TECHNICAL

INDICATORS:
IDENTIFYING BUY
AND SELL SIGNALS
Ankur Jain
Presenter Ghulam Khan
s: Saurabh
Manoj Kumar
 FUNDAMENTAL ANALYSIS:
DEFINED
Fundamental analysis is a stock valuation
method that uses financial and economic
analysis to predict the movement of stock
prices. The fundamental information that is
analyzed can include a company's financial
reports, and non-financial information such as
estimates of the growth of demand for products
sold by the company, industry comparisons,
and economy-wide changes, changes in
government policies etc.
 FUNDAMENTAL ANALYSIS: KEY
FINANCIAL RATIOS

 Earning Per Share

 P/E Ratio
 PEG Ratio
 Dividend Yield Ratio
 Price to Book Ratio
 Debt-Equity Ratio
 KEY FINANCIAL RATIOS: INFOSYS
TECH
31-03-2005 31-03-2006 31-03-2007 31-03-2008 31-03-2009

DEBT-EQUITY RATIO NIL NIL NIL NIL NIL

EPS 70.38 87.86 66.23 78.15 101.58
GROWTH IN EPS NA 24.8366013 -24.618712 17.997886 29.980806

BOOK VALUE 193.73 250.29 195.41 235.84 310.9

DIVIDEND/SHARE 11.5 45 11.5 33.25 23.5
CLOSING PRICE/SHARE 1128.6 1490.7 2018.65 1439.9 1323.9

P/E RATIO 16.035806 16.9667653 30.47939 18.424824 13.033077

PEG RATIO NA 0.68313555 -1.2380579 1.0237216 0.434714

DIVIDEND YIELD 1.0189615 3.01871604 0.5696877 2.3091881 1.7750585

RATIO
PRICE/BOOK RATIO 5.8256336 5.95589117 10.330331 6.1054104 4.2582824

SOURCE: WWW.MONEYCONTROL.COM
 FUNDAMENTAL VS TECHNICAL
ANALYSIS

Fundamental analysis is the analysis of a stock

on the basis of core financial and economic
analysis to predict the movement of stocks price.
On the other hand, technical analysis is the study
of prices and volume, for forecasting of future
stock price or financial price movements.
 TECHNICAL ANALYSIS:
DEFINED
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:
STRENGHTS

 Focus on price
 Supply, demand and price action
 Support/resistance
 Pictorial price history
 Assist with entry point
 TECHNICAL ANALYSIS:
WEAKNESS
 Analyst bias
 Open to interpretation
 Too late
 Always another level
 Trader’s remorse
 TECHNICAL ANALYSIS:
INDICATORS
 Bollinger Bands
 Moving Average Convergence
Divergence
 Volumes
 Relative Strength Index
 CHARTS
A price chart is a sequence of prices plotted
over a specific time frame. In statistical terms,
charts are referred to as time series plots. On
the chart, the y-axis (vertical axis) represents
the price scale and the x-axis (horizontal axis)
represents the time scale.
Technicians, technical analysts and chartists
use charts to analyze a wide array of securities
and forecast future price movements.
CHARTS: INFOSYS TECH
(BSE)
4
3
2

SOURCE: WWW.ICHARTS.IN
 CHARTS: INFOSYS TECH
(BSE)
SIGNAL -1 (BUY), 19-05-2005
C.P = Rs. 2098.5 * 100 SHARES = Rs. 209850/-

SIGNAL -2 (SELL), 11-07-2005

C.P = Rs. 2315.45 * 100 SHARES = Rs. 231545/-

% RETURN = (231545-209850)/209850 = 10.33%

ANNUALIZED RETURNS = (10.33/53DAYS)*360DAYS =

70.16%
 CHARTS: INFOSYS TECH
(BSE)
SIGNAL -3 (BUY), 29-07-2005
C.P = Rs. 2269.2 * 100 SHARES = Rs. 226920/-

SIGNAL -4 (SELL), 19-10-2005

C.P = Rs. 2499.95 * 100 SHARES = Rs. 249995/-

% RETURN = (249995-226920)/226920 = 10.16%

ANNUALIZED RETURNS = (10.16/82DAYS)*360DAYS =

44.6%
 CHARTS: INFOSYS TECH
(BSE)
6
5

SOURCE: WWW.ICHARTS.IN
 CHARTS: INFOSYS TECH
(BSE)
SIGNAL -5 (BUY), 7-11-2005
C.P = Rs. 2637.1 * 100 SHARES = Rs. 263710/-

SIGNAL -6 (SELL), 12-01-2006

C.P = Rs. 2835 * 100 SHARES = Rs. 283500/-

% RETURN = (283500-263710)/263710 = 7.5%

ANNUALIZED RETURNS = (7.5/66DAYS)*360DAYS =

40.9%
 CHARTS: INFOSYS TECH
(BSE)
AVERAGE ANNUALIZED RETURNS = ( 70.16+ 44.6+ 40.9)/3 =
51.8%

VS

BUY, 1-04-2005
Rs. 2243.6 * 100 SHARES = Rs. 224360/-
SELL, 27-03-2006
Rs. 2881.65 * 100 SHARES = Rs. 288165/-

ANNUALIZED RETURN = (288165-224360)/224360 = 28.43%

CHARTS: INFOSYS TECH
(BSE)
1 2 3

SOURCE: WWW.ICHARTS.IN
 CHARTS: RIL (BSE)

SIGNAL -1 (BUY), 13-07-2007

C.P = Rs. 1768.5 * 100 SHARES = Rs. 176850/-

SIGNAL -2 (SELL), 31-07-2007

C.P = Rs. 1892.3 * 100 SHARES = Rs. 189230/-

% RETURN = (189230-176850)/176850 = 7%

ANNUALIZED RETURNS = (7/17DAYS)*360DAYS =

148.23%
CHARTS: RIL (BSE)
4

SOURCE: WWW.ICHARTS.IN
 CHARTS: RIL (BSE)

SIGNAL -3 (BUY), 29-08-2007

C.P = Rs. 1889.8* 100 SHARES = Rs. 188980/-

SIGNAL -4 (SELL), 18-01-2008

C.P = Rs. 2799.5 * 100 SHARES = Rs. 279950/-

% RETURN = (279950-188980)/188980 = 48.13%

ANNUALIZED RETURNS = (48.13/142DAYS)*360DAYS =

122.01%
 CHARTS: INFOSYS TECH
(BSE)
AVERAGE ANNUALIZED RETURNS = ( 148.23+ 122.01)/2 =
135.12%

VS

BUY, 2-04-2005
Rs. 1313.5 * 100 SHARES = Rs. 131350/-
SELL, 27-03-2006
Rs. 2264.5 * 100 SHARES = Rs. 226450/-

ANNUALIZED RETURN = (226450-131350)/131350 = 72.4%

CHARTS: ICICI (BSE)

1 2 3

SOURCE: WWW.ICHARTS.IN
 CHARTS: ICICI (BSE)

SIGNAL -1 (BUY), 17-05-2007

C.P = Rs. 935.75* 100 SHARES = Rs. 93575/-

SIGNAL -2 (SELL), 26-07-2007

C.P = Rs. 945.1 * 100 SHARES = Rs. 94510/-

% RETURN = (94510-93575)/93575 = 0.99%

ANNUALIZED RETURNS = (0.99/70DAYS)*360DAYS =

5.09%
CHARTS: ICICI (BSE)
4

SOURCE: WWW.ICHARTS.IN
 CHARTS: ICICI (BSE)

SIGNAL -3 (BUY), 3-09-2007

C.P = Rs. 907.3* 100 SHARES = Rs. 90730/-

SIGNAL -4 (SELL), 18-01-2008

C.P = Rs. 1245.45 * 100 SHARES = Rs. 124545/-

% RETURN = (124545-90730)/90730 = 37.2%

ANNUALIZED RETURNS = (37.2/137DAYS)*360DAYS =

97.75%
 CHARTS: ICICI (BSE)
AVERAGE ANNUALIZED RETURNS = (5.09+97.75)/2 = 51.42%

VS

BUY, 2-04-2007
Rs. 804.5 * 100 SHARES = Rs. 80450/-
SELL, 31-03-2008
Rs. 770.1 * 100 SHARES = Rs. 77010/-

ANNUALIZED RETURN = (77010-80450)/80450 = (4.2)%

THANK YOU