companies

STOCKS CHOSEN FOR TRADING

The stocks for trading were chosen on the basis of their market
capitalization. We were instructed to trade on the stocks falling
under the category of large capitalization (stocks having market
capitalization above Rs20000 cr. primarily the following stocks
were chosen:-

A> MRF LTD.

B> MARUTI SUZUKI IND

C> BAJAJ AUTO LTD.

D> HERO MOTO CORP.

E> TVS MOTO CO

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 ABOUT AUTOMOBILE SECTOR

Introduction

The automobile industry consists of a wide range of companies and

organizations involved in the designing and developing, of motor vehicles.

It is considered as one of the world's most important economic sectors in

terms of revenue.

HISTORY OF AUTOMOBILE SECTOR-The automobile industry’s inception

began in the early 1890s with thousands of manufacturers that were the

pioneers of the horseless carriage. For many years, the United States of

America were the leaders of the world when it came to automobile

production. In the year 1929, just before the Great Depression, the world

had roughly 32,028,400 automobiles in use.

The automobile industry of India accounts for up to 21.8 per cent of the

country's manufacturing gross domestic product (GDP).

An ever expanding middle class, a very young population, and an ever

increasing interest of the automobile companies in exploring the rural

markets have made the two wheeler segment (with nearly 80 per cent

market share) the leader of the automobile market in India. In India the

overall passenger vehicle segment has 13.8 per cent market share.

In the 21st century India has also become a substantial auto exporter, with

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very good export growth expectations for the coming future. Various

initiatives taken by the Government of India and the major automobile

players in the Indian market are expected to make India a leader not only

in the Two Wheeler market but also in the Four Wheeler market in the

world by 2020.

Market Size

In India Sales of commercial vehicles grew at 5.4 per cent to 52,481 units

in the month of January 2015 from a year ago, according to the Society of

Indian Automobile Manufacturers…show more content…

In the year of March 2014 the multinational corporation consisted of

about 338,874 employees around the world and as of November of 2014,

it is considered to be the twelfth-largest company in the world by

revenue. Toyota was the largest automobile manufacturer up till 2012 in

terms of production ahead of Volkswagen Group and General Motors. In

July of the year 2012, the company posted the production of its 200-

millionth vehicle. Toyota is considered as the world’s first automobile

manufacturer to produce more than 10 million vehicles per year. This feat

was achieved in the year 2012 according to OICA, and also in 2013

according to the data of Toyota. As of the year 2014, Toyota was the

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largest listed company in Japan in terms of market capitalization worth

more than twice as much as the number 2 ranked company.

INDUSTR SCENARIO

The $118 bn Automobile industry is expected to reach $300 bn by 2026.

India’s annual production in FY 2020 was 26.36 Mn vehicles.

In the Automobile market in India, Two-wheelers and passenger cars

accounted for 80.8% and 12.9% market share, respectively, accounting for

a combined sale of over 20.1 mn vehicles in FY20. Passenger car sales are

dominated by small and midsized cars. Overall, Indian automobile export

reached 4.77 million vehicles in FY20, implying a CAGR of 6.94% between

FY16-FY20. Two-wheelers constituted 73.9% of the total vehicles

exported, followed by passenger vehicles at 14.2%, three-wheelers at

10.5%, and commercial vehicles at 1.3%.

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 LIVE TRADING

STOCK TRADING:-

Trading typically means buying and selling shares in the secondary market

on the same day or can be hold for long. Online trading is basically the act

of buying and selling financial products through an online trading

platform. These platforms are normally provided by internet-based

brokers and are available to every single person who wishes to try to

make money from the market.

TYPES OF TRADING IN THE STOCK MARKET:-

 SCALPING
 DAY TRADING
 SWING TRADING
 POSITION TRADING

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There are four main types of forex trading strategies: scalping, day trading,

swing trading and position trading. Different trading styles depend on the

timeframe and length of period the trade is open for.

 SCALPING

Scalping is the most short-term form of trading. Scalp traders only hold

positions open for seconds or minutes at most. These short-lived trades

target small intraday price movements. The purpose is to make lots of

quick trades with smaller profit gains, but let profits accumulate

throughout the day due to the sheer number of trades being executed in

each trading session. This style of trading requires tight spreads and liquid

markets. As a result, scalpers tend to trade major currency pairs only (due

to liquidity and high trading volume), such as EURUSD, GBPUSD, and

USDJPY.

 DAY TRADING

For those that are not comfortable with the intensity of scalp trading, but

still don’t wish to hold positions overnight, day trading may suit. Day

traders enter and exit their positions on the same day (unlike swing and

position traders), removing the risk of any large overnight moves. At the

end of the day, they close their position with either a profit or a loss.

Trades are usually held for a period of minutes or hours, and as a result,

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require sufficient time to analyse the markets and frequently monitor

positions throughout the day. Just like scalp traders, day traders rely on

frequent small gains to build profits.

Day traders pay particularly close attention to fundamental and technical

analysis, using technical indicators such as MACD (Moving Average

Convergence Divergence), the Relative Strength Index and the Stochastic

Oscillator, to help identify trends and market conditions.

 SWING TRADING

Unlike day traders who hold positions for less than one day, swing traders

typically hold positions for several days, although sometimes as long as a

few weeks. Because positions are held over a period of time, to capture

short-term market moves, traders do not need to sit constantly

monitoring the charts and their trades throughout the day. This makes it a

popular trading style for those who have other commitments (such as a

full-time job) and would like to trade in their leisure time. However, it is

still necessary to dedicate a few hours a day to analyse the markets.

Swing traders (as well as some day traders) tend to use trading strategies

such as trend trading, counter-trend trading, momentum and breakout

trading.
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  POSITION TRADING

Position traders are focused on long-term price movement, looking for

maximum potential profits to be gained from major shifts in prices. As a

result, trades generally span over a period of weeks, months or even

years. Position traders tend to use weekly and monthly price charts to

analyse and evaluate the markets, using a combination of technical

indicators and fundamental analysis to identify potential entry and exit

levels. As position traders are not concerned with minor price fluctuations

or pullbacks, their positions do not need to be monitored the same way as

other trading strategies, instead occasionally monitoring to keep an eye

on the major trend.

IN THESE 2 WAYS SHARES ARE ACTUALLY TRADED

A- First way is a basic Buy sell situation in which we buy the stock at a

lower pricing predicting that its price will increase in future and sell it at a

higher price to make profit.

B- In second case we do SHORT SELLING. Short selling is the sale of a

security that is not actually owned by the seller or that the seller has

borrowed. Short selling is motivated by the belief that a security's price

will decline, enabling it to be bought back at a lower price to make a

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profit. In simple words we sell the share at a higher price predicting that it

will decline in the future and buy it at a lower price to make profit.

INTRA DAY STRATEGIES

1. BULL 180

Bull 180 is a strategy in which downtrend is formed by the red

candles (at least 3-4) and then green candles are formed engulfing

the previous red candle. As soon as the green candle covers the

previous red candle it shows that the market is going to move

upwards from here onwards and a call to long the shares can be

taken. Candle time frame – 5 Minutes

SR SELLIN STRATE
STOCK BUY SELL BUYING PROF
NO DATE G LOSS GY
NAME QTY. QTY. PRICE IT
. PRICE USED
ASHOK 22-06- BULL
1 1 1 120.75 119.75 . 1
LEYLAND 2021 180

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 2. BEAR 180

Bear 180 is a strategy in which Uptrend is formed by the green candles (at

least 3-4) and then red candles are formed engulfing the previous green

candle. As soon as the red candle covers the previous green candle it

shows that the market is going to move downwards from here onwards

and a call to short the shares can be taken.

Candles time frame – 5 Minutes

SR STRATE
STOCK BUY SELL BUYING SELLING PRO LO
NO DATE GY
NAME QTY. QTY. PRICE PRICE FIT SS
. USED
ASHOK 25-06- BEAR
5 1 1 125.95 127.6 1.65 .
LEYLAND 2021 180

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3. ORB 45In ORB 45 we mark the high and low of the first three

candles formed and as soon as the candles formed post these breaches

the highs and lows marked, a trade can be taken in either direction.

Candle time frame – 15 Minutes

If the candles formed breaches the high mark we long our positions and

vice-versa.

STRATE
SR STOCK BUY SELL BUYING SELLING PRO LO
DATE GY
NO. NAME QTY. QTY. PRICE PRICE FIT SS
USED
TVS ORB 45
24-06- 1.0
3 MOTOR 1 1 613.8 612.75 . (SHORT
2021 5
S )

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 TECHNICAL ANALYSIS

Technical analysis is the examination of past price movements to forecast

future price movements. Technical analysts are sometimes referred to as

chartists because they rely almost exclusively on charts for their analysis.

Technical analysis is all about studying stock price graphs and a few

momentum oscillators derived thereof. It must be understood that

technical studies are based entirely on prices and do not include balance

sheets, P&L accounts (fundamental analysis), the assumption being that

the markets are efficient and all possible price sensitive information is

built into the price graph of a security/index. Therefore, technical analysis

supports the efficient market theory as against the "random walk theory"

which supports the belief that stocks can be bought / sold on random

events like flipping a coin!!! Technical analysis is more dynamic as

compared to fundamental analysis based on one simple argument

fundamental analysts depend on corporate events like quarterly results

and special announcements like earnings guidance and policy changes in

operations to generate a buy / sell recommendation.

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1. CANDLE STICK PTTERNS IN TRADING:

A candlestick is a chart that displays the high, low, opening and closing

prices of a security for a specific period. The wide part of the candlestick is

called the "real body" and tells investors whether the closing price was

higher or lower than the opening price. Black/red indicates that the stock

closed lower and white/green indicates that the stock closed higher. It

shows the growth or decline of a particular stock for a particular time

period.

Candle basics:

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The difference between the open and the close is called the "real body" of

the candlestick. The higher of these values creates the upper extreme of

the real body, and the lower of these values creates the lower extreme.

The amount the stock rose in price above the real body is called the upper

shadow. The amount that the stock fell below the real body is called the

lower shadow. If the candle is green or white, it means the lower extreme

is defined by the opening price and that the stock's price rose during the

period being charted. If the candle is red or black, then the lower extreme

identifies the closing price, and the stock fell during the period. Candles

may be created for any time period: Monthly, weekly, hourly or even a

minute. Regardless of the time frame, candlesticks should not be judged in

isolation, traders should always look for follow-up action to confirm any

signals during the following applicable period.

2. SUPPORT AND RESISITANCE

Support and resistance represent key junctures where the forces of supply

and demand meet. In the financial markets, prices are driven by excessive

supply (down) and demand (up). Supply is synonymous with bearish, bears

and selling. Demand is synonymous with bullish, bulls and buying. These

terms are used interchangeably throughout this and other articles. As

demand increases, prices advance and as supply increases, prices decline.

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When supply and demand are equal, prices move sideways as bulls and

bears slug it out for control.

SUPPORT:

Support is the price level at which demand is thought to be strong enough

to prevent the price from declining further. The logic dictates that as the

price declines towards support and gets cheaper, buyers become more

inclined to buy and sellers become less inclined to sell. By the time the

price reaches the support level, it is believed that demand will overcome

supply and prevent the price from falling below support.

Support does not always hold and a break below support signals that the

bears have won out over the bulls. A decline below support indicates a

new willingness to sell and/or a lack of incentive to buy. Support breaks

and new lows signal that sellers have reduced their expectations and are
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willing sell at even lower prices. In addition, buyers could not be coerced

into buying until prices declined below support or below the previous low.

Once support is broken, another support level will have to be established

at a lower level.

RESISTANCE:

Resistance is the price level at which selling is thought to be strong

enough to prevent the price from rising further. The logic dictates that as

the price advances towards resistance, sellers become more inclined to

sell and buyers become less inclined to buy. By the time the price reaches

the resistance level, it is believed that supply will overcome demand and

prevent the price from rising above resistance.

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Resistance does not always hold and a break above resistance signals that

the bulls have won out over the bears. A break above resistance shows a

new willingness to buy and/or a lack of incentive to sell. Resistance breaks

and new highs indicate buyers have increased their expectations and are

willing to buy at even higher prices. In addition, sellers could not be

coerced into selling until prices rose above resistance or above the

previous high. Once resistance is broken, another resistance level will have

to be established at a higher level.

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 3. TECHNICAL OSCILATTORS

 BOLLINGER BAND:

Bollinger bands are one of the most popular technical indicators for

traders in any financial market, whether investors are trading stocks,

bonds or foreign exchange (FX). Many traders use Bollinger Bands to

determine overbought and oversold levels, selling when a price touches

the upper Bollinger Band and buying when it hits the lower Bollinger Band.

In range-bound markets, this technique works well, as prices travel

between the two bands like balls bouncing off the walls of a racquetball

court. However, Bollinger Bands don't always give accurate buy and sell

signals. Candle time frame – 5 Minutes

STOCK DATE BUY SELL BUYING SELLING PROFIT LOSS STRATEGY

NAME QTY. QTY. PRICE PRICE USED

INFO 08-07- 01 01 5375.35 5395.95 20.6 ------ BOLLINGER

TECH 2021 BAND
(SHORT)

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STEPS:-Steps vary with different types of trading platforms, we will follow

the steps in ZERODHA:

1. Double click on the share on which you want to trade.

2. A window will open showing the graphical representation of the stock

and its values.

3. Go to the top and click on the “Fx”, a small window will pop up.

4. Select Bollinger band in it and give the time period according to your

investment plan. For example- 5 min or 1 hour, 1 day & 1month etc.

5. By clicking ok you will have two graphical lines above and below the

stock price line.

6. The above line shows the highest limit of the share price to which it

went for the particular time period. We sell the stock when the candle

stick goes above it.

7. The below line shows the lowest limit of the share price in the particular

time period that you have given.

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  MOVING AVERAGE COVERGENCE DIVERGENCE (MACD)

MACD can be applied to daily, weekly or monthly charts. MACD

represents the convergence and divergence of two moving averages. The

standard setting for MACD is the difference between the 12 and 26-period

EMA. However, any combination of moving averages can be used. The set

of moving averages used in MACD can be tailored for each individual

security. Candle time frame – 5 Minutes

 RELATIVE STRENGTH INDEX (RSI):

The Relative Strength Index ("RSI") is a popular oscillator. It was first

introduced by Welles Wilder in an article in Commodities (now known as

Futures) Magazine in June, 1978.

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So, this is how both price and RSI work in conjunction. The overbought

and oversold zones are used for long-term investments from weekly

onwards. Look at the chart below. This is a daily chart and RSI band is

placed at 70 and 30. Here wherever the RSI breaks 70, we say it is in the

overbought zone. When it comes below 30, it is oversold. Whenever

something is overbought, it means it has gone through most of the logical

profits, and hence, it needs to be sold. Similarly, when RSI is in the

oversold zone, it has hit its low and will rise, so it is a good buy. This is

because the market has already been stretched, and price always moves

in a zigzag pattern.

Candle time frame – 5 Minutes

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 SUPER TREND:-This strategy basically comprises of Super Trend.

When the Super Trend turns green (i.e. Super Trend is below the price),

a buy signal is generated. Similarly, when the Super Trend turns red (i.e.

Super Trend is above the price), a sell signal is generated. For using this

indicator, you need to open the chart of a particular stock that you

want to track and set a time interval of 5-10 minutes when doing

intraday trading. You can use any good charting software. After opening

the chart insert super trend. Candle time frame – 5 Minutes

STOCK DATE BUY SELL BUYING SELLING PROFIT LOSS OSCILLATOR

NAME PRICE PRICE USED
QTY QTY

SUPER

BAJAJ AUTO 30-06- 01 01 4141.05 4154 12.95 -------- TREND(LONG)

2021

4
  AROON:

The Aroon indicator is a technical indicator that is used to identify trend

changes in the price of an asset, as well as the strength of that trend. The

aroon indicator is composed of two lines. An up line which measures the

number of periods since a High, and a down line which measures the

number of periods since a Low. When the Aroon Up is above the Aroon

Down, it indicates bullish price behavior. When the Aroon Down is above

the Aroon Up, it signals bearish price behavior.Candle time frame – 5

Minutes

STOCK DATE BUY SELL BUYING SELLING PROFIT LOSS OSCILLATOR

NAME PRICE PRICE USED
QTY QTY

AROON
(SHORT)
EICHER 20-07-21 01 01 2544.65 2551 6.35 --------

MOTORS

4
  FIBONACCI:

Fibonacci is a commonly used trading indicator used in technical analysis

that provides levels of support and resistance. At the same time, these

levels can be used as perfect entry and exit points if you know how to use

its signals. Candle time frame – 5 Minutes

STOCK DATE BUY SELL BUYING SELLING PROFIT LOSS OSCILLATOR

NAME PRICE PRICE USED
QTY QTY

BAJAJ 30-06-21 01 01 4141.05 4154 12.95 -------- FOBONACCI

AUTO

4
  STOCHASTIC RSI:

The Stochastic RSI was first developed by trading system wizard Tushar

Chande and money management expert Stanley Kroll in their 1994 book,

“The New Technical Trader.” The idea was to increase sensitivity to give

rise to overbought and oversold signals. According to the technical

traders, Stochastic RSI oscillates between 20 and 80 for a long period

without reaching an extreme range. Unlike in the traditional momentum

indicators, where 70 and 30 indicate the turning points, the Stochastic RSI

uses 20 and 80 as the price overbought and oversold, respectively.

Basically two lines (Red and Blue) are formed when Stochastic RSI

indicator is applied and when the blue line cuts red line from above to

below above 80, a call to short sell is taken whereas when the blue line

cuts red line from below to above below 80, a call to long the shares is

taken.

Candle time frame – 5 Minutes

STOCK DATE BUY SELL BUYING SELLING PROFIT LOSS STRATEGY

NAME QTY. QTY. PRICE PRICE USED

HDFC 13-07- 01 01 2543.4 2543.55 .15 ------ STOCHASTIC

RSI (SHORT)
2021 -

4
  CENTRAL PIVOT RANGE

Central Pivot Range is a versatile technical indicator usually comprising of

3 levels – a central pivot point (pivot), top central level (TC), and bottom

central level (BC). The width of the CPR lines very accurately gives an idea

of the expected price movement. If CPR width is narrow, that is the

distance between TC and BC lines of CPR is very low, then it indicates a

trending market. While if the distance between TC and BC lines is

relatively higher it indicates sideways market.

When green candle opens above the CPR and the second green candle is

also formed as a confirmation, a call to long the shares can be taken

whereas when red candle opens below the CPR and the second red candle

is also formed as a confirmation, a call to short the shares can be taken.

4
Candle time frame – 15 Minutes required

 PIVOT POINT STANDARD:

Pivot points are used by traders as a predictive indicator and denote levels

of technical significance. When used in conjunction with other technical

indicators such as support and resistance or Fibonacci, pivot points can be

an effective trading tool. Pivot points are calculated using the high, low

and close prices of a previous day, week or month. Three different levels

of support and resistance are calculated above and below the pivot point.

The three levels of resistance are referred to as R1, R2, and R3 while the

three levels of support are referred to as S1, S2, and S3. When the current

price is trading above the daily pivot point, this serves as an indication to

initiate long positions. Conversely, when the current price is trading below

the daily pivot point, this serves as an indication to initiate short positions.

Candle time frame – 5 Minutes

4
  V-WAP:

The VWAP is a trading indicator, which averages the closing prices during

the given time period. At the same time, it puts emphasize on the periods

with higher volume. When the price goes above the VWAP indicator this

means that the strength of the bullish move is strong. It is so strong that

the price has managed to break its average value on the chart. Therefore,

we get a long signal. The same is in force for a bearish breakout, but in the

opposite direction.

Candle time frame – 5 Minutes

4
 4. PRICE ACTION

It is the study of chart of various assets, be it stocks, crypto currencies,

forex or commodities. Charts use to determine the price movement

and helps to find out the entry or exit opportunity. They usually plot

the opening and closing prices of the candles and carry it forward,

then makes a complete chart, where an investor or a trader can enter

into a trade accordingly. Price actions are preferred on the basis of

their time Period, usually to analyse or spot a pattern higher time

frames are considered because of more accuracy rather than to spot

patterns on short time period.

4
 UPWARD TREND

This pattern arises out when the price of a certain stock, keeps rising

as making a support of the Trend line and keeps making higher-highs

& higher-lows. An uptrend line has a positive slope and is formed by

connecting two of more low points. The second low must be higher

than the first for the line to have a positive slope and the time frame

could be daily, weekly and monthly to spot the trend. It shows the

overall bullishness and the strong momentum in the stock, as the

result it attracts the market. Better area to buy the shares in uptrend

is the support on trend line, whenever the price comes near that

support it’s always reliable to open a position there.

4
  DOWNWARD TREND

This pattern arises out when the price of a stock, keeps falling and

make downward channel. A down trend line has a negative slope

and is formed by connecting two or more high points. The second

high must be lower than the first for the line to have a negative slope.

It shows the weakness in the momentum of share as it keeps making

lower-lows and lower- highs.

The recommend time frame are daily, weekly and monthly. Better

area to open the short position in downward trend is near the

resistance area, because the chances are very high of price rejection

in that region.

4
 ROUNDING BOTTOM

This pattern arises out when the price of the share moves in the shape

of hemisphere or U on the higher time frame such as daily, weekly,

and monthly. The price initially go downwards, after reaching at the

bottom gradually, price starts to gain the momentum from bottom and

eventually turn into the favourable buying share. Usually the pattern

look similar to cup and handle, but in actual it doesn’t have a handle.

The trend which is required to form a rounded bottom is first we have

to be in a downtrend and then gradually move in n a U shape, which

can last for weeks or months. As soon as the price touches the point

from where the price went down earlier, position can be opened, but

for more surety one should wait for a clear breakout, then trade

accordingly.

5
 4.HEAD SND SHOULDERS PATTERN

Under this pattern we see three triangles, 2 of them are small who act

as a left and right shoulder & 1 big in the middle work as the head or

we can consider it as three peaks on a same support. Each triangle has

a same support or you can call it neck line, which works as a support,

but sometimes the support not necessarily has to same as patterns are

their but spotting them can be tough. Initially the price moves upward

to form this pattern as time passes we see three peaks. It is considered

as a trend reversal pattern and most of the trade finds it reliable. To

setup the target from the entry is considered best as the length of

highest peak to it’s support level and can done accordingly as per

trader mind-set.

5
 .BUMP AND RUN REVERSE (BARR)

Under this prices advance in an orderly manner and there is no excess

speculation. The trend line should be moderately steep and the price

moves up with making the trend line as a support. After gaining the

sharp movement in price, say of 20% the bump scenario occurs.

Which leads to mass buying of shares and after huge buying the price

make it’s peak and starts declining, sometimes price may not fall

directly but will make double top or lower-lows then start to fall.

Falling price first touches the uptrend line as support and after its

breakdown from that point this support becomes resistance. The

recommend time frame to analyse this patter are daily, weekly and

monthly and also it is considered as bearish pattern.

5
 DOUBLE TOP PATTERN

As the name signifies, under this patter the price make two peaks of

same price range or sometimes can differ a bit and usually forms an

inverted W pattern. (Ex- ₹20 was first top then stock goes down to a

certain support and again comes to ₹20 and makes two peaks of same

price). For analysing this pattern the trend must be of upward and

time frame would be of daily, weekly and monthly. This pattern is

considered as bearish or trend reversal. After the first peak Price falls

to previous support and starts rebounding, after that the price makes it

way to previous peak and exactly declines from the previous peak. To

open short position in this pattern is highly considered and as a target

the length from peak to support can be taken.

5
 . DOUBLE BOTTOM PATTERN

This pattern can be seen in the W shape, it is considered as a bullish

trend reversal. The double bottom chart pattern is found at the end of

a downtrend and resembles the letter “W”(see chart below). Price falls

to a new low and then rallies slightly higher before returning to the

new low. Unable to push price to a new lower low to continue the

downtrend, sellers give up and price bounces sharply from this area.

The bullish confirmation is specified by a break in the key price level

situated at the high point between the ‘bottoms’ resistance level

(neckline). Under this pattern the initial price movement is declining.

To find out reliable pattern, one can rely on big time frame daily,

weekly and monthly.

5
 INVERSE HEAD AND SHOULDERS PATTERN

An inverse head and shoulders, also called a “head and shoulders

bottom”, is similar to the standard head and shoulders pattern, but

inverted: with the head and shoulders top used to predict reversals in

downtrends and works as a trend reversal, good to open long positions

once the neckline breaks. Having three peaks of triangles 2 are small

and 1 is big and all are inverted triangles, where the neckline works as

a resistance.

5
 TRIPLE TOP PATTERN

A triple top is formed by three peaks moving into the same area, with

pullbacks in between, while a triple bottom consists of three troughs

with rallies in the middle. The triple top is a bearish candlestick

pattern that occurs at the end of an uptrend. As a reversal pattern, the

triple top formation suggests a likely change in the trend, after the

buyers failed to clear the horizontal resistance in three consecutive

attempts, the scenario opposite of the triple bottom pattern. The

target can be set for the area between resistance and support, in

which pattern is made.

5
 TRIPLE BOTTOM PATTERN

The triple bottom is a bullish reversal pattern that occurs at the end

of a downtrend. This candlestick pattern suggests an impending

change in the trend direction after the sellers failed to break the

support in three consecutive attempts. The best time enter into the

trade, once the prices the resistance and let the breakout retest so that

we can confirm our trade and can start building our positions. As a

reversal pattern, the triple bottom formation suggests a likely change

in the trend, after the sellers failed to break the horizontal support in

three consecutive attempts. The target can be set for the length of 3 rd

low to resistance level.

5
 CUP AND HANDLE PATTERN

A cup and handle is a technical chart pattern that resembles a cup and

handle where the cup is in the shape of a "u" and the handle has a

slight downward drift. Handle plays an important role as the trading

volume remains low in that region. It attracts traders to build their

positions and some also wait for clear breakout. The good target can

be the distance from neckline to bottom of cup.

5
 ASCENDING TRIANGLE PATTERN

It is created by price moves that allow for a horizontal line to be drawn

along the swing highs, and a rising or straight (resistance) to be

drawn along the swing lows. The two lines form the ascending

triangle. Traders often watch for breakouts from triangle patterns. The

target can be taken as the distance from initial peak to low of pattern,

after a successful breakout. Pattern can be found on daily, weekly and

monthly time frames also can be found on 4, 6 or 12 hour charts. A

ascending triangle is a signal for traders to take a long position to

accelerate a breakout.

5
 DESCENDING TRIANGLE PATTERN

It is usually a bearish pattern, a strong downward trend resistance

holds the price to go up and price moves within the down trend and

strong support area. Price keeps making lower-highs, several time on

support area and finally breakdown to lower support areas. The target

can be set for the distance from initial top(when enters into the

descending triangle pattern) to low(support area). Pattern can be

found on daily, weekly and monthly time frames also can be found on

4, 6 or 12 hour charts. A descending triangle is a signal for traders to

take a short position to accelerate a breakdown.

6
 . SYMMETRICAL TRIANGLE PATTERN

In this pattern the price moves with in the shape of more than '>', with

having at least 4 waves. Price movement either upward or downward

before entering into the shape. This pattern can be bullish as well as

bearish. The price starts making higher-lows with upward trend

support and lower-highs. The breakout or breakdown targets for a

symmetrical triangle is equal to the distance between the initial high

and low applied to the breakout or breakdown point. To find this

pattern usually higher time frames are considered but sometimes

4,6,12 hours charts are also good to find this pattern and trade

accordingly.

6
 METHODOLOGY

RESEARCH DESIGN: DESCRIPTIVE RESEARCH

RESEARCH AREA: Automobile Sector

SAMPLE SIZE: 5

PRIMARY DATA:

1. Real time stocks candlestick pattern visualization with the indicators.

2. Information given by our internship mentor regarding technical analysis.

3. Live trading in the market.

SECONDARY DATA:

To carry out this project secondary data was given by our internship

mentor, which is the different candlesticks patterns.

Various YouTube videos were used as the vital information source.

I have selected 9 large cap companies in automobile sector.

The different patterns/oscillators that we used are:

SUPERTREND, RSI, MACD, BOLLINGER BANDS, VWAP, PIVOT POINT

STANDARD, etc.

6
 DATA ANALYSIS

1. INDEXING

Under this we were instructed to select at least 5 stocks from a specific

sector, no other sector should be involved and make a proper record of all

the stocks to find out the index value for the current day, by adding the

that day’s index value in 1000 which was base value for all the trading

days. Then we had to compile all the information about each stock for ex-

its previous day closing price, it’s total market capitalisation, current day’s

closing price, share Weightage among all others selected shares,

percentage change in price of share on current day, etc. To get the current

day’s index value.

This process was meant for the trading days only, on which we had

actually traded. The purpose behind this was to develop the

understanding of how actually indexing works, how it is calculated and

interpreted.

6
 INDEXING IN AUTOMOBILE SECTOR

LAST PRICE CLOSING PRICE

STOCK NAME MARKET CAP WEIGHATAGE % CHANGE IN INDEX CHANGE BASE NEW BASE
(CLOSING) TODAY'S
PRICE
CAP/TOT WEIGHTAGE X % 1000+TOTAL
19-07-2021 (NEW-OLD)/OLD 1000
MAR CHAGE OF BASE
CAP
BAJAJ AUTO LTD 3882.85 1,12,356.87 3905.4 0.21445405 0.00580759 0.001245461 1.24546 996.82809
TVS MOTOR CO. 601.4 1,02,547.71 583.05 0.19573144 -0.030512138 -0.005972185 -5.9722
HERO MOTO CORP 2887.1 57681.34 2839 0.1100956 -0.016660317 -0.001834228 -1.8342
MARUTI SUZUKI IND 7165.55 216456.98 7232.7 0.41314853 0.009371228 0.003871709 3.87171
MRF LTD 82236.3 34877.59 81640.05 0.06657039 -0.007250448 -0.000482665 -0.4827
TOTAL 5,23,920.49 -3.1719

Let’s understand how we calculated the index value for a day.

A- STOCK NAME- Name of chosen stock

B- LAST PRICE- This price has to be recorded as per share’s previous

day closing price.

C- MARKET CAP – The Total market capitalisation of share as on that

day, after closing of the market.

D- WEIGHTAGE – It depicts the total share covered by the stock among

all others. It was calculated by = Market cap. Of the share/total

market cap of all the given stocks.

E- PERCENTAGE CHANGE IN PRICE – This shows the overall percentage

change in the price of a share, if the price increases them the

percentage comes in positive or vice-versa. The formula for this was

= (Today’s clo.sing price – previous day’s price) / previous day’s price

6
 F- INDEX CHANGE – It is calculated by the product of = weightage × %

Change in price.

G- BASE INDEX VALUE- Here the base value of 1000 points is taken and

then we have to multiply this with the ‘Index change'.

H- TODAY’S INDEX VALUE- This was the final step to come up with

index value on current day by adding the output value came from

“base index value”

2. BACK TESTING

Back testing is the process of applying a set of rules to historical data with

the goal of assessing the strategy's effectiveness in generating profit.

Streak has the most powerful back testing engine in the world that

generates performance metrics for multiple stocks in a single click.

The backtest results include pnl curve, maximum gains/losses, average

gain per winning trade, average loss per losing trade, maximum

drawdown and much more. These metrics give you a comprehensive idea

of your algo’s performance before you deploy in the market. After you

create an algo and click on run backtest, the algos starts checking for all

the signals that got generated during the selected time period.

6
The back test page allows users to adjust and modify various input

parameters which are used to run a back test.

During internship, after trading in the stock market with the help of

various oscillators on regular basis and running back testing algorithms on

these oscillators we found the results given below:-

PROBBALITY OF
OSCILLATOR NAME PROBABILITY OF WIN RANKING
LOSS

SUPER TREND 38.24 61.8 10

RSI 52.50 47.5 2

AROON 44.74 55.3 8

MACD 45.45 54.5 7

FIBONACCI 58.82 41.2 1

BOLINGER BAND 49.26 49.3 4

VWAP 41.69 56.4 9

PIVOT POINTS
45.76 53.4 6
STANDARD

CPR 50.58 49.4 3

SATOCHASTIC RSI 48.28 51.7 5

These are the back testing results of winning and losing probability of the

oscillators on the Automobile sector stocks. Looking at the back testing

results, we have found out that “ Fibonacci” is the oscillator which if

applied for taking trade in the Automobile sector stocks, will give the
6
maximum winning probability of a successful trade and “RSI” has the

second most probability of giving a successful trade and so on. However, if

“Super Trend” is used for taking a trade, there are very less chances of the

trade taken turning out to be a successful one rather a trader has the

more probability of losing out on that particular trade.

So, it is advised that proper back testing should be done and right

oscillators and strategies should be applied on the basis of the back testing

results to minimize the risk and take advantage of strong fluctuations by in

the market.

6
 FINDING

 Automobile sector has phenomenal development since last year

according to the research and technical analysis.

 Technical analysis plays a vital while trading in Equities, it predicts

the future.

 Technical analysis helps in trading in top performing stocks in a

particular sector

 Technical analysis allows you to act according to price changes and

take advantage of strong fluctuations by recognizing trends, price

levels and figures.

 Studying charts is that they can help you better determine at what

price it might be wise to open or close a position.

 Financial literacy in our country is very less and people still

invest/trade through conservative style.

 Informing or making people aware people about financial market

and the rate of return on investments which is higher than other

investments like banks, bonds or real estate is mandatory.

 Technical analysis can be more effective than fundamental analysis

in determining the best time to buy or sell a stock. For example,

using different financial ratios, fundamental analysis can help you

6
determine whether a publicly traded company is undervalued or

overvalued by the market. On the other hand, reading this

accounting data does not really allow you to anticipate where the

share price is headed over the short term.

6
 CONCLUSIONS

 They may take help of my report while suggesting another

companies investing in the Automobile sector.

 As I concerned with oscillators more, it may help them to analyse

the stocks before trading in a particular sector.

 According to my report Automobiles sector is performing in a

positive manner.

 Trading in stocks by applying the right indicators & strategies will

always give better returns. This shows that technical analysis is the

very important tool for trading.

 For long term investment fundamental analysis is better but

technical analysis can also be used since the patterns also provide

accuracy up to an extend if traced properly.

 Technical analysis is always better in intraday trading. We analyse a

charts like Bollinger band, relative strength index charts etc.

 Technical analysis showed transparent results and it reduces the

risk while trading in share market.

 Interpreting charts is that this practice allows you to identify buy

and sell signals in order to improve the timing when you take

positions.

7
 RECOMMENDATIONS

 It is recommended not to trade in a stock on an intraday basis

without having the proper knowledge of the market patterns and

technicality.

 Proper back testing of stocks should be done before taking any

trade in the market.

 Before going to trade/invest, an investor should have clear and

adequate knowledge of capital market.

 The trader should know the value of money and should set targets

and abide by them after taking the trade.

 In case of half knowledge about stock market it is very dangerous.

So, whenever a person wants to trade in stock market he should

take necessary tips from technical analysts.

 Practically, stock market activities are very risky. So investors should

be careful while trading.

7
 One should try finding out the proper patterns in the charts of the

stocks because most of the time they provide higher accuracy and

good opportunities to enter into Alim Hussain trade be it short

selling or taking long position.

 Sometimes, using multiple indicators at a time often create chaos

by giving different signals. So, multiple indicators in a stock at a time

should be minimised.

7
 REFERENCES

Use the following convention for listing references.

 Insurance
Pos Goal Suraksha-https://www.bajajallianzlife.com/tax-saving-
investment-plans/pos-goal-suraksha-investment.html

Guaranteed Income Goal-https://www.bajajallianzlife.com/tax-saving-

investment-plans/guaranteed-income-goal.html
 Stock Market

Moneycontrol-https://www.moneycontrol.com/markets/global-indices/

Market-https://www.moneycontrol.com/stocksmarketsindia/
Sector-
https://www.moneycontrol.com/stocks/marketstats/sec_performance/bs
e/automobile-passenger-cars.html

NSE-https://www.nseindia.com/

Trading view-https://in.tradingview.com/

Stock Charts-https://stockcharts.com/freecharts/

Zerodha-https://signup.zerodha.com/kite/login

Zerodha Streak-https://streak.zerodha.com/