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A Study of Combining Impact of Fundamental and Technical
Analysis on Investment Decision of Investors in Indian Stock

Market
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THESIS SUBMITTED TO
CHAUDHARY DEVI LAL UNIVERSITY, SIRSA
FOR THE AWARD OF DEGREE OF
DOCTOR OF PHILOSOPHY
IN
MANAGEMENT
Research Supervisor Submitted by:

Dr. Arti Gaur Julee
Associate Professor Regn. No. 2017035500171117
DEPARTMENT OF BUSINESS ADMINISTRATION

CHAUDHARY DEVI LAL UNIVERSITY
SIRSA-125055, HARYANA (INDIA)
CONTENTS
SERIAL NO. DESCRIPTION PAGE NO.
Declaration i
Certificate ii
Acknowledgements iii-iv
Contents v-vi
List of Tables vii-ix
List of Figures x
List of Abbreviation xi
CAPTER 1 INTRODUCTION 1-40
1.1 General Introduction and Combining 3
Fundamental and Technical Analysis
1.2 Fundamental Analysis 16
1.3 Technical Analysis 23
References 35
CHAPTER 2 REVIEW OF LITERATURE 41-78
2.1 International and National Reviews 41
2.2 Research Gaps 68
References 70
CHAPTER 3 RESEARCH METHODOLOGY 79-90
3.1 Problem Statement 79
3.2 Scope of the Study 79
3.3 Objectives of the Study 79
3.4 Hypothesis of the Study 80
3.5 Research Design 82
3.6 Time Period 86
3.7 Reliability Analysis 86
3.8 Organization of the Study 87
3.9 Importance of the Study 88
3.10 Limitations of the Study 88
CHAPTER 4 DATA ANALYSIS AND INTERPRETATION 91-164
4.1 Respondents Profile
v
4.2 Respondents Profile as Per Investment
4.3 Investor’s Awareness to the Rules, Principles

and Techniques of the Fundamental and
Technical Analysis
4.4 Combining Impact of Fundamental and

Technical Analysis on Investment Decision of
Investors
4.5 Investment Advisors Viewpoint on the

Investment Decision Taken by the Investors
CHAPTER 5 FINDINGS AND RECOMMENDATIONS 165-178

5.1 Summary of Findings 166
5.2 Recommendations of Study 174
5.3 Scope for Further Research Study 176
BIBLIOGRAPHY 179-190
ANNEXURES
Questionnaire
Certificates of Publication
Plagiarism Report
vi
LIST OF TABLES
TABLE NO. DESCRIPTION PAGE NO.
3.1 Demographic profile of Respondents 83-84
3.2 Reliability Analysis of the Questionnaire 87
4.1 Descriptive Statistics for Demographic Variables 92
4.2 Demographic Responses as Per Investment 94-95
4.3.1 KMO and Bartlett's Test Awareness to the Rules and 99
Principles of Fundamental Analysis
4.3.2 PCA of Awareness to the Rules and Principles of 100
Fundamental Analysis
4.3.3 Awareness to the Rules and Principles of Fundamental 102-103
Analysis
4.3.4 Descriptive Statistics of Awareness Regarding Rules 103-104
and Principles of Fundamental Analysis
4.3.5 Gender Wise Attribution for the Awareness of the 105
Investors to the Rules and Principles of Fundamental
Analysis
4.3.6 Marital Status Wise Attribution for the Awareness of 106
the Investors to the Rules and Principles of
4.3.7 Age Wise Attribution for the Awareness of the 107
Analysis
4.3.8 Academic Qualification Attribution for the Awareness 108
of the Investors to the Rules and Principles of
4.3.9 Occupation Wise Attribution for the Awareness of the 109
Analysis (4.3.9)
4.3.10 Annual Income Gender wise Attribution for the 110
Awareness of the Investors to the Rules and Principles
of Fundamental Analysis
4.3.11 Investment Experience Attribution for the Awareness 111
4.3.12 KMO and Bartlett's Test of Awareness to the Rules and 113
Principles of Technical Analysis
4.3.13 PCA of Awareness to the Rules and Principles of 115
Technical Analysis
vii
4.3.14 Awareness to the Rules and Principles of Technical 116-117
Analysis
4.3.15 Descriptive Analysis of Awareness to the Rules and 118-119
Principles of Technical Analysis
4.3.16 Gender Wise Attribution for the Awareness of the 120
Investors to the Rules and Principles of Technical
Analysis
4.3.17 Marital Status Wise Attribution for the Awareness of 121
the Investors to the Rules and Principles of Technical
Analysis
4.3.18 Age Wise Attribution for the Awareness of the 122
Analysis (4.3.18)
4.3.19 Academic Qualification Attribution for the Awareness 123
Technical Analysis
4.3.20 Occupation Wise Attribution for the Awareness of the 124-125
Analysis
4.3.21 Annual Income Wise Attribution for the Awareness of 126
the Investors to the Rules and Principles of Technical
Analysis
4.3.22 Investment Experience Attribution for the Awareness 127
Technical Analysis
4.3.23 Awareness regarding Techniques of Fundamental 128
Analysis
4.3.24 Awareness Regarding Techniques of Technical 131
Analysis
4.4.1 KMO and Bartlett's Test Combining Impact of 134
Fundamental and Technical Analysis on Investment
Decision of Investors
4.4.2 PCA analysis of Combining Impact of Fundamental 135
and Technical Analysis on Investment Decision of
Investors
4.4.3 Combining Impact of Fundamental and Technical 138-140
Analysis on Investment Decision of Investors
4.4.4 Descriptive statistics of Combining Impact of 141-142
Fundamental and Technical Analysis on Investment
viii
4.4.5 Regression Analysis of impact of fundamental factors 144
on investment decision
4.4.6 Regression Analysis of impact of technical factors on 145
investment decision
4.4.7 Regression Analysis of impact of fundamental and 146
technical factors on investment decision
4.5.1 KMO and Bartlett's Test Investment Advisors 147
Viewpoint on the Investment Decision Taken by the
Investors
4.5.2 PCA of Investment Advisors Viewpoint on the 148
4.5.3 Investment Advisors Viewpoint on the Investment 151-152
Decision Taken by the Investors
4.5.4 Descriptive Statistics of Investment Advisors 153-154
Investors
4.5.5 Gender Wise Attribution for the Investment Advisors 155
Investors
4.5.6 Marital Status Wise Attribution for Investment 156
Advisors Viewpoint on the Investment Decision Taken
by the Investors
4.5.7 Age Wise Attribution for the Investment Advisors 157
Investors
4.5.8 Academic Qualification Wise Attribution for the 158
Investment Advisors Viewpoint on the Investment
4.5.9 Occupation Wise Attribution the Investment Advisors 159-160
Investors
4.5.10 Income Wise Attribution for the Investment Advisors 161
Investors
4.5.11 Investment Experience Wise Attribution for the 162
Investment Advisors Viewpoint on the Investment
4.5.12 Qualities of Investment Advisors Ranked by the 163
Investors
ix
LIST OF FIGURES
TABLE NO. DECCRIPTION PAGE NO.

1 Chart Analysis 27
2 Dow Theory 28
3 Elliott Wave Theory 29
4 MACD Signal Line With Above and Below Zero line 31
5 MACD Crosses below Zero 32
6 MACD Crossed Below Signal Line 32
7 Candlestick Chart 33
x
LIST OF ABBREVIATION
F1 : Financial performance related factors
F2 : Factors related to economic indicators
F3 : Contribution of directors and underwriters
F4 : Government ideology and political instability
F5 : Conceptual factors of technical analysis
F6 : Factors related to price and volume trends
F7 : Factors related to time horizon
F8 : Factors related to demand and supply
F9 : Factors related to prediction of future price
F10 : Entry and exit point in investments
F11 : Rational investment decision and solution of queries
F12 : Market direction and time horizon
F13 : Economic indicators relation with demand supply
F14 : Selection of best securities and managing investment decision
F15 : Clarity regarding fee and tax management
F16 : Portfolio construction and risk return trade off
F17 : Expert opinion for investment decisions and strategies behind

investments
xi
CHAPTER-1
INTRODUCTION
Stock Market has been playing catalytic role in boosting investments and accelerating
the growth of the industries. Stock markets are the barometers of the economy in
country. The stock exchanges provide the proper functioning to the corporate
enterprises. It brings together the large amount of capital necessary for economic
progress in a country. It is the citadel of capital and the pivot of money market. It
provides the mobility to the savings and capital and directs the flow of capital into
profitable enterprises In Indian economy, above and beyond playing the role of a source
for financial investment, stock market also perform a function as a signalling
mechanism to managers regarding investment decisions, and also play catalyst for
corporate governance (Samuel, 1996). It may be defined that stock market is a place
where securities of joint stock companies and of government or semi government
bodies are traded in. However, stock market is also known as the best effective channel
for companies capital raise in the market (Zuravicky, 2005). The stock market
comprises of two types namely primary market and the secondary market. The primary
market is a place where the securities are issued at first time. The primary market
consists of new or fresh issue of capital whether in the form of debt, equity, bonds etc.
by any new or existing company. The secondary market is a place where the listed
securities are bought and sold. Nowadays trading‟s are online in electronic form and
resulted transparency in trades and lowering transaction cost.
In finance, Fundamental and Technical analysis is a part of security analysis which

analyses the movement or price behaviours of stocks in order to determine the buying
and selling points and also to predict the immediate and long run market trend of the
stock markets and stocks.
To better understand the investment in share market and investment decision making
and managing a portfolio of stocks is necessary to initiate techniques that facilitate
investors make their investment decisions. Techniques that investor uses in practice are
fundamental and technical analysis and also a combination of fundamental and
technical analysis to analyse the stocks while making their investment decisions.
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The amount of profits and success in the stock market and in capital markets than of
knowledge and experience is important and happiness, and that no investor should not
make their investment decision on an individual basis, but combine them all
(fundamental and technical analysis) for making the right investment decision (Veronika
Caljkusic 2011).
There are two main types of security analysis tools that the investors need to know to
succeed: fundamental and the technical analysis. Fundamental analysis is a
combination of economic, industry and company analysis to obtain a stock‟s current
fair value and for predicting its future value. The fundamental analysis approach to
investment assumes that each security has an intrinsic value that can be determined on
the basis of such fundamental data as accounting earnings, dividends, growth factors,
and debt/equity ratios. An analyst determines the intrinsic value on the basis of these
fundamentals and compares this value with the current market price to determine if the
security is under-priced or overpriced. Generally, fundamental analysis is based on
publicly available information. Those who adopt the fundamental analysis approach
tend to believe that the adjustment of security prices lags behind the arrival of publicly
available information. Fundamental analysis is also known as „top down approach‟
because the analysis starts from the economic analysis, moves to industry and narrow
down to the company. A tool for determining a security's intrinsic value by looking at
associated economic, financial, and other qualitative and quantitative factors.
Fundamental analysts look at the factors that influence the importance of a security,
such as macroeconomic factors (economy and industry conditions) and individually
specific factors (financial position and companies management). For example, the
purpose of fundamental analysis is to identify a value so that the investor can compare
the value with the security‟s current price with the expectation of determining what
position to take with that specific security (investopedia.com). Technical analysis is the
study of stock prices movements in the security market. Technical analysis believes
that the future prices of the securities can be predicted on the basis of past prices .with
the help of several indicators a technical analysts analyses the relationship between the
price volume and supply demand the overall market, as well as for an individual stock.
The technical analysis is based on the concept that history repeats itself and it is also
true in case of stock markets. The share markets always moves in a trend except some
minor movements in the price of securities. A method in which to evaluate securities by
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relying on the assumption that market data (i.e. charts of price, volume, and open
interest) may assist in predicting future (usually short-term) market trends. Technical
analysts believe that they can accurately predict the future price of a stock by looking at
its historical prices and other trading variables. Technical analysis makes the
assumption that market psychology influences trading in a manner that allows an
analyst to predict when a stock will rise or fall. For that reason, many technical analysts
are also market timers. Market timers believe that technical analysis can be applied just
as easily to the market as a whole as to an individual stock.
1.1 General Introduction and Combining Fundamental and Technical Analysis
Combining Fundamental and Technical Analysis: Both the approaches of analysis

namely fundamental and technical analysis are often said against each other and an
investor thinks that they have to choose any one of the analyzing tool from the above
mention analysis tools whereas, there is a another midway when an investor can
combined both fundamental and technical analysis for a holistic trading strategy.
Combining the technical analysis with fundamental analysis , aims to ascertain the
intrinsic value of an asset based on various financial and fundamental indicators such
as economic news and data, supply and demand of an asset, technical analysis
discovers the highest or most traded assets in the market ( Karevold and Dahl, 2014) .
Whereas analysts uses the fundamental analysis to find out the long term value of an
asset, technical analysis is commonly used to find out the short term investment
alternatives in the stock market. An Australian investor „Colin Niclolson‟ combines
both technical and fundamental analysis in his investment analysis and said “ the two
forms of analysis complement each other by adding value of the other and his approach
is to employ the strengths of both”(Colin Nicolson). Further it was evidenced in the
Indian stock market that that most of investors use both the fundamental and technical
analysis while investment in Indian stock market. Over the last five years, Tripathi
Vanita discovered a significant shift in the investing strategies used by active investors
in the Indian stock market. Investors have moved away from technical analysis-based
strategies and toward strategies that incorporate both fundamental and technical
analysis (Tripathi Vanita, 2008). The combination of technical and fundamental
analysis plays a prominent role to improvise the share prices and earning profile of
companies and in the horizon of 5- 7 years the stock performs and provides return due
to the combination of growth earnings and price earnings (Burman). Additionally, the
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combining of fundamental and technical analysis generated higher returns for small
stocks as compared to big stocks and for high value stocks as compared to low value
stocks (Sehgal and Gupta, 2007). Veliota drakopoulou supported the concept of
integration of both investment techniques would generate more successive investment
decisions for equity trades (Veliota Drakopoulou, 2015). One can convert their
investment decisions into profitable opportunities with the application of combining
fundamental and technical investment analysis approaches for analysis the stocks in the
stock market. Several studies support this the technical analysis work better for short
term , day and swing trading whereas the fundamental analysis perform well for long
term investment decisions. Ghulam supported the combination of fundamental and
technical analysis, suggested that Investor should use more than one technical indicator
for getting the better results for their investment decisions or the integration of
technical indicators and fundamental analysis (based on company financial
performance), provides the best profitable investments (Ghulam, Neil Diamond 2014).
Foreign Exchange traders confirm that, out of the both forecasting approaches,
technical analysis is more prominent as compared to fundamental analysis whereas, the
financial journalists rely more on fundamental analysis than foreign exchange traders
(Thomas Oberlechner, 2001). The study found that the individual investors rely more
on newspapers/media and noise in the market whereas the professional investors rely
more on fundamental and technical analysis and less on portfolio analysis.
For many expert traders, combining these two approaches can deliver far better results
than by using one in isolation. By using both technical and fundamental analysis, the
more successful traders tend to first look at an asset‟s fundamentals in order to
understand whether to buy or sell the asset. Then, a savvy trader can conduct technical
analysis in order to determine where exactly price entries and exits can be located. By
using these analyses in combination, a trader will have a more rational and better view
of a security or currency pair‟s potential moves and overall price direction.
Stock Exchanges: Stock exchanges work as a backbone for both the equity and debt
market. It also provides the platform to the investors from where they can buy and sell
the securities registered with stock exchanges during specific hours of business days.
The stock exchange is an organization which hosts a market place where the people can
trade in stocks, Bonds, Futures and options and commodities etc. to trade in the stock
exchange, the companies must be listed there. The stock exchange imposes certain
4
conditions and regulation on the listed companies and brokers for efficient trading and
smooth functioning of the stock exchanges. It also provides the facility of issue and
redemption of the securities. The stock exchange also plays a crucial role for
facilitating the liquidity in the markets via buying and selling of the securities at any
working day of the stock exchange. The stock exchanges works as intermediaries
between the buyer and seller of the securities. According to securities contract
(Regulation) Act 1956, a stock exchange can be defined as anybody individuals
whether incorporated or not, constituted for the purpose of assisting, regulating or
controlling the business of buying, selling or dealing in securities. The economy,
specially the industry, thrives on stock market performance and efficiency.
The Bombay Stock Exchange and the National Stock Exchange are the only two well-
known stock exchanges in India. However, India's stock exchanges are much more
numerous than just two well-known stock exchanges. Major stock exchanges in India
are:
1. Bombay Stock Exchange.
2. National Stock Exchange
3. Calcutta Stock Exchange
4. India International Exchanges( India INX)
5. Metropolitan Stock Exchange of India ltd.
6. NSE IFSC Ltd.
7. Madras Stock Exchange
8. Inter- Connected Stock Exchange Ltd.
9. OTC Exchange of India
10. Bangalore Stock Exchange
11. Ahmadabad stock Exchange
12. Cochin Stock Exchange
13. Madhya Pradesh Stock Exchange
14. Saurashtra Kutch Stock Exchange
15. Mangalore Stock Exchange
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16. Vadodara Stock Exchange
17. Bhubaneswar Stock Exchange
18. Coimbatore Stock Exchange
19. Delhi Stock Exchange Association
20. Guwahati Stock Exchange
21. Jaipur Stock Exchange
22. Lucknow City Stock Exchange
23. Ludhiana Stock Exchange Association
24. Pune Stock Exchange
Bombay Stock Exchange: Bombay stock exchange is the oldest stock exchange in
Asia. It dates back to 1855, when a group of stockbrokers gathered in front of
Mumbai's town hall under banyan trees. In the initial times or we can say time to time
the exchange accommodation was shifted from one place to another due to the rapid
increase in number of brokers. Then the group of brokers eventually moved to dalal
street in the year 1874 and became an official organization known as “The native share
and stock brokers association” in 1895.
The BSE was the first Indian stock exchange to be recognised by the Indian
government under the security contract control act, which was passed in 1957. The
exchange was moved to the Phiroze Jeejeebhoy Towers in the Dalal Street Fort district
in 1980. The BSE was revamped in 1986, and the S& P BSE sensex index was created,
which provides a way to measure the overall performance of the stock exchange. In the
year 2000, the exchange stated the derivatives trading in future contracts and also
started the future contracts or derivative trading in the equity stocks in 2001 and 2002
expanded the trading platform of the BSE. Later on in the year 1995 the Exchange
started the electronic trading system that was developed by the CMC Ltd in the same
year. The screen based trading platform also known as bolt and the BSE has the
capacity to execute 8 million contracts in a single trading session. In September 2012,
the BSE became a Partner Exchange of the United Nations Sustainable Stock Exchange
Initiative. The BSE was further upgraded and registered as first Indian international
stock exchange with name India INX dated on 30 December, 2016.
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National Stock Exchange: The National Stock Exchange of India Limited (NSE) is
India's largest government-owned stock exchange, based in Mumbai, Maharashtra. The
National Stock Exchange (NSE) was established in 1992 as the country's first
dematerialized electronic exchange. NSE got recognised as a stock exchange by the
SEBI in year 1993 and after recognised NSE started its operation in 1994. The NSE
was the first exchange in the world to introduce a modern, entirely digital screen-based
electronic trading system, enabling investors to trade around the country with ease. The
National Stock Exchange is the world's 11th largest stock exchange, with a total market
capitalization of over US$2.27 trillion as of April 2018. 1st The NSE's flagship index,
the NIFTY 50, is a 50-stock index that is widely used as a barometer of the Indian
capital market by investors in India and around the world.
Functions of Stock Exchange: The main function of the stock exchanges is to

facilitate funds rising by the corporate firms and allocation of funds by offering the best
risk and return trade off. The exchange provides the liquidity and helps in price
establishments of the securities and maintaining the flexibility in stocks to adjust the
new information arrives in the stock market. There are various functions performed by
the stock exchange in India.
1. Adequate Liquidity and Marketability: The stock market provides the liquidity
and marketability for all listed securities registered under stock exchange. One
security can be listed on more than one stock exchange.
2. Safety of Investors: The stock exchanges provide adequate safety to the investors
from fraud, misleading, scams and manipulation caused by the activities of
speculators, brokers and members.
3. Evaluation of Securities: The stock markets are affected by numerous factors such
as fundamental factors (economic indicators, industry analysis, company analysis &
GDP etc) and technical factors, demand & supply for scripts, market sentiments,
rumors, natural hazards etc.
4. Mobilization of Savings: The Stock exchanges provides the opportunity to all the
investors to invest their saving amount in the stocks and earn the capital gains
selling the same at the higher prices in the stock exchanges in future. And the
amounts earned as capital gains can be reinvested in the stock exchanges. stock
exchanges works as capital formation process in the economy
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5. Widening of Share Ownership: As the volumes of a traded scripts is increased,
widening the ownership of the company. As the number of shareholders increases it
decrease the control of its ownership in the company management and increase the
number of owners of the company. Widening of ownership avoids the demerits of
concentrated ownership in the hands of few.
6. Pricing of Securities: The stock exchanges adjust the price of the stocks to the all
available information related to that particular stock.
7. Barometer of Economy: Stock exchanges works as barometers of the economy

because the trends and pattern of the stock exchange reflect the health of the
economy. The performance of the economy of any country is gauged by the
activities of the stock exchanges. Fox ex the stock markets are highly volatile due to
the COVID 19 disease in the world.
8. Facilitates Fund Raising for Business: Stock exchanges works as inter-mediary

between the businesses and the investors in the economy. It provides the platform
for businesses to raise capital from public by share to them through the initial public
offerings.
9. Better Allocation of the Resources: Highly profitable companies share traded at a

higher price and traded in high volumes as compared to those of loss making
companies. Most of the investor‟s put their money in highly profit making
company‟s shares. This profitable investment ensures that the economy is directed
towards growth firms.
Investment: Investments in the stock market is the best way to earn handsome amount
of profits but at the same time if the investors not make the proper analysis before
investing they can lose their money in a fastest way. In today‟s world just earning
money is not enough unless we will not make best investment of money for earning
good returns in future according to the objectives and goals of investment. The money
lying idle in the accounts of people is an opportunity cost so everyone should invest
that money smartly to get handsome return on it. All savings leads to the investments
and all investment leads to the savings.
Investment is the employment of funds in financial assets for the purpose of earning
income or capital appreciation on invested amount. Investment means the investor
sacrifices his/her present consumption of money to get a future return or earnings in
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near future. The sacrifices done be the investor regarding the amount of investment is
certain but the amount of return/income in the near future is totally uncertain for
example if an individual buy a house for the purpose of his personal use for his family
may be a investment from his personal view point but can „not be considered as the
actual investment invest the purpose of the investment is not the capital appreciation or
a return in the future. Let me take another example if an investor is buying any share
from the stock market in the hope of getting good return in near future but in actual the
share market will go downside and that particular stock also went down then in actual
the investor is losing his own money also and not earning any capital appreciation on
that invested amount. Financial investment is the deployment of funds to assets that are
expected to yield some return over a period of time. Financial investment is the
exchange of stocks and bonds for the money. investment are done by the investors for
the purpose of getting some return from invested assets, it may be in the form of
regular income like interest and dividends and capital appreciation at the time of sale.
An investment operation is one which upon through analysis, promise safety of

principal and an adequate return. Operations not meeting these requirements are
speculative.(Benjamin Grahams). Moreover, suggested to the investors to hunt for
stocks that trade below actual value, that provides a margin of safety and that sell
below their intrinsic value. The margin of safety is the difference between a business
intrinsic value and the share price.
Investment is defined as the process of laying out money now in the expectation of
receiving more money in future. In another words investing as the transfer to others of
purchasing power now with reasoned expectations of receiving more purchasing power
in the future. More sketchily, Investment is forgoing consumption now in order to have
the ability to consume many more at a later date. (Warren Buffet).
The Warren Buffett known as the best investment guru stated that investment is a
marathon and not a 100 meter race, investor should take their investment decision
patiently keeping in mind a long term picture of their financial goals. Also suggested
that while making their investment decision one should consider the tax consideration if
any investment attracts tax, then it would definitely slow down the wealth of an
investor for example fixed deposit is not a good investment decision because firstly it
has very low interest rate and secondly investor has to pay the tax on income received
as interest on the fixed deposit. Additionally, he suggested that the investor should
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invest in superior economic charterstics that are controlled by successful, skilled
manager‟s team. He personally chooses for the companies with long history of above
average earnings growth and also looks for the firms fundamentals. As long as firm
fundamentals do not change, he will not sell – even in the time of recession or financial
crunch. Moreover he never gave much attention to the market fluctuations in the short
time period.
According to Rakesh Junjnuwala, he has two brains one is an investing brain and other
one is trading brain. While making investment decision he uses his investment brain
and follow the fundamental analysis tools for analyzing the investment alternative
whereas, when taking the trading decision he uses the trading brain and follow the
technical trading rules such as trend analysis, chart analysis etc.
Investor: An investor has a variety of different investment options are available that
are stocks, bonds, gold, real estate, post office services, mutual funds etc. The investor
has to choose their investment option according to the requirements and purpose of
investment return in coming future for example profits, capital appreciation, income
stability and regular dividends etc. The Indian investor has a variety of investment
option according to the requirement.
Graham, defined the investor is one who sells to optimists and buys from pessimists.
The investor should look out the opportunities in the stock market. He should buy at
low price and sell at high price – value difference that arises from the economic
depressions, market recession, market crashes, and onetime event, one negative
publicity and human errors. If there is no such opportunities present in stock market,
the investor should make the distance from the stock market and should ignores the
market noise (Graham 1949).
Investment Objectives
 Maximum the Return: Return is the income generated from the invested amount;
it may be in the form of interest/dividend and the capital appreciation too.
Whenever investor makes investment the main goal of the investor is to earn money
on the invested amount.
 Minimizing the Risk: Risk is the possibility of getting loss in the future. Every
investor wants to minimize the risk on the investment.
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 Maintain Liquidity: Every investor wants liquidity in the investment so that he/she
can convert the financial assets in the form of cash whenever they required.
 Hedging Against Inflation: Hedge against inflation protects the investor against
decrease in the purchasing power of money.
 Increase Safety: Investors wants safety in their investment and wants to get
maximum returns with minimum risk.
 Saving Tax: Every investor wants to reduce the amount of tax for their income.
The investment provides the option of saving tax in investment.
Principles of Investments: Whenever an investor makes the investment decision he

should kept some principles in mind for making the best investment decision.
 Investment selection should match with investment objective
 Diversification of investments
 Tax consideration
 Hedge against inflation
 Avoid making a biased investment decision.
 Always invest with a margin of safety
 Expect volatility and profit from It
 Know what kind of investor you are
Investment Decision Making: Investment decision in stock market is very complex in

nature. There are various factors which influence the investment decision of investors
such as economic conditions, industry and company fundamentals, political stability
and currency and oil prices etc which can change the stock market movements and the
stock prices. Briefly, investment decision making can be explained as the process of
selecting a particular investment alternative from a number of alternative available.
Moreover, it is an activity in which investor follows the proper evaluation of all the
alternatives for making investment decision. The process of investment decision
making will be affected by the available information for instance, all global news and
information.
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Process of Investment Decision Making: Investment decision making process deals
with how an investor should process in the investment decision about what securities to
invest in, how extensive the investment should be and the when the investment should
be made (Mathews, J. 2005). The process of investment decision making involves a
series of steps. The investment decision making process is a series of five steps which
starts from the investment policy and ends with the portfolio evaluation. Process of
investment decision making includes various steps.
1. Investment Policy: Befor making investment decision an investor should make the
investment policy and the invenstment policy constitutes the following steps. In any
investment policy the investor first of all decide the amount of funds to be
investested then make the investment policy according to his financial gaols and
objective for the future requiremsnts and then collect the knowlede and make the
investment policy.
 Investiable funds
 Objectives
 knowledge
2. Security Analysis: Befor buying any security one should properly conduct the
market, industry and company analysis. This is very important step of investment
decision making process. The security analysis requires the proper research at each
stage while choosing the security whether its market, indusry or a particular
compay .
 Market
 Industry
 Company
3. Valuation: This step of investment decision making process helps the investors to
determine the risk and returns expected from an investment in any security. In this
we will find out the intrinsic value and future value of stocks and make the
investment decisions on the basis of market price of stocks.
 Intrinsic value
 Future value
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4. Portfolio Construction: A portfolio is combination of different securities. The
investors construct the portfolio to meet the investment goals and objectives. The
investors wants to get the maximum profit and minimum risk , to attain this investor
conducts the portfolio for maximizing returns and minimizing risk. The portfolio
construction includes the diversification of securities and proper selection and
allocation of funds.
 Diversificcation
 Selection and allocation
5. Portfolio Evaluation: After making the investment decision, investors should

evaluate the portfolio time to time. The evaluation process consists of portfolio
appraisal and revision.
 Appraisal
 Revision
The investment decision making process begins from the formulation of the investment
policy and ends with the portfolio evaluation and then follows same process from
starting after evaluation of the portfolio.
Risk Involved in the Investment of Stock Market
The dictionary meaning of risk is the possibility of loss or injury and the degree of
probability of such loss. Risk is the variability in return or we can say the volatility in
return. Risk is the probability that the actual returns may differ from the expected return
from any asset is the risk inherent in that asset. There are mainly two types of risk
 Systematic risk: Systematic risk is that risk which affects the entire market. For
example the covid 19 in year 2019 affected stock markets all over the world and
same we can see with the example of recession of 2008 affected all over the world
including all developed and developing countries. The systematic risk is beyond the
control of the corporate houses and investors. Simply we can say that systematic
risk is unavoidable which can be further divided into the following: 1. Market risk
2. Interest rate risk 3. Purchasing Power Risk
 Unsystematic Risk: The unsystematic risk is unique in nature and it may vary from
industry to industry and company to company. Unsystematic risk may control by
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the industry and investors. The unsystematic risk can be categories as business risk
and financial risk.
Investment Advisors
Investment advisors work as professionals in financial markets and also known as the
financial advisors. The investment advisors made analysis of the securities and provide
the recommendations and guidance to their clients in exchange of commission or fee
regarding the buying and selling decisions in their trades. Any person or group that
makes investment recommendations and conducts securities analysis in return for a fee,
whether through direct management of client assets or via written publications (defined
by Investment Advisers Act of 1940 ). According to the regulation, no individual or
corporate houses act as an investment advisor until he has obtained a certificate from
the SEBI. Additionally, investment advisors are required to have a certification on
financial planning/fund/asset or portfolio management or investment advisory
services either from NISM or from any other organization or institution, including
Financial Planning Standards Board India or any recognized stock exchange in India,
provided such certification is accredited by National Institute of Securities Markets
(NISM).The SEBI regulations also fixed the minimum net worth requirement of Rs.
25 lakh for corporate bodies and one lakh for individual investment advisor.
According to investment advisor regulation act 2013 issued by Security Exchange

board of India “The investment advisor should act in the best interest of the client and
should not receive commission from the product manufacturer further, the investment
advisor shall act with due skill, care and diligence and shall ensure that its advice is
offered after thorough analysis and taking into account the available investment
alternative and matching them with the client suitability and needs”.
A good investment advisor is one who understands the stock market and always
remains on top of the companies to better understand their financial results and
earnings growth. An investment advisor should have the knowledge of all type of
markets whether its bull, bear or flat market condition, then only will be in better
position to help investors to take better investment/trade positions and investment
decisions in share market. An investment advisor provides all the services to the
investors which help the investors to select the right investment alternative for
maximize the wealth while minimizing the risk involved in investment.
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Some people like Warren Buffet who enjoy the process of investment decision making,
be their own analyst for investment analysis and put a big question mark on the
creditability and skills of some the best advisors present in the market. If someone is
working as self analysts and working for his growth and value creation, then first of all
he/ she should develop a probing mind for analyzing the stocks. Being analysts he/she
should have the knowledge to decide when to buy and sell at what price so that profit
can be generated from the investment decisions.
The analysts generally focus on a particular industry and then choose the company
from that industry and find out the best investment option at best price whereas
sometime the analyst first choose the security and then analyze the companies of that
particular segment and the industry and conduct the detailed research according to the
requirements so that targets can be achieve in investment decisions. The analysts may
choose bottom down (security to industry) and top down (industry to security) any
approach to analyses the invested securities because this is not possible to analyses
each and every stock and company and industry registered on stock exchange
Investment Advice : Investment advices includes all the advices relating to investing
in, selling and purchasing of securities, all other dealing in securities and investment
products, whether Written, oral or through any other means of communication for the
benefit of clients(investors) and shall include financial planning. Any investment
advice given through newspaper, electronic media, magazines or any
telecommunication medium and any social website, which is widely available to the
public shall not be considered as the investment advice for this purpose. (According to
SEBI guidelines or investment advisor regulation act 2013)
Role of Investment Advisors: Investment advisors play very imperative role in the
investment analysis. The investment advisors advices their client on the basis of
conduction of research on the securities and suggest them the best securities according
to their financial goals. Investment advisors play very important role in helping the
investors in analyzing the various investment avenues, educating them about the pros
and cons of various investment alternatives and helping them in making investment
decision according to the goals and objectives of the future requirements of the
investors.
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Generating wealth through stock markets is not just about investing in the right stock. It
is matter of about deciding how much to invest in each stock and to knowing when to
sell the stock and managing various risk at all times. Only we can generate the real
wealth through to buy the right stocks, book profits at the right time and are also able to
exit the underperform stocks at the right time from portfolio. In other words, simply
buying and selling of stocks at right time helps the investor to create the wealth.
Investment advisors work as emotional decision makers in the investment decision

making. The investment/financial advisor help to eliminate a lot of emotional decision
making for clients at different time horizons. The advisors provide the assistance to the
investors with their investment decisions and help them to keep emotional distance
from their invested amount so that they can make the best long term investment
strategy.
Tools of Analysis: The origin of fundamental and technical analysis for stock price
valuation can trace in the history of financial markets. The fundamental and technical
analyses are used to forecast the stock price movements in the Indian stock market.
1.2 Fundamental Analysis
The origin of fundamental for stock price valuation can trace in the history of financial
markets. The importance of fundamental analysis as a stock valuation technique was
firstly introduced by Graham and Dodd in the book „Security Analysis‟ in 1934
(Graham and Dodd, 1934). Fundamental analysis also warns the investors regarding
slowdown in company financial conditions in future (Ohlson, 1980). So it is very
essential to have knowledge of these significant fundamental variables of share prices.
Collins (1957) has done revolutionary work on fundamental variables of stock prices
for US banks and found dividend, net profit, operating earnings and book value as the
fundamental variables that affects share prices. Following Collins (1957), there have
been various attempts to identify the variables affecting share prices for various
markets across the globe at different points of time. Fundamental analysis also played
the important role for collecting the firm specific information for decision making in
investment for creating incentives for higher quality information environment and good
governance to protect the investors (Koon Boon Kee and Qihui Chen, July 2010)
Fundamental analysis is a combination of economic, industry and company analysis to

obtain a stock‟s current fair value and for predicting its future value. The fundamental
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analysis approach to investment assumes that each security has an intrinsic value that
can be determined on the basis of such fundamental data as accounting earnings,
dividends, growth factors, and debt/equity ratios. An analyst determines the intrinsic
value on the basis of these fundamentals and compares this value with the current
market price to determine if the security is under-priced or overpriced. Generally,
fundamental analysis is based on publicly available information. Those who adopt the
fundamental analysis approach tend to believe that the adjustment of security prices
lags behind the arrival of publicly available information. Fundamental analysis is also
known as „top down approach‟ because the analysis starts from the economic analysis,
moves to industry and narrow down to the company. A tool for determining a security's
intrinsic value by looking at associated economic, financial and other qualitative and
quantitative factors. Fundamental analysts look at the factors that influence the
importance of a security, such as macroeconomic factors (economy and industry
conditions) and individually specific factors (financial position and companies
management). For example, the purpose of fundamental analysis is to identify a value
so that the investor can compare the value with the security‟s current price with the
expectation of determining what position to take with that specific security
(investopedia.com). All of the news stories, economic statistics, and political events
that are released about a country are identical to the news released about a company in
that they are used by investors to determine its worth. Many factors influence this
importance over time, including economic development and financial resilience. To
determine a country's currency, fundamental traders consider all of this data (Janssen,
Langager and Murphy, 2010)
Fundamental analysis is the method of analyzing the stocks intrinsic value, used by the
analysts, trades and the investors. Fundamental analysis is used to identify those assets
which are under -valued and over - valued in the stock market. The under- valued
stocks are those stocks which are available for selling in the market at the lower price
than the intrinsic price of the stock. There are two different approaches through which
the analysts attempt the fundamental analysis on the stocks in stock market. 1. Top –
down approach 2. Bottom – up approach.
Top- down approach is that approach which starts from the economic analysis to the
industry analysis and then narrowing their research to the company analysis and then
analyzing the particular script is called the top down approach of fundamental analysis.
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Bottom – up approach is that approach is the way method to analysis a stock which
starts from the particular stock then researcher moves towards the company analysis,
industry analysis and then macro analysis for analyzing a particular stock.
Fundamental analysis for the Indian stock market examines the macroeconomic factors
company and industry analysis and political consideration of a nation for analyzing the
security. According to ( Janssen, Langager and Murphy, 2010) in the context of stock
market it is defined that the Fundamental analysis is a method of deciding the value of a
security by concentrating on the underlying factors that influence the company's
performance and future prospects.. Or as a broader way the fundamental analysis can
be applied on an industry or an economy as a whole when we talk about a specific
stock fundamental analysis then janseen, Langager and Murphy suggested that the
fundamental analysis tells about the following.
1. Is the company revenue growing?
2. Is it actually making a profit?
3. Is it strong enough to beat its competitors in future?
4. Is it financially enough sound to repay its debts in future?
5. Is management trying to “cook the books”?
Economic Analysis: Economic analysis is the study of economic factors/ economic

indicators for the evaluation of a security value. The stock market works under the
economic environment where the level of economic environment is low, stock prices
are low and when the level of activity is high, stock prices are high refers a market
booming condition for the sale and profits of the firms.
The economic analysis is very essential to understand the stock price behaviour of
stock market. The most commonly used economic indicators are GDP, saving and
investment, inflation, interest rates, budget and fiscal deficit, tax structure, balance of
payment, FII, international economic conditions, business cycles, demographic factors
and Infra facilities.
Industry Analysis: Industry analysis includes the analysis of the performance of the
prospects and problems of a specific industry. The economic analysis presents the
overall direction of the economy and the stock market, whereas the industry analysis
tells about the risk and return of a specific industry. The risk and return associated with
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any industry may differ industry to industry for example Pharmaceuticals and FMCG
may differ from the textile sector.
An Industry is a group of companies producing the identical or same nature of product

or services for example textiles, auto, banking, power and steel etc.
Kinds of Industry: According to the reaction to the different phases of the business
cycle such as growth industry, cyclical industry and defensive industry.
The Industry analysis is very essential to understand the stock price behaviour of stock
market. The most commonly used Industry analysis tools are swot analysis, porter five
model and BCG matrix, etc.
Company Analysis: Company analysis is the study of financial and operating

operations performance and future prospects of a company. Once an investor decide to
invest his money/savings in a particular industry on the basis economic and industry
analysis, is also very important to select the company in which investment is to be
made by the investor. For example if an investor decided to invest his money in
banking sector, the next step is to decide in which bank, SBI, PNB, ICICI and HDFC
etc.
In other words we can say that the evaluating the financial performance of a company
on the basis of quantitative and qualitative factors is known as company analysis. The
quantitative factor includes all factor related with financial nature whereas; at the same
time we can‟t ignore the qualitative factor of the company such as management of the
company and motivation level of employees etc. There is various quantitative and
qualitative factors mention below.
Quantitative Factors: Earnings, Competitive Edge, Financial Leverage, Operational

Leverage and Production. Efficiency
Qualitative Factors: Business Model, Management, Corporate Governance and

Corporate Culture
Tools and Techniques of Fundamental Analysis
 Industry Analysis
 Company Analysis
 Security Analysis
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 Economic Indicators
 Economic Data
 GDP
 Inflation Rate
 Money Supply
 Interest Rates
 Accounting Measures Ratios
 Discounting Cash Flow Ratios
 Market Value Based Ratios
 Growth rate of exports and imports
Industry Analysis: Industry analysis is a tool of fundamental analysis used by the

analysts to understand the competitive dynamics of a particular industry. It is the
analysis of group of companies producing same kind of products and services and also
facilitates a company‟s understanding of its position relative to other companies that
produce similar products and services. In other words we can say that industry analysis
is a type of investment research used by the analysts by focusing on the status of an
industry for making their investment decision.
Company Analysis: Company analysis is a tool of fundamental analysis which is used

by the analysts and investors to evaluate the securities, collecting information related to
company profile and performance, products and services as well as the profitability and
liquidity of the company.
Security Analysis: Security analysis is a tool of fundamental analysis used by the

analysts and investors to analyzing the value of securities like share, bonds and
debentures to assess the total value of business which will be useful for investors to
make their investment decision. The fundamental analysts should conduct the security
analysis with full integrity, competence and diligence while conducting the investment
process and should place the interest of investors over his personal use.
Economic Indicators: According to Henry Lier (2009) the most important economic
indicators that a trader must take into consideration while trading namely, consumer
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price index, producer price index, gross domestic product, Non- farm payroll
(employment changes), trade balance, capital flow ( TIC net long – term) and Institute
of supply management manufacturing management. Financial analysts and investors
keep watch on all economic indicators because economy is a source of systematic risk
that affects the growth or decline of overall economy, industry and company.
Economic Data: The economic data is released on regular basis by various government
agencies and websites. It gives a glimpse of the overall economy and the how fast it is
growing economy. Economic data such as employment data, GDP numbers and
inflation rate affects the stock markets all over the world. There is lot of benefits to
trading using economic data specially that a lot of profitable transactions take place
before or after a few minute from a major economic statement.
GDP: GDP refers to the gross domestic product and it‟s a primary measure of
economic health of a country. GDP is the sum of value added at every stage of
production of all final goods produced and services produced within a country in a
given period of time. According to warren buffet believes in investment the country‟s
share market should always be less than the country GDP rate so that we can find the
good investment opportunities and scope of investment but if the share market value is
higher than the country GDP, then it signifies that the market valuation is very high and
there is no scope of investment at this point of time.
Inflation Rate: Inflation rate affects the purchasing power of the investors if the
inflation rate will increase then it will negatively impact the share market and
investments because investors have less money to invest in share market and vice versa.
Money Supply: Money supply is used as a fundamental analysis tool of investment

analysis which measures the interaction between the central banks and the economy.
More money supply leads to more investment which increases the overall GDP and
boom in share market and vice versa.
Interest Rates: Interest rates play very catalytic role in the economy. Interest rates are
almost like a barometer of the economy‟s strength and weaknesses. Interest rate is the
amount charged by the lender to the borrower on the principal amount. The amount of
interest is the difference between the amount received by the lender and the amount
given to the borrower. The base rate is influenced by the RBI bank rate, repo rate,
reverse repo rate and the cash reserve ratio. A decrease in interest reduce the cost of
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capital/finance and provide the finance at low interest (cost) to the business houses
which encourage the amount of investments in share market and speculation and gives
a rise in the price of shares whereas, an increase in interest rate negatively affects the
availability and cost of finance for business houses/firms which are dependent upon the
banks for their working capital requirement. In other words, we can say that a low
interest rate may represent a country experiencing different economic conditions which
is very reflective in reduction of country value and on the other hand high interest rates
at beginning can generate growth and value in currency and economy (Wagner, 2012).
Accounting Measures Ratios: The accounting ratios measures the efficiency and
profitability of a company based on its financial data. They provide the relationship
between one accounting periods to another period on the basis of ratio analysis. The
accounting measures ratios are used by the company itself and the investors too for
knowing the financial health of the company. Most commonly accounting ratios are
debt equity ratio, liquidity ratios, operating ratios, dividend payout ratios and gross
profit ratios etc. Accounting ratios work as an important fundamental analysis tool in
company comparison within industry, for both company itself and investors.
Discounting Cash Flow ratios: Discounting cash flow ratios are used as fundamental
analysis tool to evaluate the value of securities/stocks on the basis of time value of
money. It is widely used by the investment analysts for making their investment
decision.
Market Value Based Ratios: Market value based ratios are used as a fundamental
analysis tool to evaluate the prices of the shares on the basis of market price of the
securities.
Growth Rate of Exports and Imports: Growth rate of export and imports also plays
very important role as a fundamental factor in investment decision making.
Demand and Supply: Supply and demand is the most important fundamental concept
in economic theory and fundamental forecasting (Murphy, 1999). Generally, both
demand and supply plays very important role in determining the price of the script.
Where both demand and supply interests on demand and supply curve, the interests
point is known as the price of the script. Price is that amount on which both buyer
(ready to buy) and sellers (ready to sell) agree on a price and transaction can occur.
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1.3 Technical Analysis
Technical Analysis History: The aspects/ principles of technical analysis initially

derived from the history of hundreds year financial data. In Asia, the technical analysis
was developed by the Homma Munehisa during the 18 century. Homma Munehisa
firstly introduced the candlestick method of the technical analysis in the history of
technical analysis. In today‟s financial world the technical analysis is also known as a
charting analysis.
The roots of technical analysis can be traced back to the Japanese rice traders in the
1600 and the Dutch markets in the 1700s and then followed by the Charles H. Dow,
The research paper published by Charles H. Dow in 1984, in the wall street journal is
the main basis of technical analysis then after he wrote a series of articles from 1900
and 1902 and almost 250 editorial in wall street journal. On the basis of Dow editorial
AJ Nelson, a close friend to Dow formalized the Dow Theory for economic forecasting.
In his Dow Theory the Dow stated that there are three Movements or trends in the
Stock market.
The Dow Theory was based on certain hypothesis. The first hypothesis was that no
single individual investor or buyer/seller can influence the market primary trend
however; a single investor can affect the daily price movements by bulk buying/ selling
of a security. Furthermore, the intermediate trend can also be affected to a lasers degree
by bulk buying/selling of a script through a single individual investor. The second
hypothesis was that the market discounts everything even the natural climate and
natural hazards also affect the stock market. The last hypothesis was that the theory is
not infallible .it‟s not a tool but its way to better understand the stock market.
Technical Analysis: Technical analysis is the study of past prices and volume data of
stocks markets and individual stocks with the aim of predicting the future prices of the
stocks or in other words we can say that the technical analysis is the prediction of the
stocks markets in coming market scenario on the basis of the previous data of the
stocks and stock market. Technical analysis involves the study of various charts, ratios,
theories and patterns to predict the future direction of the stock prices. Technical
analysis (also known as chartist analysis) is a system of methods for determining
trading recommendations for financial assets by observing the market history of a
certain asset over time, either graphically or mathematically (Taylor, 2014). Technical
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analysis is the study of supply and demand in a market with the objective of predicting
which direction, or trend, will continue in the future. To put it another way, technical
analysis attempts to understand market feelings by examining the market as a whole
rather than its components (Janssen, Langager and Murphy, 2011).
Technical analysis is based on the foundation that history repeats itself in patterned
movements of stocks which can be described by studying the past prices behaviour of
the scripts. The Technical analysis helps the investor for finding out the answer of
queries like. “Is it right time to buy/sell a share?” or “is it right time to average the
stock/security for getting higher returns?” The technical analyses solve the above
mentioned queries of investor for making their investment decisions. The technical
analysis helps the investor to choose the specific industry, company or a particular
stock and also suggest the time when to enter or exit in their trades for getting the good
returns from their investments.
The technical analysis believes that the forces of demand and supply shift the pattern of
price and volume trading. Once the price and volume data analyzed by the analysts then
he predicts the price of the script. Analysts believe that whether the prices will move in
upside or downside but always move in a direction either upside or downside except
some minor deviations. If the demand and supply shift then it may reverse the pattern
of the securities due to the changes and the analysts predict the demand and supply in
advance on the basis of the analysis of various charts, technical tools and technical
indicators. Hence the assignment of the technical analysts is to identify the trend
whether its upside or downside and also recognized that when the particular trend
comes to an end and the price start moving in the opposite direction because the analyst
have to change their investment decision according to the trend of the security in Indian
stock market.
Generally the technical analysts predicts the prices of stocks in four different price
ranges for the investors because it‟s very difficult for anyone to predict the price of
stock for a particular day because a stock has various movements and moves many a
times in a single trading session so its very difficult to gauge the exact price of the
stock hence the analyst predict the prices in different categories.
1. Open price: price of the security at which the trading on share start on a particular
trading session day.
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2. Close price: Price of the security at which trading on a share closes on a particular
trading session day.
3. High Price: High Price is the highest price at which the share has been traded on a
particular trading session day.
4. Low Price: Low Price is the lowest price at which the share has been traded on a
particular trading session day.
Assumptions of Technical Analysis: Technical analysis has some assumption. The

assumptions of technical analysis have been driven from the observation of financial
markets over hundred of years.
1. History Repeats Itself: Technical analysts believe that the history repeats itself is
also true in case of stock market. Whenever the market is bull, the investors
psychology is positive and they buy stocks in greater volume, and push the market
towards the higher prices of shares whereas in bullish trends the investor fear push
them to sell the stocks to get out of the market that will reduce the price but analysts
says that the prices will definitely come back and the future prices are predicted on
the basis of the past prices.
2. Market Discounts Everything: Price of securities is that which comes on the

interaction of demand and supply of securities. It is also true share market discounts
everything. The fear, hopes, and other inside information of the firms are reflected
in the price of shares and indices. For example covid 19 also affected the all global
stock markets and Indian stock markets.
3. Market Always Moves in Trend: Share market always moves in a trend. Except
some minor deviation, stock price always moves in trend whether its upside or
downside.
Tools/ Techniques or Indicators of Technical Analysis
Generally, we include following tools/techniques or indicators for analyzing the data

and to provide the trend analysis. The most common technical indicators of technical
analysis are:
 Technical Indicators
 Chart Analysis
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 Dow Theory
 Elliot Wave Theory
 Moving Average
 Oscillators
 RSI
 OBV
 MACD
 Volume of Trade
 Candlestick method
 Spread of the Market
 Parabolic
Technical Indicators: Technical indicators are pattern-based signals produced by

traders or technical analysts using a security's price, volume, and open interest.
Technical analysts used technical indicators to analyzing the historical prices of
securities for predicting the future price movements. Basically there are two types of
technical indicators.
1. Overlays: For example Moving Average and Bollinger bands
2. Oscillators: For example MACD, RSI and Stochastic Oscillator
Chart Analysis: Charting is a technique which provides the visual presentation of

changing pattern of price movements. Sometimes technical analysis is known as
chartist analysis because of importance of this tool as they use charts and records of
historical price and volume to identify the trend and pattern in price for future. Unlike
its mechanical equivalent, this approach is much more subjective. In order to identify
and analyse patterns, the analyst must use judgement and experience. Technicians
believe that price always moves in a direction either upside or downside, price
movements continue with certain path (upside or downside) until it meets an opposite
force due to demand and supply change.
Several pattern of chart analysis are identified by technician which can be considered
useful in indentifying price movements. Such as „head and shoulders‟, „price and
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volume chart‟, „bar chart‟, „line chart‟, „ double tops‟, „double bottoms‟, „ cup and
handle‟, „wedge‟, „flags and pennants‟,. Practitioners believe the head and shoulders
pattern to be one of, if not the most, reliable of all chart patterns.
Fig. 1: Chart Analysis
Source: Stockcharts.com
Dow Theory: This theory is developed by Charles H Dow to explore the movement of
indices of Dow Jones Average in 1984. This theory is based on certain assumptions
which are as following:
1. The first assumption is that no single buyer/seller can influence the market price
behavior. However, a single investor can affect only the daily price behavior by
buying or selling of large quantity of a single stock.
2. The stock market discounts everything, even natural climates also affects the share
market.
3. The theory tells that is not a tool to beat the market but it is a way to better
understand the market behavior.
Explanation of the Theory
According to the Dow Theory in any kind of market; whether bullish or bearish, three
trends as simultaneously work namely; primary trend, secondary trend and the minor
trend.
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Fig. 2: Dow Theory
Source: Stock investing.today
Primary Trend: The price trend may be either increasing or decreasing. The primary
trend sets the overall direction of the market if the primary trend is upward then it‟s
called bull market whereas, if the trend is downward then the market is called bearish
market. When we will talk about bull market it shows three clear cut peaks and each
peak is higher than previous peak and the reverse is true with the bear market and the
tops and bottoms are lower than the previous ones.
Secondary Trend: The secondary trends operate in the opposite direction of the
primary trend. If the primary trend is upward then the secondary trend will be
downward and vice versa.
Minor Trend: Minor trends are day to day fluctuations in the stock market which do
not last for long time period. The minor trends tries to correct the secondary trends
.minor trends are not much important for the investors for their investment decisions
they should focus on the secondary and primary trends for their investment decisions.
Elliott Wave Theory
This theory is developed by Relph Nelson Elliott in the late 1920.Elliot wave theory,
which is a variant of Dow Theory described the stock price behaviour of a set of wave
patterns- long term, short term and minor waves. The long term waves carry the entire
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market upward or downward whereas, short term waves moves in the opposite
direction and the minor waves are the daily fluctuations in the stock market.
Additionally the minor waves can be ignored by the investors while making their
investment decisions. The charterstics of Elliott wave are that they consists of five (5)
waves indicating the main trend and (3) corrective waves. A5-3 Waves complete a
cycle. According to Elliott wave theory A5-3 pattern remain constant.
Fig. 3: Elliott Wave Theory
Source: stockcharts.com
Moving Average Analysis
Moving average is a statistical technique to calculate the average of a series on rolling

basis. Moving average as a technical indicator can be used to analyse the movements of
the entire stock market as whole as well as individual stock price movements. The
moving average technical indicator can be adapted to any timeframe, suiting both long
term investor and short term trader. The most commonly application of moving average
is to identify the trend direction and also to find out the support and resistant level.
Whenever the stock prices cross over the moving average, it may generate or indicate
buy signal for technical trades and vise -versa.200 days and 53 weeks moving average
are the most popular tools for analyzing the overall market trend and 250 days moving
average is the most reliable and easily understandable method. There are two type of
moving average as technical indicator namely simple moving average and exponential
moving average.
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1. Simple Moving Average: Simple moving average is very simple and easy to
calculate. It is calculated on the basis of average prices over the specified period.
For instance, a 13 – day‟s moving average is calculated by adding the closing price
for the last 13 days and dividing the total by 13.
2. Exponential Moving Average: EMV is just like the simple moving average and it
measures the trend directions over the specified period.
EMA (current) = {[Price (Current) - EMA (Previous) * Multiplier] + EMA

(Previous)}
Formula for smoothing constant is: K= 2 / (1+N) where, N= Number of periods for
EMA
Oscillators: Oscillators are momentum indicators which are used as technical analysis
tool in technical analysis that constructs high and low bands between two extreme
values, then construct a trend indicators that moves within these bounds. Trend
indicators are used to find out the overbought and oversold signals in investment
decision in short span of time horizon, when oscillator approaches to the upper values
then asset is considered as overbought and when it touches the lower band then it is
considered as oversold situation. Technical analyst‟s considered that oscillator‟s give
best result when used in conjunction with a technical indicator that identifies the market
as being in a trend.
RSI: RSI is purposed by Wells Wilder. RSI is an oscillator which is used to find out
the inherent technical strength and weakness of whole stock market or a individual
stock.RSI is also known as an oscillator which is used to determine that whether an
asset/stock is overbought and oversold. The RSI index calculations are based on the
formula 100 – {100/ 1 + (Average of up closes for the day / Average of down closes for
the day)}.The value of RSI indicator may vary from 0 to 100, a higher number
indicating a strong upward tread whereas, a lower number indicate a downward trend.
Normally a standard set at level of 70(30), is a sign of oversold and overbought.
On Balance Volume: OBV is a technical trading momentum which predicts the

changes in stock prices on the basis of volume flow.OBC is firstly developed by Joseph
Granville in the year 1963 and published in his book Granville‟s new key to stock
market profits. Granville believed that volume is the main key force behind the market
movements and also described that the predications generated by OBV as “a spring
being wound tightly”. OBV is a momentum indicator that is determined by introducing
30
volumes on days when stock prices increased and subtracting volumes on days when
stock prices fell. A downward trend of OBV line indicated that the stock prices would
fall and vice versa. We can predict the trend of market whether it‟s bullish or bearish on
the basis of the crowd sentiments in OBV method.
Moving Average Convergence Divergence: MACD is used to predict the prices of the
stocks in the stock market. It is a momentum oscillator which is firstly introduced by
the Gerald Appel in late 1970 which comprises two lines namely, MACD line and
signal line. MACD is the correlation between MACD line and signal line. MACD line
is the difference between a 12 days and a 26 days exponential moving average. The
difference tells us whether prices in the recent past have moved upward and downward
as compared to longer time period movement.
MACD = Short period moving average – Long period moving average.
MACD generates the various buying and selling signals when the MACD line is in
positive zone then it indicates the upward trend in the stock market, gives the buy
signal as share prices are likely to shift in upward direction in near future. On the
contrary, when the MACD line is in negative zone then it indicates the downward
trend, gives selling signal as share prices are likely to fall in the future. As MACD
fluctuates from above and below zero lines which indicates various signals at different
time horizons.
Fig. 4: MACD Signal Line with Above and Below Zero line
Source: www.fidelity.com
31
Advances signals with the help of MACD
 Whenever the MACD crossed the zero line and above zero line then it is
considered as bullish market and an upward trend
 Whenever the MACD is above the zero line, but at declining rate it is the warning
signal of the bearish market in future. As we can see in the figure 5 of MACD.
Fig. 5: MACD Crosses below Zero
Fig. 6: MACD Crossed Below Signal Line
32
 Whenever the MACD is below the zero line. It is considered as the bearish market
trend in the stock market as mentioned in figure 6.
 Whenever the MACD is below the Zero line, but rising trend it is warning signal of
a bullish market in near future. AS shown in the above figure number 6 of MACD.
Volume of Trade: The number of transactions that convoy the changes reflects the
intensity of stock price changes. Volume is measured in the number of shares traded in
options and future contracts in a period of time. Volume can be a good indicator of
market strength, for predicting the future prices of the stock. Volume indicators are
represented in most commonly used charting techniques. There are many volume
indicators such as OBV, Chaikin Money Flow, and Klinger Oscillator etc.
Candlestick Method: Candlestick is a form of technical analysis price chart that

shows the high, medium, open, and closing values of a security over time. It was
developed hundreds of years ago by Japanese rice merchants and traders to monitor
market prices and everyday momentum before becoming common in the United States.
Traders use candlestick charts to forecast market change based on previous trends.
Candlesticks are useful in trading because they show four price points (open, close,
high, and low) over the time span specified by the trader. Many algorithms use the
same price data that is shown in candlestick charts. Emotion is also a driving force in
trading, as shown by candles.
Fig.7: Candlestick Chart
Source: Investopedia.com
33
Spread of the Market: Spread indicator is a measure that represents the difference
between the bid prices and ask price of a stock/asset/currency. It is very popular tool of
analysis in forex traders or commodity traders. Traders usually, trade in currency pairs with
small spreads because it costs less to enter and exit a trade. Usually, highly liquid currency
pairs have lower spreads.
Parabolic: The parabolic stop and reversal indication was developed by J. Welles
Wilder Jr. as technical analysis tool to study the price reversal which can be used as a
stop loss levels as well as triggers.
Conclusion: In conclusion we can say that this chapter included three sections. The
first section covered the combining fundamental and technical analysis, stock
exchanges, investment, investors, investment decision making, investment advisors and
role of investment advisors in the investment decision making. The second section
covered the all aspects of fundamental analysis and tools and techniques of
fundamental analysis. The third section included all the concept related to the technical
analysis and also covered the various tools and techniques of technical analysis. In
finance, Fundamental and technical analysis is a part of security analysis which
analyses the movement or price behaviours of stocks in order to determine the buying
and selling points and also to predict the immediate and long run market trend of the
stock markets and stocks. Both the approaches of analysis namely fundamental and
technical analysis are often said against each other and an investor thinks that they have
to choose any one of the analyzing tool from the above mention analysis tools whereas,
there is a another midway when an investor can combined both fundamental and
technical analysis for a holistic trading strategy. Combining the technical analysis with
fundamental analysis , aims to ascertain the intrinsic value of an asset based on various
financial and fundamental indicators such as economic news and data, supply and
demand of an asset, technical analysis discovers the highest or most traded assets in the
market.
34
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40
CHAPTER-2
REVIEW OF LITERATURE
This Chapter will summarize the literature consisting of some previous studies
undertaken in the same context of fundamental and technical analysis which has been
reviewed before conducting the research study. A large amount of research was found
separately in the context of fundamental and technical analysis, but the studies on
combining impact of fundamental and technical analysis are very few. This chapter
includes two sections and the first part includes the review of literature on various
international and national studies respectively. The second section incorporates the
research gap based on these studies.
Review of literature is an essential part of any research problem. The review of earlier
studies is very essential and useful to give the right direction of any study. It explores
the developments in the subjects of the study. It helps the researcher in formulating the
methodology comprising establishing hypotheses and selecting the variables to be
studied and seeks to explore research gap. It describes what has actually been done and
what remains yet to be done on the specific subject/phenomenon.
2.1 International and National Reviews
1. Balkrishan (1984) performed a study of two industries namely, general

engineering and cotton textile industries in India. The study examined the impact
of dividend per share, earning per share, book value and yield on the share prices.
The results directed that book value per share and dividend per share had most
significant impact on determinants of market price of shares in both the industries.
The yield also emerged as significant determinant in cotton textile industry along
with a negative sign.
2. Trenynor and Forguson (1985) investigated that the past prices of the stocks
when combined with other valuable information then unusual or abnormal profits
can be earned by the investors. It was found that many investors occasionally
receive what they believe to be non public available information about a security
where as some other group of investors feel that by applying the technical
skills/tools to the public available information they are able to arrive at valuable
decision that are not generally appreciated. The study revealed that the investor
must be correct on the two counts, on first instance the estimation of the value of
41
information reasonable in terms of its impact on the prices of stocks and on the
another count is the investors should make the realistic assessment of the
information that market has already received or insight in question. The
probability distributed data on which the market receives information already in
the hands of investors for a simple model of information propagation and the
results found that how this probability distributed data could be used for the
portfolio management.
3. Lee (1987) recognized that the role of fundamental analysis in the stock market.
Specifically, market responses to Abelson‟s fundamental analyses in Barron‟s
were studied. The analyses in Abelson‟s column were classified, according to their
contents, into four categories. Market reactions to those different contents to
analyses were measured. Univariate t-test, binomial Z-test, ANOVA F-test and
Chi-square independence tests, were applied to check the significance and the
uniformity of market reactions to various fundamental analyses. The study
concluded that the market reacted discriminatingly to the contents of fundamental
analyses and that investors did not make significant monetary gains from the use
of Abelson‟s analyses for their investment decisions.
4. Brock et al (1992) recognized the danger of data snooping biases in technical

trading research studies. The authors applied two most popular trading rules –
Moving average and trading range break on daily data collected from Dow Jones
Industrial index 30 from the year 1897 to 1986. They studied very long price
history data of Dow Jones and, for the first time, BLL bootstrap methodology for
making statistical inference about technical trading profits. The bootstrap
methodology compares the returns conditional on buy/sell signals from original
series to conditional returns generated through simulation by widely used model of
stock prices. Buy signals generate more consistent and higher returns than sell
signals, moreover the returns generated through buy signals and less volatile than
returns generated through sell signals.
5. Blume et al (1994) focused on the information role of volume and its applicability
for technical analysis and developed a new equilibrium model in which aggregate
supply is constant and traders obtain signals of varying quality. The result
demonstrates that volume offers information on information quality and that is not
available from the prices statistic. The study concluded that how volume,
42
information precision, and price movements are linked, as well as how volume and
price sequences can be insightful. The study also found that traders who rely on
market statistics to make investment decision are more effective than traders, who
do not. As a result, Technical analysis emerges as a natural element of the learning
process for agents. The result reveals that the analysis suggests, introducing
volume unrelated to the underlying information structure would survey weakly the
ability of uninformed traders to interpret market information accurately.
6. John h Cochrane (1994) investigated on the basis of two variables auto

regression to characterized transitory components in the GNP and stock prices.
The author also investigated the reasons of variation between the GNP growth and
stock returns through conventional VAR identification approach. It was found that
the consumption provides better estimates of trend in the GNP or prices and
dividend also acts in a similar way. The income model predicted the consumption
is a random walk and the consumption & income are co integrated if consumption
does not changes then consumers must take any changes in GNP is transitory. On
te basis of the results of the model, it was found that since consumption is not
exactly a random walk whereas it‟s the best approximation that described and
interpreted the VAR results. The dividend price ratio forecast the returns in better
way. The dividends are nearly a random walk and the prices shocks with constant
dividends are almost entirely transitory. The present value model suggested that
the researcher interpreted the price stocks as discount rate stocks and the dividend
stocks as earning stocks.
7. Abarbanell and Bushe (1998) investigated that whether the application of basic
concepts of fundamental analysis can yield significant abnormal returns/gains. The
study covered the data from 1983 to 1993 and the data was collected from the
1995 CRSP daily NYSE/AMEX file. The author taken the nine fundamental
signals related to contemporaneous changes in inventories, accounts receivables‟,
gross margins, selling expenses, capital expenditure, effective tax rates inventory
method, audit qualifications and labour force sales productivity were used to
construct portfolio then earn an average 12 months cumulative size adjusted
abnormal returns of 13.2 percent. It was concluded that the accounting based
signals can be used to predict abnormal returns and relative change in inventories,
capital expenditure and effective tax rates are strong indicators of one year ahead
43
earnings information when market under- reacts. Moreover, an additional analysis
suggested that the strategy continued to produce abnormal returns in a timeframe
successive to the introduction of the fundamental signals in the literature, and that
the strategy works better for some types of companies in the same setting.
8. Jeffery, S. Abarbanell & Brian J. Bushee ( 1997) conducted the study whether
the application of the basic concepts can generate the abnormal profits. The author
examined the 9 fundamental signals used by LT and AB as predicator of
contemporaneous returns, future earnings and analyst‟s future revisions. It was
found that the fundament signals provides the information about the future returns
which is associated with the news related with the earnings. It was also found that
the significant amount of the abnormal returns is generated around the subsequent
earning announcement. The results of the study were consistent with the theory of
application of fundamental forecasting is used to forecast potential profits, on the
prediction of the whereas, the strategy would not work after end of one year
return cumulation and indicating little support for idea about the future earning in
long run.
9. Mukerji et al (1997) concluded that the Korean stock returns and fundamental
variables during the year time period 1982-93 were positively related to the B/M,
S/P and D/E was negatively related to the firm size but not significantly related to
the E/P or beta. It was also found that the value stocks outperform growth stocks
in the long run. It was suggested that the S/P ratio, Book Market are more
competent indicators of value then the E/P ratio. It was further added that the D/E
is more reliable proxy for risk as compared to beta value.
10. Lucke. B (2000) investigated on the profitability of the head and shoulder rule as
representative complex chartist trading rule. The study was done on the data
collected from spot exchange rates for the USD, DM, BP, SF and YEN and the
rates were defined relative to the US dollar but the analysis covered all the
relevant cross rules. The author focused on the head and shoulder pattern as a
representative trading rule which incorporate various technical ideas such as
smoothed bend, trend reversal resistance level and volatility activity. All the
combinations of blocks of SHS definitions in general negative. It was found that
the returns of SHS trading were not significant positive.
44
11. Lo et al (2000) developed a new systematic approach to evaluate the effectiveness
of technical analysis. Non parametric kernel regression method was applied to the
daily returns of individual NYSG/AMEX and NASDAQ stocks from the 1962 to
1996 data from the CRSP. The author compared the conditional distribution of
daily stock returns to the unconditional empirical distribution of daily stock
returns, conditioned on few definite indicators such as head –end – shoulder or
double bottoms and found that over the 31 year of the sample period many
technical indicators provides incremental information. It was also found that some
technical analysis patterns applied to many stocks over many time periods then it
provides the incremental information especially for NASDAQ stocks. The author
does not say that the technical analysis can generate extra trading profits but it
does raise the possibility that technical analysis can add more value to the
investment process. It is also suggested that the technical analysis can be improved
by using automated algorithm. The authors suggested that the technical analysis
can be improved by applying automated algorithm used in the study and the
traditional patterns although sometimes efficiency, need not to be optimal.
12. Swanson et al (2001) in this study the author examined the Mexican equity
markets and revealed that the value fundamental analysis could contribute to
generate maximum returns by using RCPLA information under the rapidly
changing economic conditions. The author used data of the Mexican Bolsa from
1993 to 1998. The data set includes the financial statement of all the companies
traded in Mexican Bolsa. The pooled results of the study shown that the adjusted
R2 increases to 22.6 percent when fundamental signals included with earnings
compared to 9.4 for a model which covers only earnings. Finally the study
concluded that the fundamental analysis has incremental value relevance in
comparison to the earnings.
13. Thomas Oberlechner (2001) conducted a survey through a questionnaire and an

interview method on the perceived importance of technical and fundamental
analysis among foreign exchange traders and financial journalists in Frankfurt,
London, Vienna and Zurich. Foreign Exchange traders confirm that, out of the
both forecasting approaches, technical analysis is more prominent as compared to
fundamental analysis. Whereas, the financial journalists rely more on fundamental
analysis than foreign exchange traders.
45
14. Mitra (2002) conducted a study on profiting from technical analysis in Indian
stock market to find out a trading strategy that was profitable even after
transaction cost. The study covered the data from December 1995 to 1999 and
used daily closing prices of ACC, reliance industries, State bank of India and
TISCO from the stock market published quotes. Author used two different tools of
technical analysis, Moving average and USE of filter Rules. It was found that the
trading tools used in the study were giving profitable results, which helps investors
to believe that making profit in stock market was not just a matter of chance. It
was concluded that investor can have profitable opportunities if investor will use
analytical and systematic approach to make trading activities on a cumulative
basis.
15. Paul Asquith et al (2004) examined the relation between the stock returns and
short selling by either using of proxy for demand or proxy for supply. It was
revealed that the short sales constrained stocks beyond by high stock interest and
low ownership have lower abnormal stock returns than constrained stocks. The
results also shown that the performance of high stock interest NYSE- AMEX
stocks is generally more consistent and negative in comparison to Nasdaq
counterparts for the period of July 1988-2002 and it was also found that the EW
portfolio underperform more frequently than the VW portfolio. Finally, it is
concluded that to realize the negative abnormal returns on the stocks the frequent
rebalancing is required. Author suggested that an investor should avoid long
positions in stocks that are short sales constrained.
16. Piotroski (2004) analyzed the trade generating activities of three major market
participants- financial analysts, institutional investors and insiders influenced the
relative amount of market level information impounded into stock prices. They
find out that stock return synchronicity was positively associated with analysts
forecasting activities, consistent with analysts increasing the quantity of industry
level information in prices through intra-industry information transfers. On the
basis of results it was suggested that all three parties influence the firm‟s
information environment but the price relevant information conveyed by their
activities depends upon the each party relevant information gathered.
17. Saggar (2005) concluded that the financing and investment pattern of non-
financial, non-government, public limited firms over the period 1971-72 to 1999-
46
2000 at an aggregate and disaggregates level of major industry groups. The study
found that the financing pattern of Indian firms was debt based but their share of
internal sources increased markedly in the latter half of the 1990‟s, which had an
impact on share prices.
18. Seghal Sanjay and Gupta Meenkashi (2005) conducted the survey which aims at
providing insights about the way technical traders operate in the financial market
and the trading strategies that they ad opt. The survey covered institutional and
individual technical traders with a long and active trading record for the Indian
market. It was concluded that the respondents tend to use Technical with
Fundamental analysis for security selection.
19. Miceal a Jones et al (2005) conducted a survey among the fund managers through
a structured questionnaire survey. The author distributed 3000 questionnaire via
mails to the fund managers but in responses researcher received only 500 filled
questionnaires located in ten state area of the south eastern United States. It was
concluded that the financial advisor use more sophisticated decision process than
individual investor. The advisor used the most objective information available
appeared to generate the greatest level of satisfaction. While selecting the mutual
funds the advisor place a greater importance on performance, fund manager
relative to other fund with similar style, fund objectives, fund manager tenure,
fund risk and fund manager reputation while paying less importance on sales
loads.
20. Dimitrious I Maditinos and Zeliko Sevie et al (2006) conducted first survey
study in Greece on the practices of investment management in terms of stock
market forecasting and stock selection. The survey was conducted on six different
types of investors and three major analysis techniques namely fundamental
analysis, technical analysis and portfolio analysis. The study found that the
individual investors rely more on newspapers/media and noise in the market
whereas, the professional investors put a greater emphasis on fundamental and
technical analysis rather than portfolio analysis.
21. Sehgal and Gupta (2007) investigated the economic feasibility of technical
analysis in the context of Indian stock market. The study was based on the data
collected from the 69 large Indian companies for the period start from January 1st
47
1999 and ends on 31st December 2004. On the basis of data analysis it was
revealed that the technical analysis provides statistically significant returns for all
nine technical indicators on gross return basis during the entire study. It was found
that the technical indicators /tools provided better predictions during the booming
market phase compared to the bearish market phase. Study concluded that the
combining of fundamental and technical analysis generated higher returns for
small stocks as compared to big stocks and for high value stocks as compared to
low value stocks.
22. Tripathi (2008) study examined the relationship between the four company
fundamental variables (viz. Market capitalization, book equity to market equity
ratio, prince-earnings ratio and debt equity ratio) and equity returns in the Indian
stock market using monthly price data of 455 companies listed in S & P CNX
500 index over the period June, 1997 to June, 2007. The study revealed that the
market capitalization and price earnings ratio have statistically significant negative
relationship with equity returns while book equity to market equity ratio and debt
equity ratio have statistically positive relationship with equity returns in India. The
study concluded that the investment strategies based on these fundamental variable
produced extra risk adjusted returns over the study period. The study further
investigated about the wealth of the companies. It was found that the inclusion of
any one or more of the fundamental variable can better explain cross sectional
variations in equity returns in India than the single factor CAPM.
23. Ute Bonenkamp et al. (2008) concluded that the technical trading strategies study
the past changes in the prices for predication of the future prices of the stocks.
This made the sense that the past prices of the stocks were reflects the
fundamental factors that was not completely incorporated in current prices
however, if the past prices shows temporary pressure on pricing then technical
analysis theory was doomed to collapse. The study was done on the data collected
from NYSE, AMEX & NASDAQ companies from March, 1989 to December,
2007. For performance measure the tolls for analysis were used namely abnormal
returns and 3- factor alpha. The author introduced a combination strategy that
includes the investment in stocks with high past return and high operating cash
flows. The outperformance was used for getting higher probability in choosing the
outperforming stock. The combination strategy made use of momentum and cash
48
flow information outperforms the pure momentum strategy. That was true in 18
out of 19 single years. Moreover, the combination strategy is easily implemented
on the information that is publically available and the stocks which are liquid and
even high transaction cost was not a hindrance in the outperformance.
24. Tripathi Vanita (2008) conducted a survey to examine the perceptions,

preferences and investment strategies in the Indian stock market based on
collected data from 93 investment analysts, fund managers and active trades based
at Delhi and Mumbai. The survey revealed that most of the respondents strongly
agreed that various company fundamentals significantly effects stock prices hence
addition of these factors in asset pricing model can better explain the cross
sectional variations in the equity markets in India and the most commonly used
strategies in Indian equity markets were size based strategy, momentum strategy,
following FII investment behavior, 30 days moving average and buying stock on
the basis of relative strength index. It was found that most of investors use both the
fundamental and technical analysis while investment in Indian stock market. Study
found that there had been substantial change in the investment strategies used by
active investors in Indian stock market over the past 5 years. It was revealed that
the investors shifted from technical analysis based strategies to the one which
includes both fundamental and technical analysis.
25. Muraikhi AI et al (2008) investigated the role of fundamentalists and technicians

in the emerging stock markets and foreign exchange market of the Kuwait. The
study was based on the econometric model which is used to differentiate between
the effects on the financial prices subject to the decisions of traders who made
their decision on the basis fundamental analysis and those who had taken their
decision on the basis of technical analysis. The study concluded that the
technicians and fundamental analysts help in predicting the equity stock prices and
financial assets prices.
26. Bettman et al (2009) introduced an equity valuation model for valuing stocks that
integrates both fundamental and technical analysis, recognizing their potential and
complements rather than as substitutes. The authors used a dataset pertaining to
US listed companies that spans the period January 1983 through December, 2002
inclusive, without initial sample comprising the universe of companies for which
all important data was available. The authors fit a two factor fundamental model,
49
relating price to the book value per share and current earnings per share. It was
confirmed that the complementary nature of fundamental analysis and technical
analysis, because, although both performs, each provide superior explanatory
power when models are integrating. The integration of both analyses in equity
valuation, models sees considerable increases in adjusted r square value and
marked drops in corresponding AIC figure, with the significance of study result
further verified by the highly significant result of like hood rational testing. The
study found that valuing shares, the complementary nature of fundamental and
technical analysis has implications in the context of other valuation.
27. Bistrova and Lace (2009) the main purpose of this study was to find out the
importance of fundamental analysis on the Baltic Equity Market. The study proved
that the fundamental analysis does not add a lot of value to the portfolio
performance, while market liquidity influences performance of the share prices in
a certain way. This study was based on the fundamental and trading data of
companies of the main Baltic Equity Market benchmark ONXBBGI, making 45
companies a corpus of the research. The time period of the study was January,
2000 to November, 2008. The data was taken from the corporate annual reports
and from OMX homepage and the monthly closing share prices were used. The
hypothesis proved that the fundamental analysis was not able to generate
sustaining addition value to the performance of the portfolio comprised of Baltic
enterprises stock. The relevance of the fundamental analysis was checked by
analyzing the performance of portfolios, which were created on the basis of key
fundamental ratios: ROE, Equity Ratio, ROIC, Net debt to assets as well as PE and
BE. Besides, the interdependence of liquidity and share price performance was
checked. The companies had better than average ratio were selected to form the
stock portfolios. The statistical methods i.e. correlation analysis, quartile analysis
and indexation were used for find out the relationship between the share price
performance and the fundamental concepts taken for the study. The study shows
that neither of the mentioned ratios helped in the creating portfolios, performance
of which would beat market performance. The only exception price to earnings
ratio, which proved that cheap companies seem to be attractive to the investors.
The recommendations for the investors in Baltic equities would be to analyze the
growth potential of the companies and to put more focus on company‟s expected
50
earnings income, while also considering the valuation of the companies, basing
investing decisions of PE ratios. It would be advisable to analyze longer time
period and particularly to focus attention to the time span when the global liquidity
crouch started to influence equity market.
28. Bistrova and lace (June 2010) concluded that the fundamental analysis was
applied worldwide by the investors for finding out the investment opportunities on
the developed markets. The main objective of the study was to discover the
importance of fundamental analysis on the Baltic equity markets during the pre
crisis, crisis and post crisis periods. In this study the value creation of
fundamental analysis was tested on the Baltic equity market context by applying
the key fundamental analysis ratio like PE, ROE, equity ratio, PB ratio etc. to the
stock selection. The hypothesis that the fundamental analysis starts to be employed
more often by investors in Baltic equities was proved. The study found that Baltic
companies of higher quality are generating higher value, though not in all covered
period. The results of the pre crisis phase (2000-2007) same as in the previous
studies on Baltic equity market: and shows that the majority of the mentioned
ratios could not help to make superior stock portfolio which can beat the market
performance. The price earnings ratio was the only exception which proved that
cheap companies seem to be attractive to the investors in the pre crisis period. The
investors praised the companies with higher earning quality during the pre crisis
period. The result shows during the crisis period (2008) not only the lower PE
companies demonstrated higher than the market performance but also the one also
which had higher equity ratios. The study found the result in post crisis period
(2009-2010) was characterized by the high value added of fundamental analysis as
companies had higher than average ROE an equity ratio, lower than average debt
equity ratio provided highest performance. It is further investigated that the
performance of dividend paying stocks could not beat the market in any period
analyzed in this study. It was suggested that it would be better to consider relative
cheapness of the company, when the market in full fledged upturn phase.
29. Koon boon kee and Qihui Chen (July 2014) revealed the potential source of
returns from technical trading rules at the firm level by examining the cross –
sectional relationship between technical trading rules and stock returns
synchronicity. The study was done on the data collected from the shanghai stock
51
exchange from 2nd January 1991 to December 31st 2009 which covers the data of
740 companies registered on the exchange. The R 2 can guide trading decisions
while using technical trading rules. The Technical trading rules possibly work only
when the R 2 is low and for larger and younger stocks with low turnover, and
consistent with noise hypothesis. The study suggested that the relationship
between trading returns and R2 can help the traders to access whether the
information environment is noisy or informative and then they can make their
policies and actions accordingly if the information environment is noisy then
technical trades can save themselves from the losses and should keep their eyes on
less synchronous or low R2 stocks for getting the probability of generating
abnormal profits. It was also found that the fundamental analysis also played the
important role for collecting the firm specific information for decision making in
investment for creating incentives for higher quality information environment and
good governance to protect the investors.
30. Wong et al (2010) focused on the role of the technical analysis in signalling the
timing of stock market entry and exit. The study covered the time period from the
1st January, 1974 to December, 1994, a total of 21 years and daily closing prices
were studied. The whole sample of 21 years is divided into 3 sub sections each
covered 7 years of data. It was found that in general, single moving average
produce the best results, followed by the dual moving average and the relative
strength index using the 50 crossover method. It was revealed that the indicators
can be used to generate significantly returns. It was found that Singapore stock
exchange tends to book profits by applying technical indicators. Most of the
member‟s team of Singapore exchange have their own trading team that rely
heavily on the technical analysis tools because they don‟t have to any commission
to brokerage houses.
31. ICI of United States (2010) presented that the 81 percent of the household
investors who had invested in mutual funds taken their investment decisions on
the basis of advices taken from investment advisors.
32. Moosa Imad and Li Larry (2011) conducted an empirical study based on
monthly data on stock prices of 100 companies listed on the shanghai stock
exchange. An econometric model is used to differentiate between the effect on
stock prices of the actions taken by traders on the basis of fundamental and
52
technical analysis. Model is estimated and testing using time series and data panel.
The study concluded that the results support the econometric evidence on the role
played by fundamentalists and technical analysts in financial price determination.
Moreover, several special charterstics of Chinese market give an upper hand to the
technicians and their activities have more significant impact on stock prices as
compared to fundamentalists.
33. Mitra (2011) analyzed the profitability of moving average based trading rules in
the Indian market through the study on “How rewarding is technical analysis in the
Indian Stock market?”. Researcher used four stock index series in this study, like:
- S&P CNX Nifty, CNX Nifty Junior, CNX IT Index for the period 1st January,
1998 to 31st March, 2008. According to the findings, most technical trading laws
were able to reasonably grab market direction and have substantial positive returns
in both long and short positions. However, owing to real-world transaction costs,
these returns cannot be entirely realized. While transaction costs have decreased
over time, due to the bid-ask spread, different components of transaction costs
have broken down will never be zero. Short moving average trading rules can be
able to spot changes in financial series easily, but they can produce a vast amount
of trades, resulting in higher transaction costs. As a result, when selecting a trading
law, technical traders must focus more on minimizing transaction costs.
Nonetheless, benefit prospects from technical analysis in the Indian stock market
remain an intriguing and contentious subject.
34. Veronica Caljkusic (2011) analyzed the tolls for making the investment decision
on the basis of technical analysis and fundamental analysis and impact assessment
of macroeconomic indicators to indicate better predictions for future prices in
investment decision of the investors. It was also investigated that how and what
extent in global economy may have impact on the stock prices registered on the
Croatian stock market. It was also explored by the author that the investors should
not take their investment decision on individual analysis basis, but combines them
all for making the investment decision for maximum returns. It was also explored
that for buy and sell decision it is better to rely on the technical analysis and
fundamental analysis is best for long term investment decisions. Finally, it was
concluded that the movements of the stock prices and CROBEX index, and
whether they can be used as the signal of cyclone in the economy as presented as
the result of slow down in the market.
53
35. Gil Cohen et al (2011) conducted a survey to examine difference between
professional investors to non professional inventors in their approach towards
technical and fundamental analysis. In terms of using fundamental and
technological analysis, the research showed no significant differences between
professional and non-professional investors and the results tells us that both the
investor group‟s weather professional or nonprofessional use more frequently
fundamental analysis then technical analysis when they make buy/sell decisions
and Non-professional investors, on the other hand, use fundamental analysis as an
analyst opinion when buying securities and use technical analysis, such as
support and resistance levels, when selling stocks.
36. Venkastesh and Tyagi (2011) conducted a survey through the questionnaire
method among the brokers/sub brokers and fund managers about how they use
technical analysis to make forecast of share price movements in the Indian stock
market. The study was conducted in the year 2010 from the month of September to
November 2010. The author conjecture that more than 85 percent of the
respondents use both fundamental and technical analysis tools in combination to
forecast the prices of the stocks at different time horizon in Indian stock market.
37. Investors Education Fund Report (2011) depicted that the most of the Canadian
investors taken their investment decision on the basis of advises taken from
investment advisors. It was also found that the five out of every six investors
follows the investment advisors advices for their investment decisions.
38. Micheal S. Drake et al (2011) examined that how the publically available
information used by the short sellers and the analyst for prediction of future
returns. Firstly, it was found that the analysts over recommend stocks with high
growth, high accruals and low book to market ratios whereas, the short sellers
consider all eleven accounting and market variable taken in this study while
making investment decisions. Secondly, it was also found that the short interest
provides information about the future returns beyond the eleven items of
information that earlier study shown to be predictive of future returns and analysts
also provided the some incremental information but the negative coefficient
suggest trading against the analysts. Finally, it is concluded that a highly profitable
trading strategy is one where investors trade with short sellers when the short
sellers signal strongly conflict with the consensus analyst recommendation. It is
54
also suggested that the investors can improve their returns by short interest as a
supplementary investment signals.
39. Hesham I. et al (2011) examined the role of the technical analysis in KSE and also
explored the investment appraisal techniques used by the Kuwaiti investors
additionally the sources of information employed by respondents. For collection of
data the author conducted the interviews using semi structured questionnaire
instrument. The questionnaire included 34 different questions which covers all the
aspects of the research study. The study depicted that the technical analysis was
commonly used by the research participants as far as concerned about the
investment decision. Technical analysis was not the only method to value shares
and the majority of the respondents consider technical analysis as secondary to the
fundamental analysis and the risk analysis was ranked the last. It was concluded
that technical analysis appeared to be more widely used among researchers in
Kuwaiti than among their counterparts in other developed markets. Study also
depicted that the respondents apply technical analysis for their short term
investment decisions specifically for entry and exit points for their buying and
selling decisions. It was also found that the technical analysts of Kuwait were
different opinion in comparison to the developed stock markets. Firstly, they
scanned the firm‟s profitability then they will go for another level of charting
analysis. Moreover the analyst follows the large investor‟s movements while
trading in the stock markets.
40. Hong Yi Chen et al (2012) examined how fundamental analysis should be used to
support technical analysis in order to distinguish momentum winners from losers.
The author created the BOS momentum strategy by incorporating the BOS ratio
into the momentum strategy and discovered that the BOS would help the
momentum strategy earn more profits. The author also constructed a combined
investment strategy by introducing FSCORE and GSCORE into the momentum
strategy. The study concluded that the combined investment strategies can generate
higher returns than the momentum strategy and the BOS momentum strategy,
indicating that the composite fundamental score can help the investors to get the
stocks with more inefficient information contents in the portfolio and with larger
movement effects in the future. The study revealed that the fundamental analysis
indeed provides information to the investor‟s in addition to the technical
information for selecting the winners and losers stock from the ma
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41. Contreras Ivan et al (2012) purposed an evolutionary algorithm to optimize the
parameter of a stock trading system which combines both fundamental and
technical analysis. The author introduced a new filling operator (GAwFO),
preserve the diversity of the population and when sGA was applied, found the
solution of the problem of premature convergence. It was concluded that when the
mentioned methodology was applied to the data of 100 companies in a year, it
given a possible return of 830 & compound with a 180 % of the buy and hold
strategy.
42. Naven kumar et al (2013) study was based on an online questionnaire survey on
the perceived importance of technical and fundamental analysis and the different
strategic factors in stock price forecasting. The data was collected from the brokers
of Bombay stock exchange, India. The study conclude that the brokers rely more
on technical vis –a-vis fundamental in the short term investment forecasting and
focused more on the fundamental analysis for making investment forecasting in
long run. It was also suggested that the company specific factors was rated more
important and the all reaming factors are rated less important in the long time
horizons by the brokers of Bombay stock exchange India.
43. Joshi (2013) investigated the extent to which major factors are responsible for the
price movements in the Indian stock market. The study concluded that factors like
flow of foreign institutional investors, political stability, GDP, inflation, savings
and investments, interest rates, liquidity and global level factors are responsible to
create movements in Indian stock markets.
44. Obamuyi (2013) conducted a survey through questionnaire method on factors

influencing investment decision of investors in capital market among the
individual investors in Nigeria. The data was collected from 297 respondents
through convenient sampling method. Independent t test, ANOVA and Post hoc
test were employed for analyzing the collected data from respondents. The post-
performance of the company shares, planned stock split, dividend strategy,
expected corporate earnings, and get rich fast were found to be the most influential
influences on investors' investment decisions, while religions, rumors, commitment
to the company's brands, family members' opinions, and expected losses in their
investments in Nigeria were found to be the least influencing factors. It is also
revealed that the social economic characteristics of investor significantly
influenced the investment decision of investors in Nigeria.
56
45. Smith et al (2013) focused on the efficiency of technical analysis rather than
testing specific trading rules as studied in previous studies. The author examined
the effectiveness of technical analysis with the help of five performance metrics
namely raw rate of return, benchmark adjusted returns, information ratio, 3 factor
alpha and 4 factor alpha. The researcher has taken more than 10000 samples from
them one third samples use the technical analysis for making decisions. The
researcher also compared the investment performance of the funds that use
technical analysis versus those does not use five performances metric. Finally,
concluded that portfolio with greater reliance on technical analysis have elevated
Skewness and kurtosis level related to the portfolio that do not use the technical
analysis. And it is found that the net effect of the technical analysis on the
management of institutional equity related portfolio was beneficial although in an
unanticipated way.
46. Suresh A.S (2013) concluded that the nature of the capital market instruments
forces investors to make their investment on the basis of fundamental analysis.
The fundamental analysis examined the economic environment, industry
performance and company performance before making the investment decision.
The investment includes both risk and returns trade off and every investor wants to
maximize his wealth by selection of optimum combination of risk and return
according to his requirement and capacity. The study found that it is necessary for
the investors to do both fundamental and technical analysis for making their
investment decision about the stock. It is also found that in the stock markets the
trends are the man‟s best friend
47. Jiali (jasmine) Fang (2014) conducted a study in that the time series and cross –
sectional level was used to lighten on the efficiency of technical analysis in
international stock markets. The study was divided into four parts and the first part
covered the importance of data snooping analysis, and the second part covered the
available literature provided more conclusive evidence when assessed the
efficiency of technical analysis. The third part Ballinger bands was used to show
how investors can gradually eliminate any possible profitability of technical
analysis over time and explained how the return predictability anomalies can be
disappeared over time, and lastly the paper concluded that the technical analysis
possesses significant practical values dependent on investors cultural
57
individualism, market development and integrity and information uncertainty.
Finally, it was concluded that the usefulness of technical analysis while investing
always keep in mind the data of data snooping and investors overuse or the
practitioner never given ups on the technical analysis.
48. Ghulam, Neil Diamond (2014) explored the importance of combining

fundamental and technical analysis for getting the profitable opportunities for their
investment decision making. It was found that the technical analysis work better
for the short term trading, day trading and swing trading whereas, the fundamental
analysis work better for the long term investment decisions. It was also found that
we should use more than one technical indicator for getting the best results or the
integration of technical indicators and fundamental analysis (based on company
financial performance) provides the best profitable investments. It was also found
that when author used the combination of both fundamental and technical analysis
it given the efficient results for investment decision making and executed trades.
For day trading the researcher applied the technical indicator, a profit of 1196, 41
was made by the hedge fund. So it can be said that for hedge funds technical
indicators are best and for growth funds we should integrate the fundamental
analysis along with the technical indicators for getting best results.
49. Qin Lei et al (2014) investigated how insiders‟ trades are executed and whether
and how outside investors can simulate outperforming insiders and glean
substantial portfolio returns that withstand the erosion from adjustments for both
the standard factors and stock characteristics in the asset pricing literature. The
study was based on the insider trading data from 1993 to 2008 in the USA from
the transaction costs point of view. The regression analysis was used to control for
trade difficulty, insider reputations and the corporate role ranks of insiders and
document the existence of the abnormal trading alpha. The author constructed
portfolio on the basis of abnormal trading alpha and got abnormal returns that is
vigorous to both standard asset pricing factors model and the stock characteristics
adjustments. It was evidenced that the corporate insider obtain transactions prices
superior to the VWAP for the same stock on the same trading day. It was depicted
that the inside sales and purchase had a significant abnormal trading alpha of about
10 percent per share on average after adjustment for trade difficulty, insider
reputation and corporate role of insider. The outsider‟s investors can trance the
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trading alpha of insider for making long – short strategy to mimic certain groups
of insiders. The HBS strategy targets outperforming insiders whereas the LBS
focused on underperformance insiders and it was also found that the HBS strategy
delivered profit for a continuous period of 12 months where as the LBS was failed
and occur the losses at the end of the month. The results shown the uniquely
bridge together the transaction cost literature and the inside trading literature.
50. Thomas E Asha (2014) evaluated the technical analysis from Indian perspective
and found the usefulness of technical analysis in the Indian stock market. The
study found that the importance of the technical analysis is world renewed and
even admitted by the strongest fundamentalist in the world.
51. Naveen kumar baradi (2014) conducted an online questionnaire based survey
among stock brokers of Bombay Stock Exchange in India examined the use of
technical and fundamental analysis to forecast the stock price movements. The
researcher distributed the 262 online questionnaire and 152 returned by the brokers
of the BSE India. Over the 7 forecasting horizons: intraday, 1 week, 1 month, 6
months, 1 year, and beyond the 1 year, the priority that brokers individually assign
to fundamental and technological analysis was investigated and also the
importance of brokers view of the degree of complementary of fundamental and
technical analysis in stock price forecasting. The author constructed a 10 point
likert scale questionnaire for data collection and one way ANOVA and post hoc
test were applied for analyzing the collected data. It was revealed that the
emphasis that brokers concentrate on fundamental and technical analysis on a
seven-day, one-week, one-month, three-month, six-month, one-year, and beyond-
one-year forecasting is not the same. Depending on the forecasting horizons, the
brokers' ratings varied. And it was also discovered that a shorter time period
shown a skew towards reliance on the technical analysis as compared to
fundamental analysis but when we increase the horizon of time period then skew
shift to the fundamental analysis. Finally it was also concluded that most of the
stock brokers took the technical analysis as complementary to fundamental
analysis.
52. Tian Gang Gary et al (September 2014) examined the predictive power and
profitability of simple trading rules by expanding their universe of 26 rules to 412
rules. For finding out the relationship between the market efficiency and excess
59
returns by applying trading rules, the author examined the excess returns over
periods in US markets and also compared the excess between US markets and
Chinese markets. It was found that there was no evidence at all supporting
technical forecast power by these trading rules in US equity index after 1975. The
study finally concluded that the simple trading rules are quite successful in
predicting stock prices movements in the Chinese markets and allowed trades to
earn excess profits in 1990. While same trading rules even does not beat the US
index for the same time period.
53. C. Boobalan (2014) the main purpose of the study to find out the relevance of
technical analysis in the Indian capital market and also analyzed the performance
of the studied companies and to predict the future price for buying and selling the
securities through technical analysis. It was depicted that by applying substantial
technical analysis expertise, one can forecast the ideal stock market investment
decision. For conducted this study the author selected the top most five actively
traded stocks( i.e. WIPRO, SBIN, GAIL, ONGC, ITC) in national stock exchange
on the basis of stratified sampling technique. Secondary Data For the three years
from FEB-2011 to March 2014, the weekly share price fluctuations of the selected
companies on the NSE were taken. The closing prices of stocks were used in the
study, and the future price movement was analyzed using a variety of statistical
methods such as a share (candlestick) chart, an exponential moving average
(EMA), and a moving average convergence divergence (MACD) and Relative
strength index (RSI). The study revealed that the ONGC was technically strong
according to RSI and MACD and the GAIL shown the price variations but also
showing the increasing price for the future on the basis of charts and very strong
signal to buy the GAIL according to RSI and MACD. The candlestick charts of
ITC shows the sideways from the trading in ITC. Finally the study concluded that
the technical analysis tools gave the idea about the future prices of the stocks for
making investment decisions.
54. Monti Marco et al (April 2014) author investigated the factor that affects the trust
and advices taken by investors while making their real world portfolio decisions
from their advisors. It was depicted that the portfolio decision taken by investors
depends upon the investor- advisor relationship in comparison to the risk- return of
the investment avenues available. It was concluded that the non expert retail
investors trust their advisors a lot for their portfolio construction.
60
55. Viliam Vajda (2014) author purposed the trading strategies and back tested with
Forex market with different timeframes on the basis of the MACD, technical
indicator. The data was collected from the Met quotes software corp. from the year
2000 to till 2011 and it was taken on the basis of different timeframe M 15, M30,
H1 and H4. The data was divided on 3 equally long times period whereas, the first
phase starts from year 2000 to 2003 and represented by dot.com crisis, second
phase from 2004 to 2007 represented by the non crisis period and the last phase
from 2008 to 2011 represented the financial crisis. It was depicted that strategy
gives the positive returns at timeframes of H1 with higher parameter where, we
have positive trading balance without putting any stop loss. It was found that
strategy behavior difference was confirmed in the crisis and non crisis time frames
at 1 hour and 4 hour time‟s frame. The author concluded that the trader is able to
achieve profit in highly volatile Forex market with the implementation of strategies
based on technical indicators but the trader must look for the money management.
Finally it was suggested by the author to follow the fundamental information along
with the strategies based on technical analysis, indicators for investment/trade
analysis decisions.
56. Wellington Garikai Bonga (April 2015) explored the need to make a proper
fundamental analysis while investing in stocks. It was found that whether, an
investor applies fundamental analysis or technical analysis or in combination does
not really matter it only defines the risk taking capacity of investor. But it is also
truth it is always better to rely on analysis rather than making a blind investment. It
was concluded that the efficient investment decision involves the use of both
fundamental and technical analysis in conjunction.
57. P. Devika and Dr. S. Poornima (2015) the study presented a survey about how
traders and fund managers in the Indian stock market use fundamental and
technical analysis to predict share price movements. According to the findings,
more than 85% of respondents use both fundamental and technical analysis to
predict future stock values across various time horizons. When the market was
bullish then the participants rely more upon the technical analysis and when the
market was bearish then participants rely more on fundamental analysis for
predicting the share prices.
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58. Ahmed soliman Wafi (2015) study concluded that the research on technical
analysis is still ongoing where as it was approved only on the historical data. After
reviewed various studied it was discovered that simple trading rules could forecast
future stock prices in emerging markets due to financial inefficiency. However,
when these simple approaches were extended to developed markets, the results
were misleading, while complex forms of technical analysis, such as genetic
programming, genetic algorithms, and neural analysis, improved the effectiveness
of technical analysis in both emerging and developed markets. Finally, the study
concluded that technical analysis was beneficial in both developing and developed
countries.
59. Tamal Datta Chaudhuri and Priyam Singh (July 2015) study was conducted to
integrate technical analysis with pair trading and the results shown that the
technical indicators do help in profit making from pair trading. The author used
three technical indicators for getting results namely Momentum, Bollinger Band
and MACD. The pair trading is arbitrage/hedge strategy for making profit by
taking opposite positions in trades of same sector companies. The strategy hinges
on deviation of the ratio of prices from mean and reversal to the mean. It was
found that in some cases the trades were give immediate results and in some cases
it required some time. The arbitrage strategy will work in the short run and it can
increase the transaction cost in long run.
60. Veliota Drakopoulou (2016) investigated the fundamental analysis and other
stock valuation techniques used by the daily equity trades in the stock market.
Whereas, the daily traders often used technical charts and other charting tools for
their investment decisions without considering the intrinsic value of the daily
traded stocks. Finally it was found that the author supported the concept of
integration of both investment techniques would generate more successive
investment decisions for equity trades.
61. Yousef Atef Ahmed (May 2016) recognized that the effects of combining
between fundamental and technical analysis on the decision of the investors at
Forex markets. The study also says that the respondents “experts” use technical
analysis when they make the investment because the technical analysis is
considered bases for trading in currency markets simultaneously from another side
experts don‟t use it alone without considering the fundamental analysis that will
62
lead to earn return. And the result shows that the most loosing transaction occurred
as a result of trading with depending on one type of analysis and negligence of
another and also because of random trading.
62. Valarmathi A. (2016) described that how technical analysis plays an important
role in secondary market, analysis of stocks and its usefulness towards trading.
The study was based on the five IT sector stocks registered at NSE India and data
was collected from NSE India website of 5 months start from December 2015 to
April 2015 and the same data was analyzed with the help of technical analysis
tools like Exponential moving average (EMA) and Relative strength index (RSI).
It was found that the post recession period provides the short term investment gain
to its investors in IT stocks and it also found that the market trend of IT industry
tends up with gradual price fluctuations. It was concluded that the investors can
invest in the IT stocks in future also but while investing they have to consider the
country economic scenario and short term investors can rely on the technical
analysis/ chart analysis for their investment decisions and the technical also
provides the buy and sell signals based on the trend of price movements in the
stocks.
63. Hema et al (2016) in their research study titled, “Fundamental analysis with
special reference to pharmaceutical companies listed in NSE” analyzed that an
investor should conduct the fundamental and technical analysis before investing in
shares. It was also found that that growth prospects in the pharmaceutical industry
in India.
64. Chang, Y. et al (2017) explored the unfolded aspects of technical trading by

applying technical trading rule through VMA to 33,000 firm day observations
listed on the TWSE. Author investigated the effectiveness of technical trading rule
comparative to buy – and – hold strategy at firm level for controlling the firm size
and trading volume. The author developed three VMAS: VMA (1, 50), VMA
(1,100) and VMA (1,150) and then applied the all three on the every stock listed
on the TWSE stock exchange. After the VMRS results the author applied the
Hosen‟s (2005) SPA framework for controlling the size and the trading volumes of
the firms. The results of the VMAS were compared with buy and hold strategy for
controlling the size and volumes. The results concluded that the VMAS
outperforms on the BH strategy and the profitability of VMRs was positively
63
correlated with the size and volumes. As far as VMA (1,150) was best for the
smaller size firms where as the VMA (1,100) performs better for larger firms. On
the basis of the results the author suggested that the size and trading volume data
were more informative for the trend detection in the TWSE stock exchange.
65. Nguyan Van. Huan et al (2017) presented a technique combining fundamental

and technical analysis to limit the two methods and provide to investors to make
decision more efficiently, accurately and profitable. It was concluded that each
method has its own pros and cons and investors often use one method is
fundamental or technical because they are unaware about the combination of both
fundamental and technical will help making investment in a more accurate.
66. Pathade P. and Vinod Kumar (2017) investigated that how the basic tools of
fundamental and technical analysis plays a role in making investment decision. It
was concluded that the fundamental analysis is the best tool for making long term
investment decisions in the companies it was also found that the fundamental
analysis enables the investors to understand the financial position of firm in a
better way. The study was based on the secondary data which was collected from
the annual reports of the firma, quarterly financial results, and data collected from
the websites. The study covered the time period from April 2011 to March 2016
namely from two selected companies one is TCS and other is Infosys. The
collected data was analyzed with the implementation of fundamental analysis and
ratio analysis to measure, evaluate and compare the company‟s performance. The
study revealed TCS has higher earnings per share and higher returns on capital
employed as compared to the Infosys, whereas the Infosys had the best performer
in case of current ratios and debtor turnover ratio in caparison to the TCS.
Moreover the Infosys has higher gross profit ratio in comparison to the TCS and
also having the consistency in the results of gross profit.
67. Manna Reshmi and Pathak Saurav (2017) in their research study titled,
“Fundamental and Technical analysis of Indian pharmaceutical companies: Cipla,
Sun Pharma, Auro pharma, Ranbaxy and Lupin” explored that the long term
investment and short term investment on the basis of returns. It was found that the
fundamental analysis given strong signal for Lupin, Sun Pharma and Cipla
whereas, technical analysis gave strong signals for Sun Pharma and Lupin for
short term investment of one month period and cut gains at resistance levels.
64
68. S. Nagendra et al (2018) examined the practical usefulness of the fundamental
and technical analysis. The study was based on the selected five market
capitalization service companies namely TCS, Reliance, Coal India, HUL and
Hindustan Zinc. For the analysis of the data of last 10 years were collected from
these selected companies. For fundamental analysis the balance sheets were
analyzed and for the technical analysis stock market prices of last 10 years of these
companies were employed. The study concluded that the both the analysis were
useful in decision making in stock market activities.
69. Renu Isider R. (2018) investigated that stock selection as an investment is a

difficult task due to the large number of stocks available for trade in the stock
exchange. The author focused on the history of the fundamental and technical
analysis and their main component. Both the fundamental and technical analysis
tools have been used as the main decision making tools in the stock market. It was
also found that some investors employ either of the two tools according to the
market scenario and may use both the tools in the combination. It is suggested that
how to apply the right decision making analysis tool in the different stock market
scenario.
70. Qili Wang (2018) author constructed a novel framework that combines the
wisdom of crowds and technical analysis for financial market prediction based on a
new fusion strategy and purposed a new machine learning model called deep
random subspace and ensembles method for effective data mining. The purposed
method consisting four parts namely data collection, sentiments collection,
modeling and predications. The study was done on the data collected through
mainly from two sweets namely sina weibo and stock market returns. Sinaweibo is
a combination of face book and twitter with more than 198 million monthly active
user‟s group of Chinese investors who share their opinions and made
communication through the social media. Sina Weibos consider all the sentiments
calculations posted on the social media. Sentiments covered all the opinions on the
trends in stock market made on social media. It was depicted that the proposed
method outperforms the best base line mode in predicting stock market by 14.46 in
term the AUC value indicated the efficiency of the mode for financial market
predications.
65
71. S. Veena (2018) explored the necessary characteristics of financial advisor for role
played by him in the various stages of investment decision making process from
the available alternative and the impact created by the financial advisors in the
mind of the investors about their services. The author reviewed various research
papers and made a conclusion that the financial advisors definitely add some
values and benefits to the investor‟s wealth up to maximum extent and also help
the investors for making their investment decisions. It was also found that the high
wealth/big investors tend to utilize the services of financial advisors then with low
income/small investors.
72. Endiarto Tatok (2018) investigated the effectiveness of fundamental and

technical analyses in generating yields through buy and sell signals provided by
both analytical tools. Author studied the data taken from JII stock prices from year
2010-2014 and applied Run test, Autocorrelation on the data. PER and PBV was
also used for analyzing the data and it was found that buy signals generated by the
model gives higher return then sell signals. Finally, it was concluded that
combining fundamental and technical analysis could provide a positive return,
even though it was not statistically compatible.
73. De Souza et al (2018) investigated the profitability of technical analysis (Moving

average trading strategy) on the stock market of BRICS countries. For analyzing
the stock markets, constructed the portfolio for each country, containing all the
assets traded in the stock market of each BRICS member. Using technical analysis
methods (moving average and buy & hold), the authors created an automatic
trading method that simulated trades in this portfolio. It was found that the returns
obtained by simulated portfolio constructed on automated system on average
exceeded the value invested. Moreover results could surpass the profitability of a
buy and hold strategy for small portion of traded assets, calculated by county
while, some small portions of investment performed very well, covered the lose
amount generated by the low performing assets. It was found that only few
combinations of moving average were outperforms from a buy and hold strategy
and noticed that the automated generated trading system produced vary
heterogeneous results whereas, the BRICS markets share homogeneous
characteristics. It was also depicted that some combination generated very sound
returns since some combinations are not able to provide enough returns. It was
66
also suggested by the authors that the technical and fundamental analysis can
complement each other for investment analysis.
74. Bassam A. Elbialy (2019) conducted a survey among individual trade of Egyptian
Stock Exchange to identify the impact of traders‟ use of fundamental and technical
analysis on the effectiveness of their investment decision. It was found that only 5
percent respondents whose investment decision are effective. Author concluded
that there is a significant impact of traders‟ use of fundamental and technical
analysis of their investment decision and suggested that traders should use them
for increasing the effectiveness of investment decision in Egyptian stock
exchange.
75. Frida Rasiwala & Bindya kohli (2019) conducted a survey through interview
method among the 50 respondents of Pune city, Maharashtra regarding the
awareness and perception about the Robo portfolio services in Pune. The main
purpose of the study to target the respondents between the age group of 25 to 45
who are generally considered technologically savvy. It was depicted that the most
of the respondents were aware about the capital markets, but not aware about
Robo advisory financial services. it was found that the investors with high
investment amount (above 25 lakh) were not willing to use the robo advisory
services for their investment decisions whereas investors in medium income group
with 5 to 10 lakh were either using the Robo advisory services for investment
decisions or positive attitude to use the same in future too.
76. Zhaobo Zhu, Licheng Sun (2019) presented the portfolio performance of
investment strategies that jointly apply both fundamental analysis and technical
analysis. The study was done from January 1985 to December 2015 and collected
data from New York stock exchange, American stock exchange, and NASDAQ.
The stock information like share price, trading volume and share outstanding are
collected from CRSP. The author used the 3 fundamental factors namely
FSCORE, SUE, and ROE and technical indicators such as moving average and
Bollinger bands. The results shown that when compared with one strategy that rely
on one approach fundamental, or technical the integrated approach to fundamental
and technical analysis investing significantly improves the portfolio performance.
In particular study found that the combination of Bollinger bands with a
fundamental variable, such as SUE, provides higher return, more attractive Sharpe
67
ratio, and the lower tail risk. If we study separately the SUE is a momentum type
study and the Bollinger is a reversal type study and some studies explain that the
fundamental strategies are also momentum type studies. Finally, the study
concluded that the combining the two momentum type trading strategy is a bad
idea whereas, combining a momentum type strategy with reversal- type strategy
gives better results in case of value added.
2.2 Research Gaps
Only few studies have been published in last decade exploring the combining impact of
fundament and technical analysis on the investment decision on foreign markets and
there is no study evidenced in the context of Indian stock market. However, there is a
lack of research that consolidates the available knowledge concerning the combining
impact of fundamental and technical analysis. There is no study in Indian context on
the combining impact of fundamental and technical analysis on investment decision of
investors which is based on the survey of the investors. Many research works had been
done on technical and fundamental analysis in foreign capital markets. But in Indian
context, a little research had been made on technical and fundamental analysis and
separate research work has been done on technical and fundamental analysis.
Therefore, the present study is an improvement over the earlier studies. Firstly, it
combines the impact of fundamental and technical analysis of investment decisions of
investors in Indian stock market. Secondly, it explains the advisors viewpoint on the
investment decision taken by the investors. The present study entitled “A Study of
Combining Impact of Fundamental and Technical Analysis on Investment Decisions of
Investors in Indian stock Market” has been conducted to solve the problems relating to
combining impact of fundamental and technical analysis. This study will help in
identifying the underlying investment strategies and tools of analysis applied by the
investors while making their investment decisions for getting the higher returns.
This study will help in identifying the underlying investment strategies and tools of
analysis applied by the investors while making their investment decisions for getting
the higher returns. Only few studies have been published in last decade exploring the
combining impact of fundament and technical analysis on the investment decision on
foreign markets and there is no study evidenced in the context of Indian stock market.
However, there is a lack of research that consolidates the available knowledge
68
concerning the combining impact of fundamental and technical analysis. There is no
study in Indian context on the combining impact of fundamental and technical analysis
on investment decision of investors which is based on the survey of the investors.
Therefore; the present study is an improvement over the earlier studies. Firstly, it
combines the impact of fundamental and technical analysis of investment decisions of
investors in Indian stock market. Secondly, it explains the role of investment advisors
viewpoint on the investment criteria taken by the investors. This study will also provide
a framework to the researchers for conducting their research further in this field.
69
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.Retrieved on July 3, 2019.
Wang, Q., X, W., & Zheng, H. (2018). Combining the wisdom of crowds and technical
analysis for financial market prediction using deep random subspace
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neucom.2018.02.095
Wong, W, K., Mehar, M., & Boon- kiat, C. (2010). How rewarding is technical
analysis? Evidences from Singapore stock market. Applied Financial
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fundamental and technical analysis. SSRN Electronic Journal, August.
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CHAPTER-3
RESEARCH METHODOLOGY
Research Methodology
The present chapter explains the various components of the methodology used in
carrying out this research study. Mainly, it includes problem statement, scope of the
study, research objectives, research hypothesis, research design, source of data, tools
and techniques applied in analysis, organisation of the study in the form of different
chapters, importance and relevance of the study and limitations of the study.
3.1 Problem Statement
Every investor wants to protect his/her investment and promote it as his source of
earning. The existing studies have been conducted in this area with different objectives.
The existing studies have been conducted in this area are not covering the combining
impact of fundamental and technical analysis. The major objective of this research is
to empirically examine the combining impact of fundamental and technical analysis on
investment decision of investors in Indian stock markets. The present research work
also seeks to examine the awareness level of investors regarding the rules and
principles of fundamental and technical analysis. This research work also make an
attempt to bring into light the combining impact of fundamental and technical analysis.
3.2 Scope of the Study
The present study has been made attempt to analyses the combining impact of
fundamental and technical analysis on investment decision of investors in Indian stock
market. It also undertakes the role of investment advisors viewpoint on investment
Criteria taken by the investors. For this study 413 respondents were selected from
various stock exchanges and brokerage houses. The selected stock exchanges are
Ahmadabad stock exchange, Vadodara stock exchange, Ludhiana stock exchange,
Jaipur stock exchange etc and various branches of brokerages houses all over India
such as Haryana, Chandigarh, Delhi, Gurgaon, Ahmadabad, Vadodara, Punjab,
Hyderabad, Jaipur etc.
3.3 Objectives of the Study
The main objective of this study is to find out the combining impact of fundamental
and technical analysis on decision of investors in Indian stock market. The other
supportive objectives are:
79
 To analyze the awareness of the investors to the rules, principles of fundamental
and technical analysis.
 To study the combining impact of fundamental and technical analysis on

investment decision of investors.
 To study the investment advisors viewpoint on the investment decision taken by the
investors.
3.4 Hypothesis of the Study
H01: There is no awareness of the investors to the rules, principles and techniques of
fundamental and technical analysis.
H1.1: There is no awareness of the investors to the rules and principles of fundamental
analysis.
H1.2: There is no significant difference in gender wise viewpoint of investors regarding

the awareness towards the rules and principles of fundamental analysis.
H1.3: There is no significant difference in marital status wise viewpoint of investors

regarding the awareness towards the rules and principles of fundamental analysis.
H1.4: There is no significant difference in age wise viewpoint of investors regarding the
awareness towards the rules and principles of fundamental analysis.
H1.5: There is no significant difference in academic qualification wise viewpoint of

investors regarding the awareness towards the rules and principles of fundamental
analysis.
H1.6: There is no significant difference in occupation wise viewpoint of investors

H1.7: There is no significant difference in annual income wise viewpoint of investors

H1.8: There is no significant difference in investment experience wise viewpoint of

investors regarding the awareness towards the rules and principles of fundamental
analysis.
H1.9: There is no awareness of the investors to the rules and principles of technical
analysis
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H1.10: There is no significant difference in gender wise viewpoint of investors regarding
the awareness towards the rules and principles of technical analysis.
H1.11: There is no significant difference in marital status wise viewpoint of investors

regarding the awareness towards the rules and principles of technical analysis.
H1.12: There is no significant difference in age wise viewpoint of investors regarding the
awareness towards the rules and principles of technical analysis.
H1.13: There is no significant difference in academic qualification wise viewpoint of

investors regarding the awareness towards the rules and principles of technical analysis.
H1.14: There is no significant difference in occupation wise viewpoint of investors

H1.15: There is no significant difference in annual income wise viewpoint of investors

H1.16: There is no significant difference in investment experience wise viewpoint of

investors regarding the awareness towards the rules and principles of technical analysis.
H1.17: There is no awareness of the investors to the techniques of fundamental analysis.

H1.18: There is no awareness of the investors to the techniques of technical analysis.
H02: There is no significant impact of combining fundamental and technical analysis on

H2.1: There is no significant impact of fundamental analysis on investment decision of

investors.
H2.2: There is no significant impact of technical analysis on investment decision of

investors.
H03: There is no significant viewpoint of the investment advisors on the investment

decision taken by the investors.
H3.1: There is no significant gender wise viewpoint of the investment advisors on the
investment decision taken by investors.
H3.2: There is no significant marital status wise viewpoint of the investment advisors on
the investment decision taken by investors.
H3.3: There is no significant age wise viewpoint of the investment advisors on the
investment decision taken by investors.
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H3.4: There is no significant academic qualification wise viewpoint of the investment
advisors on the investment decision taken by investors.
H3.5: There is no significant occupation wise viewpoint of the investment advisors on

the investment decision taken by investors.
H3.6: There is no significant annual income wise viewpoint of the investment advisors
on the investment decision taken by investors.
H3.7: There is no significant investment experience wise viewpoint of the investment

advisors on the investment decision taken by investors.
3.5 Research Design
In this present study, the research design is exploratory-cum-descriptive in nature. In

order to achieve the foresaid objectives of the following research methodology have
been used in the present study.
A. Nature and Source of Data Collection
B. Sample Design and Sample Technique
C. Profile of the Respondents
D. Instruments of Data Collection
E. Tabulation and Codification of Data
F. Statistical Analysis
A. Nature and Sources of Data:
The present study is based on the primary as well as secondary data to achieve its
research objectives. Primary data were solicited with the help of a structured
questionnaire administered to the investors/brokers/advisors manually and
electronically. Prior to finalizing the questionnaire, a pilot survey had been carried out
and it involved forty respondents based on pilot study and suggestions received, the
questionnaires were modified before the final survey. Secondary data was collected
from various annual reports, books, journals, research papers, newspapers and websites
etc. Moreover we also reviewed and examined the research literature generated on this
subject in India and abroad.
B. Sampling Design and Sampling Technique:
Complete enumeration of all items, commonly known as a census, may not be feasible
due to shortage of time or huge amount of money and energy. Therefore, examine the
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whole universe in research study is very difficult to adopt because of required resources
and the only alternate is left sampling. The process of sampling involves a series of
steps which includes selecting a sample, collecting all relevant information and finally
to draw conclusion on the basis of sample drawn from the population. As we increase
the size of sample it will become more representative of the population but time and
money constraints tend to limit the size of the sample.
In present study, as the universe comprises investors of Indian stock market is very
wide, we have followed convenience cum purposive sampling method for deciding the
sample for the study. For this study, sampling element comprised of five hundred
investors. The total number of questionnaire distributed to investors are 600 but around
500 are received back as filled up and from these 500 questionnaire, 87 could not be
included in the final sample due to the inadequate information provided by the
respondents. Finally the responses of 413 respondents were included in the research
study.
C. Profile of the Respondents:
Demographic profile of the respondents includes various variables such as gender, age,
academic qualification, annual income, marital status, and investment experience. The
below mention table shows the frequency and percentage of the variable collected as
sampled survey.
Table 3.1: Demographic Profile of Respondents
Variables Groups Frequency Percent

Gender Male 297 71.9
Female 116 28.9
Marital Status Married 304 73.6
Unmarried 109 26.4
Age Less than 20 39 9.4
20 to 30 102 24.7
30 to 40 144 34.9
40 to 50 87 21.1
50 and above 41 9.9
Academic Qualification Student 35 8.5
Business Man 129 31.2
83
Govt. Employee 149 36.1
Private Employee 100 24.2
Professional 39 9.4
Professional Investor 52 12.6
Broker 80 19.4
Investment Advisor 139 33.7
Annual Income Below 300000 29 7.0
3,00,001 to 6,00,000 22 5.3
6,00,001 to 9,00,000 48 11.6
Above 9,00,000 4 1.0
Investment Experience Below 5 years 91 22.0
5 to 10 years 180 43.6
10 15 years 71 17.2
15 and above 71 17.2
D. Instrument for Data Collection:
The study aimed at combining impact of fundamental and technical analysis of

investment decision of investors in Indian stock market. For the data collection a total
of 600 questionnaire were send/ distributed to different stock exchanges and various
brokerage houses with a request to get these filled questionnaire from the investors who
have any kind of investments in Indian stock exchanges. Some of the stock exchange
managers and brokerage houses managers are very helpful to allowed distributing the
questionnaire to different broker‟s offices inside the campus area of stock exchange.
Moreover Google forms, emails and were also used to collect the data from the
investors. Personal meetings and telephone calls were used to questionnaire distribution
and make them understand the purpose of the research and to assure to the investors
that data provided by them will be used only for academic research purpose. Finally,
the information was collected through questionnaire method. Whereas, some of the
brokerage house managers even didn‟t allow collecting the data from their branches
because of their hectic schedules and working trading session. To achieve the
objectives taken up in the study, primary data collection was used. For the primary data
collection, questionnaire was prepared with the help of fundamental and technical
analysts and study martial available on the internet and books.
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For collection of data, drafted questionnaire consists five different sections and each
section covers a specific objective of the study.
1. The first section of information is about the profile of the respondents. The
variables taken up in the study includes, gender, marital status, age, academic
qualification, occupation, income and investment experience.
2. The second section of the questionnaire was made of factors related to the
investment decision in the Indian stock market such as investment objectives,
frequency of monitoring investments, how frequently do they apply fundamental
and technical analysis and application of fundamental and technical analysis in
combination and considered sources of information while making investment
decision.
3. The third Section of the questionnaire was made of awareness to the rules and
principals and tools/techniques of the fundamental and technical analysis. It
includes the tools and techniques of the fundamental & technical analysis and
meaning of fundamental and technical analysis and basic assumption of
4. The fourth section of the questionnaire was made of combining impact of

fundamental and technical analysis on investment decision of investors in Indian
stock market. It includes the combining impact of fundamental and technical
analysis on investment and portfolio construction, long term and short term
investment selection by applying fundamental and technical analysis, solution of
query through combining fundamental and technical analysis, to know the expected
price of stocks , rational investment decision etc.
5. The fifth section of the questionnaire was made of investment advisors viewpoint
on the investment decision taken by the investors, it include the factors like advisors
helps in achieving financial goals and portfolio construction, guide regarding
diversification, minimizing risk, maximizing returns, regarding strategies behind
investment and expert opinion, provide factual and logical information and
improving performance of investment through factual information etc. This section
also includes the importance of the qualities expected by investors from their
investment advisors such as skills of the advisor, accuracy of calls, timely
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information, experience, organisation skills, entry and exit time and solution of the
problem etc.
E. Tabulation and Codification of Data:
Initially the sampled data (collected through questionnaire) entry is done with
Microsoft Excel 2013.The questions and responses of the respondents were coded and
entered in the computer using Microsoft excel and data validation also used for
accuracy of the entered data. Then the excel sheet transferred to SPSS 16.0 software
for further processing and the required analysis was done with aid of statistical package
for social science 16.0 version.
F. Data Analysis:
The primary data collected through sample survey are subject to statistical analysis with
the help of SPSS 16.0 software. The main statistical techniques used for data analysis
includes frequency distribution, mean, SD, f test, percentage, t test, factor analysis and
regression analysis. Application of these tools has been identified as relevant to the
object of the research study. F test is used where the demographic characters get
classified into more than two categories. SD is used to check the variation of responses
of respondents from the average value of their responses. Additionally, factor analysis
is used as a data reduction technique to reduce the size of the factors and regression
analysis is used to the study the combining impact of fundamental and technical
analysis on investment decision. Cronbach‟s alpha was also used to check the reliability
of the questionnaire.
3.6 Time Period
It took more than one and half year in collecting primary data as the process of data
collection was started from June, 2019 and end by February, 2021.
3.7 Reliability Analysis
To measure the reliability of data collected through sample, we used Cronbach‟s alpha
test. Basically, it is necessary to obtain high quality reliable research results. To the
end, it is necessary to the test the reliability of the study. Reliability is the property by
which consistent results are achieved when we repeat the measurement of sampling. In
theory, an alpha coefficient of 0.60 and more than 0.60 is considered to be a good
reliability estimate and it does indicate good internal consistency. In order to check the
reliability of the statements in the questionnaire, Cronbach‟s alpha was run on a sample
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of 40 respondents on four different sections which includes 66 likert scale statements.
The result of this analysis has been shown as per table.
Table 3.2: Reliability Analysis of the Questionnaire
S. NO Factor Value of Cronbach No of Statements

Alpha
1. Rules and principles 0.803 16
fundamental Analysis
2. Rules and principles of 0.887 14
technical analysis.
3. Combining impact of 0.852 15
fundamental and technical
analysis on investment
decisions
4. Investment advisors viewpoint 0.872 21
on investment decision
Source: SPSS Software
It can be seen from table 3.1 that the value of Alpha coefficients for different factors
has been found ranging from 0.803 to 0.887. Hence the factor wise Cronbach alpha
value, being higher than 0.60 justify the reliability of the questionnaire for data
collection. At the end we can say that further analysis of the collected data to be
believed as truthful.
3.8 Organization of the study
The present study is divided into following five chapters:
Chapter-1 Introduction is divided into three sections. The first section contains the
general introduction and combining fundamental and technical analysis, background of
Indian share market, regarding investors and general background of investments/
trading. The second section includes the fundamental analysis. The last section includes
the technical analysis such as: Charts, Trends and Volume.
Chapter-2 Review of literature consist the related reviews of the various research
studies on the topic under study.
Chapter-3 Research methodology deals with research design, problem statement, scope
of the study, objectives of the study, hypothesis of the study, research methodology,
87
data collection method, statistical tools used for analysis, sample profile, organization
and limitations of the study.
Chapter-4 The sampled data is analyzed and interpreted by applying various statistical
tools and techniques such as mean, SD, t-test, one way ANOVA, factor, regression,
ranking and also includes the Cronbach‟s alpha reliability test of the scale.
Chapter-5 Findings and recommendations is divided into three sections. The first
section incorporates the results of the study. The second section includes the
recommendations of the study. The last section directs about the future scope of the
study in further research.
3.9 Importance and Relevance of the Study
The present research work studied the investor‟s perspective on the combining impact
of fundamental and technical analysis on investment decision and also the investment
advisors viewpoint on the investment decision taken by investor for making their
investment decision. So the awareness level of rules, principles and tool and techniques
of fundamental and technical analysis, and combining impact of fundamental and
technical analysis and investment advisors viewpoint on the investment decision from
the standpoint of the investors. The present study will identify the combining impact of
fundamental and technical analysis on the investment decision of investors in Indian
stock market. This study will help in finding out the investment strategies behind the
investment decision taken by the investors for making investments in Indian stock
market. The results of this research work help the government, SEBI and financial
advisors for redesigning the policies, strategies for grooming the investments in the
Indian stock market. It will also provide a framework to the researchers for pursuing
their research further in the related field.
3.10 Limitations of the Study
As it is true of all research studies, the present research study has also some limitations
in so far as the applications of its generalization results are concerned. Our thesis work
will be subjected to several limitations due to lack of availability of relevant research
literature as the subject of study is of recent origin and also due to reliability of
information because not all respondents were fully groomed and updated in the detail
of combining impact of fundamental and technical analysis. Moreover, investors were
using the fundamental and technical analysis but they are not aware of the technical
terms of these analytical tools. The results of the study should be viewed in background
88
of the limitations such as sample size, sampling technique and time constraint for the
study.
The full control of error is very difficult to exercise in a research work of this kind,
though all care has been taken while conducting the research study. The present
research study is based on the primary data collected through a sample survey and,
therefore, sampling errors cannot be ruled out, where as all possible take care has been
taken while collected data to keep it free from bias as explained in the sampling
procedure. Additionally, the result of the research study comprises an outcome of the
statistical inferences drawn by application of selected statistical tools and techniques
which have their own inherent limitations.
The biggest limitation of the study is Covid- 19 pandemic and national lockdown all
over country because it was the biggest hurdle faced while collecting the data through
questionnaire because managers of stock exchanges and brokerage houses were not
allowing visiting the stock exchange and brokerage houses.
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90
CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
This chapter covers the data analysis. In this study the main objective was to analyse
investors in Indian stock market. The responses collected from respondents on the
combining impact of fundamental and technical analysis were analysed with the help of
frequency distribution, mean, standard deviation, KMO test, factor analysis, principal
component matrix, regression analysis, t - test and f - test.
For the purpose of analysis, the chapter is divided into five sections. The first section
presents the detailed description of respondents profile with the help of frequency
distribution and descriptive analysis. Second section covers the descriptive analysis of
sampled respondents according to the frequency of applying fundamental analysis,
frequency of applying technical analysis, frequency of applying both fundamental and
technical analysis before making investment decision and the applicability of
techniques of fundamental and technical before making investment decision. Section
third, covers the awareness of investors to the rules, principles and techniques of
fundamental and technical analysis. Fourth, section covers the factors related to the
combining impact of fundamental and technical analysis on investment decision of
investors in Indian stock market. This section also covers the impact of fundamental
analysis and technical analysis investment decision. Moreover, it also includes the
investors. The last section presents the factors related to the investment advisors
viewpoint on the investment decision taken by the investors and also includes the
ranking of charterstics of the investment advisors done by investors according to their
charterstics.
4.1 Respondents Profile
Before analyzing the response pattern, it is deemed appropriate to discuss the profile of
the respondents collected through primary data. The sampled users forming part of this
study come from diverse backgrounds. The present section gives a distribution of
sampled respondents according to their gender, age, marital status, academic
91
qualification, income, investment experiences and profession. These characteristics are
used as independent variables for the purpose of analysis and interpretations.
Total of 413 questionnaire are found correct out of 500 questionnaire collected by the
researchers for the purpose of research study. Thus the further analysis is based on the
413 responses collected from respondents.
Table 4.1: Descriptive Statistics for Demographic Variables

Variable Groups Frequency Percentage Mean SD
Gender Male 297 71.9 1.28 .44
Female 116 28.9
Marital Status Married 304 73.6 1.26 .44
Unmarried 109 26.4
Age less than 20 39 9.4
20 to 30 102 24.7
30 to 40 144 34.9 2.97 1.11
40 to 50 87 21.1
50 and above 41 9.9
Academic Below graduate 35 8.5
Qualification Graduate 129 31.2
Post Graduate 149 36.1
Professional Course 100 24.2 2.76 .91
Occupation Student 39 9.4
Business Man 52 12.6
Professional 29 7.0
Broker 48 11.6 3.83 1.73

Annual Income Below 300000 91 22.0
300000 to 600000 180 43.6
600000 to 900000 71 17.2
Above 900000 71 17.2 2.29 .99
Investment Below 5 Years 168 40.7
Experience 5 to 10 years 117 28.3
10 to 15 years 62 15.0
15 and above 66 16.0 2.06 1.09
Source: Primary Survey
92
As exhibited in Table 4.1, presents the detailed descriptive statistics for demographic
variables of the respondents. Table 4.1 shows the detailed frequency related to the
gender out of the total responses 297 respondents are male and 116 are females. In
terms of frequency majority (71.9 %) of the respondents are males, while only 28.9
percent are females. The mean value of gender group is mean=1.28 with SD=0.44.
Marital Status wise distribution of sampled respondents and reveals that the highest
percentage (73.6 %) of them fall in married category, whereas, only 26.4 %
respondents lie in the group of unmarried and the mean value of this group is mean
=1.26 with SD=0.44. The age – wise distribution of sample respondents and reveals
that the highest percentages (34.9 %) of them fall in the age group of 30-40 years,
followed by those falling in the age group of 20 to 30 years (24.7 %) and 40 to 50 years
(21.1 %). The respondents in the age group of 50 and above and less than 20 years are
respectively 9.9 % and 9.4 percent. The mean and SD value of this group is 2.97 and
1.11 respectively. Table 4.1 presents the academic qualification wise Respondents‟
distribution of sampled data and reveals that the highest percentage (36.1 %) of them
fall in the category of post graduation, followed by graduates i.e. 31.2 percent. 24.2
percent respondents belongs under professional courses whereas, only 8.5 %
respondents lie in the category of below graduate. The mean value of gender group is
mean =2.76 with SD=0.91. Results of the descriptive analysis show that the profession
wise analysis of sampled respondents which reveals that the highest percentage (33.7
%) of them fall under the category of „private employee‟. Whereas, the percentage of
respondents who are government employees is 19.4 percent. 12.6 % respondents are
business man, whereas the percentage of respondents who are professional is 7 percent.
The respondents who are professional investors and brokers are respectively 5.3 % and
11.6 percent respectively. The respondents who belong to the category of students are
9.4 % of total respondents, whereas only one (1) percent respondents lie in the group of
investment advisors category. The mean value of occupation wise group is 3.83 with
SD=1.73. Table also presents the annual income wise distribution of sampled
respondents which reveals that the highest percentage i.e. 43.6 of them fall under the
income group of 3 lakh to 6 lakh whereas 22 percent respondents lie under the below 3
lakh income group. The respondents who are 6 lakh to 9 lakh and 9 lakh and above
group are exactly equally distributed as their percentage are 17.2 and 17.2 %
respectively and the mean value of this group is 2.29 with SD=.99. The last group
shows the respondents distribution according to their investment experience in the
93
stock market. It is clear from the above mentioned table that the largest percentage
(40.7 %) of the respondents falls in the group with investment experience of under 5
years. Those who have experience of 5 to 10 years and 15 and above are almost equally
distributed as their percentage are 15 and 16 percent respectively. In the sample, while
there are 28.3 percent respondents having experience of 5 to 10 years in investment and
the group average value is mean=2.06 with SD=1.09.
4.2 Respondents Profile as Per Investment
This section includes the aspects of investment objective, frequency of monitoring

investments, frequency of applying fundamental analysis, frequency of applying
technical analysis, frequency of applying both fundamental and technical analysis
before making investment decision and also includes the source of information
considered while making their investment decisions.
Table 4.2: Demographic Responses as Per Investment

Variable Groups N Percentage Mean S.D
(Frequency)
Investment Objective Short term capital 152 36.8
gains
Long term capital 149 36.1
gains
Regular income as 42 10.2
dividends
Speculation 47 11.4
2.12 1.18
Others 23 5.6
Frequency of Monitoring Daily 215 52.1
Investments Weekly 79 19.1
Monthly 38 9.2
Quarterly 28 6.8 2.16 1.59
Bi- Annually 22 5.3
Annually 31 7.5
Frequency of applying F.A Always 172 41.6
before investment decision Rarely 102 24.7 2.05 1.07
Often 85 20.6
Never 54 13.1
Frequency of applying T.A Always 144 34.9
before investment decision Rarely 108 26.2
Often 86 20.8 2.22 1.11
Never 75 18.2
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Frequency of applying both Always 135 32.7
F.A and T.A before Rarely 132 32.0 2.18 1.06
Investment decision
Often 80 19.4
Never 66 16.0
Brokers Advice Yes 110 26.6 1.7337 .44258
No 303 73.4
Investment Advisors Yes 86 20.8 1.79 .40
No 327 79.2
Family and Friends Yes 145 35.1 1.64 .47
No 268 64.9
Business News Channels Yes 141 34.1 1.65 .47
No 272 65.9
Investment Websites Yes 101 24.5 1.75 .43
No 312 75.5
Newspapers & Magazines Yes 95 23.0 1.77 .42
No 318 77.0
Fundamental Analysis Yes 149 36.1 1.63 .48
No 264 63.9
Technical Analysis Yes 147 35.6 1.64 .47
No 266 64.4
Data Source: Primary Survey, N:Number of Respondents
Table 4.2 shows the demographic profile of respondents according to investment

objectives, frequency of applying fundamental and technical analysis, monitoring of
investment etc. The respondent‟s distribution according to their investment objectives
in the stock market and it is clear from the table that the largest percentage (36.8 %) of
the respondents makes investment for short term capital gains then followed by the
investors who make investment for long term capital gain (36.1 %). Those who have
investments for regular income as dividends and speculation are almost equally
distributed as their percentage are 10.2 and 11.4 percent respectively. Only 5.6 percent
respondents comes under the category of other, whereas the category of „others‟
includes those respondents who are invested for more than one objective such as short
term gains and speculation, long term capital gains and income as dividend etc,.
Additionally, as exhibited in table 4.2 it was shown that the respondents distribution
according to the frequency of monitoring investments in the stock. The above table
reveals that the majority of respondents (52.1 %) monitor their investments on daily
basis, whereas 19.1 percent respondents monitor their investment on weekly basis.
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Those who have monitoring of investment quarterly and bi- annually are almost
equally distributed as their percentage are 6.8 and 5.3 percent respectively. Only 7.5
percent respondents monitor their investment annually. Respondent‟s distribution
according to the frequency of applying fundamental analysis before making investment
decision. Majority of the respondents (41.6 %) always apply fundamental analysis
before making their investment decisions. Those who are applying fundamental
analysis before investment decision rarely and often are 24.7 % and 20.6 percent
subjectively. Whereas, 13.1 % respondents are those who never apply fundamental
analysis before making their investment decisions. Respondent‟s distribution according
to the frequency of applying technical analysis before making investment decision.
Majority of the respondents (34.9 %) always apply technical analysis before making
their investment decisions. Those who are applying technical analysis before
investment decision rarely and often are 26.2 % and 20.8 percent subjectively.
Whereas, 18.20 percent respondents never apply technical analysis before making their
investment decisions. Respondents‟ distributions according to the frequency of
applying combine both fundamental and technical analysis before making investment
decision. Majority of the respondents (32.7 %) always apply combined fundamental
and technical analysis before making their investment decisions. Those who are
applying combining fundamental and technical analysis before investment decision
rarely and often are 32 % and 19.4 percent subjectively. Whereas, 16 percent
respondents never use combined fundamental and technical analysis before making
their investment decisions. Respondent‟s distribution according to the source of
information consideration while making investment decision consists that 26.6 percent
respondents consider advice from the brokers while making investment decision
whereas, 73.4 percents respondents do not consider the brokers advice. 20.8 percent
respondents consider advice from the investment advisors while making investment
decision whereas, 79.2 percents respondents do not consider the investment advisors
advice. Only 35.1 percent respondents consider advice from the family and friends
while making investment decision whereas, 64.9 percents respondents do not consider
the family and friends advice. 34.1 percent respondents consider advice from the
business news channels while making investment decision whereas, 65.9 percents
respondents do not consider the business news channels advice. 24.5 percent
respondents consider advice from the investment websites while making investment
decision whereas, 75.5 percents respondents do not consider the investment websites
96
advice. 23 percent respondents consider advice from the newspapers & magazines
while making investment decision whereas, 77 percents respondents do not consider the
newspapers & magazines advice. 36.1 percent respondents consider the fundamental
analysis while making investment decision whereas, 63.9 percents respondents do not
consider the fundamental analysis. 35.6 percent respondents consider the technical
analysis while making investment decision whereas, 64.4 percents respondents do not
consider the technical analysis.
Factorization of the Statements: For checking the combining impact of fundamental

and technical analysis on investment decision of investors first of all a pilot study was
conducted and factors were determined by factor analysis tool for analyzing the
awareness of investors to the rules, principles of fundamental and technical analysis,
investors and study the investment advisors viewpoint on the investment decision
taken by the investors.
Fundamental Analysis Factors
 F1: Financial performance related factors
 F2: Factors related to economic indicators
 F3: Contribution of directors and underwriters
 F4: Government ideology and political instability
Technical Analysis Factors
 F5: Conceptual factors of technical analysis
 F6: Factors related to price and volume trends
 F7: Factors related to time horizon
 F8: Factors related to demand and supply
 F9: Factors related to prediction of future price
Combined Factors
 F10: Entry and exit point in investments

 F11: Rational investment decision and solution of queries
 F12: Market direction and time horizon

97
 F13: Economic indicators relation with demand supply
Factors Related to Investment Advisors Viewpoint on Investment Decision
 F14: Selection of best securities and managing investment decision
 F15: Clarity regarding fee and tax management
 F16: Portfolio construction and risk return trade off
 F17: Expert opinion for investment decisions and strategies behind investments
4.3 Investor’s Awareness to the Rules, Principles and Techniques of the

Fundamental and Technical Analysis
The first objective was to analyze the awareness of the investors to the rules, principles
and techniques of fundamental and technical analysis. To analyze the awareness of
investors to the rules and principles of fundamental and technical analysis, 16
parameters for fundamental analysis and 14 parameters for technical analysis have been
used for 413 respondents to Indian stock market. First of all descriptive analysis of all
30 parameters has been done which gives an extensive information of investors
responses about the parameters of awareness to the rules and principles of fundamental
and technical analysis. Moreover, to study the techniques of fundamental and technical
analysis, 13 parameters for fundamental analysis and 14 parameters for technical
analysis have been used.
Investor’s Awareness to the Rules and Principle of the Fundamental Analysis
This aspect covers sixteen statements which were evaluated on a five point likert scale
encompassing strongly agree=1, agree=2, neutral=3, disagree=4 and strongly
disagree=5. Factor analysis is used on these sixteen statements to find out the major
awareness factors of fundamental analysis for making investment decision. Kaiser--
Meyer- Olkin (KMO) have been applied to examine the suitability of factor analysis
and it‟s a good measure of sampling adequacy. The Principal components method is
used to find out the major factors of awareness to the rules and principles of
fundamental analysis and only factors with Eigen values greater than one were retained
for analysis. Further, the varimax rotation method is used. In addition to this, factor
ranking is assigned on the basis of the overall mean values of each factor.
Factor Analysis: The 16 items of the Rules and principles of the fundamental analysis
scale were subjected to principal components analysis (PCA) using SPSS version 16.
98
Before employing PCA the suitability of data for factor analysis was assessed.
Inspection of correlation matrix revealed that many coefficients are more than have
value .3, which allows us for further analysis.
Prior to performing PCA, the suitability of data for factor analysis was assessed.
Inspection of the correlation matrix revealed the presence of many coefficients of .3
and above. Mention in table 4.3.1 the Kaiser-Meyer-Olkin value was .793, exceeding
the recommended value of .6 (Kaiser 1970, 1974) and Bartlett‟s Test of Sphericity
(Bartlett 1954) reached statistical significance, supporting the factorability of the
correlation matrix. Bartlett‟s test of sphericity is based on the chi- square
transformation of the determinates of the correlation matrix and also significant at 5
percent level of significance, hence the null hypothesis H1.1 is rejected.
Table 4.3.1: KMO and Bartlett's Test of Awareness to the Rules and Principles of
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .793
Bartlett's Test of Sphericity Approx. Chi-Square 2170.602
Df 120
Sig. .000*
Source: Primary Survey, * Significant at 5% level.
Principal Component Analysis: As mentioned in table 4.3.2 revealed the presence of

four components with eigen values exceeding 1, explaining 20.85%, 17.67%, 11.02%
and 8.66% of the variance respectively. The rotated component solution revealed the
presence of simple structure (Thurstone 1947), with all factors showing a number of
strong. The results of this analysis support the use of present scale with obtained
factors.
 F1: Financial performance related factors
 F2: Factors related to economic indicators
 F3: Contribution of directors and underwriters
 F4: Government ideology and political instability
99
Table 4.3.2: PCA of Awareness to the Rules and Principles of Fundamental Analysis
Total Variance Explained
Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Component Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %
1 4.84 30.30 30.30 4.84 30.30 30.30 3.33 20.85 20.85
2 1.99 12.48 42.79 1.99 12.48 42.79 2.82 17.67 38.52
3 1.40 8.75 51.55 1.40 8.75 51.55 1.76 11.02 49.54
4 1.06 6.65 58.20 1.06 6.65 58.20 1.38 8.66 58.20
5 .928 5.80 64.00
6 .867 5.41 69.42
7 .802 5.01 74.43
8 .699 4.36 78.80
9 .602 3.76 82.56
10 .557 3.48 86.05
11 .502 3.13 89.18
12 .460 2.87 92.06
13 .381 2.38 94.44
14 .369 2.30 96.75
15 .284 1.77 98.52
16 .236 1.47 100.00
Extraction Method: Principal Component Analysis.
100
F1: Financial performance related factors
Here, table 4.3.3 presents the first factor F1 consisting seven statements, viz. I know the
meaning of fundamental analysis, Industry performance contributes in determining the
investment decision, Company reputation and the brand image contribute in
determining the investment decision, management of the company, directors of the
company image contribute in determining the investment decision, result
announcement of the companies contribute in determining the investment decision,
financial performance of the company contributes in the investment decision and
fundamental analysis provides better investment opportunities in long run.
As mentioned in table 4.3.3, loading values of these factors worked out at 0.54, 0.62,
0.60, 0.61, 0.66, 0.67 and 0.71 respectively. The factor loading values shows the
correlation between the factor and the variables and it is implied that the factor F1
„financial performance related factors‟ and all seven variables are highly correlated. On
the basis of nature of these variables the name of F1 is considered as „financial
performance related factors‟.
F2: Factors related to economic indicators
As exhibited from table 4.3.3, the second factor comprises five statements namely,
fundamental analysis includes economic, industry and company analysis, fundamental
analyses are based on the economic news, fundamental analysis is based on the
economic data, fundamental analysis is based on the economic indicators and
fundamental analysts take decision on the basis of by comparing current news with
previous news and the expected news for the economic indicator. The loading values of
these factors worked out at .55, 0.83, 0.74, 0.67 and 0.63 respectively. Due to the high
value of loading variables, this implies a high level of correlation between the second
factor and its variables.
F3: Contribution of directors and underwriters
As exhibited from table 4.3.3, the third factor F3, contribution of director and
underwriters, is a combination of two variables such as tenure of directors and
underwriters of the company contribute in the investment decision and a lot of
profitable transactions take place before or after announcement of the economic data.
The loading values of these variables are 0.81 and 0.73 respectively. The greater the
correlation between the factor and the variables, the higher the loading values of the
101
variables. It implies that the third component and its variables have a high degree of
correlation.
F4: Government ideology and political instability
As per table 4.3.3, the Fourth factor F4 (government ideology and political instability)
has only two sub factors, political instability of the country contributes in determining
the investment decision and ideologies of government contribute in determining the
investment decision. Table 4.3.3 presents the loading values of these two sub factors
are 0.79 and 0.44 respectively. These loading values are good enough and show a high
correlation between factor and variable.
Table 4.3.3: Awareness to the Rules and Principles of Fundamental Analysis

Factors Statements Loading Eigen Mean SD Factor Factor Total
Values mean Rank variance
Explained
F1 - I know the meaning of .54
1.80 .97
Financial fundamental analysis.
performance Industry performance .62
related contributes in determining 2.02 .91
factors the investment decision.
Company reputation and the
brand image contribute in
.60 1.80 .81
determining the investment
decision
Management of the 4.8 1.87 4 20.85
company, directors of the
company image contributes .61 1.88 .88
in determining the
investment decision.
Result announcements of the
companies contribute in
.66 1.83 .85
determining the investment
decision.
Financial performance of the
company contributes in the .67 1.89 .90
Fundamental analysis
provides better investment .71 1.87 .98
opportunities in long run.
F2 -Factors Fundamental analysis .55
related to includes economic, industry 1.84 .88
economic and company analysis.
indicators Fundamental analysis is .83
2.20 .96
based on the economic news.
Fundamental analysis is .74
1.99 2.14 .89 2.12 2 17.67
based on the economic data
Fundamental analysis is .67
based on the economic 2.23 .92
indicators.
102
Fundamental analysts take .63
decision on the basis of by
comparing current news with
2.23 .98
previous news and the
expected news for the
economic indicator.
F3 - Tenure of directors and .81
Contribution underwriters of the company
2.39 .96
of directors contribute in the investment 1.40 2.32 1 11.02
and decision.
underwriter A lot of profitable .73
transactions take place before
2.25 .96
or after announcement of the
economic data
F4 - Factors Political instability of the .79
related to country contributes in
1.99 .86
government determining the investment 1.06 2.09 3 8.66
ideology and decision
stability Ideologies of government .44
contribute in determining 2.20 .87
the investment decision.
Table 4.3.3 further, disclose the value of loading, Eigen values, mean and SDs of
variables, ranking of factors on the basis of mean values and total variance. It is noticed
that factor F3 (contribution of directors and underwriters) having the highest mean
value (2.32), falls in the category of first rank. The factors F2(factors related to
economic indicators) and factor F4 (government ideology and political instability) got
second and third rank on the basis of their mean values 2.12 and 2.09 respectively. F1
(financial performance related factors) has the lowest mean value 1.87 and scored the
last rank. The aforementioned factor rankings are based on the premise that when a
factor's mean value lowers the corresponding value of its rank increases.
Table 4.3.4: Descriptive Statistics of Awareness Regarding Rules and Principles of

Descriptive Statistics of Awareness Regarding Rules and Principles of Fundamental Analysis
Statements Total SA A N D SD Min. Max. Mean SD
I know the meaning of fundamental
413 195 141 51 14 12 1.00 5.00 1.80 .97
analysis.
Fundamental analysis includes
economic, industry and company 413 168 164 63 12 6 1.00 5.00 1.84 .88
analysis.
Fundamental analysis is based on the
413 112 146 122 26 7 1.00 5.00 2.20 .96
economic news.
103
413 90 215 75 25 8 1.00 5.00 2.14 .89
economic data.
413 84 192 106 19 12 1.00 5.00 2.23 .92
economic indicators.
Fundamental analysts take decision on
the basis of by comparing current news
413 99 176 88 43 7 1.00 5.00 2.23 .98
with previous news and the expected
news for the economic indicator.
Industry performance contributes in
413 125 187 73 21 7 1.00 5.00 2.02 .91
determining the investment decision.
Company reputation and the brand
image contribute in determining the 413 158 200 33 2 2 1.00 5.00 1.80 .81
investment decision
Management of the company, directors
of the company image contribute in 413 153 187 45 24 4 1.00 5.00 1.88 .88
Political instability of the country
contributes in determining the 413 124 200 60 27 2 1.00 5.00 1.99 .86
Ideologies of government contribute in
413 83 197 107 18 8 1.00 5.00 2.20 .87
Result announcements of the companies
contribute in determining the investment 413 162 184 45 19 3 1.00 5.00 1.83 .85
decision.
Tenure of directors and underwriters of
the company contribute in the 413 73 170 105 62 3 1.00 5.00 2.39 .96
Financial performance of the company
413 154 179 56 17 7 1.00 5.00 1.89 .90
contributes in the investment decision.
A lot of profitable transactions take
place before or after announcement of 413 94 166 116 27 10 1.00 5.00 2.25 .96
the economic data.
Fundamental analysis provides better
413 174 157 53 17 12 1.00 5.00 1.87 .98
investment opportunities in long run.
Moreover, table 4.3.4 also revealed the frequency, mean and standard deviations
regarding the rules and principles of fundamental analysis. Results presents that there
are sixteen variables with regards to the rules and principles of the fundamental
analysis namely, I know the meaning of fundamental analysis (mean =1.80 with SD
=0.97), fundamental analysis includes economic, industry and company analysis
(mean=1.84 with SD=0.88), fundamental analyses are based on the economic
news(mean=2.20 with SD=0.96), fundamental analysis is based on the economic data
104
(mean=2.14 with SD=0.89), fundamental analysis is based on the economic indicators
(mean=2.23 with SD=0.92), fundamental analysts take decision on the basis of by
comparing current news with previous news and the expected news for the economic
indicator (mean=2.23 with SD=0.98), industry performance contributes in determining
the investment decision(mean = 2.02 with SD =0.91), company reputation and the
brand image contribute in determining the investment decision (mean = 1.80 with SD
=0.81), management of the company, directors of the company image contribute in
determining the investment decision (mean = 1.88 with SD =0.88), political instability
of the country contributes in determining the investment decision (mean=1.99 with
SD=0.86), ideologies of government contribute in determining the investment
decision(mean=2.20 with SD=0.87), result announcements of the companies contribute
in determining the investment decision (mean=1.83 with SD=0.85), tenure of directors
and underwriters of the company contribute in the investment decision (mean=2.39
with SD=0.96), financial performance of the company contributes in the investment
decision (mean = 1.89 with SD =0.90), a lot of profitable transactions take place before
or after announcement of the economic data (mean=2.25 with SD=0.96) and
fundamental analysis provides better investment opportunities in long run(mean=1.87
with SD=0.98). It was considered worthwhile when the sampled respondents having
mean rank less than neutral value. Substantially, the results also depict investors are
aware about the rules and principles of the fundamental analysis, most of the investors
belong to the category of agree and strongly agree.
Table 4.3.5: Gender Wise Attribution for the Awareness of the Investors to the
Rules and Principles of Fundamental Analysis
Factor Gender N Mean SD SE t-
Df Sig.
Mean Value
F1: Financial performance related Male 297 13.03 4.42 .25
.69 411 .48
factors Female 116 13.36 3.82 .35
F2 : Factors related to economic Male 297 10.84 3.50 .20
1.86 411 .06
indicators Female 116 10.16 2.92 .27
F3 : Contribution of directors and Male 297 4.62 1.56 .09
.52 411 .60
underwriter Female 116 4.72 1.85 .17
F4: Factors related to government Male 297 4.19 1.42 .08
.11 411 .91
ideology and stability Female 116 4.18 1.46 .13
Source: Primary Survey, N= Number of Respondents, * Significant at 5 % level.
105
Table 4.3.5 revealed the respondents gender wise difference (between male and female)
and their effect on respondent‟s awareness for all four factors related to the rules and
principles of fundamental analysis while making investment decision making. The table
shows the mean, SD, SE, t- value and significance value. It can be seen from the above
mention table that males have an edge over females with respect to all the factors
except F2 (factors related to economic indicators). However, no significant gender
differences exist with respect to all four factors at 5% level of significance as having P
> 0.05. Therefore, null hypothesis H1.2 is accepted which means that there is no
significant difference in the viewpoint of males and females towards the awareness to
the rules and principles of fundamental analysis.
Table 4.3.6: Marital Status Wise Attribution for the Awareness of the Investors to
the Rules and Principles of Fundamental Analysis
Factor Marital N Mean SD SE t- Df Sig.
status Mean Value
F1 : Financial performance Married 304 13.20 4.28 .24

.60 411 .54
related factors Unmarried 109 12.91 4.21 .40
F2: Factors related to economic Married 304 10.90 3.38 .19

2.52 411 .01*
indicators Unmarried 109 9.96 3.22 .30
F3: Contribution of directors and Married 304 4.67 1.66 .09

.37 411 .70
underwriter Unmarried 109 4.60 1.61 .15
F4: Factors related to government Married 304 4.22 1.41 .08

.63 411 .52
ideology and stability Unmarried 109 4.11 1.48 .14
Table 4.3.6 reveals the respondents‟ marital status -wise analysis with respect to all
factors of awareness related to the rules and principles of fundamental analysis while
making investment decision and results disclose that the significant differences have
not been obtained for different categories of marital status groups of respondents except
the F2 i.e. factors related to economic indicators. It means that null hypothesis H1.3 has
been accepted for all factors except F2 (factors related to economic indicators) and the
investors have insignificant difference towards the statements lying in F2 (factors
related to economic indicators).
106
Table 4.3.7: Age Wise Attribution for the Awareness of the Investors to the Rules
and Principles of Fundamental Analysis
Factor Age N Mean F-Value Sig.
F1: Financial performance related less than 20 39 13.94
factors 20 to 30 102 12.35
1.43
30 to 40 144 13.38 .22
40 to 50 87 13.05
50 and above 41 13.51
F2: Factors related to economic less than 20 39 8.46
indicators 20 to 30 102 10.44
30 to 40 144 10.94 5.49 .00*
40 to 50 87 11.18
50 and above 41 11.14
F3: Contribution of directors and less than 20 39 4.51
underwriter 20 to 30 102 4.23
30 to 40 144 4.63 4.24 .02*
40 to 50 87 5.19
F4: Factors related to government less than 20 39 3.53
ideology and stability 20 to 30 102 4.23
30 to 40 144 4.17 3.93 .04*
40 to 50 87 4.57
Table 4.3.7 reveals the respondents age wise analysis with respect to all factors of
awareness related to the rules and principles of fundamental analysis while making
investment decision and results disclose that despite of visible differences across all the
factors, the significant differences have not been obtained for different categories of
age groups of respondents at 0.05 level of significance except F1 (financial performance
related factors) with P > 0.05, therefore, null hypothesis H1.4 has been rejected for all
factors except F1 (financial performance related factors. It means that the investor‟s age
wise respond differently to the factors related to financial performance.
107
Table 4.3.8: Academic Qualification Attribution for the Awareness of the
Investors to the Rules and Principles of Fundamental Analysis
Factor Academic N Mean F- Sig.
Qualification Value
F1: Financial performance related Below graduate 35 13.28

factors Graduate 129 12.40
5.18 .00*
Professional
100 12.46
Course
F2: Factors related to economic Below graduate 35 10.02
indicators Graduate 129 10.57 4.45
Post Graduate 149 11.37 .00*
Professional
100 9.91
Course
F3: Contribution of directors and Below graduate 35 4.80

underwriter Graduate 129 5.08
9.34 .00*
Professional
100 3.97
Course
F4: Factors related to government Below graduate 35 3.42
ideology and stability Graduate 129 4.27
Post Graduate 149 4.36 4.24 .00*
Professional
100 4.10
Course
Table 4.3.8 presents the mean values, f - values and significance value of all factors of
awareness related to the rules and principles of fundamental analysis. It reveals the
respondents‟ academic qualification wise analysis with respect to all factors of
awareness related to the rules and principles of fundamental factors and results disclose
that despite of visible differences across all the factors, the significant differences have
been obtained for different categories of academic qualification groups of respondents
as all having P < 0.05 for their respective values of f-test. Therefore, null hypothesis
H1.5 has been rejected for all factors. It means that the investor‟s academic qualification
wise respond differently to all awareness factors to the rules and principles of
fundamental analysis.
108
Table 4.3.9: Occupation Wise Attribution for the Awareness of the Investors to the
Rules and Principles of Fundamental Analysis
Factor Occupation N Mean F-value Sig.
F1 : Financial performance related Student 39 12.38
factors Business Man 52 15.05
Private Employee 139 12.15 4.02 .00*
Professional 29 13.72
Broker 48 13.97
F2: Factors related to economic Student 39 8.58
indicators Business Man 52 11.71
5.02 .00*
Broker 48 10.45
F3: Contribution of directors and Student 39 5.48
underwriter Business Man 52 5.11
Broker 48 5.08
F4: Factors related to government Student 39 4.05
ideology and stability Business Man 52 4.00
Broker 48 3.95
109
Table 4.3.9 presents the occupation wise analysis with respect to all the factors of
awareness related to the rules and principles of fundamental analysis. The table
includes the frequency, mean, f- value and the significance value of all factors. The
value of f-test shows that a significant difference exists for all the four factors at 5 %
level of significance among all the respondents belonging to different occupation as all
having P < 0.05 for their respective values of f-test therefore, null hypothesis H1.6 has
been rejected for all the factors related to the rules and principles of fundamental
analysis which means that investor‟s occupation wise respond differently to all factors
related to the rules and principles of fundamental analysis. Further, the mean values
show that students and business man consider factor F1 (financial performance related
factors) the most while making investment decision with mean values 12.38 and 15.05
respectively and all investors from other occupation also more aware about F1
(financial performance related factors) and consider while making investment decisions
except investment advisors, they rely more on F2 (factors related to economic
indicators) with mean value 13.25.
Table 4.3.10: Annual Income Gender wise Attribution for the Awareness of the
Factor Annual Income N Mean F-Value Sig.
F1: Financial performance related Below 300000 91 13.25

factors 300000 to 600000 180 12.57 2.12 .09
600000 to 900000 71 13.87
900000 and above 71 13.63
F2: Factors related to economic Below 300000 91 10.04
indicators 300000 to 600000 180 10.85 2.27 .08
600000 to 900000 71 10.32
900000 and above 71 11.28
F3: Contribution of directors and Below 300000 91 5.06
underwriter 300000 to 600000 180 4.42
3.08 .02*
600000 to 900000 71 4.70
900000 and above 71 4.66
F4: Factors related to government Below 300000 91 4.32
ideology and stability 300000 to 600000 180 4.12
.58 .62
600000 to 900000 71 4.09
900000 and above 71 4.28
110
Table 4.3.10 reveals the sampled respondents income - wise analysis with respect to the
factors of awareness related to the rules and principles of fundamental analysis while
making investment decision. The table includes the frequency in each group, mean
values of all factors, f - values and significance value at 5 percent level of significance.
The result of f test present that among all the factors only factor F3 (factors related to
government ideology and stability) shows the significant difference at f = 3.08, P <
0.05 while, for remaining three factors, no significant difference have been found
among groups with different amount of annual income. Therefore, the null hypothesis
H1.7 is accepted for all the factors namely, F1 (financial performance related factors), F2
(factors related to economic indicators), F4 (factors related to government ideology and
stability) except F3 (contribution of directors and underwriter) which means that the
investors with respect to income do not think differently regarding the rules and
principles of fundamental analysis except F3 (contribution of directors and
underwriter).
Table 4.3.11: Investment Experience Attribution for the Awareness of the

Factor Investment Experience N Mean F-Value Sig.
F1: Financial performance Below 5 Years 168 12.64

related factors 5 to 10 years 117 14.12
3.63 .01*
10 to 15 years 62 12.37
15 and above 66 13.30
F2: Factors related to Below 5 Years 168 10.37
economic indicators 5 to 10 years 117 11.01
.84 .47
10 to 15 years 62 10.69
15 and above 66 10.69
F3: Contribution of directors Below 5 Years 168 4.58
and underwriter 5 to 10 years 117 4.76 1.22 .30
10 to 15 years 62 4.38
F4: Factors related to Below 5 Years 168 4.12
government ideology and 5 to 10 years 117 4.26
stability 2.58 .05
10 to 15 years 62 4.56
Sources: Primary Survey, N= Number of Respondents, * Significant at 5 % level.
111
Table 4.3.11 presents the investment experience wise analysis with respect to the
factors of awareness related to the rules and principles of fundamental analysis. The
results of f- test depicts that among all the factors, namely, F2 (factors related to
economic indicators) and F3 (contribution of directors and underwriter) and F4 (factors
related to government ideology and stability) have not been obtained significant
difference at 5 % level of significance with respect to different time horizons of
investment experience of respondents, f= .84, P > 0.05 and f=1.12, P > 0.05. f= 2.58, P
> 0.05 except F1 (financial performance related factors) with f= 3.63, P < 0.05 presents
a significant difference among respondents group with different length of investment
experience. Therefore null hypothesis H1.8 is accepted for all factors except factor
F1(financial performance related factors) which means that the investors with respect to
investment experience wise do not think differently regarding the rules and principles
of fundamental analysis except F1 (financial performance related factors).
Investor’s Awareness to the Rules and Principle of the Technical Analysis
This aspect covers fourteen statements which were evaluated on a five point likert scale
disagree=5. Factor analysis is used on these fourteen statements to find out the major
awareness factors of technical analysis for making investment decision. Kaiser--Meyer-
Olkin (KMO) have been applied to examine the suitability of factor analysis and it‟s a
good measure of sampling adequacy. In addition to this, factor ranking is assigned on
the basis of the overall mean values of each factor.
Factor Analysis: The 14 items of the Rules and principles of the fundamental analysis
scale were subjected to principal components analysis (PCA) using SPSS version 16.
Before employing PCA the suitability of data for factor analysis was assessed.
Inspection of correlation matrix revealed that many coefficients are more than have
value 0.3, which allows us for further analysis.
Inspection of the correlation matrix revealed the presence of many coefficients of 0.3
and above. Mention in table 4.3.12, the Kaiser-Meyer-Olkin value was .812, exceeding
112
correlation matrix. Bartlett's Test of Sphericity is based on chi - square transformation
of the determinant of the correlation matrix and also significant at the 5 percent level of
significance, hence the null hypothesis H1.9 is rejected.
Table 4.3.12: KMO and Bartlett's Test of Awareness to the Rules and Principles of
Technical Analysis
Df 91
Sig. .000
Source: Primary Survey, *Significant at 5 % level.
As mention in table 4.3.13, Principal components analysis revealed the presence of five
components with eigen values exceeding 1, explaining 20.85%, 17.67%, 11.02% and
8.66% of the variance respectively. The rotated component solution revealed the
presence of simple structure (Thurstone 1947), with all factors showing a number of
strong. The results of this analysis support the use of present scale with obtained
factors.
 F5: Conceptual factors of technical analysis
 F6: Factors related to price and volume trends
 F7: Factors related to time horizon
 F8: Factors related to demand and supply
 F9: Factors related to prediction of future price
F5: Conceptual factors of technical analysis
As mentioned in table 4.3.14, the factor F5 consisting five statements, viz. the meaning
of technical analysis, Technical analysis is based on the foundation that history repeats
itself, Technical analysis is based on the foundation that market discounts everything,
Technical analysis is based on the foundation that the price always moves in trends, and
technical analysis is based on the assumption that market always moves in the trend.
The loading values of these factors worked out at 0.67, 0.69, 0.60, 0.71 and 0.66
respectively. The factor loading values shows the correlation between the factor and the
113
variables and it is implied that the factor F5 „conceptual factors of technical analysis‟
and all five variables are highly correlated. On the basis of nature of these variables the
name of F5 is considered as conceptual factors of technical analysis.
F6: Factors related to price and volume trends
As exhibited from table 4.3.14, the sixth factor F6 comprises three statements namely,
technical analyst use charts and trends for predicting future price, technical analyst use
trading volume and price and technical analysts believe that breakdowns from previous
trends are important signals The loading values of these factors worked out at 0.74,
0.72 and 0.80 respectively. Due to the high value of loading variables, this implies a
high level of correlation between the second factor and its variables.
F7: Factors related to time horizon
Table 4.3.14 revealed that the seventh factor F7, factors related to time horizon, is a
combination of two statements such as technical analysis is considered effective in
short term investment decisions and the technical indicators contribute in the
determining of market direction besides the charts. The loading values of these
variables are 0.74 and 0.78 respectively. The greater the correlation between the factor
and the variables, the higher the loading values of the variables. It implies that the
seventh component and its variables have a high degree of correlation.
F8: Factors related to demand and supply
Table 4.3.14 revealed that the factor F8 (factors related to demand and supply) has only
two sub factors, technical analysis based on the foundation that interaction of demand
and supply determines the price of the security and you follow up demand and supply
for determining the direction of the price. The loading values of these two sub factors
are 0.79 and 0.79 respectively. These loading values are good enough and show a high
correlation between factor and variable.
F9 : Factors related to prediction of future price
Table 4.3.14 presents that the factor F9 consisting only two statements, viz. technical
analyst predicts the most probable price of the stocks, and the technical indicators
contribute in the determining of price movements besides the charts. The loading
values of these factors worked out at 0.76, 0.69, and 0.50 respectively. These loading
values are good enough and show a high correlation between factor and variable.
114
Table 4.3.13: PCA of Awareness to the Rules and Principles of Technical Analysis
Component Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %
1 4.971 35.50 35.50 4.97 35.50 35.50 2.54 18.16 18.16
2 1.382 9.86 45.37 1.38 9.86 45.37 2.19 15.70 33.87
3 1.124 8.02 53.40 1.12 8.02 53.40 2.00 14.30 48.17
4 1.106 7.90 61.30 1.10 7.90 61.30 1.69 12.09 60.27
5 1.016 7.25 68.55 1.01 7.25 68.55 1.15 8.28 68.55
6 .801 5.72 74.28
7 .663 4.73 79.02
8 .603 4.30 83.33
9 .525 3.74 87.07
10 .445 3.17 90.25
11 .412 2.94 93.19
12 .370 2.64 95.84
13 .316 2.25 98.09
14 .267 1.90 100.00
Sources: Primary Survey
115
Table 4.3.14: Awareness to the Rules and Principles of Technical Analysis
Factors Statements Loading Eigen Mean SD Factor mean Factor Rank Total variance
Values Explained
I know the meaning of Technical

.67 1.87 .89
analysis.
Technical analysis is based on the

foundation that history repeats
.69 2.16 .95
itself.

Factor 5-Conceptual foundation that market discounts .60 2.21 .95
factors of technical everything.
analysis
foundation that the price always .71 2.13 .95
moves in trends.
4.97 2.14 3
Technical analysis is based on the 18.16
assumption that market always
.66 2.31 .98
moves in the trend except some
minor deviations.
Factor 6 - Technical analyst use Charts and

1.92 .90
Factors related to Trends for predicting future price. .74
price and volume Technical analyst use trading
trends .72 1.87 .88
volume and price. 1.38 1.93 5 15.70
116
Technical analysts believe that
breakdowns from previous trends .80 2.02 .97
are important signals
Technical analysis is considered

effective in short term investment .74 2.26 .88
Factor 7 - Factors decisions.
related to time
horizon The technical indicators contribute
in the determining of market .78 1.12 2.31 .92 2.28 2 14.30
direction besides the charts.
Technical analysis based on the

foundation that interaction of
2.27 .97
Factor 8 - Factors demand and supply determines the
price of the security .79
related to demand
12.09
and supply You follow up demand and supply 1.10 2.29 1
for determining the direction of .79 2.31 .90
the price
Technical analyst predicts the

.76 2.25 .93
Factor 9 - Factors most probable price of the stocks.
2.13
related to prediction
The technical indicators contribute 1.01 8.28
of future price 4
in the determining of price .50 2.02 .97
movements besides the charts.
117
that factor F8 (factors related to demand and supply) having the highest mean value
(2.29), falls in the category of first rank. Factor F7 (factors related to time horizon)
obtained the second rank with mean value 2.28.The factors F5 (conceptual factors of
technical analysis) and factor F9 (factors related to prediction of future price) got third
and fourth rank on the basis of their mean values 2.14 and 2.13 respectively. F6 (factors
related to price and volume trends) has the lowest mean value 1.93 and scored the last
rank. The aforementioned factor rankings are based on the premise that when a factor's
mean value lowers the corresponding value of its rank increases.
Table 4.3.15: Descriptive Analysis of Awareness to the Rules and Principles

of Technical Analysis
Descriptive Statistics
N SA A N D SD Min. Max. Mean SD
I know the meaning of Technical analysis. 413 153 193 4 18 8 1.00 5.00 1.87 .89

413 112 28 107 30 6 1.00 5.00 2.16 .95
foundation that history repeats itself.

foundation that market discounts 413 103 165 105 35 5 1.00 5.00 2.21 .95
everything.

foundation that the price always moves in 413 123 149 105 33 3 1.00 5.00 2.13 .96
trends.

assumption that market always moves in 413 82 182 96 3 10 1.00 5.00 2.31 .98
the trend except some minor deviations.
Technical analysis based on the foundation

that interaction of demand and supply 413 92 173 92 53 3 1.00 5.00 2.27 .97
determines the price of the security.
Technical analyst use Charts and Trends

413 149 175 64 19 6 1.00 5.00 1.92 .90
for predicting future price.
Technical analyst use trading volume and

413 157 180 54 16 6 1.00 5.00 1.87 .88
price.
118
Technical analyst predicts the most
413 80 199 89 38 7 1.00 5.00 2.25 .93
probable price of the stocks.
Technical analysis is considered effective

413 79 187 109 36 2 1.00 5.00 2.26 .88
in short term investment decisions.
The technical indicators contribute in the

determining of market direction besides the 413 67 203 95 40 8 1.00 5.00 2.31 .92
charts.
The technical indicators contribute in the

determining of price movements besides 413 90 215 83 25 0 1.00 4.00 2.10 .80
the charts.
You follow up demand and supply for

413 74 175 128 30 6 1.00 5.00 2.31 .90
determining the direction of the price.
Technical analysts believe that breakdowns

413 147 146 90 23 7 1.00 5.00 2.02 .97
from previous trends are important signals.
Moreover, table 4.3.15 also revealed the frequency, mean and standard deviations
regarding the rules and principles of technical analysis results presents that there are
fourteen variables with regards to the rules and principles of the technical analysis
namely, know the meaning of Technical analysis (mean =1.87 with SD =0.89),
technical analysis is based on the foundation that history repeats itself(mean = 2.16
with SD =0.95), technical analysis is based on the foundation that market discounts
everything. (mean = 2.21 with SD =0.95), technical analysis is based on the foundation
that the price always moves in trends (mean = 2.13 with SD =0.96), technical analysis
is based on the assumption that market always moves in the trend except some minor
deviations (mean=2.31 with SD=0.98), technical analysis based on the foundation that
interaction of demand and supply determines the price of the security (mean = 2.27
with SD =0.97), technical analyst use charts and trends for predicting future price
(mean=1.92 with SD=0.90), technical analyst use trading volume and price.
(mean=1.87 with SD=0.88), technical analyst predicts the most probable price of the
stocks (mean=2.25 with SD=0.93), technical analysis is considered effective in short
term investment decisions (mean=2.26 with SD=0.88), the technical indicators
contribute in the determining of market direction besides the charts (mean=2.31 with
SD=0.92), the technical indicators contribute in the determining of price movements
besides the charts (mean=2.10 with SD=0.80), you follow up demand and supply for
119
determining the direction of the price (mean=2.31 with SD=0.90), and Technical
analysts believe that breakdowns from previous trends are important signals
(mean=2.02 with SD=0.97). It was considered worthwhile when the sampled
respondents having mean rank less than neutral value. Substantially, the results also
depict investors are aware about the rules and principles of the technical analysis, most
of the investors belong to the category of agree and strongly agree.
Table 4.3.16: Gender Wise Attribution for the Awareness of the Investors to the
Rules and Principles of Technical Analysis
Factor Gender N Mean SD SE t- Sig.
Mean Value
F5: Conceptual factors of Male 297 10.93 3.28 .19

2.15 .03*
technical analysis Female 116 10.12 3.79 .35
F6: Factors related to price and Male 297 5.76 2.43 .14
-.87 .38
volume trends Female 116 5.98 1.84 .17
Male 297 4.47 1.61 .09

F7: Factors related to time horizon 2.17 .03*
Female 116 4.85 1.51 .14
F8: Factors related to demand and Male 297 4.67 1.74 .10
1.45 . 14
supply Female 116 4.41 1.16 .10
F9: Factors related to prediction of Male 297 4.37 1.31 .07

.34 .73
future price Female 116 4.32 1.00 .09
Table 4.3.16 revealed the respondents gender wise difference (between male and
female) and their effect on respondent‟s awareness for all five factors related to the
rules and principles of technical analysis while making investment decision. The table
shows the mean, SD, SE, t - value and significance value. It can be seen from the above
mention table that males have an edge over females with respect to all the factors
except F6 (factors related to price and volume trends, mean=5.76 with SD=2.43) and F7
(factors related to time horizon, mean=4.47 with SD=1.61) with minor deviation.
However, no significant gender differences exist with respect to F6 (factors related to
price and volume trends), F8 (factors related to demand and supply), F9 (factors related
to prediction of future price) factors at 5% level of significance as having P > 0.05
whereas, F5 (conceptual factors of technical analysis) and F7 (factors related to time
120
horizon) obtained the significance difference at 5% level of significance as having P <
0.05. Therefore, the null hypothesis H1.10 has been rejected for F5 (conceptual factors of
technical analysis) and F7 (factors related to time horizon). Whereas, the null
hypothesis H1.10 has been accepted for the factors namely F6 (factors related to price
and volume trends), F8 (factors related to demand and supply), F9 (factors related to
prediction of future price) which means that there is no significant difference in the
viewpoint of males and females towards the awareness to the rules and principles of
technical analysis.
Table 4.3.17: Marital Status Wise Attribution for the Awareness of the Investors
to the Rules and Principles of Technical Analysis
Factor Marital N Mean SD SE t- Sig.
status Mean Value
F5: Conceptual factors of Married 303 10.83 3.47 .19

1.28 .19
technical analysis Unmarried 109 10.33 3.37 .32
F6: Factors related to price and Married 304 5.86 2.23 .12
.53 .59
volume trends Unmarried 109 5.72 2.42 .23
F7: Factors related to time Married 304 4.61 1.67 .09

.79 .42
horizon Unmarried 109 4.47 1.35 .13
F8: Factors related to demand Married 304 4.77 1.64 .09

3.82 .00*
and supply Unmarried 109 4.10 1.39 .13
F9: Factors related to prediction Married 304 4.41 1.28 .07

1.38 .16
of future price Unmarried 109 4.22 1.08 .10
factor of awareness related to the rules and principles of technical analysis. The table
includes the number of respondents, mean, SD, SE mean, t- value and significant
values of each factor. The results disclose that the significant differences have not been
obtained for different categories of marital status groups of respondents with P > 0.05
except the F8 (factors related to demand and supply) with P < 0.05. Therefore, the null
hypothesis H1.11 has been accepted for all factors except F8 (factors related to demand
and supply) which means the investors have insignificant difference towards the
statement lying in F8 (factors related to demand and supply).
121
Table 4.3.18: Age Wise Attribution for the Awareness of the Investors to the Rules
and Principles of Technical Analysis
F5: Conceptual factors of technical less than 20 39 9.53

analysis 20 to 30 102 10.06
30 to 40 144 10.84 4.19 .00*
40 to 50 87 11.06
50 and above 41 12.14
F6: Factors related to price and less than 20 39 5.66
volume trends 20 to 30 102 6.07
30 to 40 144 5.84 .58 .67
40 to 50 87 5.59
F7: Factors related to time horizon less than 20 39 4.53
20 to 30 102 4.26
30 to 40 144 4.81 1.79 .12
40 to 50 87 4.56
F8: Factors related to demand and less than 20 39 4.48
supply 20 to 30 102 4.33
30 to 40 144 4.72 1.94 .10
40 to 50 87 4.51
F9 : Factors related to prediction of less than 20 39 3.82
future price 20 to 30 102 4.09
30 to 40 144 4.65 6.62 .00*
40 to 50 87 4.24
Table 4.3.18 reveals the respondent‟s age wise analysis with respect to all factors of
awareness related rules and principles of technical analysis. The table includes the
number of respondents, mean, SD, SE mean, t- value and significant values. The results
disclose that that the significant differences have not been obtained for different
categories of age groups of respondents except the F5 (conceptual factors of technical
analysis) with p value, P < 0.05 and F9 (factors related to prediction of future price)
122
with p value, P < 0.05 therefore, the null hypothesis H1.12 has been rejected for the
factors F5 and F9. Whereas, the null hypothesis H1.12 has been accepted for the factors
namely, F6 (factors related to price and volume trends, P=.67), F7 (factors related to
time horizon, P = .12) and F8 (factors related to demand and supply, P= .10) with P >
0.05 related to the rules and principles of technical analysis which means there is no
significant difference in the viewpoint of different age group investors towards the
awareness of rules and principles of technical analysis.
Table 4.3.19: Academic Qualification Attribution for the Awareness of the

Investors to the Rules and Principles of Technical Analysis
Qualification Value
F5: Conceptual factors of technical Below graduate 35 10.94
analysis Graduate 129 10.99
3.66 0.12
Professional Course 100 9.72
F6: Factors related to price and Below graduate 35 5.94
volume trends Graduate 129 5.20
6.87 .00*
F7: Factors related to time horizon Below graduate 35 5.08
Graduate 129 3.98
11.03 .00*
F8: Factors related to demand and Below graduate 35 4.60
supply Graduate 129 4.68
1.80 .14
F9: Factors related to prediction of Below graduate 35 4.22
future price Graduate 129 4.25
2.58 .05*
Table 4.3.19 presents academic qualification wise analysis with respect to all factors of
awareness related to the rules and principles of technical analysis. The value of f-test
shows that a significant difference exists for all factors at 5% level of significance
123
among all the respondents belonging to different group, according to their academic
qualification as all having p < 0.05 for their respective values of f-test except the F5
(conceptual factors of technical analysis with P = 0.12) and F8 (factors related to
demand and supply with P =0.14) with P values P > 0.05. Therefore, the null
hypothesis H1.13 has been rejected for F6 (factors related to price and volume trends
with P=0.00), F7 (factors related to time horizon with P=0.00) and F9 (factors related to
prediction of future price with P=.05) except F5 and F8. It means that the investor‟s
education qualification wise respond differently to all statements lying in factors, F6
(factors related to price and volume trends with P=0.00), F7 (factors related to time
horizon with P=0.00) and F9 (factors related to prediction of future price with P=.05)
related to the factors of awareness to the rules and principles of technical analysis.
Table 4.3.20: Occupation Wise Attribution for the Awareness of the Investors to
the Rules and Principles of Technical Analysis
Factor Occupation N Mean F- Sig.
Value
F5: Conceptual factors of technical Student 39 8.69
analysis Business Man 52 11.30
Broker 48 10.87
F6: Factors related to price and volume Student 39 4.38
trends Business Man 52 6.30
7.18 .00*
Broker 48 6.20
F7: Factors related to time horizon Student 39 4.30
.00*
Business Man 52 4.76 5.71
124
Broker 48 4.91
F8: Factors related to demand and Student 39 3.84
supply Business Man 52 5.34
Broker 48 4.33
F9: Factors related to prediction of Student 39 3.84
future price Business Man 52 4.61
6.39 .00*
Broker 48 5.02
Sources: Primary Survey, N= Number of Respondents, * Significant at 5 % level.
Table 4.3.20 presents occupation wise analysis with respect to all the factors of
awareness related to the rules and principles of technical analysis. The value of f-test
shows that a significant difference exists for all factors at 5% level of significance
among all the respondents belonging to different group, according to their academic
qualification as all having P < 0.05 for their respective values of f- test. Therefore the
null hypothesis H1.14 is rejected for all the factors of awareness related to the rules and
principles of technical analysis. It means that investors occupation wise respond
differently to all factors related to the rules and principles of technical analysis.
Further, the mean values show that all groups consider factor F5 (conceptual factors of
technical analysis) the most while making investment decision with highest mean
values 8.69,11.30,11.37,10.28,11.86,10.81,10.87 and 12.50 respectively.
125
Table 4.3.21: Annual Income Wise Attribution for the Awareness of the Investors
to the Rules and Principles of Technical Analysis
Factor Age N Mean F- Sig.
Value
F5: Conceptual factors of technical Below 3 lakh 91 13.25
analysis 300000 to 600000 180 12.57
1.53 .20
600000 to 900000 71 13.87
900000 and above 71 13.63
F6: Factors related to price and volume Below 3 lakh 91 10.04
trends 300000 to 600000 180 10.85
2.34 .07
600000 to 900000 71 10.32
900000 and above 71 11.28
F7: Factors related to time horizon Below 3 lakh 91 5.06
300000 to 600000 180 4.42
.75 .52
600000 to 900000 71 4.70
900000 and above 71 4.66
F8: Factors related to demand and supply Below 3 lakh 91 4.32
300000 to 600000 180 4.12
4.89 .00*
600000 to 900000 71 4.09
900000 and above 71 4.28
F9: Factors related to prediction of future Below 3 lakh 91 4.32
price 300000 to 600000 180 4.12
8.22 .00*
600000 to 900000 71 4.09
900000 and above 71 4.28
Table 4.3.21 reveals the sampled respondents‟ income - wise analysis with respect to
the factors of awareness for rules and principles of technical analysis for investment
decision, the results of f test. The result of f test present that among all the factors,
factor F8 (factors related to demand and supply) and F9 (factors related to prediction of
future price) shows the significant difference at f=4.89 with P < 0.05 and 8.22 with P <
0.05 while, for remaining three factors, no significant difference have been found
among groups with different group of annual income. Therefore, the null hypothesis
H1.15 has been rejected for F8 and F9 whereas, for all other factors such as F5
(conceptual factors of technical analysis with P=.20), F6 (factors related to price and
volume trends with P=.07) and F7 (factors related to time horizon with P=.52) we will
accept the null hypothesis H1.15 which means that the investors with respect to income
126
do not think differently regarding the rules and principles of technical analysis except
F8 (factors related to demand and supply) and F9 (factors related to prediction of future
price).
Table 4.3.22: Investment Experience Attribution for the Awareness of the

Investors to the Rules and Principles of Technical Analysis
Factor Investment N Mean F- Sig.
Experience Value
F5: Conceptual factors of technical analysis Below 5 Years 168 9.98
5 to 10 years 117 11.14
4.42 .00*
10 to 15 years 62 10.95
15 and above 66 11.50
F6: Factors related to price and volume Below 5 Years 168 5.81
trends 5 to 10 years 117 5.65
.47 .69
10 to 15 years 62 5.91
F7: Factors related to time horizon Below 5 Years 168 4.50
5 to 10 years 117 4.92
3.12 .02
10 to 15 years 62 4.20
F8: Factors related to demand and supply Below 5 Years 168 4.52
5 to 10 years 117 4.57
.39 .76
10 to 15 years 62 4.75
F9: Factors related to prediction of future Below 5 Years 168 4.19
price 5 to 10 years 117 4.55
2.42 .06
10 to 15 years 62 4.27
factors of awareness related to the rules and principles of fundamental analysis. The
results of f- test depicts that among all the factor , two factor namely, F5 (conceptual
factors of technical analysis) and F7 (factors related to time horizon ) presents a
significant difference at 5% level of significance with respect to different time horizons
of investment experience of respondents, f=4.42, P < 0.05 and f= 3.12, P < 0.05. While,
all other factors namely, F6 (factors related to price and volume trends with P =.69), F8
(factors related to demand and supply with P = 0.76) and F9 (factors Factors related to
127
prediction of future price with P= 0.065), no significant difference have been obtained
among respondents group with different length of investment experience. Therefore the
null hypothesis H1.16 is accepted for F6 (factors related to price and volume trends), F8
(factors related to demand and supply), F9 (factors Factors related to prediction of
future price) and rejected for the statements lying in the F5 (conceptual factors of
technical analysis) and F7 (factors related to time horizon). It means the respondents
think differently for all statements lying in F5 and F7 whereas, investors have same
viewpoint regarding all statements lying in F6, F8 and F9 related to factors of awareness
to the rules and principles of technical analysis.
Table 4.3.23: Awareness regarding Techniques of Fundamental Analysis

Variable/ Techniques Groups Number Frequency Mean SD t- Value Sig.
Industry Analysis Yes 262 63.4 1.40 .55 51.26 .00*
No 151 36.6
Company Analysis Yes 318 77.0 1.23 .42 59.32 .00*
No 95 23.0
Security Analysis Yes 209 50.6 1.51 .50 61.14 .00*
No 204 49.4
Economic Indicator Yes 215 52.1 1.47 .50 60.10 .00*
No 198 47.9
Economic Data Yes 207 50.1 1.50 .50 60.94 .00*
No 206 49.9
GDP Yes 187 45.3 1.54 .49 62.40 .00*
No 226 54.7
Inflation Rate Yes 165 40.0 1.60 .49 65.52 .00*
No 248 60.0
Money Supply Yes 108 26.2 1.73 .43 79.37 .00*
No 305 73.8
Interest Rate Yes 194 46.7 1.53 .49 62.21 .00*
No 219 53.0
Accounting Ratios Yes 99 24.0 1.76 .42 83.69 .00*
No 314 76.0
Discounted Cash Flow Yes 91 22.0 1.77 .41 87.15 .00*
Ratios No 322 78.0
Market Value Based Yes 153 37.0 1.62 .48 68.49 .00*
Ratios No 260 63.0
Growth rate of Export Yes 178 43.1 1.56 .49 63.19 .00*
Import No 235 56.9
Source: Primary Survey, * Significant at 5 % level.
128
Table 4.3.23 reveals the sampled respondents awareness with respect to the techniques
of fundamental analysis. The table includes the numbers, frequency, mean, standard
deviation, t-value and significance value. The above table shows that 63.4 percent
respondents are aware about with industry analysis technique of fundamental analysis
while 36.4 percent respondents are not aware towards the industry analysis technique of
fundamental analysis. The mean score of the technique is 1.40 and the standard
deviation of the industry analysis technique is 0.55. The above table presents that 77
percent respondents are aware about with company analysis technique of fundamental
analysis while 23 percent respondents are not aware towards the company analysis
technique of fundamental analysis. The mean score of the technique is 1.23 and the
standard deviation of the company analysis technique is 0.42. The 50.6 percent
respondents are aware about with security analysis technique of fundamental analysis
while 49.4 percent respondents are not aware towards the security analysis technique of
deviation of the security analysis technique is 0.50. The above mentioned table shows
that 52.9 percent respondents are aware about with economic indicator technique of
fundamental analysis while 47.1 percent respondents are not aware towards the
economic indicator technique of fundamental analysis. The mean score of the technique
is 1.47 and the standard deviation of the economic indicator technique is 0.50. It also
shows that 50 percent respondents are aware about with economic data technique of
fundamental analysis while 50 percent respondents are not aware towards the economic
data technique of fundamental analysis. The mean score of the technique is 1.50 and the
standard deviation of the economic data technique is 0.50. The table shows that 45.3
percent respondents are aware about GDP technique of fundamental analysis while 54.7
percent respondents are not aware towards the GDP technique of fundamental analysis.
The mean score of the technique is 1.54 and the standard deviation of the GDP
technique is 0.49. The table also shows that 40 percent respondents are aware about
inflation rate technique of fundamental analysis while 60 percent respondents are not
aware towards the inflation rate technique of fundamental analysis. The mean score of
the technique is 1.60 and the standard deviation of the inflation rate technique is 0.49.
According to money supply wise 26.2 percent respondents are aware about with money
supply technique of fundamental analysis while 73.8 percent respondents are not aware
towards the money supply technique of fundamental analysis. The mean score of the
129
technique is 1.73 and the standard deviation of the money supply technique is 0.43. The
above mentioned table shows that 46.7 percent respondents are aware about interest
rate technique of fundamental analysis while 53.3 percent respondents are not aware
towards the interest rate technique of fundamental analysis. The mean score of the
technique is 1.53 and the standard deviation of the interest rate technique is 0.49. As
per accounting ratio wise the table 4.3.23 shows that 24 percent respondents are aware
about accounting ratio technique of fundamental analysis while 76 percent respondents
are not aware towards the accounting ratio technique of fundamental analysis. The
mean score of the technique is 1.76 and the standard deviation of the accounting ratio
technique is 0.42. As per discounted cash flow ratio wise 22 percent respondents are
aware about discounted cash flow ratio technique of fundamental analysis while 78
percent respondents are not aware towards the discounted cash flow ratio technique of
deviation of the discounted cash flow ratio technique is 0.41. The table also presents
that 37 percent respondents are aware about with market value based ratios technique
of fundamental analysis while 63 percent respondents are not aware towards the market
value based ratios technique of fundamental analysis. The mean score of the technique
is 1.62 and the standard deviation of the market value based ratios technique is 0.48 and
the table also presents the 43.1 percent respondents are aware about with growth rate of
export import technique of fundamental analysis while 56.9 percent respondents are not
aware towards the growth rate of export import technique of fundamental analysis. The
mean score of the technique is 1.56 and the standard deviation of the growth rate of
export import technique is 0.49.
The results of the descriptive analysis of techniques of fundamental analysis presents

that the majority of the respondents are awareness regarding industry analysis (63.4),
company analysis (77%) and security analysis (50%), economic indicators (52.1%) and
economic data (almost 50%) whereas, in all other techniques of fundamental analysis,
investors are less aware as compared to the industry, company and security analysis,
economic indicators and economic data.
The results disclose that the significant differences have been obtained for all
techniques of fundamental analysis with P < 0.05. Therefore, the null hypothesis H1.17
has been rejected for all techniques of fundamental analysis which means the investors
are aware for all the techniques of fundamental analysis.
130
Table 4.3.24: Awareness Regarding Techniques of Technical Analysis
Variable/Techniques Groups Number Frequency Mean SD t- Sig.
Value
Chart Analysis Yes 318 77.0 1.23 .42 59.32 .00*
No 95 23.0
Technical Indicators Yes 277 67.1 1.32 .47 56.20 .00*
No 136 32.9
Fluctuations and Yes 186 55.0 1.54 .49 63.22 .00*
Volatility No 227 45.0
Floating Stocks and Yes 173 58.1 1.58 .49 62.34 .00*
Volume Trends No 240 41.9
Dow Theory Yes 125 30.3 1.69 .45 68.02 .00*
No 288 69.7
Elliot Wave Theory Yes 76 18.4 1.81 .38 95.12 .00*
No 337 81.6
Relative Strength Index. Yes 121 29.3 1.70 .45 76.13 .00*
No 292 70.7
Moving Average. Yes 193 53.3 1.53 .49 62.35 .00*
No 220 46.7
MACD Yes 104 74.8 1.74 .43 81.75 .00*
No 309 25.2
Candlestick Method Yes 167 59.6 1.56 .49 65.18 .00*
No 246 40.4
Oscillators (rate of change Yes 91 22.0 1.77 .41 87.15 .00*
or ROC). No 322 78.0
Spread of the Market. Yes 100 24.2 1.75 .42 83.29 .00*
No 313 75.8
OBV Yes 51 12.3 1.87 .32 15.77 .00*
No 362 87.7
Parabolic Yes 69 16.7 1.83 .37 98.18 .00*
No 344 83.3
Table 4.3.24 reveals the sampled respondents awareness with respect to the techniques
of technical analysis. The table includes the numbers, frequency, mean, standard
deviation t-value and significance value. The above table shows that 77 percent
respondents are aware about chart analysis technique of technical analysis while 23
131
percent respondents are not aware towards the chart analysis technique of technical
analysis. The mean score of the technique is 1.23 and the standard deviation of the
chart analysis technique is 0.48. The above table presents that 67.1 percent respondents
are aware about technical indicators technique of technical analysis while 32.9 percent
respondents are not aware towards the technical indicators technique of technical
technical indicators technique is 0.47. The 55 percent respondents are aware about
fluctuations and volatility technique of technical analysis while 45 percent respondents
are not aware towards the fluctuations and volatility technique of technical analysis.
The mean score of the technique is 1.54 and the standard deviation of the fluctuations
and volatility technique is 0.49. The above mentioned table shows that 58.1 percent
respondents are aware about with floating stocks and volume trends technique of
technical analysis while 41.9 percent respondents are not aware towards the floating
stocks and volume trends technique of technical analysis. The mean score of the
technique is 1.58 and the standard deviation of the floating stocks and volume trends
technique is 0.49. It also shows that 30.3 percent respondents are aware about with
Dow theory technique of technical analysis while 69.7 percent respondents are not
aware towards the Dow theory technique of technical analysis. The mean score of the
technique is 1.69 and the standard deviation of the Dow Theory technique is 0.45. The
table shows that 18.4 percent respondents are aware about Elliot wave theory technique
of technical analysis while 81.6 percent respondents are not aware towards the Elliot
wave theory technique of technical analysis. The mean score of the technique is 1.81
and the standard deviation of the Elliot wave theory technique is 0.38. The table also
shows that 29.3 percent respondents are aware about RSI technique of technical
analysis while 70.7 percent respondents are not aware towards the RSI technique of
technical analysis. The mean score of the technique is 1.70 and the standard deviation
of the RSI technique is 0.45. According to moving average wise 53.3 percent
respondents are aware about with moving average technique of technical analysis while
46.7 percent respondents are not aware towards the moving average technique of
of the moving average technique is 0.49. The above mentioned table shows that 74.8
percent respondents are aware about MACD technique of technical analysis while 25.2
132
percent respondents are not aware towards the MACD technique of technical analysis.
The mean score of the technique is 1.74 and the standard deviation of the MACD
technique is 0.43. As per candlestick method wise the table 4.3.24 shows that 59.6
percent respondents are aware about candlestick method of technical analysis while
40.4 percent respondents are not aware towards the candlestick method of technical
candlestick method is 0.49. As per oscillators wise 22 percent respondents are aware
about oscillator‟s technique of technical analysis while 78 percent respondents are not
aware towards the oscillators‟ technique of technical analysis. The mean score of the
technique is 1.77 and the standard deviation of the oscillator‟s technique is 0.41. The
table also presents that 24.2 percent respondents are aware about with spread of the
market technique of technical analysis while 75.8 percent respondents are not aware
towards the spread of the market technique of technical analysis. The mean score of the
technique is 1.75 and the standard deviation of the spread of the market technique is
0.42. The table also shows that 13.3 percent respondents are aware about with OBV
technique of technical analysis while 87.7 percent respondents are not aware towards
the OBV technique of technical analysis. The mean score of the technique is 1.87 and
the standard deviation of the OBV technique is 0.32 and the table also presents the 16.7
percent respondents are aware about with parabolic technique of technical analysis
while 83.3 percent respondents are not aware towards the parabolic technique of
of the growth rate of export import technique is 0.37.
The results of the descriptive analysis of techniques of technical analysis presents that
the majority of the respondents are awareness regarding chart analysis (77 %), MACD
(74.8%), technical indicators (67.1%) and candlestick method (59.6%), floating stocks
and volume trends (58.1%), fluctuations and volatility (55%) and moving average
(53.3) whereas, in all other techniques of technical analysis, investors are less aware as
compared to the above mention techniques.
The results disclose that the significant differences have been obtained for all
techniques of technical analysis with P < 0.05. Therefore, the null hypothesis H1.18 has
been rejected for all techniques of technical analysis which means the investors are
aware for all the techniques of technical analysis.
133
4.4 Combining Impact of Fundamental and Technical Analysis on Investment
This aspect covers fifteen statements which were evaluated on a five point likert scale
disagree=5. Factor analysis is used on these fifteen statements to find out the major
factors of combining impact of fundamental and technical analysis for making
investment decision. Kaiser--Meyer- Olkin (KMO) have been applied to examine the
suitability of factor analysis and it‟s a good measure of sampling adequacy. In addition
to this, factor ranking is assigned on the basis of the overall mean values of each factor.
Factor Analysis: The fifteen items of the combining impact of fundamental and
technical analysis in investment decision scale were subjected to principal components
analysis (PCA) using SPSS version 16. Before employing PCA the suitability of data
for factor analysis was assessed. Inspection of correlation matrix revealed that many
coefficients are more than have value 0.3, which allows us for further analysis.
Inspection of the correlation matrix revealed the presence of many coefficients of 0.3
the recommended value of 0.6 (Kaiser 1970, 1974) and Bartlett‟s Test of Sphericity
significance, hence the null hypothesis H02 is rejected.
Table 4.4.1: KMO and Bartlett's Test Combining Impact of Fundamental and
Technical Analysis on Investment Decision of Investors
Df 105
Sig. .000*
Source: Primary Survey, * Significance at 5% level
134
Table 4.4.2: PCA Analysis of Combining Impact of Fundamental and Technical Analysis on Investment Decision of Investors
Component
Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %
1 5.399 35.99 35.99 5.39 35.99 35.99 2.79 18.63 18.63
2 1.285 8.56 44.55 1.28 8.56 44.55 2.41 16.12 34.76
3 1.127 7.51 52.06 1.12 7.51 52.06 1.89 12.66 47.42
4 1.060 7.06 59.13 1.06 7.06 59.13 1.75 11.71 59.13
5 .925 6.16 65.30
6 .812 5.41 70.71
7 .749 4.99 75.70
8 .702 4.68 80.39
9 .657 4.38 84.77
10 .521 3.47 88.24
11 .484 3.22 91.47
12 .394 2.62 94.09
13 .373 2.48 96.58
14 .296 1.97 98.55
15 .216 1.44 100.00
135
Principal components analysis revealed in table 4.4.2 the presence of four components
with eigen values exceeding 1, explaining 18.63%, 16.12%, 12.66% and 11.71 % of the
variance respectively. The rotated component solution revealed the presence of simple
structure (Thurstone 1947), with all factors showing a number of strong. The results of
this analysis support the use of present scale with obtained factors.
 F10: Entry and exit point in investments

 F11: Rational investment decision and solution of queries
 F12: Market direction and time horizon
 F13: Economic indicators relation with demand supply
F10: Entry and exit point in investments
Here, the factor F10 consisting five statements, viz. the investor is the one who combine
the fundamental and technical analysis while making investment decision, The investor
is the one who combines the fundamental and technical analysis while constructing
portfolio, Investor determines the selection of the securities by applying fundamental
analysis and when to enter and exit by applying the technical analysis, I combine the
fundamental and technical analysis to determine the entry and exit time from the stock
market and I prefer the investment decision by applying the combined analysis of
As mentioned in table 4.4.3, the loading values of these factors worked out at 0.78,
0.87, 0.58, 0.42 and 0.66 respectively. The factor loading values shows the correlation
between the factor and the variables and it is implied that the factor F10 „entry and exit
point in investments‟ and all five variables are highly correlated. On the basis of nature
of these variables the name of F10 is considered as entry and exit point in investments.
F11: Rational investment decision and solution of queries
As mentioned in table 4.4.3, the factor F11- comprises four aspects namely, I get most
of my queries solved about the stock market trends through combining the fundamental
and technical analysis, I get to know the expected price depending on the combining
impact of fundamental and technical analysis, rational investment decision is the one
depending on the fundamental analysis only and rational investment decision is the one
depending on the technical analysis only. The loading values of these factors worked
136
out at 0.66, 0.63, 0.52 and 0.78 respectively. Due to the high value of loading variables,
this implies a high level of correlation between the second factor and its variables.
F12: Market direction and time horizon
As mentioned in table 4.4.3, the factor F12, market direction and time horizon, is
comprises of three variables such as Long term investment alternative selection by
applying fundamental analysis while short term alternative selection by applying
technical analysis, Most analyst in the stock market /financial markets more uses
fundamental and technical analysis in determining the direction of the stock market and
its expected future prices and rational investment decision is the one depending on the
both fundamental and technical analysis. The loading values of these variables are 0.82,
0.67 and 0.46 respectively. The values of factor loadings present the correlation
between factor and variables. It implies that the factor F12 (market direction and time
horizon) and all three variables are highly correlated.
F13: Economic indicators relation with demand supply
As mentioned in table 4.4.3, the factor, F13 (economic indicators relation with demand
supply) has only three sub factors, Investor determines the direction of the stock market
movements by following up the economic news when it is released and their impact on
demand and supply, investor is one who studies the fundamental analysis for finding
out the reasons of the market movements and studies the technical analysis to know the
effect of the economic news on the stock market and economic indicators contribute in
selecting the industry while technical indicators contribute in the confirmation of the
price movements besides the charts. The loading values of these two sub factors are
0.81, 0.65 and 0.45 respectively. These loading values are good enough and show a
high correlation between factor and variable.
The table 4.4.3 further disclose the value of loading, Eigen values, mean and SDs of
that factor F11 (rational investment decision ion and solution of queries) having the
highest mean value (2.32), falls in the category of first rank. Factor F13 (economic
indicators relation with demand supply) and factor F12 (market direction and time
horizon) obtained the second and third rank on the basis of their mean values 2.07 and
2.02 respectively. F10 (entry and exit point in investments) has the lowest mean value 1.95
and scored the last rank. The aforementioned factor rankings are based on the premise
that when a factor's mean value lowers the corresponding value of its rank increases.
137
Table 4.4.3: Combining Impact of Fundamental and Technical Analysis on Investment Decision of Investors
Factors Statements Loading Eigen Mean SD Factor mean Factor Rank Total variance
Values Explained
F10: Entry and The investor is the one who .78

exit point in combine the fundamental and
1.75 .81
investments technical analysis while
making investment decision.
The investor is the one who .87
combines the fundamental and
1.89 .82
technical analysis while
constructing portfolio.
Investor determines the
selection of the securities by 5.39 1.95 4 18.63
applying fundamental analysis .58 2.08 .83
and when to enter and exit by
applying the technical analysis.
I combine the fundamental and
technical analysis to determine
.42 2.00 .92
the entry and exit time from the
stock market.
I prefer the investment decision
by applying the combined
.66 2.03 .93
analysis of fundamental and
technical analysis.
138
F11: Rational I get most of my queries solved
investment about the stock market trends
decision ion through combining the .66 2.24 .93
and solution of fundamental and technical
queries analysis.
I get to know the expected
price depending on the
combining impact of .63 2.33 .88
analysis. 1.28 2.32 1 16.12
Rational investment decision is
the one depending on the .52 2.32 .99
fundamental analysis only
the one depending on the .78 2.47 1.02
technical analysis only.
F12: Market Long term investment
direction and alternative selection by
time horizon applying fundamental analysis
.82 2.00 .92
while short term alternative
selection by applying technical
analysis 1.12 2.02 3 12.66
Most analyst in the stock

market /financial markets more .67 1.96 0.83
uses fundamental and technical
139
analysis in determining the
direction of the stock market
and its expected future prices.
the one depending on the both
.46 2.10 .88
analysis
F13: Economic Investor determines the .81
indicators direction of the stock market
relation with movements by following up
2.12 .79
demand supply the economic news when it is
released and their impact on
demand and supply
Investor is one who studies the .65 1.00 2.07 2 11.71
fundamental analysis for
finding out the reasons of the
market movements and studies 1.96 .84
the technical analysis to know
the effect of the economic
news on the stock market.
Economic indicators contribute .45
in selecting the industry while
technical indicators contribute 2.15 .88
in the confirmation of the price
movements besides the charts
140
Table 4.4.4: Descriptive Statistics of Combining Impact of Fundamental and
Technical Analysis on Investment Decision of Investors
Descriptive Statistics
The investor is the one who combine the
fundamental and technical analysis while 413 177 179 47 3 7 1.00 5.00 1.75 .81
The investor is the one who combines the
fundamental and technical analysis while 413 150 170 83 7 3 1.00 5.00 1.89 .82
constructing portfolio.
Investor determines the direction of the
stock market movements by following up
413 96 183 121 13 0 1.00 4.00 2.12 .79
the economic news when it is released and
their impact on demand and supply.
Investor determines the selection of the
securities by applying fundamental analysis
413 104 191 98 8 2 1.00 5.00 2.08 .83
and when to enter and exit by applying the
technical analysis.
Investor is one who studies the fundamental
analysis for finding out the reasons of the
market movements and study the technical 413 130 187 84 6 6 1.00 5.00 1.96 .84
analysis to know the effect of the economic
news on the stock market.
Long term investment alternative selection
by applying fundamental analysis while
413 135 173 78 20 7 1.00 5.00 2.00 .92
short term alternative selection by applying
technical analysis.
Economic indicators contribute in selecting
the industry while technical indicators
413 100 181 105 23 4 1.00 5.00 2.15 .88
contribute in the confirmation of the price
movements besides the charts.
Most analyst in the stock market /financial
markets more uses fundamental and
technical analysis in determining the 413 128 191 73 17 4 1.00 5.00 1.96 .83
direction of the stock market and its
expected future prices.
I combine the fundamental and technical
analysis to determine the entry and exit time 413 130 183 71 21 8 1.00 5.00 2.07 .92
from the stock market.
I prefer the investment decision by applying
the combined analysis of fundamental and 413 132 169 81 23 8 1.00 5.00 2.03 .93
technical analysis.
141
I get most of my queries solved about the
stock market trends through combining the 413 91 174 106 38 4 1.00 5.00 2.24 .93
I get to know the expected price depending
on the combining impact of fundamental 413 72 170 135 30 6 1.00 5.00 2.33 .88
Rational investment decision is the one
413 100 128 144 32 9 1.00 5.00 2.32 .99
depending on the fundamental analysis only
413 80 132 131 54 10 1.00 5.00 2.47 1.02
depending on the technical analysis only.
depending on the both fundamental and 413 108 183 97 20 5 1.00 5.00 2.10 .88
technical analysis.
Moreover, the above mention table 4.4.4 also revealed the mean and standard
deviations regarding the combining impact of fundamental and technical analysis on
investment decision results presents that there are fifteen variables with regards to
combining impact of fundamental and technical analysis namely, the investor is the one
who combine the fundamental and technical analysis while making investment decision
(mean =1.7 with SD =0.81), the investor is the one who combines the fundamental and
technical analysis while constructing portfolio (mean = 1.89 with SD =0.82), investor
determines the direction of the stock market movements by following up the economic
news when it is released and their impact on demand and supply (mean = 2.12 with SD
=0.79), investor determines the selection of the securities by applying fundamental
analysis and when to enter and exit by applying the technical analysis (mean = 2.08
with SD =0.83), investor is one who studies the fundamental analysis for finding out
the reasons of the market movements and study the technical analysis to know the
effect of the economic news on the stock market. (mean=1.96 with SD=0.84), long
term investment alternative selection by applying fundamental analysis while short
term alternative selection by applying technical analysis (mean = 2.00 with SD =0.92),
economic indicators contribute in selecting the industry while technical indicators
contribute in the confirmation of the price movements besides the charts (mean=2.15
with SD=0.88), most analyst in the stock market /financial markets more uses
fundamental and technical analysis in determining the direction of the stock market and
its expected future prices. (mean=1.96 with SD=0.83), I combine the fundamental and
technical analysis to determine the entry and exit time from the stock market
142
(mean=2.07 with SD=0.92), I prefer the investment decision by applying the combined
analysis of fundamental and technical analysis (mean=2.03 with SD=0.93), I get most
of my queries solved about the stock market trends through combining the fundamental
and technical analysis (mean=2.24 with SD=0.93), I get to know the expected price
depending on the combining impact of fundamental and technical analysis(mean= 2.33
with SD=0.88) Rational investment decision is the one depending on the fundamental
analysis only (mean=2.32 with SD=0.99), rational investment decision is the one
depending on the technical analysis only. (Mean=2.47 with SD=1.02), and rational
investment decision is the one depending on the both fundamental and technical
analysis (mean=2.10 with SD=0.88). It was considered worthwhile when the sampled
respondents having mean rank less than neutral value.
Regression Analysis: The factor solution obtained from the awareness to rules and
principles of fundamental analysis shows that there were no cross loadings. Therefore
the factor obtained in first objective reflected the significance validity and hence can be
used for further analysis. To attain the second objective to assess the significance of
these factors on overall combining impact of fundamental and technical analysis on
investment decision of investors in Indian stock market. The scores of the factors were
calculated and treated as independent variable in the regression analysis and the
investor‟s responses for combining impact of fundamental and technical analysis on
investment decision was used as dependent variable. Linear multiple regression
analysis has been used to assess the influence/impact of independent variables( factors
obtained from rules and principles of fundamental analysis) on dependent variable
(investment decision based on combining impact of fundamental and technical
analysis).
Linear multiple regression was used to assess the influence of fundamental analysis on
investment decision of investors. Preliminary analysis were conducted to ensure no
violation of the assumptions of normality, linearity, multi collinearity and
homoscedasticity and all the values were found in acceptable range. Further we have
tested the influence of fundamental analysis on investment decision and we found that
there is a statistically significant (beta.516, P <.001) influence exist in the measured
relationship. A total 26.3% variance was explained by independent variable towards the
dependent variable. A micro level investigation was also carried out to see the F1-
financial performance related factors, F2- factors related to economic indicators, F3-
143
contribution of directors and underwriters and F4- government ideology and political
instability on investment decision. In the investigation every factor of fundamental
Analysis, F1 - financial performance related factors (beta.315, P < .05), F2 - factors
related to economic indicators (beta.155, P < .05), F3 - contribution of directors and
underwriters (beta.119, P < .05), and F4- government ideology and political instability
(beta.103, P < .05), was found to be statistically significant. Therefore, the null
hypothesis H2.1 has been rejected.
Table 4.4.5: Regression Analysis of Impact of the Fundamental factors on

Investment Decision
Independent Factor Dependent Factor R2 Adjusted B T- Sig.
R2 Value
F1: Financial Investment Decision (Combining .315 6.33 .000*

performance related impact of fundamental and
factors technical analysis on investment
F2: Factors related to decision) .155 3.21 .001*
economic indicators
F3: Contribution of .119 2.44 .015*
.270 .263
directors and
underwriters
F4: Government .103 2.16 .031*
ideology and political
instability
Fundamental .516 12.13 .000*
Analysis
principles of technical analysis shows that there were no cross loadings. Therefore, the
factor obtained in first objective reflected the significance validity and hence can be
used for further analysis. To attain the second objective to assess the significance of
these factors overall combining impact of fundamental and technical analysis on
investment decision of investors in Indian stock market. The scores of the factors were
calculated and treated as independent variable in the regression analysis and the
investor‟s responses for combining impact of fundamental and technical analysis on
investment decision was used as dependent variable. Liner multiple regression analysis
has been used to assess the influence/impact of independent variables (factors obtained
144
from rules and principles of technical analysis) on dependent variable (investment
decision based on combining impact of fundamental and technical analysis).
Table 4.4.6: Regression Analysis of Impact of Technical Factors on

Investment Decisions
Independent Factor Dependent Factor R2 Adjusted B t-
Sig.
R2 Value
F5: Conceptual factors of
.311 6.55 .000*
technical analysis Investment Decision
F 6: Factors related to price (Combining impact
.250 5.47 .000*
and volume trends of fundamental and
F7: Factors related to time technical analysis on
investment decision) .137 2.79 .005*
horizon .427 .426
F 8: Factors related to demand
.079 1.80 .072
and supply
F9: Factors related to
.077 1.53 .126
prediction of future price
Technical Analysis .654 17.38 .000*
Linear multiple regressions were used to assess the influence of technical analysis on
investment decision. Preliminary analyses were conducted to ensure no violation of the
assumptions of normality, linearity, multicollinearity and homoscedasticity and all the
values were found in acceptable range. Further we have tested the influence of
technical analysis on investment decision and we found that there is a statistically
significant (beta .654, P <.001) influence exist in the measured relationship. A total
42.6% variance was explained by independent variable towards the dependent variable.
A micro level investigation was also carried out to see the F6- conceptual factors of
technical analysis, F6- factors related to price and volume trends, F7- factors related to
time horizon, F8- factors related to demand and supply, F9- factors related to prediction
of future price, on investment decision. In the investigation three factor of technical
analysis F5- conceptual factors of technical analysis (beta.311, P <.05), F6- factors
related to price and volume trends (beta.250, P <.05), F7- factors related to time horizon
(beta.130, P <.05) were found to be significant and other two, F8- factors related to
demand and supply (beta.079, P >.05), and F9- factors related to prediction of future
price (beta.077, P >.05), were found statistically insignificant. Therefore, the null
hypothesis H2.2 has been rejected for all factors except F8 (factors related to demand and
supply) and F9 (factors related to prediction of future price).
145
principles of fundamental and technical analysis shows that there were no cross
loadings. Therefore the factor obtained in first objective reflected the significance
validity and hence can be used for further analysis. To attain the second objective to
assess the significance of these factors on overall combining impact of fundamental and
technical analysis on investment decision of investors in Indian stock market. The
scores of the factors were calculated and treated as independent variable in the
regression analysis and the investor‟s responses for combining impact of fundamental
and technical analysis on investment decision was used as dependent variable. Liner
multiple regression analysis has been used to assess the influence/impact of
independent variables (factors obtained from rules and principles of fundamental and
technical analysis) on dependent variable (investment decision based on combining
impact of fundamental and technical analysis).
Table 4.4.7: Regression Analysis of impact of Fundamental and Technical Factors

on Investment Decision
Independent Dependent R2 Adjusted R2 B t-Value Sig.
Factor Factor
Combining Investment
Impact Decision
(Fundamental (Combining
+Technical) impact of
.406 .404 .637 16.63 .000*
Analysis fundamental
and technical
analysis on
investment
decision)
Source: Primary Source, * Significance at 5 % level.
Simple linear regression was used to assess the influence of combining influence of
Fundamental and Technical analysis on investment decision Preliminary analyses were
conducted to ensure no violation of the assumptions of normality, linearity,
multicollinearity and homoscedasticity and all the values were found in acceptable
range. Further we have tested the combining influence of fundamental and technical
analysis on investment decision and we found that there is a statistically significant
(beta .637, P < .001) influence exist in the measured relationship. A total 40.4%
variance was explained by independent variable towards the dependent variable.
Therefore the null hypothesis H02 has been rejected.
146
4.5 Investment Advisors Viewpoint on the Investment Decision Taken by the
Investors
This aspect covers twenty one statements which were evaluated on a five point likert
scale encompassing strongly agree=1, agree=2, neutral=3, disagree=4 and strongly
disagree=5. Factor analysis is used on these twenty one statements to find out the major
factors of investment advisors viewpoint on the investment decision taken by the
investors for making investments. Kaiser--Meyer- Olkin (KMO) have been applied to
examine the suitability of factor analysis and it‟s a good measure of sampling
adequacy. In addition to this, factor ranking is assigned on the basis of the overall mean
values of each factor.
Factor Analysis: The 21 items of the investment advisors viewpoint on the investment
decision taken by the investors scale were subjected to principal components analysis
(PCA) using SPSS version 16. Before employing PCA the suitability of data for factor
analysis was assessed. Inspection of correlation matrix revealed that many coefficients
are more than have value .3, which allows us for further analysis.
Inspection of the correlation matrix revealed the presence of many coefficients of .3
significance, hence the null hypothesis H03 is rejected.
Table 4.5.1: KMO and Bartlett's Test Investment Advisors Viewpoint on the
Df 210
Sig. .000*
147
Table 4.5.2: PCA of Investment Advisors Viewpoint on the Investment Decision Taken by the Investors
Initial Eigen values Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Component
Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %
1 7.910 37.66 37.66 7.91 37.66 37.66 3.50 16.68 16.68
2 1.654 7.87 45.54 1.65 7.87 45.54 2.94 14.01 30.69
3 1.235 5.88 51.42 1.23 5.88 51.42 2.80 13.35 44.04
4 1.147 5.46 56.88 1.14 5.46 56.88 2.69 12.84 56.88
5 .989 4.70 61.59
6 .837 3.98 65.57
7 .813 3.87 69.45
8 .702 3.34 72.79
9 .665 3.16 75.96
10 .655 3.11 79.08
11 .562 2.67 81.75
12 .540 2.57 84.33
13 .514 2.44 86.77
14 .452 2.15 88.93
15 .417 1.98 90.91
16 .404 1.92 92.83
17 .373 1.77 94.61
18 .346 1.64 96.26
19 .295 1.40 97.66
20 .283 1.34 99.01
21 .207 .98 100.00
148
Principal components analysis revealed in table 4.5.2 the presence of four components
with eigen values exceeding 1, explaining 16.68%, 14.01%, 13.35% and 12.84 % of the
variance respectively. The rotated component solution revealed the presence of simple
structure (Thurstone 1947), with all factors showing a number of strong. The results of
this analysis support the use of present scale with obtained factors.
 F14: Selection of best securities and managing investment decision
 F15: Clarity regarding fee and tax management
 F16: Portfolio construction and risk return trade off
 F17: Expert opinion for investment decisions and strategies behind investments
F14: Selection of best securities and managing investment decision
Here, as mentioned in table 4.5.3, the factor F14 consisting eight statements, viz.
investment advisor provides advices with respect to the priorities of the client,
investment advisors help in avoiding mistakes while making investment decision, they
help you regarding legal matters for reducing fiduciary responsibility, investment
advisor guides you regarding investment in best securities at the best price, investment
advisors provide factual and logical information to the investors, they help you in
improving your investment performance to the best, they play a key role at the time of
recession in managing the investment portfolio and they are capable of understanding
the investor‟s psychology in investment decision.
The loading values of these factors worked out at 0.68, 0.58 0.71, 0.53, 0.63, 0.53 0.45
and 0.54 respectively. The factor loading values shows the correlation between the
factor and the variables and it is implied that the factor F14 „selection of best securities
and managing investment decision‟ and all five statements are highly correlated. On the
basis of nature of these variables the name of F14 is considered as selection of best
securities and managing investment decision.
F15: Clarity regarding fee and tax management
As mentioned in table 4.5.3, the factor F15 comprises five aspects namely, investment
advisor guides you with respect to tax and planning opportunities, investment advisors
manage risk in tax smart way, to protect and grow your assets, advisors help you in
coping up with the confusion about the fee paid for the financial planning services,
investment advisors do detailed research on asset allocation and investment advisors
149
help in motivating the family members of investor who are not inclined towards
investment for their own. The loading values of these factors worked out at 0.68, 0.58,
0.71, 0.53, 0.63, 0.57, 0.45 and 0.54 respectively. Due to the high value of loading
variables, this implies a high level of correlation between the second factor and its
variables.
F16: Portfolio construction and risk return trade off
As mentioned in table 4.5.3, the factor F16 „portfolio construction and risk return trade
off‟ is comprises of four variables such as investment advisors help you in investing
your money for achieving your financial goals, investment advisor helps you in
portfolio construction, investment advisors help you in guiding regarding
diversification of investment for (equity, debt, real estate, commodity) and they help
you in managing your risk return trade off balance. The loading values of these
variables are 0.69, 0.70, 0.61 and .46 respectively. The values of factor loadings present
the correlation between factor and variables. It implies that the factor F16 (portfolio
construction and risk return trade off) and all variables are highly correlated.
F17: Expert opinion for investment decisions and strategies behind investments:
As mentioned in table 4.5.3the factor F17 (expert opinion for investment decisions and
strategies behind investments) also have four sub factors, investment advisor helps you
in minimizing the risk, investment advisor helps you in maximizing the returns,
investment advisor gives expert opinion regarding investment and investment advisors
help you in understanding the strategies behind your investment decision. The loading
values of these two sub factors are 0.59, 0.72, 0.79 and 0.73 respectively. These loading
values are good enough and show a high correlation between factor and variable.
that factor F15 (clarity regarding fee and tax management) having the highest mean
value (2.22), falls in the category of first rank. Factor F14 (selection of best securities
and managing investment decision) with mean value 2.21 and factor F17 (expert opinion
for investment decisions and strategies behind investment) obtained the second and
third rank on the basis of their mean values 2.21 and 2.07 respectively. F16 (portfolio
construction and risk return trade off) has the lowest mean value 1.97 and scored the last
rank. The aforementioned factor rankings are based on the premise that when a factor's
mean value lowers the corresponding value of its rank increases.
150
Table 4.5.3: Investment Advisors Viewpoint on the Investment Decision Taken by the Investors
Factors Statements Loading Eigen Mean SD Factor Factor Total variance
Values Mean Rank Explained
F14: Selection of best securities and Investment advisor provides advices with respect to the .68 2.26 .87
managing investment decision priorities of the client.
Investment advisors help in avoiding mistakes while .58 2.22 .85
They help you regarding legal matters for reducing .71 2.38 .88
fiduciary responsibility.
Investment advisor guides you regarding investment in .53 2.07 .84
best securities at the best price.
Investment advisors provide factual and logical .63 2.27 .75
information to the investors. 7.91 2.21 2 16.68
They help you in improving your investment .53 2.13 .83

performance to the best.
They play a key role at the time of recession in .45 2.22 .82
managing the investment portfolio.
They are capable of understanding the investor‟s .53 2.19 .93
psychology in investment decision.
F15: Clarity regarding fee and tax Investment advisor guides you with respect to tax and .63 2.22 .87 2.22
management planning opportunities 1
Investment advisors manage risk in tax smart way, to .714 2.23 .83
protect and grow your assets.
151
Advisors help you in coping up with the confusion .660 2.43 .94
about the fee paid for the financial planning services.
Investment advisors do detailed research on asset .604 2.07 .86
allocation.
Investment advisors help in motivating the family .69 2.17 .90
members of investor who are not inclined towards
investment for their own. 1.65 14.01
F16: Portfolio construction and risk Investment advisors help you in investing your money .69 1.85 .78
return trade off for achieving your financial goals.
Investment advisor helps you in portfolio construction. .70 1.99 .80
Investment advisors help you in guiding regarding .61 1.91 .81
diversification of investment for (equity, debt, real
1.23 1.97 4 13.35
estate, commodity)
They help you in managing your risk return trade off .46 2.16 .84
balance.
F17: Expert opinion for investment Investment advisor helps you in minimizing the risk. .59 1.96 .80
decisions and strategies behind Investment advisor helps you in maximizing the return. .72 2.03 .85
investment
Investment advisor gives expert opinion regarding .79 2.10 .83
investment.
Investment advisors help you in understanding the .73 1.00 2.21 .83 2.07 3 12.84
strategies behind your investment decision.
152
Table 4.5.4: Descriptive Statistics of Investment Advisors Viewpoint on the
Descriptive Statistics of Investment Advisors Viewpoint on the Investment Decision Taken by the
Investors
Investment advisors help you in
investing your money for achieving 413 148 191 60 14 00 1.00 4.00 1.85 .78
your financial goals.
Investment advisor helps you in
413 110 219 66 14 04 1.00 5.00 1.99 .80
portfolio construction.
guiding regarding diversification of
413 134 203 56 18 02 1.00 5.00 1.91 .81
investment for (equity, debt, real
estate, commodity)
413 117 212 67 14 03 1.00 5.00 1.96 .80
minimizing the risk.
413 109 208 72 19 05 1.00 5.00 2.03 .85
maximizing the return.
Investment advisor gives expert
413 87 221 86 11 08 1.00 5.00 2.10 .83
opinion regarding investment.
understanding the strategies behind 413 74 200 122 09 08 1.00 5.00 2.21 .83
your investment decision.
Investment advisor provides advices
with respect to the priorities of the 413 78 186 111 37 01 1.00 5.00 2.26 .87
client.
Investment advisor guides you with
respect to tax and planning 413 85 187 106 34 01 1.00 5.00 2.22 .87
opportunities.
Investment advisors help in avoiding
mistakes while making investment 413 77 197 114 18 07 1.00 5.00 2.23 .85
decision.
Investment advisors manage risk in tax
smart way, to protect and grow your 413 69 213 105 20 06 1.00 5.00 2.22 .83
assets.
Advisors help you in coping up with
the confusion about the fee paid for the 413 66 157 145 33 12 1.00 5.00 2.43 .94
financial planning services.
Investment advisors do detailed
413 105 206 74 24 04 1.00 5.00 2.07 .86
research on asset allocation.
They help you regarding legal matters
413 56 192 124 33 08 1.00 5.00 2.38 .88
for reducing fiduciary responsibility.
153
Investment advisors help in motivating
the family members of investor who
413 97 182 103 26 05 1.00 5.00 2.17 .90
are not inclined towards investment for
their own.
Investment advisor guides you
regarding investment in best securities 413 107 194 90 20 02 1.00 5.00 2.07 .84
at the best price.
They help you in managing your risk
413 88 195 107 19 04 1.00 5.00 2.16 .84
return trade off balance.
Investment advisors provide factual
and logical information to the 413 55 208 134 14 02 1.00 5.00 2.27 .75
investors.
They help you in improving your
413 84 221 78 27 03 1.00 5.00 2.13 .83
investment performance to the best.
They play a key role at the time of
recession in managing the investment 413 67 219 99 24 04 1.00 5.00 2.22 .82
portfolio.
They are capable of understanding the
investor‟s psychology in investment 413 103 169 101 37 03 1.00 5.00 2.19 .93
decision.
Valid N (list wise) 413
Moreover, the above mention table 4.5.4 also revealed the mean and standard
deviations regarding the investment advisors viewpoint on the investment decision
taken by the investors while making investment decision. The results presents that there
are twenty one statements with regards to investment advisors viewpoint on the
investment decision taken by investors namely, investment advisors help you in
investing your money for achieving your financial goals (mean =1.85 with SD =0.78),
investment advisor helps you in portfolio construction (mean = 1.99 with SD =0.80),
investment advisors help you in guiding regarding diversification of investment for
(equity, debt, real estate, commodity) (mean = 1.91 with SD =0.81), investment advisor
helps you in minimizing the risk (mean = 1.96 with SD =0.80), investment advisor
helps you in maximizing the return. (mean=2.03 with SD=0.85), investment advisor
gives expert opinion regarding investment (mean = 2.10 with SD =0.83), investment
advisors help you in understanding the strategies behind your investment decision
(mean=2.21 with SD=0.83), investment advisor provides advices with respect to the
priorities of the client (mean=2.26 with SD=0.87), investment advisor guides you with
respect to tax and planning opportunities (mean=2.22 with SD=0.87), investment
154
advisors help in avoiding mistakes while making investment decision (mean=2.23 with
SD=0.85), investment advisors manage risk in tax smart way, to protect and grow your
assets (mean=2.22 with SD=0.83), advisors help you in coping up with the confusion
about the fee paid for the financial planning services (mean= 2.43 with SD=0.94),
investment advisors do detailed research on asset allocation (mean=2.07 with
SD=0.86), they help you regarding legal matters for reducing fiduciary responsibility
(Mean=2.38 with SD=0.88), investment advisors help in motivating the family
members of investor who are not inclined towards investment for their own ( mean=
2.17 with SD=0.90), investment advisor guides you regarding investment in best
securities at the best price (mean =2.07 with SD=0.84), they help you in managing your
risk return trade off balance( mean= 2.16 with SD=0.84), investment advisors provide
factual and logical information to the investors (mean=2.27 with SD=0.75), they help
you in improving your investment performance to the best (mean =2.13 with SD
=0.83), they play a key role at the time of recession in managing the investment
portfolio (mean = 2.22 with SD=0.82) and they are capable of understanding the
investor‟s psychology in investment decision (mean=2.19 with SD=0.88). It was
considered worthwhile when the sampled respondents having mean rank less than
neutral value. Substantially, the results also depict that the investment advisors
viewpoint on the investment decision taken by the investors while making investment
decision, most of the investors belong to the category of agree and strongly agree.
Table 4.5.5: Gender Wise Attribution for the Investment Advisors Viewpoint on
the Investment Decision Taken by the Investors
Factor Gender N Mean SD SE t- Sig.
Mean Value
F14: Selection of best securities Male 297 18.01 4.64 .26
and managing investment 1.65 .09
Female 116 17.17 4.66 .43
decision
F15: Clarity regarding fee and tax Male 297 11.11 3.18 .18
.96 .33
management Female 116 11.18 3.48 .32
F16: Portfolio construction and Male 297 8.11 2.61 .15
2.58 .01*
risk return trade off Female 116 7.43 1.87 .17
F17: Expert opinion for Male 297 8.39 2.64 .15
investment decisions and .67 .49
Female 116 8.18 2.87 .26
strategies behind investments
Source: Primary Survey, N= Number of Respondents, * Significance at 5% level
155
Table 4.5.5 revealed the respondents gender wise difference (between male and female)
with respect to all the factors to the investment advisors viewpoint on the investment
decision taken by the investors while making investment decision. The table shows the
mean, SD, SE, t- value and significance value. It can be seen from the above mention
table that males have an edge over females with respect to all the factors except F15
(clarity regarding fee and tax management) with minor deviation males have mean
value = 11.11 and women‟s 11.18. However, no significant gender differences exist
with respect to F14 (selection of best securities and managing investment decision with
P=.09), F15 (clarity regarding fee and tax management with P=0.33), F17 (expert
opinion for investment decisions and strategies behind investments with P= 0.49)
factors at 5% level of significance as having P > 0.05 whereas, F16 (portfolio
construction and risk return trade off with P=.01) obtained the significance difference at
5% level of significance as having P < 0.05. Therefore, the null hypothesis H3.1 is
accepted for all factors except the F16 (portfolio construction and risk return trade off)
related to the investment advisors viewpoint on the investment decision taken by the
investors.
Table 4.5.6: Marital Status Wise Attribution for Investment Advisors Viewpoint
on the Investment Decision Taken by the Investors
Factor Marital N Mean SD SE t- Sig.
status Mean Value
F1 : Selection of best securities and Married 304 17.58 4.70 .26
1.37 .17
managing investment decision Unmarried 109 18.30 4.50 .43
F15: Clarity regarding fee and tax Married 304 11.23 3.34 .19
1.01 .31
management Unmarried 109 10.86 3.04 .29
F16: Portfolio construction and risk Married 304 7.93 2.47 .14
.08 .93
return trade off Unmarried 109 7.90 2.38 .22
F17 : Expert opinion for investment Married 304 8.30 2.77 .15
decisions and strategies behind -.31 .75
Unmarried 109 8.40 2.52 .24
investments
factors related to the investment advisors viewpoint on the investment decision taken
by the investors while making investment decision and results disclose that the
significant differences have not been obtained for different categories of marital status
156
groups of respondents at 5% level of significance as having P > 0.05. Therefore, the
null hypothesis H3.2 has been accepted for all factors related to the investment advisors
viewpoint on the investment decision taken by the investors. It means that the investors
with respect to marital status wise do not think differently regarding the investment
advisors viewpoint on the investment decision taken by the investors.
Table 4.5.7: Age Wise Attribution for the Investment Advisors Viewpoint on the
Factor Age N Mean F-value Sig.
F14: Selection of best securities and less than 20 39 18.17

managing investment decision 20 to 30 102 17.49
30 to 40 144 17.82 2.60 .03*
40 to 50 87 16.95
50 and above 41 19.68
F15: Clarity regarding fee and tax less than 20 39 11.84
management 20 to 30 102 10.44
30 to 40 144 11.32 5.98 .00*
40 to 50 87 10.47
50 and above 41 12.92
F16: Portfolio construction and risk less than 20 39 7.71
return trade off 20 to 30 102 7.50
1.96 .09
30 to 40 144 8.13
40 to 50 87 7.83
F17: Expert opinion for investment less than 20 39 7.92
decisions and strategies behind 20 to 30 102 8.21
investments
30 to 40 144 8.58 .93 .44
40 to 50 87 8.08
Table 4.5.7 reveals the respondents age- wise analysis with respect to all factors related
to the investment advisors viewpoint on the investment decision taken by the investors
while making investment decision. The table includes the number of respondents as per
different age groups, mean, f - value and significance value for all factors. The results
disclose that that the significant differences have not been obtained for different
categories of age groups of respondents except the F14 (selection of best securities and
157
managing investment decision with P= .03) with p value, P < 0.05 and F15 (clarity
regarding fee and tax management with P = .00) with p value, P < 0.05. Therefore the
null hypothesis H3.3 has been rejected for the statements lying in F14 (selection of best
securities and managing investment decision) and F15 (clarity regarding fee and tax
management) whereas, the null Hypothesis H3.3 is accepted for all the statements lying
in F16 (portfolio construction and risk return trade off with P= .09) and F17 (expert
opinion for investment decisions and strategies behind investments with P= .44). It
means investors have different viewpoint for the investment advisors viewpoint on the
investment decision taken by investors for all the statements lying in F14 (selection of
best securities and managing investment decision) and F15 (clarity regarding fee and tax
management).
Table 4.5.8: Academic Qualification Wise Attribution for the Investment Advisors
Viewpoint on the Investment Decision Taken by the Investors
qualification Value
F14: Selection of best securities Below graduate 35 19.22
and managing investment Graduate 129 18.03 2.99 .31
decision
F15: Clarity regarding fee and Below graduate 35 11.85
tax management Graduate 129 10.80 1.04
.37
F16: Portfolio construction and Below graduate 35 9.02
risk return trade off Graduate 129 7.75 2.95 .32
F17: Expert opinion for Below graduate 35 8.60
investment decisions and Graduate 129 8.21 .34 .79
strategies behind investments
Table 4.5.8 reveals the respondents‟ academic qualification wise analysis with respect
to all factors related to the investment advisors viewpoint on the investment decision
taken by the investors while making investment decision and results disclose that
158
despite of visible differences across all the factors, the significant differences have not
been obtained for different categories of academic qualification groups of respondents.
The value of f-test shows that there is no significant difference exists for all the four
factors at 5% level of significance among all the respondents belonging to different
academic qualification groups as all having P > 0.05 for their respective values of f-test.
Therefore, the null hypothesis H3.4 is accepted for all factors related to the investment
advisors viewpoint on the investment decision taken by the investors.
Table 4.5.9: Occupation Wise Attribution the Investment Advisors Viewpoint on

the Investment Decision Taken by the Investors
Factor Occupation N Mean F- Sig.
Value
F14: Selection of best securities and Student 39 18.30
managing investment decision Business Man 52 18.53
3.98
Private Employee 139 16.41 .00*
Broker 48 19.64
F15: Clarity regarding fee and tax Student 39 11.35
management Business Man 52 11.23
Govt. Employee 80 12.32 3.55
.00*
Broker 48 11.66
F16: Portfolio construction and risk Student 39 7.56
return trade off Business Man 52 8.11
4.21
Broker 48 8.47
159
F17: Expert opinion for investment Student 39 8.58
decisions and strategies behind Business Man 52 8.75
investments
3.25
Broker 48 8.47
Table 4.5.9 presents occupation wise analysis with respect to all factors related to the
investment advisors viewpoint on the investment decision taken by the investors while
making investment decision. The value of f-test shows that a significant difference
exists for all the four factors at 5% level of significance among all the respondents
belonging to different occupation as all having p < 0.05 for their respective values of f-
test. Further, the mean values corresponding to F14 (selection of best securities and
managing investment decision) show that all groups consider factor F14 (selection of
best securities and managing investment decision) the most while making investment
decision with mean values 18.30,18.53,18.72,16.41,17.03,17.50,19.64 and 15.50.
Therefore, the null hypothesis H3.5 is rejected which means that the investors,
occupation wise respond differently to all factors related to the investment advisors
viewpoint on the investment decision taken by the investors.
Table 4.5.10 reveals the sampled respondents‟ income wise analysis with respect to the
by the investors while making investment decision. However, no significant annual
income wise differences exist with respect to all four factors namely, F14 (selection of
best securities and managing investment decision with P= .17), F15 (clarity regarding
fee and tax management with P= .96), F16 (portfolio construction and risk return trade
off with P= .14) and F17 (expert opinion for investment decisions and strategies behind
investments with P= .20) at 5% level of significance as having P > 0.05. Therefore, null
hypothesis H3.6 is accepted it means that there is no significant difference in the
viewpoint of respondents towards the investment advisors viewpoint on the investment
decision taken by investors.
160
Table 4.5.10: Income Wise Attribution for the Investment Advisors Viewpoint
on the Investment Decision Taken by the Investors
F14: Selection of best Below 3 lakh 91 18.67

securities and managing 300000 to 600000 180 17.35
investment decision 1.64 .17
600000 to 900000 71 17.66
900000 and above 71 17.83
F15: Clarity regarding fee Below 3 lakh 91 11.10
and tax management 300000 to 600000 180 11.12
.09 .96
600000 to 900000 71 11.02
900000 and above 71 11.30
F16: Portfolio construction Below 3 lakh 91 8.15
and risk return trade off 300000 to 600000 180 7.66
1.82 .14
600000 to 900000 71 7.84
900000 and above 71 8.38
F17: Expert opinion for Below 3 lakh 91 8.67
investment decisions and 300000 to 600000 180 8.42
strategies behind 1.53 .20
600000 to 900000 71 8.22
investments
900000 and above 71 7.78
by the investors while making investment decision. The table includes the number of
respondents, mean, f values and significance value of each factor. The results of f- test
depicts that among all the factor, two factor namely, F14 (selection of best securities and
managing investment decision with P= .31) and F17 (expert opinion for investment
decisions and strategies behind investments with P= .81) have not been obtained
significant difference at 5 % level of significance with respect to different time
horizons of investment experience of respondents, f=1.17, P > 0.05 and f= 0.31, P >
0.05. While other two factors namely, F15 (clarity regarding fee and tax management
with P = .00) and F16 (portfolio construction and risk return trade off with P = .01)
presents a significant difference among respondents group with different length of
investment experience. Therefore, the null hypothesis H3.7 is rejected for the factor F15
and F16 whereas, the null hypothesis H3.7 is accepted for all the statement lying in F14
161
(selection of best securities and managing investment decision) and F17 (expert opinion
for investment decisions and strategies behind investments) which means investment
experience wise respondents do not think differently regarding the investment advisors
viewpoint on the investment decision taken by the investors except the statement lying
in F15 (clarity regarding fee and tax management with) and F16 (portfolio construction
and risk return trade off with).
Table 4.5.11: Investment Experience Wise Attribution for the Investment

Advisors Viewpoint on the Investment Decision Taken by the Investors
Factor Investment N Mean F- Sig.
experience Value
F14: Selection of best securities and managing Below 5 Years 168 17.30
investment decision 5 to 10 years 117 17.96
1.17 .31
10 to 15 years 62 17.91
15 and above 66 18.50
F15: Clarity regarding fee and tax management Below 5 Years 168 10.53
5 to 10 years 117 11.55
3.94 .00*
10 to 15 years 62 11.11
15 and above 66 11.93
F16: Portfolio construction and risk return trade off Below 5 Years 168 7.72
5 to 10 years 117 7.57
3.85 .01*
10 to 15 years 62 8.40
F17: Expert opinion for investment decisions and Below 5 Years 168 8.18
strategies behind investments 5 to 10 years 117 8.39 .81
.31
10 to 15 years 62 8.43
In this study to understand the investment advisors viewpoint on the investment

decision taken by investors,13 qualities were given to give the rank according to the
importance of their role and importance in investment decision making. As exhibited
from table 4.5.12 the results demonstrate that the statement ability to influence gets the
rank one. So, it can be said that to influence the investors is most prominent quality
given by all the respondents. The second most important quality is margin trading
facility must be given to the investors so that they can trade more in less amount of
money.
162
Table 4.5.12: Qualities of Investment Advisors Ranked by the Investors
Statements/Ranks 1 2 3 4 5 6 7 8 9 10 11 12 13 Score Rank
Skills of the Advisor. 90 59 37 45 23 24 30 24 11 13 10 29 18 2081 12
Accuracy of Calls 16 44 63 36 28 30 34 79 32 28 0 17 6 2477 10
Maximum Return 69 54 77 38 37 28 30 23 33 10 7 1 6 1871 13
Timely Information Regarding Events. 41 49 25 37 39 29 54 46 27 39 16 7 4 2422 11
Trust and Confidentiality 21 41 20 38 46 47 40 33 62 14 13 31 7 2675 8
Experience. 26 34 68 32 34 50 30 37 13 47 10 13 19 2502 9
Protection of Capital and Investments. 33 40 21 35 37 60 31 32 23 28 21 28 24 2700 7
Solution of Problem. 36 16 21 23 27 28 32 22 48 24 58 47 31 3203 4
Ability to Influence 10 7 18 12 24 25 49 12 33 64 70 34 55 3665 1
Minimum Fee Structure 31 15 13 22 43 8 27 28 29 54 36 59 48 3393 3
Excellent Organisation Skills 47 17 19 26 33 43 26 30 36 32 22 29 53 3010 5
Entry and Exit Time for Investments 55 37 28 39 15 27 9 23 46 30 28 56 20 2807 6
Margin Trading Facility 30 36 19 30 23 12 20 21 18 24 17 53 110 3429 2
163
Margin trading provides the facility of trading/ investments when investors have
scarcity of funds in their Demat accounts. The third and fourth rank is given to the
minimum fee structure and solution of the problem. It is observed that investors wants
the solution of their problems on time and also want these services in minimum fee
structure. Excellent organisation skills of the advisor got the fifth position. Investment
advisory services should provide the safety of investments at minimum cost of services.
The Sixth and seven ranks are given to the entry and exit time for investments and
protection of capital and investment. Trust and Confidentiality and experience scored
the eighth and ninth rank according to the respondent‟s viewpoint regarding the
qualities of investment advisors. The maximum returns scored the last rank.
164
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A Study of Combining Impact of Fundamental and Technical
Analysis on Investment Decision of Investors in Indian Stock
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THESIS SUBMITTED TO
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IN
MANAGEMENT
Research Supervisor Submitted by:

Dr. Arti Gaur Julee
Associate Professor Regn. No. 2017035500171117
DEPARTMENT OF BUSINESS ADMINISTRATION

CHAUDHARY DEVI LAL UNIVERSITY
SIRSA-125055, HARYANA (INDIA)
CHAPTER-5
FINDINGS AND RECOMMENDATIONS
The present chapter covers a summary of findings, recommendations and further scope
of research in this area. Accordingly the chapter is divided into three sections. The first
section includes the summary of findings on the basis of combining impact of
fundamental and technical analysis on investment decision of investors in Indian stock
market. The second section includes the recommendations and the last section includes
the further scope for the research.
The present research work is an outcome of the extensive literature along with the
proper analysis of sampled data collected from investors. Combining impact of
fundamental analysis and technical analysis is a great area of research for researcher,
analysts and academicians. Various efforts have been made by the researcher from time
to time to find out the best combination of fundamental and technical analysis
techniques along with the validity of such combined techniques in the stock markets.
But most of time either the study is concentrated only to fundamental analysis or
technical analysis to the Indian stock market and foreign markets are taken with single
analysis tool. Only few studies have been done by researchers in which they have
studied the combing impact of fundamental and technical analysis on investment
decision of investors. Moreover, in Indian context there is no study on the combining
impact of fundamental and technical analysis on investment decision of investors in
Indian stock market based on survey data. The data taken for the study is collected from
various stock exchanges, brokerages houses and investors through questionnaire based
sampled survey.
In present scenario, everyone wants to earn money in very short span of time from
stock market investments, combining impact of fundamental and technical analysis
becomes a very hot area of research because the fundamental analysis tell the investor
where to invest and technical analysis tells about when to enter and exit from securities.
The present study gives an attempt to study the combining impact of fundamental and
technical analysis on investment decision of investors in Indian stock market.
165
Objective and Methodology of the Study
Objectives of the Study
The main objective of this study is to find out the combining impact of fundamental
and technical analysis on decision of investors in Indian stock market. The other
supportive objectives are
 To analyze the awareness of the investors to the rules, principles of fundamental

 To study the combining impact of fundamental and technical analysis on

 To study the investment advisors viewpoint on the investment decision taken by the
investors.
Data and Tool used in the Study
The present study is based on the primary as well as secondary data to achieve its
research objectives. Primary data were solicited with the help of a structured
questionnaire administered to the investors/brokers/advisors manually and
electronically. The secondary data was collected from various website and review of
literature of previous studies. To analyze the sampled data collected through
questionnaire method, various statistical techniques like Anova, t- test, SD, frequency,
KMO and factor analysis and regression analysis have been used.
5.1 Summary of Findings
The study focused on the combining impact of fundamental and technical analysis on
investment decision of investors in Indian stock market. The findings are summarized
in three sub sections, namely findings based on awareness to the rules, principles and
techniques of fundamental and technical analysis, finding based on combining impact
of fundamental and technical analysis and findings related to the investment advisors
viewpoint on the investment decision taken by investors.
After visiting various investors, it was found that there is a lack of knowledge among
them in regard of technical terms and techniques of technical analysis and combining
impact of fundamental and technical analysis. They are using the volume and price
trend for investment decision making but not aware about these techniques as technical
analysis tool.
166
It was found that most of the investor either invest for long term (36.1 %) or short
term(36.8 %) investment whereas, only 27 percent respondents lie in other such as,
regular income as dividend and speculation.
Majority of the investors (52.1 %) monitor their investment on daily basis and 19.1
percent respondents monitor on weekly basis, whereas 9.2 % respondents monitor on
the monthly basis. Only few investors are found less active in case of monitoring their
investments.
It was found that 42 percent investor always apply fundamental analysis while making
investment decision whereas only 13 percent respondents are there who never apply
fundamental analysis.
38 percent respondents always apply technical analysis whereas, 18 percent never apply
technical analysis and 44 percent respondents rarely apply technical analysis.
Study concluded that 18 percent respondents never combine fundamental and technical
analysis, whereas rest 82 percent people combine fundamental and technical analysis.
It was found that almost 77 percent investors use company analysis for making
investment techniques as compared to other techniques of fundamental analysis.
It was found that in case of technical analysis techniques, investors more rely on
charting method (77%) as compared to other techniques and less rely on OBV and
parabolic with lowest percentage. Almost 90 percent respondents said they never use
OBV and parabolic.
Major Finding Related to the Rules, Tools and Techniques of Fundamental and
Technical Analysis
 The results shows that investors are aware about the rules and principles of the
fundamental analysis, most of the investors belong to the category of agree and
strongly agree. The mean score of the statements is less than neutral values which is
considered worthwhile.
 The analysis of survey results have revealed that the sampled respondents
considered four factors, namely, F1 (financial performance related factors), F2
(factors related to economic indicators), F3 (contribution of directors and
underwriters), F4 (government ideology and political instability) regarding rules,
167
principles and techniques of fundamental analysis while making investment
decision.
 The KMO value is .793 and Bartlett's Test of Sphericity is based on chi - square
transformation of the determinant of the correlation matrix and also significant at
the 5 percent level of significance, as the significance value is 0.000 which is less
than 0.05 hence, the null hypothesis is rejected.
 Results revealed the respondents gender wise difference (between male and female)
and their awareness level for all four fundamental analysis factors related to the
rules and principles while making investment decision making. It was found that
males have an edge over females with respect to all the factors except F2 (factors
related to economic indicators). However, no significant gender differences exist
with respect to all four factors at 5% level of significance as having P > 0.05.
 Results revealed the respondents‟ marital status -wise analysis with respect to all
factors of awareness related to the rules and principles of fundamental analysis
while making investment decision and results disclose that the significant
differences have not been obtained for different categories of marital status groups
of respondents except the F2 i.e. factors related to economic indicators.
 Results revealed the respondents age wise analysis with respect to all factors of
awareness related to the rules and principles of fundamental analysis while making
investment decision and results disclose that despite of visible differences across all
the factors, the significant differences have not been obtained for different
categories of age groups of respondents at 0.05 level of significance except F1
(financial performance related factors) with P > 0.05.
 Investor‟s academic qualification wise responds differently to all awareness factors

to the rules and principles of fundamental analysis while making investment
decision.
 Investor‟s occupation wise respond differently to all factors related to the rules and
principles of fundamental analysis. Further, the mean values show that students and
business man consider factor F1 (financial performance related factors) the most
while making investment decision with mean values 12.38 and 15.05 respectively
and all investors from other occupation also more aware about factor- F1 (financial
performance related factors) and consider while making investment decisions
168
except investment advisors, they rely more on F2 (factors related to economic
indicators) with mean value 13.25.
 Investors with respect to income do not think differently regarding the rules and
principles of fundamental analysis except F3 (Contribution of directors and
underwriter).
 Investors with respect to investment experience wise do not think differently

regarding the rules and principles of fundamental analysis except F1 (financial
performance related factors).
 The results shows that investors are aware about the rules and principles of the
technical analysis, most of the investors belong to the category of agree and
strongly agree. The mean score of the statements is less than neutral values which is
considered worthwhile.
 Mention in table 4.6 the Kaiser-Meyer-Olkin value was .812, exceeding the
recommended value of .6 (Kaiser 1970, 1974) and Bartlett‟s Test of Sphericity
correlation matrix. Hence, the null hypothesis is rejected.
 On the basis of factor analysis five factors are extracted which are more important
namely, F5 (conceptual factors of technical analysis), F6 (factors related to price and
volume trends), F7 (factors related to time horizon), F8 (factors related to demand
and supply) and factor F9 (factors related to prediction of future price).
 It was found that there was a significant difference between males and females with
regard to F5 (conceptual factors of technical analysis) and F7 (factors related to time
horizon) regarding rules, principles of technical analysis, whereas no significant
difference between gender with regards to F6 (factors related to price and volume
trends), F8 (factors related to demand and supply) and factor F9 (factors related to
prediction of future price) respectively at 5 % level of significance.
 Results revealed that the respondents‟ marital status -wise analysis with respect to
all factor of awareness related to the rules and principles of technical analysis and
disclose that the significant differences have not been obtained for different
categories of marital status groups of respondents with P > 0.05 except the F8
(factors related to demand and supply) with P < 0.05.
169
 Results revealed that the respondent‟s age wise analysis with respect to all factors
of awareness related rules and principles of technical analysis and disclose that that
the significant differences have not been obtained for different categories of age
groups of respondents except the F5 (conceptual factors of technical analysis) with p
value, P < 0.05 and F9 (factors related to prediction of future price) with p value, P
< 0.05.
 Investor‟s education qualification wise respond differently to all statements lying in

factors, F6 (factors related to price and volume trends with P=0.00), F7 (factors
related to time horizon with P=0.00) and F9 (factors related to prediction of future
price with P=.05) related to the factors of awareness to the rules and principles of
technical analysis.
 Investor‟s occupation wise respond differently to all factors related to the rules and
principles of technical analysis.
 Investors with respect to income do not think differently regarding the rules and
principles of technical analysis except F8 (factors related to demand and supply) and
F9 (factors related to prediction of future price).
 Investment experience wise analysis with respect to the factors of awareness related
to the rules and principles of technical analysis and results depicts that among all
the factor, two factor namely, F5 (conceptual factors of technical analysis) and F7
(factors related to time horizon) presents a significant difference at 5% level of
significance with respect to different time horizons of investment experience of
respondents, f=4.42, P < 0.05 and f= 3.32, P < 0.05. While, all other factors namely,
F6 (factors related to price and volume trends with P =0.69), F8 (factors related to
demand and supply with P = 0.76) and F9 (factors Factors related to prediction of
future price with P= 0.06), no significant difference have been obtained among
respondents group with different length of investment experience.
 The results of the descriptive analysis of techniques of fundamental analysis

presents that the majority of the respondents are aware regarding industry analysis
(63.4 %), company analysis (77 %) and security analysis (50 %), economic
indicators (52.1 %) and economic data (almost 50 %) whereas, in all other
techniques of fundamental analysis, investors are less aware as compared to the
industry, company and security analysis, economic indicators and economic data.
170
 The results disclose that the significant differences have been obtained for all
techniques of fundamental analysis with P < 0.05. Therefore, the null hypothesis
H1.17 has been rejected for all techniques of fundamental analysis which means the
investors are aware for all the techniques of fundamental analysis.
 The results of the descriptive analysis of techniques of technical analysis presents

that the majority of the respondents are aware regarding chart analysis (77 %),
MACD (74.8%), technical indicators (67.1%) and candlestick method (59.6%),
floating stocks and volume trends (58.1%), fluctuations and volatility (55%) and
moving average (53.3) whereas, in all other techniques of technical analysis,
investors are less aware as compared to the above mention techniques.
 The results disclose that the significant differences have been obtained for all
techniques of technical analysis with P < 0.05. Therefore, the null hypothesis H1.18
has been rejected for all techniques of technical analysis which means the investors
are aware for all the techniques of fundamental analysis.
Major Findings Related to Combining Impact of Fundamental and Technical

Analysis
 The results shows that investors are agree about the combining impact of
fundamental and technical analysis on investment decision of investors, most of the
investors belongs to the category of agree and strongly agree. The mean score of all
the statements is less than neutral values which is considered worthwhile.
considered four factors, namely, F10 (entry and exit point in investments), F11
(rational investment decision and solution of queries), F12 (market direction and
time horizon) and F13 (economic indicators relation with demand supply) regarding
investors.
the 5 percent level of significance, as the significance value is 0.000 which is less
than 0.05 hence, the null hypothesis H02 is rejected.
171
 For knowing the impact of fundamental analysis on investment decision, regression
analysis was used. Results shows that the fundamental analysis have significant
impact on the investment decision of investors for all the factors of fundamental
analysis. Further the influence of fundamental analysis on investment decision is
tested and found that there is a statistically significant (beta.516, P <.001) influence
exist in the measured relationship. A total 26.3% variance was explained by
independent variable towards the dependent variable.
 For knowing the impact of technical analysis on investment decision, regression

analysis was used. Results shows that the technical analysis have significant impact
on the investment decision. Further the influence of technical analysis on
investment decision is tested and found that there is a statistically significant (beta
.654, P <.001) influence exist in the measured relationship. A total 42.6% variance
was explained by independent variable towards the dependent variable.
 For knowing the combining impact of fundamental and technical analysis on

investment decision, regression analysis was used. Results shows that the combined
fundamental and technical analysis have significant impact on the investment
decision. Further, the combining influence of fundamental and technical analysis on
investment decision is tested and we found that there is a statistically significant
(beta .637, P <.001) influence exist in the measured relationship. A total 40.4%
variance was explained by independent variable towards the dependent variable.
Major Finding Related to the Investment Advisors Viewpoint in the Investment

Decision Making
 The results shows that investors are agree with the investment advisors viewpoint
on the investment decision taken by the investors, most of the investors belongs to
the category of agree and strongly agree. The mean score of all the statements is
less than neutral values which is considered worthwhile.
considered four factors, namely, F14 (selection of best securities and managing
investment decision), F15 (clarity regarding fee and tax management), F16 (portfolio
construction and risk return trade off) and F17 (expert opinion for investment
decisions and strategies behind investments) regarding investment advisors
viewpoint on the investment decision taken by the investors.
172
the 5 percent level of significance, as the significance value is .000 which is less
than 0.05 hence, the null hypothesis H03 is rejected.
 Results revealed that the respondents gender wise difference (between male and
female) with respect to all the factors to the investment advisors viewpoint on the
investment decision taken by the investors while making investment decision and
found that males have an edge over females with respect to all the factors except F15
(clarity regarding fee and tax management) with minor deviation males have mean
value = 11.11 and women‟s 11.18. However, no significant gender differences exist
with respect to all factors except the F16 (portfolio construction and risk return trade
off with P=.01) obtained the significance difference at 5% level of significance as
having P < 0.05.
 Investors with respect to marital status wise do not think differently regarding the
investment advisors viewpoint on the investment decision taken by the investors.
 Results revealed the respondents age wise analysis with respect to all factors related
to the investment advisors viewpoint on the investment decision taken by the
investors while making investment decision and disclose that that the significant
differences have not been obtained for different categories of age groups of
respondents except the F14 (selection of best securities and managing investment
decision with P= .03) with p value, P < 0.05 and F15 (clarity regarding fee and tax
management with P = .00) with p value, P < 0.05.
 Results shows that there is no significant difference exists for all the four factors at
5% level of significance among all the respondents belonging to different academic
qualification groups as all having P > 0.05 for their respective values of f-test.
 Investor‟s occupation wise respond differently to all factors related to the

investment advisors viewpoint on the investment decision taken by the investors.
 Results revealed that the sampled respondents income wise analysis with respect to
the factors related to the investment advisors viewpoint on the investment decision
taken by the investors while making investment decision. However, no significant
annual income wise differences exist with respect to all four factors
173
 Investment experience wise respondents do not think differently regarding the
investment advisors viewpoint on the investment decision taken by the investors
except the statement lying in F15 (clarity regarding fee and tax management with )
and F16 (portfolio construction and risk return trade off with ).
 In this study to understand the investment advisors viewpoint on the investment

decision taken by investors,13 qualities were given to give the rank according to the
importance of their role in the investment decision making. The results demonstrate
that the statement ability to influence gets the rank one. So, it can be said that to
influence the investors is most prominent quality given by all the respondents. The
second most important quality is margin trading facility must be given to the
investors so that they can trade more in less amount of money. Margin trading
provides the facility of trading/ investments when investor have scarcity of funds in
their Demat accounts. The third and fourth rank is given to the minimum fee
structure and solution of the problem and so on. Last rank was given to the
maximum returns.
From results, it is concluded that investors do not make proper use of combining
fundamental and technical while making their investment decisions; if they use both
the analysis tools in combination then good investment can be generated. Investor‟s
activism is necessary for generating handsome returns from investment decision
making in all investment horizons. Moreover, if investor‟s hire the investment
advisors for managing their fund then also they can get higher returns as results
shown that the advisors helps then managing portfolio and portfolio risk in
investment decision making in Indian stock market.
5.2 Recommendations of Study
 Before making an investment decision, investors should practice applying

company, industry, and economic research to strengthen their investment skills.
 Investors should practice studying both economic data and economic news effects
on the stock market to develop their investing skills and make investment decisions
based on the economic conditions.
 Investors should practice using fundamental analysis tools, as well as stock price
and volume, to develop their investing abilities and make investment decisions
based on market behavior.
174
 Investors can practise applying technical analysis and charting methods based on
price and volume to strengthen their expertise in daily trading and short-term
investing so that they can forecast market direction in the short run while making
investment decisions.
 To boost long-term viability and wealth creation, investors can use a combination
of fundamental and technical analysis to determine the true value of shares, identify
attractive securities for investment, and determine when to enter (buy) and exit
(sell) the stocks. Fundamental analysis helps in the selection of securities, while
technical analysis helps in the selection of securities.
 Investors should consider the importance of financial advisors in investment

decision-making so that they can employ investment advisors to improve the
benefits of stock market investment.
 To improve the investment skills, investors should practice to apply fundamental

analysis techniques such financial statement analysis, ratio analysis on companies‟
financial statements before making investment decision.
Educate the Investors about Fundamental and Technical Analysis: It is essential

that all the investors especially minority investors are appropriately educated through
training sessions such as seminars, webinars, and workshops with regard to the
fundamental and technical analysis. When they will get proper training or knowledge
about their respective domain will become more effective as it will enhance the
investor‟s participation in the stock market investments. These types of events should
be organized by the SEBI, stock exchange, brokerage houses and investment advisory
companies themselves to enhance the investments in the stock market. The organizers
should include the various tools, techniques of fundamental and technical analysis and
also impart the knowledge about practical implementation of these tools and techniques
so that maximum benefit can be availed from the organized events.
Imparting knowledge Regarding Combining of Fundamental and Technical

Analysis: It is essential to impart knowledge about how to apply fundamental and
technical analysis both simultaneously so that benefit of combining fundamental and
technical analysis can be availed. SEBI, stock exchanges, brokerage house and advisors
should conduct time to time seminars, webinars and training sessions to impart
knowledge regarding implementation of combining fundamental and technical analysis
so that investors avail the benefit of combining these techniques.
175
Educate the Investors Regarding Investment Advisors Viewpoint: It is necessary
that the investors are adequately imparted knowledge through webinars, conferences
and seminars with regard to the investment advisors viewpoint on the investment
decision of investors and also the services offered by the investment advisors regarding
investment decision making in the Indian stock market to the investors. When investors
will get proper guidance about the investment advisors viewpoint, they will get proper
knowledge regarding the services offered by the advisors and also become efficient and
effective in choosing the investment advisors on the basis of their services. These types
of events should be organized by the companies who are providing the advisory
services them to enhance their image in the eye of investors. Moreover, the SEBI and
Stock Exchange should also mandatory for investment advisors companies to conduct
such events on regular intervals.
5.3 Scope for Further Research Study
The present research on combining impact of fundamental and technical analysis on

investment decision of investors has put every effect to find out the application of
investors in Indian stock market but every study has some scope for further research
work.
In this study special focus is on the combining impact of fundamental and technical
analysis on investment decision of investors in Indian stock market, other markets like,
commodity market and forex markets are totally ignored due to the constraints of time
and resources.
In present research work the researcher collected the sampled data from individual
investors of Indian Stock Market, other investors like qualified investors and
institutional investors were ignored so further, research work can be done on the other
investors also.
In present study the researcher has studied the combining impact of fundamental and
technical analysis only through primary data collected from respondents, whereas it can
be studied on the secondary data of stock market also so in future others can study the
combing impact of fundamental and technical analysis on both primary and secondary
data.
176
In addition we have taken 413 investors (sample respondent) from various stock
exchanges and brokerage house for this research work so, for further research work,
researcher can make the comparison between investors and brokers/advisors.
Moreover, researcher can do further research on investment advisors/fund
manager/brokers etc.
177
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A Study of Combining Impact of Fundamental and Technical

Analysis on Investment Decision of Investors in Indian Stock

, LVMh vkWQ dEckbZfuax bEiSDV vkWQ QaMkesVa y ,aM VsfDudy

Research Supervisor Submitted by:

DEPARTMENT OF BUSINESS ADMINISTRATION

4.3 Investor’s Awareness to the Rules, Principles

4.4 Combining Impact of Fundamental and

4.5 Investment Advisors Viewpoint on the

CHAPTER 5 FINDINGS AND RECOMMENDATIONS 165-178

TABLE NO. DECCRIPTION PAGE NO.

F1 : Financial performance related factors

F2 : Factors related to economic indicators

F3 : Contribution of directors and underwriters

F4 : Government ideology and political instability

F5 : Conceptual factors of technical analysis

F6 : Factors related to price and volume trends

F7 : Factors related to time horizon

F8 : Factors related to demand and supply

F9 : Factors related to prediction of future price

F10 : Entry and exit point in investments

F11 : Rational investment decision and solution of queries

F12 : Market direction and time horizon

F13 : Economic indicators relation with demand supply

F14 : Selection of best securities and managing investment decision

F15 : Clarity regarding fee and tax management

F16 : Portfolio construction and risk return trade off

F17 : Expert opinion for investment decisions and strategies behind

In finance, Fundamental and Technical analysis is a part of security analysis which

1.1 General Introduction and Combining Fundamental and Technical Analysis

Combining Fundamental and Technical Analysis: Both the approaches of analysis

1. Bombay Stock Exchange.

2. National Stock Exchange

3. Calcutta Stock Exchange

4. India International Exchanges( India INX)

5. Metropolitan Stock Exchange of India ltd.

6. NSE IFSC Ltd.

7. Madras Stock Exchange

8. Inter- Connected Stock Exchange Ltd.

9. OTC Exchange of India

10. Bangalore Stock Exchange

11. Ahmadabad stock Exchange

12. Cochin Stock Exchange

13. Madhya Pradesh Stock Exchange

14. Saurashtra Kutch Stock Exchange

15. Mangalore Stock Exchange

17. Bhubaneswar Stock Exchange

18. Coimbatore Stock Exchange

19. Delhi Stock Exchange Association

20. Guwahati Stock Exchange

21. Jaipur Stock Exchange

22. Lucknow City Stock Exchange

23. Ludhiana Stock Exchange Association

24. Pune Stock Exchange

Functions of Stock Exchange: The main function of the stock exchanges is to

7. Barometer of Economy: Stock exchanges works as barometers of the economy

8. Facilitates Fund Raising for Business: Stock exchanges works as inter-mediary

9. Better Allocation of the Resources: Highly profitable companies share traded at a

An investment operation is one which upon through analysis, promise safety of

Principles of Investments: Whenever an investor makes the investment decision he

 Investment selection should match with investment objective

 Hedge against inflation

 Avoid making a biased investment decision.

 Always invest with a margin of safety