c045TGp Finance Diagram v2

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L O G O

Date: 22/09/2010Date: 22/09/2010

TECHNICAL ANALYSISTECHNICAL ANALYSIS

By: Pavitra & Swapnika


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Technical Analysis

Contents

Introduction1

History2

The Theory3

Primary, Secondary & Minor Trend4

Support & Restance Level5


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Technical Analysis

Contents

Indicators6

Odd Lot Trading7

Moving Avg8

Rate OfExchange9

Charts10


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Technical Analysis

FUNDAMENTALS!!


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Technical Analysis

By Charles H.Dow in 1984

Charts of individual stocks & Moving avg

Dow Theory summarized by Samuel N.Nelson

a) Hypothesis 1 Individual & Buyer

b) Hypothesis 2 affect on the Share Market if any natural calamity

c) Hypothesis 3 Not a tool to beat the market but to understand it better

He was the founder of Dow Jones & Company later was called Wall Street Journal


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Primary Trend1

Intermediate Trend2

Short Term Trend3

Technical Analysis


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Technical Analysis

Major trend of the market, which makes

it the most important one to determine.

This is because the overriding trend is

the one that affects the movements in

stock prices.

PHASES OF PRIMARY TREND

(bull market) (bare market)

Accumulation Phase

Participation Phase

Excess phase

The Distribution Phase

Participation

The Panic Phase


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Technical Analysis

Notice how the short-term highs (shown by the

horizontal lines) fail to create successively

higher peaks, suggesting that a short-term

downtrend is present.

Secondary trend moves in the opposite

direction of the primary trend, or as a

correction to the primary trend.


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Technical Analysis

The minor trend is generally the corrective

moves within a secondary move, or those

moves that go against the direction of the

secondary trend.

The minor trend is watched with the large

picture in mind, as these short-term price

movements are a part of both the primary

and secondary trends.


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Technical Analysis

Diagram

Bull

Tech Analysis

Bear

Primary Trend Increasing ordecreasing

3 PEAKS

Revival

Improvement in

Corporate profit

Speculation

Secondary

Trend Upward &DownwardCorrections

Corrects theoverbought &oversold condition

Swift & Quicker

Trends

Minor Trends


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Technical Analysis

Falling Trend

Trend Direction

OfMovement

Flat TrendRising Trend


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Technical Analysis

Diagram

LEVELS

Based onBUY &SELL!

Support Level

Demand>Supply

Price Reversal

ResistanceLevel

Supply>Demand

Selling Pressure


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Technical Analysis

Marketing Diagram

INDICATORSINDICATORS

Short SellShort Sell

VolumeVolume

Breath ofBreath ofMktMkt

MACD


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Technical Analysis

Diagram

Rises with the fall in priceSmall Volume ofTrade

Narrows with

The bare market

Large Volume ofTrade

Expands with the bull

Market

Falls with the rise in price

Volume


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Technical Analysis

Breath Of Market

DAY Adv Decline NetBreadt

hBSE

Index

21-02-00 1486 774 712 712 5876.89

22-02-00 1310 966 344 1056 5883.33

23-02-00 898 1225 -327 729 5642.46

24-02-00 1108 1091 17 746 5810.17

25-02-00 931 1270 -348 398 5623.08


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Short Sell

Technical Analysis

Borrowing a security (orcommodity futures contract) from a

brokerand selling it, with the understanding that it must later

be bought back and returned to the broker. Short selling (or

"selling short") is a technique used by investors who try to

profit from the falling price of a stock.

PROFIT = Difference between the Stock which was SOLD &

the Cost of BUY BACK minus the Commission expensis for

the borrowing of the stock.


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L O G O


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Index and Stock Price Moving Average


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Stock Price and Stock prices Moving Averages

Buy signal

Sellsignal


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Comparison of Two Moving Averages

Buy

Sell


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Relative Strength index

Date Price Gain Loss

Sep 22 200 - -

23 206 6 -

24 211 5 -

25 209 - 2

26 217 8 -

27 216 - 1

19/3 =6.33

3/2 = 1.5

RSI = 100 (100/(1+RS))

RS = Avg Gain / Avg Loss

RS = 4.22

RSI = 100 ( 100/(1+4.22))

= 100 19.1570

= 80.8429

RSI > 70 , market downturn and time to sell

RSI < 30 , market pick up and time to buy


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c045TGp Finance Diagram v2