The objective of the project is to study the various theories of technical analysis, which help us to understand the movement of stock prices. The study also involves understanding the factors that affect the movement of stock prices in the Indian Stock markets. Analysing the various factors would help us in understanding the stock markets in a better manner and hence ensuring the safety of our investments as well as maximizing returns on such investments.
We all want to make money in the stock market. We do so by selling stock at a price higher than what we buy it for. It makes sense, then, that to make money in the stock market; we need to understand what causes prices to change. By having an appreciation for the things that motivate stock price change, we can be better at anticipating the direction and velocity of price moves.
Tuesday, October 7, 2008
METHODOLOGY
The study is carried on in a proper planned and systematic manner.
This methodology includes:-
1) Familiarization with the Stock Exchanges & technical theories
2) Observation and collection of data
) Descriptive research
& An in depth study of secondary data is carried out, in order to predict the stock price movements in the Indian market.
4) Sample size
5) Data of 10 selected index stocks
& Data for the period of last 3 years
6) Sample technique
& Dow theory
& Moving average
& Elliot wave theory
& Trend is the best friend
7) Instrument design
& Charts
This methodology includes:-
1) Familiarization with the Stock Exchanges & technical theories
2) Observation and collection of data
) Descriptive research
& An in depth study of secondary data is carried out, in order to predict the stock price movements in the Indian market.
4) Sample size
5) Data of 10 selected index stocks
& Data for the period of last 3 years
6) Sample technique
& Dow theory
& Moving average
& Elliot wave theory
& Trend is the best friend
7) Instrument design
& Charts
SCOPE FOR FUTURE STUDY
1) Master the basics. Most investor spend there time looking for easy money (which is not an easy search) instead of learning the key factors to security prices --- supply and demand.
2) Study various other theories of technical analysis like candle stick etc
3) Increase the sample size of the data (prices & volume).
4) To gain access to maximum number of stock charts.
2) Study various other theories of technical analysis like candle stick etc
3) Increase the sample size of the data (prices & volume).
4) To gain access to maximum number of stock charts.
Limitations
1) Relying on the past data
The major limitation of technical analysis is itself deals with past data. Analyst is studying the past trends which may or may not repeat in the future. So, an uncertainty is always there in the technical analysis.
2) Late entry& late exit
There are certain condition before which one could not make entry or exit in a particular stock. For example only due to increase in the volumes one cannot make entry until that stock indicate the upward trend. The time when we make entry in a particular stock that stock has already increase a substantial amount.
3) Expect only reasonable return from technical analysis
The last limitation is technical analyst is the trend follower so he can only make reasonable return from technical theories though the major gains are made by insiders (company directors or major stock holders) only.
4) Not a guarantee way of predicting share prices
Technical analysis is not a guarantee way of predicting share prices if it was, everybody would use it and if everybody used it, it wouldn’t work anyway. At best technical analysis will provide you with a mixed bag of results. Sometimes the technical indicators will come good and you will make money, at other times.
The major limitation of technical analysis is itself deals with past data. Analyst is studying the past trends which may or may not repeat in the future. So, an uncertainty is always there in the technical analysis.
2) Late entry& late exit
There are certain condition before which one could not make entry or exit in a particular stock. For example only due to increase in the volumes one cannot make entry until that stock indicate the upward trend. The time when we make entry in a particular stock that stock has already increase a substantial amount.
3) Expect only reasonable return from technical analysis
The last limitation is technical analyst is the trend follower so he can only make reasonable return from technical theories though the major gains are made by insiders (company directors or major stock holders) only.
4) Not a guarantee way of predicting share prices
Technical analysis is not a guarantee way of predicting share prices if it was, everybody would use it and if everybody used it, it wouldn’t work anyway. At best technical analysis will provide you with a mixed bag of results. Sometimes the technical indicators will come good and you will make money, at other times.
NATIONAL STOCK EXCHANGE
What makes NSE the dynamic and enterprising entity that is? The answers lie within the portals of this section. About the management, the financials, the new age technology, the members, the trading system and much more. All the facts that will make you realize that NSE is more than a mere market facilitator. It's that force which is guiding the industry of the region, towards new horizons and greater opportunities.
MILESTONES
1) NSE was incorporated on - November 27, 1992.
2) NSE started its operations on June 30, 1994 whereas the NSE Capital Market segment started its operations on November 3, 1994
3) Settlement Guarantee Fund set up in June 1996
4) NSDL set up as a first depository in India - November 1996
5) NSE commenced trading in Dematerialized securities from December 26, 1996
6) Regional clearing facility goes live - February 1997
7) NSE launched NIFTY (NSE-50 Index) - April 22, 1996
MILESTONES
1) NSE was incorporated on - November 27, 1992.
2) NSE started its operations on June 30, 1994 whereas the NSE Capital Market segment started its operations on November 3, 1994
3) Settlement Guarantee Fund set up in June 1996
4) NSDL set up as a first depository in India - November 1996
5) NSE commenced trading in Dematerialized securities from December 26, 1996
6) Regional clearing facility goes live - February 1997
7) NSE launched NIFTY (NSE-50 Index) - April 22, 1996
DEVELOPMENTS ON THE EXCHANGE
NSE and NSCCL went live with the inaugural session for Automatic Lending and Borrowing Mechanism (ALBM) for lending and borrowing of securities on February 10, 1999. This is the first time an Indian agency approved by SEBI will be conducting the securities lending & borrowing transactions based on international practices.
MEMBERSHIP
1) 890 trading members on the Capital Market segment, of which around 86% account for corporate and the remaining are individuals and firms.
2) Out of these 890 trading members, 89 trading members are also members of Wholesale Debt Market segment, all of which are corporate and there are 7 trading members exclusively on Wholesale Debt Market Segment.
GEOGRAPHIC DISTRIBUTION
1) Over 6839 trading terminals given to the members as on November 25, 1999
2) Over 2342 VSAT's across the country with a 24 hour Network monitoring system in over 291 cities as of November 01, 2003.
NUMBER OF COMPANIES
1) On the Capital Market segment, Equity Shares of 685 companies are listed and 572 companies are permitted to trade as of October 31, 2003.
2) On the Wholesale Debt Market segment, 797 securities are listed and 517 securities are permitted to trade as of October 31, 1999. Of the 797 securities listed, 369 are Government Securities/T-Bills and the balance account for other securities.
CLEARING & SETTLEMENT
1) Completed 562 settlements successfully without any delay or postponement as on December 02, 2003.
2) Value of shares handled by the Clearing house per week has increased from Rs. 30 crores in November 1994 to over Rs.4432 crores per week in September 2003.
3) Inter-Region Clearing: NSCCL has Regional Clearing Centres at Delhi, Calcutta, Chennai and a Central Clearing Centre at Mumbai. Members have the option of delivering/receiving the securities at a clearing centre chosen by them.
MEMBERSHIP
1) 890 trading members on the Capital Market segment, of which around 86% account for corporate and the remaining are individuals and firms.
2) Out of these 890 trading members, 89 trading members are also members of Wholesale Debt Market segment, all of which are corporate and there are 7 trading members exclusively on Wholesale Debt Market Segment.
GEOGRAPHIC DISTRIBUTION
1) Over 6839 trading terminals given to the members as on November 25, 1999
2) Over 2342 VSAT's across the country with a 24 hour Network monitoring system in over 291 cities as of November 01, 2003.
NUMBER OF COMPANIES
1) On the Capital Market segment, Equity Shares of 685 companies are listed and 572 companies are permitted to trade as of October 31, 2003.
2) On the Wholesale Debt Market segment, 797 securities are listed and 517 securities are permitted to trade as of October 31, 1999. Of the 797 securities listed, 369 are Government Securities/T-Bills and the balance account for other securities.
CLEARING & SETTLEMENT
1) Completed 562 settlements successfully without any delay or postponement as on December 02, 2003.
2) Value of shares handled by the Clearing house per week has increased from Rs. 30 crores in November 1994 to over Rs.4432 crores per week in September 2003.
3) Inter-Region Clearing: NSCCL has Regional Clearing Centres at Delhi, Calcutta, Chennai and a Central Clearing Centre at Mumbai. Members have the option of delivering/receiving the securities at a clearing centre chosen by them.
Subscribe to:
Posts (Atom)