Dr. D. Y.

Patil Pratishthan’s
Dr. D.Y. Patil Institute of Management Studies
(Approved by AICTE, recognized by Govt. of Maharashtra and affiliated to Savitribai Phule Pune University)
MBA PROGRAM ACCREDITED BY National Board of Accreditation (NBA) 2021-24
Sector 29, Behind Akurdi Railway Station, Nigdi Pradhikaran, Akurdi, Pune 411 044
Tel: 020- 27654736/27652794. Fax: 020-27650229 Email: director@dypims.com, Website: www.dypims.com

SIP 1ST PRESENTATION

ON
A STUDY OF TECHNICAL ANALYSIS WITH THE HELP OF CANDLESTICK CHART PATTERNS AND TECHNICAL
INDICATOR IN EQUITY MARKET OF INDIAN STOCK EXCHANGE
SIP COMPANY
ECOSENSE FINANCIAL SERVICES PVT.LTD
SPECIALIZATIONS (Major)
FINANCE
SUBMITTED BY:
20186 SATYAM VILAS SHELKE
UNDER THE GUIDANCE OF:
DR.MONIKA GORKHE
 INTRODUCTION
This chart
chart shows
shows price
price on
on the
the right
right (vertical)
(vertical)
Candlestick
Candlestick charts
charts are
are available
available on
on trading
trading
In Indian
Indian stock
stock Exchange,
Exchange, candlesticks
candlesticks are
are aa axis,
axis, and
and time
time onon the
the bottom
bottom (horizontal)
(horizontal)
platforms for all assets & individuals
way
way of
of communicating
communicating information
information about
about axis,
axis, Moreover,
Moreover, the the chart
chart is
is made
made of of bars
bars that
that
centrode
centrode on
on the
the platforms
platforms Candles
Candles refer
refer to
to
how
how price
price is
is moving.
moving. have
have little
little lines
lines stemming
stemming fromfrom the
the top
top and
and
that information for a specific unit
unit of time.
the bottom;
the bottom; these are
are known as candles

If the candle
candle is
is red,
red, or
or denoted as bearish inin
The candle
candle conveys
conveys four
four pieces
pieces of The
The color
color of
of the
the candle
candle is
is also
also significant
significant in
in some other
other manner,
manner, this
this means
means that the
the open
information:
information: 1)open
1)open price
price 2)close
2)close Price
Price understanding whether
whether the open price
price was
was price
price isis lower
lower than the
the close;
close; and the opposite
3)high price 4)low price.
3)high price 4)low price. higher or lower than the close price.
than the close price. is
is true if the candle is green.
true if the candle is green. denoted
denoted as
as
bearish
COMPANY
PROFILE

In 2020 we
expanded our
business and
started Ecosense
Financial Services
Pvt Ltd with 900
plus active clients. Ecosense as a service provider
Founder & Director :- Mr. Shivshankar Bind and distributor deals in all
major segment such as equity,
Location :- Akurdi , Pune future option, commodity,
mutual fund, currency. bond,
IPO. PMS, insurance, taxation,
Email :- shiv@ecosense.net.in audit, accounting, financial
management, project finance,
Contact No :- 9921239308/9307115036 loans

Website :- https://ecosense.net.in/index.html
OBJECTIVE

To Study the present To study of technical

To study technical To study and
behavior & analysis with help of
analysis with the understand selection
predicting the future candlestick charts
help of Indian process for selecting
behavior of equity in and technical
Equity market. company
stock market. indicators
SCOPE OF THE STUDY
To study technical analysis
online under the guidance of
expertise
Data is only pried
of last 5 year 2015-
Study of limited only to 2020. The study
technical analysis of equity completely based
market in India on secondary data
available on
tradeview website
THEORETICAL BACKGROUND
A candlestick is a type of
price chart used in
technical analysis that
It is the method of displays the high, low,
evaluating securities by open, and closing prices
analyzing the statistics of a security for a specific
Technical analysis is the generated by market period. It originated from
study of investor activity, such as past Japanese rice merchants
behavior & its effect on prices & volume. and traders to track
According to technical the subsequent price market prices and daily
analysis, the price of action of financial momentum hundreds of
stock depends on demand instrument. It is the years before becoming
and supply in the market process of trying to popularized in the United
place. interpret that supply & States. The wide part of
demand. the candlestick is called
the "real body" and tells
investors whether the
closing price was higher
or lower than the opening
price
 Head and
shoulders

Double top

Double bottom
Advantages of Candlestick Chart Pattern: Disadvantages of Candlestick Chart
1)Quick to predict the current state of the Pattern: Rounding bottom
stock market 1)Gives to much information
2)Sometimes hard to analyze pattern
Type of
2)Just by looking at the color and length of a Cup and handle
candlestick, traders can determine instantly if because of market sudden fluctuation. candlestick
the market is strengthening (becoming 3)Unknown movements give new patterns s chart Wedges
bullish) or weakening (becoming bearish) which are hard to predict. patterns
3)Gives direction of the market to investor 4)Sometimes Candlestick charts often
come with gaps. There may be instances Pennant or flags
where to invest in that particular stock or not
where one candle closes at a particular
4)We can identify market patterns quickly Ascending
level and the following candle may open at
which trend is going on triangle
a different level.
5)Easy to understand interface and predict Descending
market move. triangle
6)Easy to predict price movement based on Symmetrical
past patterns. triangle
Candlestick Patterns The power of Candlestick Charts is
with multiple candlesticks forming reversal and
continuation patterns. Following are the different
candlestick patterns used in technical analysis:

 Bullish Engulfing Pattern

 Bearish Engulfing Pattern
 Dark Cloud Cover
 Doji
 Dragonfly Doji
 Evening Star
 Gravestone Doji
 Hammer
 Hanging Man
 Harami
 Inverted Hammer
 Morning Star
 Piercing Pattern
 Shooting Star
 Tweezer Tops
 Bottoms Windows
LITERATURE REVIEW

"Candlestick Technical Analysis on Select Indian Stocks: Pattern detection and Efficiency
Statistics" written by Manoharan. M, Rajesh Mamilla, etal., In this paper they give information
about Financial markets generate vast data every trading day and exponential growth of financial
markets is the order of the modern-day.

"The effectiveness of candlestick chart analysis for the Brazilian stock market" written by
Hércules A. do Pradoa, Edilson Ferneda, Luis C. R. Moraisa, Alfredo J.B. Luizb, Eduardo Matsurac
etal,. In this paper they give information about candle stick chart created in the 18th century and the
behavior of part of the Brazilian capital market was studied using sixteen candlestick patterns
considered the data series of ten stocks between 2005-2009.The main contributions of this paper are
a partial replication of Morris’ study for a set of stocks traded in the Brazilian market, and a statistical
analysis of the effectiveness of candlestick patterns as predictors of the behavior of those stocks.
LITERATURE REVIEW

The Efficient Market Hypothesis (EMH) states that security prices already reflect all available and
relevant information (Fama, 1970). As a result, technical analysis including charting patterns, which use
only historical trading data, cannot generate positive abnormal returns. Investors could make money from
charting patterns only if the market is inefficient.

"Profitability of Candlestick Charting Patterns in the Stock Exchange of Thailand" written by

Piyapas Tharavanij,Vasan Siraprapasiri,Kittichai Rajchamaha, etal,. In this paper they investigates
the profitability of candlestick patterns for holding periods of 1, 3, 5, and 10 days. Also with Two exit
strategies are studied. The daily data include open, high, low, and close prices of components statistical
analysis finds little use of both bullish and bearish candlestick reversal patterns. Even statistically
significant returns do have high risks in terms of standard deviations is analysed. And binomial test results
also indicate that candlestick patterns cannot reliably predict market directions
LITERATURE REVIEW

George Joseph1 , Saranya G Das, Amrudha Romeo The study on the formation of candlestick
pattern is done to finding out the different candlestick patterns and identifying its accuracy. It will
help the investors to check whether the candlestick patterns are dependable for trading decision. This
study is conducted based on the past five years Nifty index

Azizan N, jacinta C. Can technical analysis predict the movementof futures prices? IUP journal
of financial risk management 2010; This paper presents a study of technical analysis trading rules
that generate abnormal returns for futures prices. It reports abnormal returns over and above that
generated by the passive buy-and-hold policy for FKLI, FCPO, Soyoil, Soybean and Corn futures for
the periods tested. This research devises a new technical analysis trading model, Bollinger Bands Z-
Test (BBZ), using standard deviation. It proposes that BBZ attempts to capture large price
movements which happen beyond 1 standard deviation
LITERATURE REVIEW
Dow Theory is based on the collected writings of Dow Jones co-founder and Editor
Charles Dow, and inspired the use and development of modern technical analyse is from
the end of the 19th century. Other pioneers of analysis techniques include Ralph Nelson
Elliott and William Delbert Gann who developed their respective techniques in the early
20th century. Many more technical tools and theories have been developed and enhanced
in recent decades, with an increasing emphasis on computer-assisted techniques

Technical analysis is a security analysis discipline for forecasting the future direction of
prices through the study of past market data, primarily price and volume. It is a process of
identifying trend reversals at an earlier stage to formulate the buying and selling strategy
LITERATURE REVIEW

Short-term stock market prediction based on candlestick pattern analysis June 2017 This study
performs a comparative analysis and evaluates the impact of different Relative Strength Index (RSI) and
stop loss configurations on a trading algorithm based on candlesticks patterns. It is tested on both the
Swedish OMXS30 market and the UK FTSE100 market .

P.Varaprasad Goud, Mrs.M.Sangeetha “A Study on Price Action Patterns (Inside Bar and Outside
Bar) Formed at Prime Numbers with Reference to Equity Stocks”. In the research paper An investor in
the stock market is concerned in analysing the price movement of stocks. Prices in the stock market
fluctuate because of continuous buying and selling in the market. The basic approaches used in analysing
the share price movements are fundamental and technical analysis. Candle stick patterns provide an
immense advantage to investors..
LITERATURE REVIEW

Sadegh Bafandeh Imandoust, Mohammed Bolandraftar[ attempted to develop three models and
compared their performance in predicting stock price movement direction in Tehran Stock Exchange (TSE)
Index. They used Decision tree, Random Forest and Naïve Bayesian Classifier classification techniques
with ten microeconomic variables and 3 macroeconomic variables as input.

“Stock Price Prediction using Technical Indicators: A Predictive Model using Optimal Deep
Learning,”written by Manish Agrawal, Asif Ullah Khan, Piyush Kumar Shukla, In this paper they give
information about The stock market is highly volatile and complex in nature. Technical analysts often
apply Technical Analysis (TA) on historical price data, which is an exhaustive task and might produce
incorrect predictions. The machine learning coupled with fundamental and / or Technical Analysis
also yields satisfactory results for stock market prediction.
THANK YOU