Presentation contains technical and fundamental description of Research.

1. Technical Analysis Presentation
1

2. Introduction
 Basicof Financial Market
 What is Research
 F & O Strategies
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3. Financial Market
 It is a mechanism that allows
people to buy and sell financial
securities .
 Types of Financial Market
 Capital Market (Primary and
secondary)
 Commodity market
 Money Market (Short term Debt)
 Foreign Exchange market
3

4. Financial Instrument
 FD
 Govt. Security
 Equity
 Mutual Fund
 Commodity
 Real estate
 Bond
 Currency
4

5. Research
Demand &
Supply
Political Factors Macro Economic
Issues
Fundamental Analysis
International Environmental
Price Global Events Conditions
Movements & Markets
5

6. Research
Prices &
Volumes
Open Interest
Intra Day
Charts
Technical Analysis
Indicators: Historical Data-
Candlesticks, Trend Monthly & Weekly
lines
& Moving average
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7. Basic Assumption & Chart
 Price moves in trend
 History tends to repeat it self
 The market discounting everything
 Charts
 Line chart
 Bar chart
 Candle Stick
 Point and Figure chart
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8. Technical Indicator
 Trend line
 Support
 Resistance
 Pivot
 Moving average
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9. Different types of Pattern
 Doji candle stick pattern
 The Bullish and Bearish Engulfing
 The Hammer
 Morning star and Evening star
 Triangle pattern
 Double Top and Double bottom
 Head and Shoulder
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10. Open Interest
 Open Interest details
 Change in OI and price
 Rollover figures
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11. Technical Analysis (Versus
Fundamental Analysis)
 Technical analysis is a method of
forecasting price movements by looking
at purely market-generated data. A trader
who uses technical analysis (sometimes
called a technician or chartist) is
essentially concerned with two things;
 1) what is the current price?
 2) What is the history of price
movement?
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12. 12

13. Tools Of The Trade
We accomplish these things by:
 Identifying the short, medium and long-term
trends for market direction.
 Identifying the levels of support and resistance to
determine where price is likely to change
direction.
 Identifying price (or Chart) patterns that indicate
reversals or the continuation of a trend.
 Using technical indicators to reveal useful market
forces behind the price to predict future
movements and determine good points of entry
and exit.
13

14. Technical analysis
 Technical Analysis is the forecasting of
future financial price movements based
on an examination of past price
movements.
 Like weather forecasting, technical
analysis does not result in absolute
predictions about the future.
 Instead, technical analysis can help
investors anticipate what is "likely" to
happen to prices over time.
 Technical analysis uses a wide variety of
charts that show price over time.
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15. Premise of Technical Analysis
 All known Fundamental
Information are shown in Price.
 All changes in Emotion and
Sentiment are shown in Price
and Volume action.
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16. The three basic principles of
Technical Analysis
 Price Discounts Everything
 Prices move in trends
 History repeats itself
16

17. 1. Price discounts everything
 Technical analysts believe that the current
price fully reflects all information.
 Because all information is already
reflected in the price, it represents the
fair value, and should form the basis for
analysis.
 After all, the market price reflects the
sum knowledge of all participants,
including traders, and investors
 Stock Market Technical analysis utilizes
the information captured by the price to
interpret what the market is saying with
the purpose of forming a view on the
future.
17

18. 2. Prices Move in Trends
 Technical analysts or chartists
believe that profits can be made by
following the trends.
 In other words if the price has risen,
they expect it to continue rising; if
the price has fallen, they expect it
to continue falling.
18

19. Prices move in Trends
 Price may be rising – Market is in an
Uptrend (Bullish)
 Prices may be falling – Market is in a
Downtrend (Bearish)
 Prices may be moving sideways – Non-
trending market (Sideways market)
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20. Up Trend
20

21. Down Trend
21

22. Sideways Trend
22

23. 3. History Repeats Itself
 This result’s in periodical emerging of the
similar price patterns and technical
indicators (based on price patterns).
These patterns, generated by price
movement, often signify what type of
movement is to come in the near future.
 The goal in technical analysis is to
identify and use these price patterns in
the current market to predict what will
happen in the future by examining and
quantifying their regular effects in the
past.
23

24. Chart Presentation Styles
Bar Chart Line Chart
Candlestick Total Return or Comparative
24

25. Basic Tool of Technical Analysis
 The Chart
 A picture of changes in Investor Sentiment and
Emotions over time.
 Shows where Trader Greed became excessive
and turned to Fear – “Resistance”
 Shows where Trader Fear became excessive and
turned to Greed – “Support”
 Shows when Investor Sentiment has changed. –
“Breakouts” above Resistance or below Support
 Show Investor Commitment – Big Volume
Breakout
 Shows when the Public is jumping in – Up trends
 Shows when the Pros are bailing out – Down
trends
25

26. Charts Shows Where:
 Investor
Sentiment:
 Turned Negative
 Turned Positive Break
Down
 Pros bailing out
 Public jumping in
Breakout
 Trader Emotion: Resistance
 Greed turned to
Fear
 Fear turned to
Support
Greed
26

27. Chart Timeframes
 Monthly
 Weekly
 Daily
 Intra-
day
 Hourly
 10
minute
2
minute,
27

28. Market Participants
Participant Time in Position Selection Decision Timing Decision
Based on: Based on:
Long Term (LT) Months to Years Company Fundamentals Charts
Investor Fund Manager History
Intermediate (IT) Weeks to Months Market Rankings Charts
Trader
Short Term (ST) 3 – 10 Days Charts Charts
“Swing” Trader
Day Trader Hours Charts Charts
Micro Trader Seconds to Minutes Charts Charts
28

29. Levels of Technicals
 Support level – level at which
declining share may evoke a
substantial increase in price is called
support level (price fall below
certain level)
 Resistance level – the share price is
not likely to rise above the level of
stock price (price rise above certain
level)
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30. Support & Resistance
30

31. More about trends
 There are 3 types of trends as per the time factor.
 Major Trend – Seen on the Monthly charts (6 months to 3-4 years)
 Intermediate Trend – Seen on the Weekly charts (3 weeks to 6 months)
 Minor Trend – Seen on the Daily charts (3 days to 3 weeks)
 Trend Reversal.
 When the Index/Stock changes direction from Up Trend to a Sideways Trend or Down Trend or
vice versa.
 Support & Resistance.
 Once a support/resistance is violated by 3% or 3 consecutive trading sessions it reverses its
role, i.e., Support becomes resistance and vice versa.
31

32. Chart Patterns.
Trendlines - Support lines & Resistance lines
 Channels
 Rectangles
 Head & Shoulders Top & Bottom
 Triangles
 Cup & Handle
 Rounding

33. Trendline support

34. Trendline resistance

35. HLL – Quarterly chart (Channels)

36. EKC – Rectangle Pattern

37. RIL – Rectangle Pattern

38. RIL – Daily chart (Head & Shoulders Top)

39. Shipping Corp – Head and Shoulders Bottom

40. Tata Motors – Daily chart (Triangles)

41. L&T – (Ascending Triangle)

42. Triangles
42

43. Tripple Top & Bottom
43

44. Cup and Handle Pattern
44

45. Rounding Pattern
45

46. Wedges
46

47. How to use Technical Analysis
 Volumes
 Price increase Volume increase …… Bullish
 Price decrease Volume increase…… Bearish
 Moving Averages
 Short, Medium, and Long Term moving averages
 MACD
 Moving Average Convergence Divergence

48. Volume & Price Relationship
 Important part of technical analysis
 High trade volume is considered as
bullish trend
 Low trade volume is considered as
bearish trend.
 High volume with constant rise in
price is consider as more bullish
trend.
 Trends – stock price behaviour
48

49. Analysis
Indicators
Oscillators
Volatility
49

50. Element in Strategy Testing
 Entry Rate: Entry rate is the actual rate
where one can enter a trade on getting a
buy/sell signal. One can either consider
the Day’s close as the entry rate OR Next
day’s opening as the entry rate.
 Exit Rate: Exit rate is the actual rate where
one can exit a trade on getting a
sell/short cover signal. One can either
consider the Day’s Close as the exit rate
OR Next day’s open as the exit rate.
50

51. Element in Strategy Testing
 Entry Stop: It may happen that when one enters a trade
using a particular strategy, the stock price may come down
immediately. In such a case an Entry Stop loss has to be
entered, which if triggered, the trader may exit the position.
One needs to monitor such exits also in testing the Strategy.
The trader may keep the Entry Stop according to the Risk
reward ratio. This may help the trader identify how many
times an entry stop is hit when he enters a trade using a
particular strategy.
 Trailing Stop: If the Trailing stop feature is enabled, it
would help the trader to identify as to how many times the
Trailing stop is triggered and it made the Trader exit the
trade. For eg,if the Entry rate is 800 and the Trailing Stop is
Initiated (Initiate Trailing Stop) is kept at 10%,then when the
stock reaches 880,the Trailing stop would be initiated and
when the Stock fall below 2% from this level (i.e. 880) to
862.4.
51

52. Exit Reasons
 Exit Signals: Displays all the exit trades that have
been generated by the reversal of the entry trade
strategy. For eg: If one enters a long trade when a 8
day EMA crosses the 13 day EMA and when you get a
exit signal on reversal (ie 8 day EMA cuts 13 day EMA
down),it is displayed as Exit Signal
 Entry Stops: Displays all the exit trades that due to
hitting of the entry Stops.
 Profit Stops: Displays all the Exit Trades that occurred
due to hitting of the Target set.
 Trail stops: Displays the entire exit Trades that
occurred due to hitting of the Trailing Stops.
52

53. Indicators
 Oscillators
 Moving
Averages
 simple MA  Momentum
 weighted MA  Stochastics
 exponential MA  many more
 MACD (RSI, ROC, …)
 MACD-line:
EMAshort-term – EMAlong-term
53

54. Buy Signal
 Stock price rises through the
Moving Average (M.A.)line when the
graph of the M.A. line is flattering
out.
 Stock price line falls below the M.A.
line which is rising
 Stock price line which is above the
M.A. line, falls but begins to rise
again before reaching the M.A. line
54

55. Sales Signal
 Stock price line falls through the
M.A. line when the graph of the
M.A. line is flattering out.
 Stock price line rises above the M.A.
line which is falling
 Stock price line which is below the
M.A. line, rises but begins to fall
again before reaching the M.A. line
55

56. Moving Averages – Monthly chart
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57. Moving Averages – Weekly chart
57

58. Tisco MACD (Weekly chart – buy/sell)
58

59. Punj Lloyd MACD – Daily Chart buy/sell)
59

60. Gold Kg – Daily chart – Buy/Sell
60

61. Negative Divergence on AD Line
NI FTY [ N59901] 6143. 45, 6144. 05, 5970. 60, 5988. 70, 903835008 -2. 17% 1085744256.0
Price Log I RI S 15/ 09/10 Wed
6300 Op 5795. 25
Hi 5869. 45
Lo 5792. 20
6200 Cl 5860. 95
6100
6000
5900
Negative 5800
Divergence : Market 5700
was Rising But Ad 5600
Line was Falling 5500
5400
Source : www. SpiderSof t wareI ndia.Com
5300
Vol Cr
Qt 80.98
100
75. 00
50. 00
25. 00
ADL
AD-150361. 00
-148000.00
-150000.00
-152000.00
61
10: J A S O N Dly

62. AD Volume Line
NI FTY [N59901] 6143.45, 6144.05, 5970. 60, 5988. 70, 903835008 -2.17% 0. 00
Price Log I RI S 13/ 10/ 10 Wed
6300 Op 6091.45
Hi 6240.25
In the Last Screen we have 6200
Lo
Cl
6089.75
6233.90
seen that AD Line was not 6100
6000
supporting the Market ,But 5900
Though Market Made New High 5800
Reason is AD Vol Line was 5700
Supporting it. 5600
5500
5400
Source : www.SpiderSof t wareIndia.Com
5300
Vol Cr
Qt 100.87
100
75.00
50.00
25.00
ADvL
AD 13934.65
14000
13750
13500
13250 62
13000

63. McClellan Oscillator
NIFTY [ N59901] 6143.45, 6144.05, 5970. 60, 5988. 70, 903835008 -2.17% 618335360. 00
Price Log IRIS 15/ 10/10 Fri
6300 Op 6175.90
Hi 6200.60
6200 Lo 6050.35
Cl 6062.65
6100
6000
5900
5800
5700
Useful For Traders to Know the 5600
Market Strength 5500
5400
Source : www. SpiderSof twareIndia.Com
Vol Cr
Qt 85.98
100
75.00
50.00
25.00
McOsc(Y,E,19,E,39)
Mc -2. 63
2.50
0.00
-2. 50
Base Line Like MACD Zero Line
Avg(S, 1) Avg(S,20)
Av -2. 63
2.50 Av -0. 64
0.00
-2. 50
McOsc Ploted as an Average 63
10: J A S O N Dly

64. McClellan Summation Index
NIFTY [N59901] 6143.45, 6144. 05, 5970. 60, 5988. 70, 903835008 -2.17% 0. 00
Price Log IRIS 20/ 09/ 10 Mon
Op 5885. 05
6200 Hi 5989. 50
Lo 5885. 05
6000 Cl 5980. 45
5800
5600
5400
Useful to Medium to Long Term Investor 5200
Source : www. SpiderSof twareIndia.Com
to know Market Strength 5000
4800
Vol Cr
Qt 89. 44
100
50. 00
McOsc(Y,E, 19, E,39)
5.00 Mc 1. 49
0.00
McSum(Y, E, 19, E, 39)
0.00 Mc -28. 79
Base Line Like MACD Zero Line -50. 00
Avg(S, 1) Avg(S, 20)
0.00 Av -28. 79
Av -36. 25
McSum Ploted as an Average
-50. 00
64

65. This (Arrow Signal) Feature is available for following indicators only.
-> Adaptative moving Avg
-> Arron Up Down Indicator
-> ATP
-> Average
-> Avg 2 line 2 input
-> Avg OHLCVUT
-> Avg Short Long
-> Candlestick momentum index
-> Chande Mommentum Oscillator
-> Chande Vidya Indicator
-> Commodity Chanel Index
-> Directional Mov Index
-> Directional Trend Index
-> KST
-> Money flow index
-> Relative Strenght Index (RSI)
-> Rsi Up/Down
65

66. Alternative methods
 Fibonacci.
 Dow Theory.
 Elliot Wave.
 Japanese Candlesticks.
 Gann Theory.
66