A PROJECT REPORT

On

“STUDY OF STOCK MARKET AND ANALYSIS OF INFRASTRUCTURE SECTOR(L&T,RELIANCE INFR LTD

& JAIPRAKASH ASSOCIATE LTD)”

Submitted to Savitribai Phule Pune University in partial fulfillment of the requirements for the Degree of

Master of Business Administration (M.B.A.)

by

Md ErshadAlam

(Roll No. ________)

A Study Conducted for the Company:

Mudrabiz Finance and Stock Broking Company

At

Akemi Education Society’s

Akemi Business School

Pune - 411057

1
CERTIFICATE

This is to certify that Mr. / Miss MD ErshadAlam who is a Bonafide student of Akemi Education Society’s
Akemi Business School, Pune – 411 057, has worked on Project titled STUDY OF STOCK MARKET AND
ANALYSIS OF INFRASTRUCTURE SECTOR(L&T,RELIANCEINFR LTD & JAIPRAKASH ASSOCIATE LTD) and has
successfully completed the project work in partial fulfillment of the requirements of Savitribai Phule Pune
University for the Award of Degree of Master of Business Administration (M.B.A.)

This report is the record of Student’s own efforts under our supervision and guidance.

Swapan ___________________________
Internal Guide Director, Akemi Business School

2
TO WHOMSOEVER IT MAY CONCERN

This is to certify that Mr./Miss Md ErshadAlamS/O /D/O SM.GhousAlam, Student of M.B.A. III semester
from Akemi Education Society’s Akemi Business School, Pune, has undergone practical training and
undertaken the Project work with us entitled_STUDYOF STOCK MARKET AND ANALYSIS OF
INFRASTRUCTURE SECTOR(L&T,RELIANCEINFR LTD & JAIPRAKASH ASSOCIATE LTD)

during the period 26 MAY TO 26JULY 2019

In pursuance of the work, he / she were sincere and punctual and his / her conduct was found very well.

Date: Signature

Place: Name

Designation

3
DECLARATION

I, Mr. / Ms. Md ErshadAlam hereby declare that this project is a record of authentic work carried out by
me during the academic year 2018-2019 and has not been submitted to any other University or Institute
towards the award of any Degree or Diploma.

Signature of the student

(Name of the Student to be written here)

4
 ACKNOWLEDGEMENT

I am deeply indebted to many people for the successful completion of this project.

I would like to take this opportunity and go on record to thank them for their help and support.

I am thankful to the Akemi Education Society’s Akemi Business School, Pune for all the support
provided for this project.

I express my deep sense of gratitude and sincere feelings of obligation to my Project Guide Swapan
Kamble who helped me in overcoming many difficulties and who imparted me the necessary conceptual
knowledge.

I also wish to acknowledge the excellent support of my Company Guide GaneshChabukswar. for this
work.

I wish to thank all my teachers and friends too, for their helpful inputs, insightful comments, steadfast
love and support.

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Executive Summary
Title: Study of Stock Market And Analysis of Infrastructure Sector (L&T, Reliance Infr ltd
&JaiprakashAssociates ltd.

The purpose of this study is to know about Indian Stock Market and Analysis of Infrastructure Sector (L&T,
Reliance Infra ltd &Jaiprakash associates ltd).

Stock market refers to the collection of markets and exchange where the issuing and trading of equities or
stock of publicly held companies, bonds and other classes of securities take place.Stock market consists
of two main section: primary market and secondary market. There are two main stock exchange in India
BSE(Bombay Stock Exchange) and NSE(National Stock Exchange).BSE being the oldest stock exchange
in ASIA,NSE is First to start online operations of shares i.e. DEMATERIALIZATION of share in India.
Indian Capital Markets are regulated and monitored by the Ministry of Finance, The Securities and
Exchange Board of India and The Reserve Bank of India

Technical indicators are used to evaluate securities and identify trading opportunities by analyzing statistics
gathered from trading activities. There are various technical indicators but in this project only Exponential
Moving Average, MACD,RSI and Candle sticks are used.

In this project technical analysis is used to evaluate the trading opportunities for Infrastructure sector:
L&T,Reliance Infra ltsd& Jaiprakash associates ltd.

While doing this summer internship program one main thing which I got to know that is people are not such
aware about the stock market. They don’t know about working of stock market, market condition etc. Thus
study of stock market is crucial part.

For this summer internship project I have worked in Mudrabiz, Pune

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Objective

● To understand the concept of stock and stock market.

● To know the regulatory framework for Indian stock market.
● To understand the technical analysis.
● To understand the movement of Infrastructure sector of different
company.

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INDEX

Chapter Particulars Page No.

Nomenclature & List of Abbreviations

1 2-6
Introduction

2 Objectives of the Project 7

3 Theoretical Background of the Topic 8-52

Company Profile :
 History of Organization
4 53-55
 Organization Chart
 Product Profile
Research Methodology :
 Methods Used, Sampling Techniques
5  Sources of Data 56
 Data collection
 Tools used for Analysis

6 Data Interpretation & Analysis 57-78

Findings
7 Observations 79
Conclusions
Learning from the project
8 80
Benefit to the Organization

9 Suggestions / Recommendations 81

10 Scope and Limitations 82

Annexure :
11  Bibliography 83
 Questionnaire

8
Theoretical Background

9
What is stock market
A stock market, equity market or share market is the aggregation of buyers and sellers (a
loose network of economic transactions, not a physical facility or discrete entity)
of stocks (also called shares), which represent ownership claims on businesses; these may
include securities listed on a public stock exchange, as well as stock that is only traded
privately. Examples of the latter include shares of private companies which are sold
to investors through equity crowdfundingplatforms. Stock exchanges list shares of
common equity as well as other security types, e.g. corporate bonds and convertible
bonds.

Size of the market

Stocks are categorized in various ways. One way is by the country where the company is domiciled. For
example, Nestlé and Novartis are domiciled in Switzerland, so they may be considered as part of
the Swiss stock market, although their stock may also be traded on exchanges in other countries, for
example, as American depository receipts (ADRs) on U.S. stock markets.
As of 2017, the size of the world stock market (total market capitalization) was about US$79.225 trillion.
By country, the largest market was the United States (about 34%), followed by Japan (about 6%) and
the United Kingdom (about 6%) These numbers increased in 2013.
As of 2015, there are a total of 60 stock exchanges in the world with a total market capitalization of $69
trillion. Of these, there are 16 exchanges with a market capitalization of $1 trillion or more, and they
account for 87% of global market capitalization. Apart from the Australian Securities Exchange, these 16
exchanges are based in one of three continents: North America, Europe and Asia.
Stock exchange
A stock exchange is an exchange (or bourse) where stock brokers and traders can buy and
sell shares of stock, bonds, and other securities. Many large companies have their stocks listed on a stock
exchange. This makes the stock more liquid and thus more attractive to many investors. The exchange
may also act as a guarantor of settlement. Other stocks may be traded "over the counter" (OTC), that is,
through a dealer. Some large companies will have their stock listed on more than one exchange in
different countries, so as to attract international investors.
Stock exchanges may also cover other types of securities, such as fixed interest securities (bonds) or (less
frequently) derivatives which are more likely to be traded OT
Importance

Even in the days before perestroika, socialism was never a monolith. Within the Communist

10
 countries, the spectrum of socialism ranged from the quasi-market, quasi-syndicalist system of
Yugoslavia to the centralized totalitarianism of neighboring Albania. One time I asked Professor von
Mises, the great expert on the economics of socialism, at what point on this spectrum of statism
would he designate a country as "socialist" or not. At that time, I wasn't sure that any definite
criterion existed to make that sort of clear-cut judgment. And so I was pleasantly surprised at the
clarity and decisiveness of Mises's answer. "A stock market," he answered promptly.
"A stock market is crucial to the existence of capitalism and private property. For it means that
there is a functioning market in the exchange of private titles to the means of production. There
can be no genuine private ownership of capital without a stock market: there can be no true
socialism if such a market is allowed to exist.

Function and purpose

The stock market is one of the most important ways for companies to raise money, along with debt
markets which are generally more imposing but do not trade publicly.[44]This allows businesses to be
publicly traded, and raise additional financial capital for expansion by selling shares of ownership of the
company in a public market. The liquiditythat an exchange affords the investors enables their holders to
quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less
liquid investments such as property and other immoveable assets.
History has shown that the price of stocks and other assets is an important part of the dynamics of
economic activity, and can influence or be an indicator of social mood. An economy where the stock
market is on the rise is considered to be an up-and-coming economy. The stock market is often
considered the primary indicator of a country's economic strength and development. [45]
Rising share prices, for instance, tend to be associated with increased business investment and vice versa.
Share prices also affect the wealth of households and their consumption. Therefore, central banks tend
to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation
of financial systemfunctions. Financial stability is the raison d'être of central banks.[46]
Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the
shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer
or seller that the counterparty could default on the transaction.[47]
The smooth functioning of all these activities facilitates economic growth in that lower costs and
enterprise risks promote the production of goods and services as well as possibly employment. In this
way the financial system is assumed to contribute to increased prosperity, although some controversy
exists as to whether the optimal financial system is bank-based or market-based.[48]
Recent events such as the Global Financial Crisis have prompted a heightened degree of scrutiny of the
impact of the structure of stock markets (called market microstructure), in particular to the stability of
the financial system and the transmission of systemic risk.
Capital market

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A capital market is a financial market in which long-term debt (over a year) or equity-
backed securities are bought and sold.[6] Capital markets channel the wealth of savers to those who can
put it to long-term productive use, such as companies or governments making long-term
investments.[a] Financial regulators like the Bank of England(BoE) and the U.S. Securities and Exchange
Commission (SEC) oversee capital markets to protect investors against fraud, among other duties.
Modern capital markets are almost invariably hosted on computer-based electronic trading platforms;
most can be accessed only by entities within the financial sector or the treasury departments of
governments and corporations, but some can be accessed directly by the public. As an example, in the
United States, any American citizen with an internet connection can create an account
with TreasuryDirect and use it to buy bonds in the primary market, though sales to individuals form only a
tiny fraction of the total volume of bonds sold. Various private companies provide browser-based
platforms that allow individuals to buy shares and sometimes even bonds in the secondary markets.
There are many thousands of such systems, most serving only small parts of the overall capital markets.
Entities hosting the systems include stock exchanges, investment banks, and government departments.
Physically, the systems are hosted all over the world, though they tend to be concentrated in financial
centres like London, New York, and Hong Kong.
Type of market
primary market:-
When a company wants to raise money for long-term investment, one of its first decisions is whether to
do so by issuing bonds or shares. If it chooses shares, it avoids increasing its debt, and in some cases the
new shareholders may also provide non-monetary help, such as expertise or useful contacts. On the
other hand, a new issue of shares will dilute the ownership rights of the existing shareholders, and if they
gain a controlling interest, the new shareholders may even replace senior managers. From an investor's
point of view, shares offer the potential for higher returns and capital gains if the company does well.
Conversely, bonds are safer if the company does poorly, as they are less prone to severe falls in price, and
in the event of bankruptcy, bond owners may be paid something, while shareholders will receive nothing.
When a company raises finance from the primary market, the process is more likely to involve face-to-
face meetings than other capital market transactions. Whether they choose to issue bonds or
shares,[d] companies will typically enlist the services of an investment bank to mediate between
themselves and the market. A team from the investment bank often meets with the company's senior
managers to ensure their plans are sound. The bank then acts as an underwriter, and will arrange for a
network of brokers to sell the bonds or shares to investors. This second stage is usually done mostly
through computerized systems, though brokers will often phone up their favored clients to advise them
of the opportunity. Companies can avoid paying fees to investment banks by using a direct public
offering, though this is not a common practice as it incurs other legal costs and can take up considerable
management time.[13][16]

Secondary market

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An electronic trading platform being used at the Deutsche Börse. Most 21st century capital market transactions are
executed electronically; sometimes a human operator is involved, and sometimes unattended computer systems
execute the transactions, as happens in algorithmic trading.

Most capital market transactions take place on the secondary market. On the primary market, each security can be
sold only once, and the process to create batches of new shares or bonds is often lengthy due to regulatory
requirements. On the secondary markets, there is no limit to the number of times a security can be traded, and the
process is usually very quick. With the rise of strategies such as high-frequency trading, a single security could in
theory be traded thousands of times within a single hour.[e] Transactions on the secondary market do not directly
raise finance, but they do make it easier for companies and governments to raise finance on the primary market, as
investors know that if they want to get their money back quickly, they will usually be easily able to re-sell their
securities. Sometimes, however, secondary capital market transactions can have a negative effect on the primary
borrowers: for example, if a large proportion of investors try to sell their bonds, this can push up the yields for
future issues from the same entity. An extreme example occurred shortly after Bill Clinton began his first term as
President of the United States; Clinton was forced to abandon some of the spending increases he had promised in
his election campaign due to pressure from the bond markets [source?]. In the 21st century, several governments
have tried to lock in as much as possible of their borrowing into long-dated bonds, so they are less vulnerable to
pressure from the markets. Following the financial crisis of 2007–08, the introduction of quantitative easing further
reduced the ability of private actors to push up the yields of government bonds, at least for countries with a central
bank able to engage in substantial open market operations.[13][15][16][17]

A variety of different players are active in the secondary markets. Individual investors account for a small
proportion of trading, though their share has slightly increased; in the 20th century it was mostly only a few
wealthy individuals who could afford an account with a broker, but accounts are now much cheaper and accessible
over the internet. There are now numerous small traders who can buy and sell on the secondary markets using
platforms provided by brokers which are accessible via web browsers. When such an individual trades on the
capital markets, it will often involve a two-stage transaction. First they place an order with their broker, then the
broker executes the trade. If the trade can be done on an exchange, the process will often be fully automated. If a
dealer needs to manually intervene, this will often mean a larger fee. Traders in investment banks will often make
deals on their bank's behalf, as well as executing trades for their clients. Investment banks will often have a division
(or department) called "capital markets": staff in this division try to keep aware of the various opportunities in both
the primary and secondary markets, and will advise major clients accordingly. Pension and sovereign wealth
funds tend to have the largest holdings, though they tend to buy only the highest grade (safest) types of bonds and
shares, and some of them do not trade all that frequently. According to a 2012 Financial Times article, hedge funds
are increasingly making most of the short-term trades in large sections of the capital market (like the UK and US
stock exchanges), which is making it harder for them to maintain their historically high returns, as they are
increasingly finding themselves trading with each other rather than with less sophisticated investors.

There are several ways to invest in the secondary market without directly buying shares or bonds. A common
method is to invest in mutual fundsor exchange-traded funds. It is also possible to buy and sell derivatives that are
based on the secondary market; one of the most common type of these is contracts for difference – these can
provide rapid profits, but can also cause buyers to lose more money than they originally invested.

Bombay Stock Exchange

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The Bombay Stock Exchange (BSE) is the first and largest securities market in India and was established
in 1875 as the Native Share and Stock Brokers' Association. Based in Mumbai, India, the BSE lists close
to 6,000 companies and is one of the largest exchanges in the world, along with the New York Stock
Exchange (NYSE), NASDAQ, London Stock Exchange Group, Japan Exchange Group, and Shanghai
Stock Exchange.

The BSE has helped develop the country's capital markets, including the retail debt market, and helped
grow the Indian corporate sector.

Breaking Down Bombay Stock Exchange (BSE)

In 1995, the BSE switched from an open-floor to an electronic trading system. There are more than a
dozen electronic exchanges in the U.S. alone with the New York Stock Exchange (NYSE) and Nasdaq
being the most widely known. Today electronic systems dominates the financial industry overall, offering
fewer errors, faster execution, and better efficiency than traditional open-outcry trading systems.

Securities that the BSE lists includes stocks, stock futures, stock options, index futures, index options,
and weekly options. The BSE's overall performance is measured by the Sensex, an index of 30 of the
BSE's largest stocks covering 12 sectors.

Other Major International Stock Exchanges

In addition to the BSE major international stock exchanges include:

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The New York Stock Exchange (NYSE). NYSE is considered the largest equities-based exchange in the
world, based on the total market capitalization of its listed securities. NYSE was formerly a private
organization but became public in 2005 after it acquired the electronic trading exchange Archipelago.

Nasdaq. This is a global electronic marketplace and the benchmark index for U.S. technology stocks.
National Association of Securities Dealers (NASD) created Nasdaq in 1971 to enable investors to trade
securities on a rapid, computerized, and transparent system. Today “Nasdaq” also refers to the Nasdaq
Composite, an index of more than 3,000 listed technology that include Apple, Google, Microsoft, Oracle,
Amazon, Intel, and Amgen.

National Stock Exchange

DEFINITION of National Stock Exchange

The National Stock Exchange, abbreviated NSX, was the first stock exchange in America to be completely
electronically automated. It began life as the Cincinnati Stock Exchange in Ohio in 1885, moved to Chicago in 1995,
changed its name in 2003, and was taken over by the New York Stock Exchange (NYSE) in early 2017. It is now
known as the NYSE National and operates as a subsidiary of NYSE Holdings.

BREAKING DOWN National Stock Exchange

The National Stock Exchange was originally founded in Cincinnati, Ohio in 1885, at that stage known as the
Cincinnati Stock Exchange. At that time, its main business listings were in railroads, banks and insurance
companies. One hundred years later, still known as the Cincinnati Exchange, it became the first national stock
exchange to operate electronically without a trading floor (NASDAQ was not yet listed with the Securities and
Exchange Commission).

It moved to Chicago in 1995, and changed its name in 2003 to the National Stock Exchange. It later moved again, to
New Jersey, in 2006. The NSX ceased trading in May 2014 due to low trading volume; it resumed trade about a year
and a half later. Subsequently, it stated in December 2016 that it was once again about to stop trading due to low

15
volumes. It accounted for just a 0.01% market share of US equity trading at that stage. The NYSE then bought the
exchange and changed its name to the NYSE National. Although the intention was ultimately to continue trading, it
ceased doing so in February 2017 after the NYSE transaction was finalized. The NYSE announced that the NYSE
National would eventually transition to the NYSE Pillar platform, a relatively new integrated trading technology
platform. It started trading again, on this platform, in the second quarter of 2018. It is now a trading-only (not a
listing) venue.

The term "National Stock Exchange" can also refer to stock markets in India or Australia. In India, abbreviated as
NSE, it is the main stock market — see National Stock Exchange of India. In Australia, it is the second-largest listing
exchange, and specializes in growth companies, and also carries the abbreviation of NSX

A Bull Market
This is when the market is showing confidence. Indicators of confidence are prices going up, market indices like the NASDAQ
go up too. Number of shares traded is also high and even the number of companies entering the stock market show that the
market is confident.

These are bullish characteristics. If there is a run of bullish days then you may hear the market is a bull market. Technically
though a bull market is a rise in value of the market of at least 20%. The huge rise of the Dow and NASDAQ during the tech
boom is a good example of a bull market.

A Bear Market
A bear market is the opposite to a bull. If the markets fall by more than 20% then we have entered a bear market. A bear
market is a market showing a lack of confidence. Prices hover at the same price then go down, indices fall too and volumes are
stagnant. In a bear market people are waiting for the bulls to start driving the prices up again. However, a bear is a very
tentative bull or a bull that is asleep.

Market Timing
Some people believe that by recognizing the different kinds of markets you can make money on stock trading and investing.
The basic idea behind buying stocks is to buy low and sell high. This will give you a profit. So to make money you buy stocks in
a bear market when stock prices are low and sell stocks in a bull market when stock prices are high. However, knowing when is
the best time to buy and sell is not that simple.

Unfortunately, most investors are often too emotional and they sell in a bear market because they are scared to lose money
and they buy in a bull market because they don’t want to miss the big gains. You can make some money that way but it also
explains why many investors lose money by trying to time the market. The safest way to help prevent yourself from making
these mistakes is to buy stocks and invest in the market by regularly making fixed size investments, and holding your
investments for a long period of time.

What Is a Financial Instrument

Financial instruments are assets that can be traded, or they can also be seen as packages of capital that may be
traded. Most types of financial instruments provide efficient flow and transfer of capital all throughout the world's
investors. These assets can be cash, a contractual right to deliver or receive cash or another type of financial
instrument, or evidence of one's ownership of an entity

Understanding Financial Instruments

Financial instruments can be real or virtual documents representing a legal agreement involving any kind of
monetary value. Equity-based financial instruments represent ownership of an asset. Debt-based financial
instruments represent a loan made by an investor to the owner of the asset.

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Types of Financial Instruments
Financial instruments may be divided into two types: cash instruments and derivative instruments.

Cash Instruments

 The values of cash instruments are directly influenced and determined by the markets. These can be
securities that are easily transferable.
 Cash instruments may also be deposits and loans agreed upon by borrowers and lenders.

Derivative Instruments

 The value and characteristics of derivative instruments are based on the vehicle’s underlying components,
such as assets, interest rates, or indices.
 These can be over-the-counter (OTC) derivatives or exchange-traded derivatives.

Types of Asset Classes of Financial Instruments

Financial instruments may also be divided according to an asset class, which depends on whether they are debt-
based or equity-based.

Debt-Based Financial Instruments

Short-term debt-based financial instruments last for one year or less. Securities of this kind come in the form of T-
bills and commercial paper. Cash of this kind can be deposits and certificates of deposit (CDs).

Exchange-traded derivatives under short-term, debt-based financial instruments can be short-term interest rate
futures. OTC derivatives are forward rate agreements.

Long-term debt-based financial instruments last for more than a year. Under securities, these are bonds. Cash
equivalents are loans. Exchange-traded derivatives are bond futures and options on bond futures. OTC derivatives
are interest rate swaps, interest rate caps and floors, interest rate options, and exotic derivatives.

Equity-Based Financial Instruments

Securities under equity-based financial instruments are stocks. Exchange-traded derivatives in this category
include stock options and equity futures. The OTC derivatives are stock options and exotic derivatives.

Special Considerations
There are no securities under foreign exchange. Cash equivalents come in spot foreign exchange. Exchange-traded
derivatives under foreign exchange are currency futures. OTC derivatives come in foreign exchange options, outright
forwards, and foreign exchange swaps.

Key Takeaways

 A financial instrument is a real or virtual document representing a legal agreement involving any kind of
monetary value.
 Financial instruments may be divided into two types: cash instruments and derivative instruments.
 Financial instruments may also be divided according to an asset class, which depends on whether they are
debt-based or equity-based.
 Foreign exchange instruments comprise a third, unique type of financial instrument.

Future contract

What is a Futures Contract

A futures contract is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time
in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange. The buyer of

17
a futures contract is taking on the obligation to buy the underlying asset when the futures contract expires. The seller of the
futures contract is taking on the obligation to provide the underlying asset at the expiration date.

"Futures contract" and "futures" refer to the same thing. For example, you might hear somebody say they bought oil
futures, which means the same thing as an oil futures contract. When someone says "futures contract," they're
typically referring to a specific type of future, such as oil, gold, bonds or S&P 500 index futures. The term "futures" is
more general, and is often used to refer to the whole market, such as "They're a futures trader."

OPTION

What Is an Option
Options are financial instruments that are derivatives or based on underlying securities such as stocks. An options
contract offers the buyer the opportunity to buy or sell—depending on the type of contract they hold—the underlying
asset. Unlike futures, the holder is not required to buy or sell the asset if they choose not to.

 Call options allow the holder to buy the asset at a stated price within a specific timeframe.
 Put options allow the holder to sell the asset at a stated price within a specific timeframe.

Each option contract will have a specific expiration date by which the holder must exercise their option. The stated
price on an option is known as the strike price. Options are typically bought and sold through online or retail brokers.

Forward Contract

A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a
future date. A forward contract can be used for hedging or speculation, although its non-standardized nature makes
it particularly apt for hedging.

Swaps

A swap is a derivative contract through which two parties exchange the cash flows or liabilities from two different
financial instruments. Most swaps involve cash flows based on a notional principal amount such as a loan or bond,
although the instrument can be almost anything. Usually, the principal does not change hands. Each cash
flow comprises one leg of the swap. One cash flow is generally fixed, while the other is variable and based on a
benchmark interest rate, floating currency exchange rate or index price.The most common kind of swap is
an interest rate swap. Swaps do not trade on exchanges, and retail investors do not generally engage in swaps.

18
Rather, swaps are over-the-counter contracts primarily between businesses or financial institutions that are
customized to the needs of both parties.

Common Terms used in Indian Share market

Following are Indian stock market terminologies which are very commonly
used while trading and investing in Indian stock Market
Share Trading - Buying and selling of shares is called as share trading.

Open - The first price at which the stock opens in the morning when the market opens at
9:00 AM.

High - The stock price reached at the highest level throughout the trading day

Low - The stock price reached the lowest level throughout the trading day.

Close - The final price of the stock when the market closes for a day or the stock price at
which it remains at the time of closing the market at 3:30 PM
Transaction - One complete cycle of buying and selling of shares is considered as one
Transaction.

Squaring off - This term is used to complete one transaction. Means if you buy then
have to sell (means square off) and if you short sell then you have to buy (means
square off).

Limit Order - In limit order, the buying or selling price has to be mentioned and when
the share price comes to that price then the order will get executed with the price
mentioned by the trader.

Market Order - When you put buy or sell price at market rate then the price get
executes at the current rate of market. The market order get immediately executed at
the current available price.

Stop Loss Orders - As the name indicates the stop loss orders are used to stop or limit
the losses in the share market.
Stop loss orders are limit price set by traders at which the order will automatically enter
or exit the trade.
The stop loss order is placed below the current market price of the stock to stop the
loss in buy position and above the current market price to stop the loss in short sell

position.
Margin Trading - Margin amount is the amount given by broker for day trading. The
trading done using margin amount is called as margin trading.If you use margin amount

then the trades has to be closed on the same day.

Alpha stock - A weighted measure of how much a stock has risen or fallen over a
certain period, usually a year. Generally, more emphasis is placed on recent activity by
assigning higher weights to it than those assigned to earlier movements. This helps to
give a return figure that has a greater focus on the most current period and is a more
relevant measure for short-term analysis.

19
f the stock was up over the period, it will have a positively weighted alpha. An
unchanged stock price has a small weighted alpha. A stock whose price has fallen over
the period will have a negatively weighted alpha. Technical analysts use this measure to
identify companies that have shown a strong trend over the past year and, more
specifically, to focus their attention on companies whose momentum is building.
Beta Stock - Beta is a measure of a stock's volatility in relation to the market. By definition, the
market has a beta of 1.0, and individual
stocks are ranked according to how much they deviate from the market. A stock that swings more
than the market over time has a beta above
1.0. If a stock moves less than the market, the stock's beta is less than 1.0. High-beta stocks are
supposed to be riskier but provide a
potential for higher returns; low-beta stocks pose less risk but also lower returns.

Bull Phase - when the market keeps going up it is called as Bull phase or cycle.

Bear Phase - when the market keeps going down it is called as Bear phase or cycle.

Forex Trading - Trading done in currency is called as Forex trading

Online Share Trading - Buying and selling of shares through internet during market hours is called
as online share trading

Offline Share Trading - Buying and selling of shares through broker and placing orders through
telephone is called as offline share trading. The

offline share trading can be done during live market hours and also when the market is closed by

placing order through telephone to broker.

Mutual Fund - It is a financial instrument which collects money from all investor and then invests in
financial instruments like stocks, bonds, etc. It is managed by fund manager.

Investor - The person investing the money in stocks for long term based on the fundamentals of the
company is called as investor. Long term like 2 to 5 years or even for 10 years.

Trader - The person who trades to make quick money in share market is called as trader. The trader
is not
concerned about the company’s fundamentals. The trader waits for any type of news which gives an
opportunity to make money in a day or in a week or in a month.

Penny stock - The stock price less then Rs 1 is called as penny stock.

Large Cap stocks - Shares of those companies with a market capitalization over Rs. 1000 crores is
called
as large cap stocks

Mid Cap stocks - Shares of those companies with a market capitalization between Rs. 100 crores
and Rs.
1000 crores is called as Mid cap stocks

Small cap stocks - Shares of those companies with a market capitalization less then Rs. 100 crores
is
called as Small cap stocks

20
Future Derivatives - It is the financial instrument whose price depends on the underlying
instrument.
Underlying instrument can be stock, currency, commodity etc. It has expiry of one month. Every last
Thursday it expires. For more information please visit at
www.daytradingshares.com/futures_options_derivatives_trading.html

Option - Please visit this link to get clear understanding of option

http://www.daytradingshares.com/futures_and_options/option_trading_stocks.html

Short Selling - Selling of shares and then buying them at lower price to generate profits is called as
short
selling.
Short selling of shares is done only during day trading.
Futures and options can also be short selled

Buy Back of shares - The buying of shares by a company from open market in order to reduce the
number
of shares in the market. Companies will buy back shares to increase the value of shares whenever
company
feel the share price is undervalued in the open market.
IPO - It stands for Initial public offering. when a company issues common shares to the public for the
first time. They are often issued by
smaller, younger companies seeking capital to expand, but can also be done by large privately-owned
companies looking to become publicly
traded.

FPO - The basic difference between Initial Public Offer (IPO) and Follow on Public Offer (FPO) is as
the names suggest IPO is for the
companies which have not listed on an exchange and FPO is for the companies which have already
listed on exchange but want to raise funds
by issuing some more equity shares.

Right Issue - Issuing rights to a company's existing shareholders to buy a proportional number of
additional shares at a given price (usually
at a discount) within a fixed period.
Day trading - Buy and selling of shares in a day is called as day trading. Day trading can also be
done in futures and in options.

Volatility in Share market - When the share price moves up and down without proper direction is
called as volatility.
Volume - Volume is nothing but quantity in share market.

Stock Broker - The person or company authorized by stock exchange like NSE and or BSE to carry
out buying and selling of shares on behalf

of others.
52 Week High price (52 WH) - The highest price of the stock touched in a year is called as 52
week high price.

52 Week Low (52 WL) - The lowest price of the stock touched in a year is called as 52 week low
price

21
Depository participant (DP) - Depository is an institution or a kind of organization which holds
securities with it, in which trading is done
among shares, debentures, mutual funds, derivatives, F&O and commodities.

Market Trend - It is also called as market direction. Bearish trend means market direction is going
down. Bullish trend means market direction
is going up.

Upper Circuit - when the index or stock goes up by more than a fixed limit the exchange places the
upper circuit for that stock or index.
Trading is then suspended for some time to let the market cool down. Upper circuit is a system lock
used to stop excessive speculation in the
stock market, applied by the stock exchanges.

Lower Circuit - When the index or stock goes down by more than a fixed limit the exchange places

the lower circuit for that stock or index.

Securities and Exchange Board of India

The Securities and Exchange Board of India (SEBI) is the regulator for the securities
market in India. It was established in 1988 and given statutory powers on 12 April 1992
through the SEBI Act, 1992.

22
Securities and exchange Board of India (SEBI) was first established in the year 1988 as a non-statutory body for regulating the
securities market. It became an autonomous body by The Government of India on 12 May 1992 and given statutory powers in
1992 with SEBI Act 1992 being passed by the Indian Parliament. SEBI has its headquarters at the business district of Bandra
Kurla Complex in Mumbai, and has Northern, Eastern, Southern and Western Regional Offices in New
Delhi, Kolkata, Chennai and Ahmedabad respectively. It has opened local offices at Jaipur and Bangalore and is planning to open
offices at Guwahati, Bhubaneshwar, Patna, Kochi and Chandigarh in Financial Year 2013 - 2014.

Controller of Capital Issues was the regulatory authority before SEBI came into existence; it derived authority from the Capital
Issues (Control) Act, 1947.
Initially SEBI was a non statutory body without any statutory power. However, in 1992, the SEBI was given additional statutory
power by the Government of India through an amendment to the Securities and Exchange Board of India Act, 1992. In April 1988
the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India. The SEBI is
managed by its members, which consists of following:
The chairman who is nominated by Union Government of India.Two members, i.e., Officers from Union Finance Ministry. One
member from the Reserve Bank of India. The remaining five members are nominated by Union Government of India, out of them
at least three shall be whole-time members.
After amendment of 1999, collective investment scheme brought under SEBI except NIDHI, chit fund and cooperatives
Functions and Responsibility
The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board
of India as "...to protect the interests of investors in securities and to promote the development of, and to regulate the securities
market and for matters connected there with or incidental there to
SEBI has to be responsive to the needs of three groups, which
constitute the market:

 issuers of securities
 investors
 market intermediaries
SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its
legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in
its judicial capacity. Though this makes it very powerful, there is an appeal process to create accountability. There is a Securities
Appellate Tribunal which is a three-member tribunal and is currently headed by Justice TarunAgarwala, former Chief Justice of
the Meghalaya High Court.[6] A second appeal lies directly to the Supreme Court. SEBI has taken a very proactive role in
streamlining disclosure requirements to international standards.
Powers
For the discharge of its functions efficiently, SEBI has been vested with the following powers:

 to approve by−laws of Securities exchanges.

 to require the Securities exchange to amend their by−laws.
 inspect the books of accounts and call for periodical returns from recognized Securities exchanges.
 inspect the books of accounts of financial intermediaries.
 compel certain companies to list their shares in one or more Securities exchanges.
 registration of Brokers and sub-brokers
There are two types of brokers: Discount brokers & Merchant brokers.
SEBI committee
SEBI committee

Reserve Bank of India (RBI)

23
The Reserve Bank of India (RBI) is India's central banking institution, which controls
the issuance and supply of the Indian rupee. Until the Monetary Policy Committee was
established in 2016,[6] it also controlled monetary policy in India. It commenced its
operations on 1 April 1935 in accordance with the Reserve Bank of India Act,
1934.The original share capital was divided into shares of 100 each fully paid, which
were initially owned entirely by private shareholders.Following India's independence
on 15 August 1947, the RBI was nationalised on 1 January 1949.
The RBI plays an important part in the Development Strategy of the Government of
India. It is a member bank of the Asian Clearing Union. The general
superintendence and direction of the RBI is entrusted with the 21-member central
board of directors: the governor; four deputy governors; two finance
ministryrepresentatives (usually the Economic Affairs Secretary and the Financial
Services Secretary); ten government-nominated directors to represent important
elements of India's economy; and four directors to represent local boards
headquartered at Mumbai, Kolkata, Chennai and the capital New Delhi. Each of
these local boards consists of five members who represent regional interests, the
interests of co-operative and indigenous banks.

24
TECHNICALANALYSIS
What is TechnicalAnalysis
Technical Analysis can be defined as an art and science of forecasting future prices based on
anexaminationofthepastpricemovements.Technicalanalysisisnotastrologyforpredicting prices.
Technical analysis is based on analyzing current demand-supply of commodities, stocks,
indices, futures or any tradableinstrument.

Technical analysis involve putting stock information like prices, volumes and open interest
on a chart and applying various patterns and indicators to it in order to assess the future
price movements. The time frame in which technical analysis is applied may range from
intraday(1-minute,5-minutes,10-minutes,15-minutes,30-minutesorhourly),daily,weekly or
monthly price data to manyyears.

There are essentially two methods of analyzing investment opportunities in the security
marketvizfundamentalanalysisandtechnicalanalysis.Youcanusefundamentalinformation likefinancialandnon-
financialaspectsofthecompanyortechnicalinformationwhichignores fundamentals and focuses on actual
pricemovements.

CANDLE CHARTS

What is a chart

Chartsaretheworkingtoolsoftechnicalanalysts.Theyusechartstoplotthepricemovements of a
stock over specific time frames. It’s a graphical method of showing where stock prices have
been in thepast.

A chart gives us a complete picture of a stock’s price history over a period of an hour, day,
week,monthormanyyears.Ithasanx-axis(horizontal)anday-axis(vertical).Typically,the x-
axisrepresentstime;they-axisrepresentsprice.Byplottingastock’spriceoveraperiodof time, we
end up with a pictorial representation of any stock’s tradinghistory.

A chart can also depict the history of the volume of trading in a stock. That is, a chart can
illustrate the number of shares that change hands over a certain timeperiod.

Types of price charts:

1. Line charts

“Line charts” are formed by connecting the closing prices of a specific stock or market over
a given period of time. Line chart is particularly useful for providing a clear visual illustration
of the trend of a stock’s price or a market’s movement. It is an extremely valuableanalytical
tool which has been used by traders for past manyyears.
Line charts

25
 “Line charts” are formed by connecting the closing prices of a specific stock or market over
a given period of time. Line chart is particularly useful for providing a clear visual illustration
of the trend of a stock’s price or a market’s movement. It is an extremely valuableanalytical
tool which has been used by traders for past manyyears.

Line charts

“Line charts” are formed by connecting the closing prices of a specific stock or market over
a given period of time. Line chart is particularly useful for providing a clear visual illustration
of the trend of a stock’s price or a market’s movement. It is an extremely valuableanalytical
tool which has been used by traders for past manyyears.

NIFTY (Daily) Line Chart

2. Bar chart

Bar chart is the most popular method traders use to see price action in a stock over a
given period of time. Such visual representation of price activity helps in spotting trends and
patterns.

Although daily bar charts are best known, bar charts can be created for any time period -
weekly and monthly, for example. A bar shows the high price for the period at the top and
the lowest price at the bottom of the bar. Small lines on either side of the vertical bar serve
tomarktheopeningandclosingprices.Theopeningpriceismarkedbyasmallticktotheleft of the
bar; the closing price is shown by a similar tick to the right of the bar. Many investors work
with bar charts created over a matter of minutes during a day’strading.

26
NIFTY (Daily) Bar Chart
3. Candlesticks

Formation

Candlestickchartsprovidevisualinsighttocurrentmarketpsychology.Acandlestickdisplays
theopen,high,low,andclosingpricesinaformatsimilartoamodern-daybar-chart,butina
mannerthatextenuatestherelationshipbetweentheopeningandclosingprices.Candlesticks
don’tinvolveanycalculations.Eachcandlestickrepresentsoneperiod(e.g.,day)ofdata.The figure
given below displays the elements of acandle.

A candlestick chart can be created using the data of high, low, open and closing prices for each
time period that you want to display. The hollow or filled portion of the candlestick is called “the
body” (also referred to as “the real body”). The long thin lines above and below the body
represent the high/low range and are called “shadows” (also referred to as “wicks”
and“tails”).Thehighismarkedbythetopoftheuppershadowandthelowbythebottomof
thelowershadow.Ifthestockcloseshigherthanitsopeningprice,ahollowcandlestick is drawn
with the bottom of the body representing the opening price and the top of the body representing
the closing price. If the stock closes lower than its opening price, a filled candlestick is
drawn with the top of the body representing the opening price and the bottom of the body
representing the closingprice.

Each candlestick provides an easy-to-decipher picture of price action. Immediately a trader can
see and compare the relationship between the open and close as well as the high and low. The

27
relationship between the open and close is considered vital information and forms the essence of
candlesticks. Hollow candlesticks, where the close is greater than the open, indicate buying
pressure. Filled candlesticks, where the close is less than the open, indicate
sellingpressure.Thus,comparedtotraditionalbarcharts,manytradersconsidercandlestick charts
more visually appealing and easier tointerpret.

NIFTY (Daily) Candlestick Chart

Why candlestick charts?

WhatdoescandlestickchartingofferthattypicalWesternhigh-lowbarchartsdonot?Instead of
vertical line having horizontal ticks to identify open and close, candlesticks represent two
dimensional bodies to depict open to close range and shadows to mark day’s high andlow.

For several years, the Japanese traders have been using candlestick charts to track market
activity. Eastern analysts have identified a number of patterns to determine the continuation
and reversal of trend.

ThesepatternsarethebasisforJapanesecandlestickchartanalysis.Thisplacescandlesticks rightly
as a part of technical analysis. Japanese candlesticks offer a quick picture into the
psychology of short term trading, studying the effect, not the cause. Applying candlesticks
meansthatforshort-term,aninvestorcanmakeconfidentdecisionsaboutbuying,selling,or holding
aninvestment.

Candlestickanalysis
Onecannotignorethatinvestor’spsychologicallydrivenforcesoffear;greedandhopegreatly
influencethestockprices.Theoverallmarketpsychologycanbetrackedthroughcandlestick
analysis. More than just a method of pattern recognition, candlestick analysis shows the
interactionbetweenbuyersandsellers.Awhitecandlestickindicatesopeningpriceofthe

session being below the closing price; and a black candlestick shows opening price of the
session being above the closing price. The shadow at top and bottom indicates the high and
28
 low for the session.

Japanesecandlesticksofferaquickpictureintothepsychologyofshorttermtrading,studying the
effect, not the cause. Therefore if you combine candlestick analysis with other technical
analysis tools, candlestick pattern analysis can be a very useful way to select entry and exit
points.

One candle patterns

In the terminology of Japanese candlesticks, one candle patterns are known as “Umbrella
lines”. There are two types of umbrella lines - the hanging man and the hammer. They have
longlowershadowsandsmallrealbodiesthatareattopofthetradingrangeforthesession.
Theyarethesimplestlinesbecausetheydonotnecessarilyhavetobespottedincombination with
other candles to have somevalidity.

Hammer andHangingMan HammerHanging ManCandlesticks

Hammer

Hammer is a one candle pattern that occurs in a downtrend when bulls make a start to
step into the rally. It is so named because it hammers out the bottom. The lower shadow of
hammer is minimum of twice the length of body. Although, the color of the body is not of
much significance but a white candle shows slightly more bullish implications than the black
body. A positive day i.e. a white candle is required the next day to confirm thissignal.

Criteria

1. The lower shadow should be at least two times the length of thebody.

2. There should be no upper shadow or a very small uppershadow.

3. The real body is at the upper end of the trading range. The color of the body is not
important although a white body should have slightly more bullishimplications.

4. The following day needs to confirm the Hammer signal with a strong bullishday.

Signal enhancements
1. The longer the lower shadow, the higher the potential of a reversaloccurring.

2. Large volume on the Hammer day increases the chances that a blow off day has
occurred.

3. Agapdownfromthepreviousday’sclosesetsupforastrongerreversalmoveprovided the day

29
 after the Hammer signal openshigher.

Pattern psychology

The market has been in a downtrend, so there is an air of bearishness. The price opens and
startstotradelower.Howeverthesell-offisabatedandmarketreturnstohighforthedayas
thebullshavesteppedin.Theystartbringingthepricebackuptowardsthetopofthetrading range.
This creates a small body with a large lower shadow. This represents that the bears could
not maintain control. The long lower shadow now has the bears questioning whether the
decline is still intact. Confirmation would be a higher open with yet a still higher close on the
next tradingday.

Hanging man

The hanging man appears during an uptrend, and its real body can be either black or white.
While it signifies a potential top reversal, it requires confirmation during the next trading
session. The hanging man usually has little or no upper shadow.

Soybean Oil-December, 1990, Daily (Hanging Man and Hammer)

Dow Jones Industrials-1990, Daily (Hanging Man and Hammer)

Shooting star and invertedhammer

Other candles similar to the hanging man and hammer are the “shooting star,” and the
“inverted hammer.” Both have small real bodies and can be either black or white but they
30
 both have long upper shadows, and have very little or no lower shadows.

Inverted Hammer

Description -:Inverted hammer is one candle pattern with a shadow at least two times greater than the body.
This pattern is identified by the small body. They are found at the bottom of the decline

whichisevidencethatbullsaresteppinginbutstillsellingisgoingon.Thecolorofthesmall body is not

important but the white body has more bullish indications than a black body. A positive day is
required the following day to confirm thissignal.

Signal enhancements
1. The longer the upper shadow, the higher the potential of a reversaloccurring.

2. A gap down from the previous day’s close sets up for a stronger reversalmove.

3. Large volume on the day of the inverted hammer signal increases the chances that a
blow off day hasoccurred

4. The day after the inverted hammer signal openshigher.

Pattern psychology

Afteradowntrendhasbeenineffect,theatmosphereisbearish.Thepriceopensandstartsto trade higher.

The Bulls have stepped in, but they cannot maintain the strength. The existing
sellersknockthepricebackdowntothelowerendofthetradingrange.TheBearsarestillin
control.Butthenextday,theBullsstepinandtakethepricebackupwithoutmajorresistance from the
Bears. If the price maintains strong after the Inverted Hammer day, the signal is confirmed.

Stars
A small real body that gaps away from the large real body preceding it is known as star. It’s still
a star as long as the small real body does not overlap the preceding real body. The color of the
star is not important. Stars can occur at tops or bottoms.

Shooting star

31
 Description

The Shooting Star is a single line pattern that indicates an end to the uptrend. It is easily
identified by the presence of a small body with a shadow at least two times greater than the
body. It is found at the top of an uptrend. The Japanese named this pattern because it looks like
a shooting star falling from the sky with the tail trailing it.

Criteria
1. The upper shadow should be at least two times the length of thebody.

2. Prices gap open after anuptrend.

3. Asmallrealbodyisformednearthelowerpartofthepricerange.Thecolorofthebody
isnotimportantalthoughablackbodyshouldhaveslightlymorebearishimplications.

4. The lower shadow is virtuallynon-existent.

5. ThefollowingdayneedstoconfirmtheShootingStarsignalwithablackcandleorbetter yet, a
gap down with a lowerclose.

Signal enhancements
1. The longer the upper shadow, the higher the potential of a reversaloccurring.

2. A gap up from the previous day’s close sets up for a stronger reversal moveprovided.

3. The day after the Shooting Star signal openslower.

4. Large volume on the Shooting Star day increases the chances that a blow-off day has
occurred although it is not anecessity.

Pattern psychology

Duringanuptrend,themarketgapsopenandralliestoanewhigh.Thepriceopensandtrades higher.
The bulls are in control. But before the close of the day, the bears step in and take
thepricebackdowntothelowerendofthetradingrange,creatingasmallbodyfortheday.

This could indicate that the bulls still have control if analyzing a Western bar chart. However,
the long upper shadow represents that sellers had started stepping in at these levels. Even
though the bulls may have been able to keep the price positive by the end of the day, the

32
 evidence of the selling was apparent. A lower open or a black candle the next day reinforces
the fact that selling is going on.

Two candles pattern

Bullish engulfing

A “bullish engulfing pattern” consists of a large white real body that engulfs a small black
real body during a downtrend. It signifies that the buyers are overwhelming the sellers

Engulfing

Bullish engulfing

Description

The Engulfing pattern is a major reversal pattern comprised of two opposite colored bodies.
This Bullish Pattern is formed after a downtrend. It is formed when a small black candlestick
isfollowedbyalargewhitecandlestickthatcompletelyeclipsesthepreviousdaycandlestick. It
opens lower that the previous day’s close and closes higher than the previousday’s open.

Criteria
1. The candlestick body of the previous day is completely overshadowed by the next day’s
candlestick.

2. Prices have been declining definitely, even if it has been in shortterm.

3. The color of the first candle is similar to that of the previous one and the body of the
secondcandleisoppositeincolortothatfirstcandle.Theonlyexceptionbeinganengulfed body
which is adoji.

Signal enhancements
1. A small body being covered by the larger one. The previous day shows the trend was
runningoutofsteam.Thelargebodyshowsthatthenewdirectionhasstartedwithgood force.

2. Large volume on the engulfing day increases the chances that a blow off day has
occurred.

3. The engulfing body engulfs absorbs the body and the shadows of the previous day; the

33
 reversal has a greater probability ofworking.

4. Theprobabilityofastrongreversalincreasesastheopengapsbetweenthepreviousand the
current dayincreases.

Pattern psychology

After a decline has taken place, the price opens at a lower level than its previous day closing
price. Before the close of the day, the buyers have taken over and have led to an increase in
thepriceabovetheopeningpriceoftheprevious day.Theemotionalpsychologyofthetrend has now
beenaltered.

When investors are learning the stock market they should utilize information that has worked
with high probability in the past.

BullishEngulfingsignalifusedafterpropertrainingandatproperlocations,canleadtohighly
profitable trades and consistent results. This pattern allows an investor to improve their
probabilitiesofbeeninacorrecttrade.Thecommonsenseelementsconveyedincandlestick signals
makes for a clear and concise trading technique for beginning investors as well as
experiencedtraders.

Bearish engulfing

A“bearishengulfingpattern,”ontheotherhand,occurswhenthesellersareoverwhelming the
buyers. This pattern consists of a small white candlestick with short shadows or tails
followed by a large black candlestick that eclipses or “engulfs” the small whiteone.

Bearish Engulfing

34
 Piercing

The bullish counterpart to the dark cloud cover is the “piercing pattern.” The first thing to
lookforistospotthepiercingpatterninanexistingdowntrend,whichconsistsofalongblack
candlestick followed by a gap lower open during the next session, but which closes at least
halfway into the prior black candlestick’s realbody.

Description

The Piercing Pattern is composed of a two-candle formation in a down trending market. With
daily candles, the piercing pattern will often end a minor downtrend (a downtrend that lasts
between six and fifteen trading days). The day before the piercing candle appears, the

35
 daily candle should have a fairly large dark real body, signifying a strong down day.

Criteria
1. The downtrend has been evident for a goodperiod.

2. The body of the first candle is black; the body of the second candle iswhite.

3. A long black candle occurs at the end of thetrend.

4. The white candle closes more than halfway up the blackcandle.

5. The second day opens lower than the trading of the priorday.

Signal enhancements
1. The reversal will be more pronounced, if the gap down the previous day close ismore.

2. The longer the black candle and the white candle, the more forceful thereversal.

3. The higher the white candle closes into the black candle, the stronger thereversal.

4. Large volume during these two trading days is a significantconfirmation.

Pattern psychology

Theatmospherebecomesbearishonceastrongdowntrendhasbeenineffect.Thepricegoes down.
Bears may move the price even further but before the day ends the bulls enters and
bringadramaticchangeinpriceintheoppositedirection.Theyfinishnearthehighoftheday. The
move has almost negated the price decline of the previous day. This now has the bears
concerned. More buying the next day will confirm the move. Being able to utilize information
that has been used successfully in the past is a much more viable investment strategy than
takingshotsinthedark.Keepinmind,whenyouaregivenprivilegedinformationaboutstock market
tips, where you are in the food chain. Are you one of those privileged few that get top-notch
pertinent information on a timely manner, or are you one of the masses that feed into a
frenzy and allow the smart money to make theprofits?

36
37
 Harami

Bearish Harami

In up trends, the harami consists of a large white candle followed by a small white or black
candle (usually black) that is within the previous session’s large real body.

Bearish Harami

Description

Bearish Harami is a two candlestick pattern composed of small black real body contained
within a prior relatively long white real body. The body of the first candle is the same color
as that of the current trend. The open and the close occur inside the open and the close of
the previous day. Its presence indicates that the trend is over.

Criteria
1. The first candle is white in color; the body of the second candle isblack.

2. The second day opens lower than the close of the previous day and closes higher than
the open of the prior day.

3. For a reversal signal, confirmation is needed. The next day should showweakness.

4. The uptrend has been apparent. A long white candle occurs at the end of thetrend.

Signal enhancements
1. The reversal will be more forceful, if the white and the black candle arelonger.

2. The lower the black candle closes down on the white candle, the more convincing that a
reversal has occurred, despite the size of the blackcandle.

38
 3. Pattern psychology

The bears open the price lower than the previous close, after a strong uptrend has been in
effectandafteralongwhitecandleday. Thelongsgetconcernedandstartprofittaking.The
priceforthedayendsatalowerlevel.Thebullsarenowconcernedasthepricecloseslower.
Itisbecomingevidentthatthetrendhasbeenviolated.Aweakdayafterthatwouldconvince
everybody that the trend was reversing. Volume increases due to the profit taking and the
addition of shortsales.

Bullish Harami

A candlestick chart pattern in which a large candlestick is followed by a smaller candlestick

whosebodyislocatedwithintheverticalrangeofthelargerbody.Indowntrends,theharami
consistsofalargeblackcandlefollowedbyasmallwhiteorblackcandle(usuallywhite)that is within
the previous session’s large real body. This pattern signifies that the immediately preceding
trend may be concluding, and that the bulls and bears have called atruce.

Bullish Harami

Description

The Harami is a commonly observed phenomenon. The pattern is composed of a two candle
formation in a down-trending market. The color first candle is the same as that of current
trend. The first body in the pattern is longer than the second one. The open and the close
occurinsidetheopenandthecloseofthepreviousday.Itspresenceindicatesthatthetrend isover.

39
 The Harami (meaning “pregnant” in Japanese) Candlestick Pattern is a reversal pattern. The
pattern consists of two Candlesticks. The first candle is black in color and a continuation of

theexistingtrend.Thesecondcandle,thelittlebellystickingout,isusuallywhiteincolorbut that is
not always the case. Magnitude of the reversal is affected by the location and size of
thecandles.

Criteria
1. The first candle is black in body; the body of the second candle iswhite.

2. Thedowntrendhasbeenevidentforagoodperiod.Alongblackcandleoccursattheend of
thetrend.

3. The second day opens higher than the close of the previous day and closes lower than
the open of the prior day.

4. Unlike the Western “Inside Day”, just the body needs to remain in the previous day’s
body,whereasthe“InsideDay”requiresboththebodyandtheshadowstoremaininside the
previous day’sbody.

5. For a reversal signal, further confirmation is required to indicate that the trend is now
movingup.

Signal enhancements
1. The reversal will be more forceful if the black candle and the white candle arelonger.

2. If the white candle closes up on the black candle then the reversal has occurred in a
convincing manner despite the size of the whitecandle.

Pattern psychology

Afterastrongdown-trendhasbeenineffectandafterasellingday,thebullsopenataprice higher than

the previous close. The short’s get concerned and start covering. The price for the day
finishes at a higher level. This gives enough notice to the short sellers that trend has been
violated. A strong day i.e. the next day would convince everybody that the trend was
reversing. Usually the volume is above the recent norm due to the unwinding of short
positions.

When the second candle is a doji, which is a candle with an almost non-existent real body,
thesepatternsarecalled“haramicrosses.”Theyarehoweverlessreliableasreversalpatterns as
more indecision isindicated.

40
 Three candle pattern

Evening star

The Evening Star is a top reversal pattern that occurs at the top of an uptrend. It is formed by a tall
white body candle, a second candle with a small real body that gaps above the first
realbodytoforma“star”andathirdblackcandlethatcloseswellintothefirstsession’swhite realbody.

Description

TheEveningStarpatternisabearishreversalsignal.LiketheplanetVenus,theeveningstar
representsthatdarknessisabouttosetorpricesaregoingtodecline.Anuptrendhasbeenin
placewhichisassistedbyalongwhitecandlestick.Thefollowingdaygapsup,yetthetrading

range remain small for the day. Again, this is the star of the formation. The third day is a
blackcandledayandrepresentsthefactthatthebearshavenowseizedcontrol.Thatcandle
shouldconsistofaclosingthatisatleasthalfwaydownthewhitecandleoftwodaysprior.The optimal Evening
Star signal would have a gap before and after the starday.

Criteria
1. The uptrend should beapparent.

2. Thebodyofthefirstcandleiswhite,continuingthecurrenttrend.Thesecondcandlehas small trading

range showing indecisionformation.

3. The third day shows evidence that the bears have stepped in. That candle should close at least
halfway down the whitecandle.

Signal enhancements
1. Long length of the white candle and the 41
black candle indicates more forcefulreversal.

2. The more indecision the middle day portrays, the better probabilities that a reversal will occur.

3. A gap between the first day and the second day adds to the probability of occurrence of
 reversal.

4. A gap before and after the star day is even more desirable. The magnitude, that the
thirddaycomesdownintothewhitecandleofthefirstday,indicatesthestrengthofthe reversal.

Pattern psychology

The psychology behind this pattern is that a strong uptrend has been in effect. Buyers have
beenpilingupthestock.However,itisthelevelwheresellersstarttakingprofitsorthinkthe price is fairly
valued. The next day all the buying is being met with the selling, causing for a
smalltradingrange.Thebullsgetconcernedandthebearsstarttakingover.Thethirddayis
alargeselloffday.Ifthereisbigvolumeduringthesedays,itshowsthattheownershiphas dramatically
changed hands. The change of direction is immediately seen in the color of the bodies.

Morning star

Morning star is the reverse of evening star. It is a bullish reversal pattern formed by a tall
blackbodycandle,asecondcandlewithasmallrealbodythatgapsbelowthefirstrealbody
toformastar,andathirdwhitecandlethatcloseswellintothefirstsession’sblackrealbody. Its name indicates
42
that it foresees higherprices.
Description

The Morning Star is a bottom reversal signal. Like the planet Mercury, the morning star,
signifiesbrighterthings–thatissunriseisabouttooccur,orthepricesaregoingtogohigher. A downtrend has
been in place which is assisted by a long black candlestick. There is little about the downtrend
continuing with this type of action. The next day prices gap lower on the open, trade within a small
range and close near their open. This small body shows the beginning of indecision. The next day
prices gap higher on the open and then close much higher. A significant reversal of trend
hasoccurred.

Themakeupofthestar,anindecisionformation,canconsistofanumberofcandleformations.
Theimportantfactoristowitnesstheconfirmationofthebullstakingoverthenextday.That

candle should consist of a closing that is at least halfway up the black candle of two days prior.

Criteria
1. Downtrend should bethere.

2. The body of the first candle is black, continuing the current trend. The second candle is an
indecisionformation.

3. Thethirddayistheoppositecolorofthefirstday.Itshowsevidencethatthebullshave stepped in. That

candle should close at least halfway up the blackcandle.

Signal enhancements
1. Long length of the black candle and the white candle indicates more forcefulreversal.

2. The more indecision that the star day illustrates, the better probabilities that a reversal will
occur.

3. AGapbetweenthefirstdayandtheseconddayaddstotheprobabilityofoccurrenceof reversal.

4. A gap before and after the star day is even moredesirable.

5. Themagnitude,thatthethirddaycomesupintotheblackcandleofthefirstday,indicates the strength of

thereversal.

Pattern psychology
Whileastrongdowntrendhasbeenineffect,thereisalargesell-offday.Thesellingcontinues and bulls
continue to step in at low prices. Big volume on this day shows that the ownership has dramatically
43
changed. The second day does not have a large trading range. The third
day,thebearsstarttoloseconvictionasthebullincreasetheirbuying.Whenthepricestarts moving back into
the trading range of the first day, the sellers diminish and the buyers seize control.
 Doji

Doji lines are patterns with the same open and close price. It’s a significant reversal indicator.

The Importance of the Doji

The perfect dojii session has the same opening and closing price, yet there is some flexibility
tothisrule.Iftheopeningandclosingpricearewithinafewticksofeachother,thelinecould still be viewed as a
doji

The doji is a distinct trend change signal. However, the likelihood of a reversal increases if
subsequent candlesticks confirm the doji’s reversal potential. Doji sessions are important only in
markets where there are not many doji. If there are many doji on a particular chart, one should not
view the emergence of a new doji in that particular market as a meaningful
development.Thatiswhycandlestickanalysisusuallyshouldnotuseintra-daychartsofless
than30minutes.Lessthan30minutesandmanyofthecandlesticklinesbecomedojiornear doji
44
Doji at tops
 ADojistaratthetopisawarningthattheuptrendisabouttochange.Thisisespeciallytrue
afteralongwhitecandlestickinanuptrend.Thereasonforthedoji’snegativeimplicationsin uptrend is
because a doji represents indecision. Indecision among bulls will not maintain the
uptrend.Ittakestheconvictionofbuyerstosustainarally.Ifthemarkethashadanextended
rally,orisoverbought,thenformationofadojicouldmeanthescaffoldingofbuyers’support will giveway.

Dojiarealsovaluedfortheirabilitytoshowreversalpotentialindowntrends.Thereasonmay be that a doji

reflects a balance between buying and selling forces. With ambivalentmarket

participants,themarketcouldfallduetoitsownweight.Thus,anuptrendshouldreversebut a falling market

may continue its descent. Because of this, doji need more confirmation to signal a bottom than they
do atop.
PATTERN STUDY

What are support and resistancelines

Supportandresistancerepresentkeyjunctureswheretheforcesofsupplyanddemandmeet. These lines
appear as thresholds to price patterns. They are the respective lines which stops the prices from
decreasing orincreasing.

A support line refers to that level beyond which a stock’s price will not fall. It denotes that price level
at which there is a sufficient amount of demand to stop and possibly, for a time, turn a downtrend
higher. Similarly a resistance line refers to that line beyond which a stock’s price will not increase. It
indicates that price level at which a sufficient supply of stock is available to stop and possibly, for a
time, head off an uptrend in prices. Trend lines are often referred to as support and resistance lines
on an angle.

Support

A support is a horizontal floor where interest in buying a commodity is strong enough to overcome
the pressure to sell. Support level is the price level at which sufficient demand exists to, at least
temporarily, halt a downward movement in prices. Logically as the price declines towards support
and gets cheaper, buyers become more inclined to buy and sellers
becomelessinclinedtosell.Bythetimethepricereachesthesupportlevel,itisbelievedthat demand will
overcome supply and prevent the price from falling belowsupport.

Support does not always hold true and a break below support signals that the bulls have lost over the bears. A
fall below support level indicates more willingness to sell and a lack of willingness to buy. A break in the levels of
45 reducing and they are ready to sell at even lower prices. In
support indicates that the expectations of sellers are
addition, buyers could not be coerced into buying until prices declined below support or below the previous low.
Once support is broken, another support level will have to be established at a lowerlevel
 ACC chart showing the support level at 720

Resistance

A resistance is a horizontal ceiling where the pressure to sell is greater than the pressure to
buy.ThusaResistancelevelisapriceatwhichsufficientsupplyexiststo;atleasttemporarily,
haltanupwardmovement.Logicallyasthepriceadvancestowardsresistance,sellersbecome
moreinclinedtosellandbuyersbecomelessinclinedtobuy.Bythetimethepricereachesthe resistance level,
it is believed that supply will overcome demand and prevent the price from rising aboveresistance.

Resistance does not always hold true and a break above resistance signals that the bears have lost
over the bulls. A break in the resistance level shows more willingness to buy or lack of incentive to
sell. Resistance breaks and new highs indicate that buyer’s expectations have increased and are
ready to buy at even higher prices. In addition, sellers could not be coerced into selling until prices
rose above resistance or above the previous high. Once
resistanceisbroken,anotherresistancelevelwillhavetobeestablishedatahigherlevel.

MAJOR INDICATORS ANDOSCILLATORS

ATechnicalindicatorisamathematicalformulaappliedtothesecurity’sprice,volumeoropen interest. The result
is a value that is used to anticipate future changes inprices.

Atechnicalindicatorisaseriesofdatapointsderivedbyapplyingaformulatothepricedata
ofasecurity.Pricedataincludesanycombinationoftheopen,high,loworcloseoveraperiod
oftime.Someindicatorsmayuseonlytheclosingprices,whileothersincorporatevolumeand open interest
into their formulas. The price data is entered 46
into the formula and a data point isproduced.
 What Does a Technical indicatoroffer?
Technical analysts use indicators to look into a different perspective from which stock prices can be
analyzed. Technical indicators provide unique outlook on the strength and direction of the underlying
price action for a given timeframe.

Why use indicators?

TechnicalIndicatorsbroadlyservethreefunctions:toalert,toconfirmandtopredict.Indicator
actsasanalerttostudypriceaction,sometimesitalsogivesasignaltowatchforabreakof support. A large
positive divergence can act as an alert to watch for a resistance breakout. Indicators can be used to
confirm other technical analysis tools. Some investors and traders use indicators to predict the
direction of futureprices.

Types of indicators

Indicators can broadly be divided into two types “LEADING” and “LAGGING”.

Leading indicators

Leading indicators are designed to lead price movements. Benefits of leading indicators are early
signaling for entry and exit, generating more signals and allow more opportunities to trade. They
represent a form of price momentum over a fixed look-back period, which is the number of periods
used to calculate the indicator. Some of the wellmore popular leading indicators include Commodity
Channel Index (CCI), Momentum, Relative Strength Index (RSI), Stochastic Oscillator and Williams
%R.

Lagging Indicators

Lagging Indicators are the indicators that would follow a trend rather then predicting a reversal. A
lagging indicator follows an event. These indicators work well when prices move
inrelativelylongtrends.Theydon’twarnyouofupcomingchangesinprices,theysimplytell you what prices
are doing (i.e., rising or falling) so that you can invest accordingly. These
trendfollowingindicatorsmakesyoubuyandselllateand,inexchangeformissingtheearly opportunities,
they greatly reduce your risk by keeping you on the right side of the market. Moving averages and
the MACD are examples of trend following, or “lagging,”indicators.

Moving averages

Oneofthemostcommonandfamiliartrend-followingindicatorsisthemovingaverages.They
smoothadataseriesandmakeiteasiertospottrends,somethingthatisespeciallyhelpfulin volatile markets.
They also form the building blocks for many other technical indicators and overlays.

The two most popular types of moving averages are the Simple Moving Average (SMA) and the
Exponential Moving Average (EMA). They are described in more detail below.
Simple moving average(SMA) 47

A simple moving average is formed by computing the average (mean) price of a security over a
specified number of periods. It places equal value on every price for the time span selected.
 While it is possible to create moving averages from the Open, the High, and the Low data points,
most moving averages are created using the closing price. For example: a 5-
daysimplemovingaverageiscalculatedbyaddingtheclosingpricesforthelast5daysand dividing the total
by5.

The calculation is repeated for each price bar on the chart. The averages are then joined to form a
smooth curving line - the moving average line. Continuing our example, if the next closing price in
the average is 15, then this new period would be added and the oldest day, which is 10, would be
dropped.

The new 5-day simple moving average would be calculated as follows:

Overthelast2days,theSMAmovedfrom12to13.Asnewdaysareadded,theolddayswill be subtracted and

the moving average will continue to move overtime.

Exponential moving average (EMA)

Exponentialmovingaveragealsocalledasexponentiallyweightedmovingaverageiscalculated
byapplyingmoreweighttorecentpricesrelativetoolderprices.Inordertoreducethelagin simple moving
averages, technicians often use exponential moving averages. The weighting applied to the most
recent price depends on the specified period of the moving
average.TheshortertheEMA’speriod,weightisappliedtothemostrecentprice.Forexample:a10-period
exponential moving average weighs the most recent price 18.18% while a 20-period EMA weighs the
most recent price 9.52%. As we’ll see, the calculating and EMA is much harder than calculating an
SMA. The important thing to remember is that the exponential moving average puts more weight on
recent prices. As such, it will react quicker to recent price changes than a simple moving average.
Here’s the calculationformula.

Exponential moving average calculation

Exponential Moving Averages can be specified in two ways - as a percent-based EMA or as a period-
based EMA. A percent-based EMA has a percentage as its single parameter while a period-based EMA
has a parameter that represents the duration of the EMA. The formula for an exponential moving
averageis:

EMA (current) = ((Price (current) - EMA (prev)) x (Multiplier) + EMA (prev)

For a percentage-based EMA, “Multiplier” is equal to the EMA’s specified percentage. For a period-
based EMA, “Multiplier” is equal to 2 / (1 + N)
48where N is the specified number of periods.

For example, a 10-period EMA’s Multiplier is calculated like this:

 This means that a 10-period EMA is equivalent to an 18.18% EMA.

The 10-period simple moving average is used for the first calculation only. After that the previous
period’s EMA is used.

Notethat,inexponentialmovingaverage,everypreviousclosingpriceinthedatasetisused in the
calculation. The impact of the older data never disappears though it diminishes over a period of time.
This is true regardless of the EMA’s specified period. The effects of older data diminish rapidly for
shorter EMA’s than for longer ones but, again, they never completely disappear.

Simple versus exponential

Generally you will find very little difference between an exponential moving average and a
simplemovingaverage.Considerthisexamplewhichusesonly21tradingdays,thedifference
isminimalbutadifferencenonetheless.Theexponentialmovingaverageisconsistentlycloser to the actual
price. On average, the EMA is 3/8 of a point closer to the actual price than the SMA.

Moving average settings

Oncethesecurityexhibitingtheabovecharacteristicsisselectedthenexttaskistoselectthe
numberofmovingaverageperiodsandtypeofmovingaverage.Thenumberofperiodsin

a moving average will depend upon the security’s volatility, trend and personal preferences. Shorter
length moving averages are more sensitive and identify new trends earlier, but also give more false
alarms. Longer moving averages are more reliable but less responsive, only
pickingupthebigtrends.Thereisnopredeterminedorfixedlengthofmovingaverages,but some of the more
popular lengths include 21, 50, 89, 150 and 200 days as well as 10, 30 and 40 weeks. Short-term traders
may look for evidence of 2-3 week trends with a 21-day movingaverage,whilelonger-
terminvestorsmaylookforevidenceof3-4monthtrendswith a 40-week moving average. You

should examine how the moving average fits with the price
data.Iftherearetoomanybreaks,lengthenthemovingaveragetodecreaseitssensitivity.If
themovingaverageisslowtoreact,shortenthemovingaveragetoincreaseitssensitivity.In
addition,youmaywanttotryusingbothsimpleandexponentialmovingaverages.Exponential moving averages
are usually best for short-term situations that require a responsive moving average. Simple moving
averages work well for longer-term situations that49
do not require a lot ofsensitivity.

Trend identification/ Confirmation

Moving averages are helpful in keeping you in line with the price trend by providing buy signals shortly
after the market bottoms out and sell signals shortly after it tops, rather than trying to catch the exact

bottom or top.

There are three ways to identify the trend with moving averages: direction, location and crossovers.

Thefirsttrendidentificationtechniqueusesthedirectionofthemovingaveragetodetermine the trend. The trend

is considered up when moving average is continuously rising. If the
movingaverageisdeclining,thetrendisconsidereddown.Thedirectionofamovingaverage can be determined
simply by looking at a plot of the moving average or by applying an indicator to the moving average. In
either case, we would not want to act on every subtle change, but rather look at general directional
movement andchanges.

Thesecondtechniquefortrendidentificationispricelocation.Thebasictrendcanbedetermined through location

of the price relative to the moving average. If the price is located belowthe

moving average then there is a downward trend in place and visa versa for the price being located above
the moving average.

The third technique for trend identification is the location of the shorter moving average relative to the
longer moving average. The trend will go up is going up if the shorter moving average is above the longer
moving average. If the shorter moving average is below the longer moving average, the trend is
considered down.A variable moving average is an exponential moving average that automatically adjusts
the smoothing percentage based on the volatility of the data series. Such moving average compensates
for trading-range versus trending markets. This MA automatically adjusts the smoothing constant to
adjust its sensitivity, often allowing it to outperform the othermoving averages in these difficultmarkets.

Because of the potential for false signals MAs should always be used in conjunction with the other
indicators. For example Bollinger bands adjust in distance from a moving average
basedonvolatility,usingstandarddeviationaboveandbelowthemovingaverageratherthan
percentages.Indicatorswhichareespeciallywell-suitedforbeingusedwithmovingaveragesinclude

MACD, Price ROC, Momentum, and Stochastic. A moving average of another moving average is also
common.

False signals can be avoided by using a filtering mechanism. Many traders, for example, recommend
waiting for one period - that is one day for daily data and one week for weekly data.

Whenever possible try to use a combination of signals. MA crossovers that take place at the same
time as trend line violations or price pattern signals often provide strong confirmation.

Signals - multiple movingaverages

It is usually advantageous to employ more 50

than one moving average. Double and triple MAs often
provide useful signals.

With two MAs the double crossover is used. When the short term moving average crosses
 thelongtermmovingaveragetothedownside,thenasellsignalwouldbetriggeredandvisa versa.

Forexample,twopopularcombinationsarethe5and20-dayaveragesandthe20and 100-day averages.

The technique of using two averages together lags the market a bit more than a single moving
average but produces fewerwhipsaws.

Many investors use the triple moving average crossover system to buy and sell stock. The most
widely used triple crossover system is the popular 4-9-18-day MA combination. A buy
signalisgenerated

whentheshortest(andmostsensitive)average-the4day-crossesfirst the9-dayandthenthe18-
dayaverages,eachcrossoverconfirmingthechangeintrend.

Oscillators

Relative Strength Index(RSI)

The RSI is part of a class of indicators called momentum oscillators.

There are a number of indicators that fall in this category, the most common being Relative Strength
Index, Stochastic, Rate of Change, Williams %R. Although these indicators are all calculated
differently, there are a number of common elements to their use which shall be discussed in the
context of the RSI.

RISK MANAGEMENT
Riskisthereineverybusinessandproperriskmanagementisroadtosuccessforanybusiness. Equity trading is a lucrative
business which is very rewarding but this reward is not risk free, as theoretically and practically risk free trade does
not exist. Because risk is associated with the reward, it becomes essential to manage risk in order to protect
one’scapital.

Components of risk management

Stop loss

Stop loss is an integral part of risk management. Stop loss is an order placed to buy or sell security
51
once certain price is reached. It is basically designed to limit the amount of loss on buy/sell position.
In fact by placing the stop loss one is just closing the losing position and limiting the amount of loss
which can increase beyond imagination.
Analyze reward risk ratio
Before initiating a trade, the trade should analyze reward risk ratio. On a conservative basis if the
said ratio is less than 1.5 then one should not initiate the trade.
Trail stoploss
Initially stop loss is placed to protect one’s capital on a losing trade, but once the trade is in profit
stop loss should be so moved that trade is at zero risk even if trailed stop loss gets triggered.

Booking profit
Profit is the only goal for which we all trade. But at the same time profit is profit only when it is
realized otherwise its notional profit. Hence one should book profit at predefined target
levelsandoneshouldnotbecarriedawaybyone’semotionsspeciallygreedwhenpricesare near to
predefined targetlevels.
Use of stop loss
AtradershouldalwaysputStopLossandtradeafractionofhiscapital.Itisveryimportantfor
thetradertohavesoundknowledgeintheareaconcernedandshouldbecomfortablewiththe trading system.
He should be aware that it is possible and inevitable to have a losing streak of five losses in a row.
This is called drawdown. This awareness will help the traders prepare as to how to control risk and
choose their tradingsystem.What we are striving for is a balanced growth in the trader’s equity curve
over time.

Qualities of successfultraders:
1. Always usestops
2. Trade size should be determined on the basis oftradingaccountequity, and stop loss price for
everytrade.

3. Never trade more than 10% on any givesector

4. Never exceed a loss of 2 to 5% on any giventrade

5. Trade size should be determined on the basis oftradingaccountequity, and stop loss price for
everytrade.

6. Never trade more than 10% on any givesector

7. Never exceed a loss of 2 to 5% on any giventrade

8. Always trade with risk capital, money you can afford tolose.

9. Always trade with risk capital, money you can afford tolose.
10. Trade size should be determined on the basis oftradingaccount equity, and stop loss price
for everytrade.

11. Never trade more than 10% on any givesector

12. Never exceed a loss of 2 to 5% on any giventrade

13. Always trade with risk capital, money you can afford tolose.

14. Never trade with borrowed money and don’t overtrade basedonthe time frame you have chosen
52
totrade

15. Trade size should be determined on the basis oftradingaccountequity, and stop loss price for
everytrade.
 16. Never trade more than 10% on any givesector

Introduction
Mudrabiz is India's premier "Finance Services" Company, with over years of experience in helping
people protect and grow their wealth. We've helped to create more capital than any other firms
in India. But it is our deep personal relationships with clients that truly set us apart..
No other firm can match the depth of our experience and our dedication to personal service. The
markets may fluctuate, but our dependability never does.
With, Headquarters in PUNE, INDIA. Since 2014, we have assisting our valuable customer to take
better business and investment decision- in India and across the Globe. We educate the youth of
the Nation to be better finance professionals & provide them great opportunities with their
careers.

Composition of board
The company was founded in the year 2014 and is currently governed by a founder-Mr
Amresh Dash (Director)
- Chinmayee Desai((HR)

Vision
Helping people to protect and grow their wealth Mudrabiz is India's premier "Finance Services"
Company, with over years of experience in helping people protect and grow their wealth. We've
helped to create more capital than any other firms in India. But it is our deep personal
relationships with clients that truly set us apart..
No other firm can match the depth of our experience and our dedication to personal service. The
markets may fluctuate, but our dependability never does.
With, Headquarters in PUNE, INDIA. Since 2014, we have assisting our valuable customer
to take better business and investment decision- in India and across the Globe. We educate
the youth of the Nation to be better finance professionals & provide them great
opportunities with their careers.
53
Service
1.Stock broking

Mudrabiz have a tie up with B.N Rathi Securities Ltd hyderabad & PROFITMART Securities
Ltd.Mumbai.Both deal with-

-Equity Long-term wealth generation

-Derivative High profits at a low cost

-Mutual Funds Portfolio diversification for investors

-Currency Portfolio with a global asset

-Commdities An exciting opportunity to enhance your portfolio

Product/ service Portfolia of Mudrabiz

Equity Derivative Commodities Mutual Fund Currency

2.Advisory

Our advisory basically provides the recommendations for Stocks-Cash and F&O traded in
NSE and commodities bullion, metals and agro-commodities traded in MCX, NCDEX.

We work with various kinds of strategies to delight the customers by providing continues profit in the market.

We offer diversified range of services as per the investments of an investor, trader and broker.

We strictly follow the basic principles of the investment.

4. Education

Mudrabiz have 54taken bold steps to empower the state’s youth with financial
knowledge that will lead to future stability and success in homes and the economy.We are empowering the
youth to emerge strong in the field of finance. With 250+
Successful placement record we have a target to generate more awareness about Capital Markets believing it
to be a major source of economy.From a trading perspective, exposure to live trading in equity, derivative,
currency and commodity would be provided.InMudrabiz we don’t only educate you but also provide you with a
unique 100% Job Guarantee, Securing your careers.Become a complete Financial Market professional with us.

Our Modules:

 Basic Module
 Standard Module
 Advanced Modules
 Professional Module

4.Placement

Banking and finance has come up as one of main industries that are in need of high intellect and is seeing growth rate
that is faster than ever before.Further, with overall industrial as well as economic development, there is also need of
handling the funds that rapidly change hands and find their way through banking and finance institutions, thus making
this industry sector as a hub of all commercial activities as well as basis of every business.

55
Research Methodology

Research is careful investigation of inquiry specially through search for new fact in any branch of knowledge.

Once can also defend research as a scientific and systematic search for pertinent information on specific topic.

Research Methodology:

The process used to collect information and data for the purpose of making business decisions.The methodology may include
publication research,interviews surveys and other research techniques, and could both present and historical information.

It has been defined also as fellows:

1-“the analysis of the principle of methods, rules and postulates employed by a discipline”

2-“the systematic study of methods that are, can be, or have been applied within a discipline”
3- “the study or description of methods”

Data Analysis:
Primary data : The primary data is collected using Sampling Method and by survey using questionnaire .
Secondary data: secondary data is collected from the book, journals, related to training & development.
The data in this project is used ins secondary data for the purpose of analysis.
Type of research:
Type of research is used in this project is Analysis research.
In Analysis Research, the researcher has to use facts or information already available, and analyse them to make a
critical evalution of the market.
Data collection:
The data of infrastructure sector has been collected from the website-

https://in.investing.com
https://www.moneycontrol.com
https://www.screener.in

https://www.investopedia.com

56
Data Interpretation & Analysis

57
 Larsen & Turbo Ltd
 Market Cap: 192,434 Cr.
 Current Price: 1,372
 52 weeks High / Low Rs 1607.00 / 1182.50
 Book Value: 374.54
 Stock P/E: 30.53
 Dividend Yield: 1.31 %
 ROCE: 17.11 %
 ROE: 12.44 %
 Sales Growth (3Yrs): 11.25 %
 Face Value Rs: 2.00

Introduction
Larsen & Toubro originated from a company founded in 1936 in Mumbai by two Danish engineers, Henning Holck-
Larsen and Søren Kristian Toubro. The company began as a representative of Danish manufacturers of dairy
equipment. However, with the start of the Second World War in 1939 and the resulting restriction on imports, the
partners started a small workshop to undertake jobs and provide service facilities. Germany's invasion of Denmark in
1940 stopped supplies of Danish products. The war-time need to repair and refit ships offered L&T an opportunity, and
led to the formation of a new company, Hilda Ltd, to handle these operations. L&T also started to repair and fabricate
ships signalling the expansion of the company. The sudden internment of German engineers in British India (due to
suspicions caused by the Second World War), who were to put up a soda ash plant for the Tata's, gave L&T a chance to
enter the field of installation.
In 1944, ECC was incorporated by the partners; the company at this time was focused on construction projects
(Presently, ECC is the construction division of L&T). L&T began several foreign collaborations. By 1945, the company
represented British manufacturers of equipment used to manufacture products such as hydrogenated oils, biscuits,
soaps and glass. In 1945, the company signed an agreement with Caterpillar Tractor Company, USA, for
marketing earth moving equipment. At the end of the war, large numbers of war-surplus Caterpillar equipments were
available at attractive prices, but the finances required were beyond the capacity of the partners. This prompted them to
raise additional equity capital, and on 7 February 1946, Larsen & Toubro Private Limited was incorporated.
After India's independence in 1947, L&T set up offices in Calcutta (now Kolkata), Madras (now Chennai) and New Delhi.
In 1948, 55 acres of undeveloped marsh and jungle was acquired in Powai, Mumbai. A previously uninhabitable swamp
subsequently became the site of its main manufacturing hub. In December 1950, L&T became a public company with a
paid-up capital of ₹20 lakh (US$29,000). The sales turnover in that year was ₹1.09 crore (US$160,000). In 1956, a
major part of the company's Mumbai office moved to ICI House in Ballard Estate, which would later be purchased by the
company and renamed as L&T House, its present headquarters. Larsen & Toubro is a major technology, engineering,
construction, manufacturing and financial services conglomerate, with global operations. L&T addresses critical
needs in key sectors - Hydrocarbon, Infrastructure, Power, Process Industries and Defence - for customers in over
30 countries around the world.

L&T is engaged in core, high impact sectors of the economy and our integrated capabilities span the entire
spectrum of ‘design to deliver’. With 8 decades of a strong, customer focused approach and a continuous quest for
world-class quality, we have unmatched expertise across Technology, Engineering, Construction, Infrastructure
Projects and Manufacturing, and maintain a leadership in all our major lines of business.
Every aspect of L&T's businesses is characterised by professionalism and high standards of corporate
governance. Sustainability is embedded into our long-term strategy for growth.
The Company’s manufacturing footprint extends across eight countries in addition to India. L&T has several
international offices and a supply chain that extends around the globe.

58
Business Segment

Larsen & Toubro is a major technology, engineering, construction, manufacturing and

financial services conglomerate, with global operations. L&T addresses critical needs in
key sectors - Hydrocarbon, Infrastructure, Power, Process Industries and Defence - for
customers in over 30 countries around the world.

Vision
●L&T shall be professionally managed Indian multinational committed total
customer satisfaction and enhancing shareholders value.
● L&T-ites shall be innovative entrepreneurial and attending global benchmarks.
● L&T shall foster a culture of caring,trust and continuos learning while meeting expectation
of employees,stakeholders and society.

Mission
We be:
● Be responsive to customer needs,delivering optimal solutions and value-addaed services.
● Ensure sustainable growth and professional excellence using state-of-the-art technology,
process-driven approaches,eco-friendly solutions and IT ended tools
● Foster a culture of mutual trust,respect,teamwork, continuous learning,innovation.challenge
and employee empowerment to provides a growth-oriented workplace.
● Remain flexible and agile,continually adapting to the changing business environment.

59
One year chart of Larsen & turbo ltd

60
Peer company sector: Infrastructure
S.no Name CMP P/E Mar cap DivYld% NP Qtr QtrProfitVar sales QtrSales ROCE
RS. Rs.cr Rs.cr % QtrRs.Cr Var % %

1 L&T 1376.35 21.44 193114.47 1.31 1472.58 26.53 29635.95 9.74 13.46

2 GMR 14.45 8721.94 0.00 - -2747.25 198.54 -6.01 3.92

2341.25
3 RITES 301.85 13.58 6037.00 4.22 131.82 70.18 714.32 31.42 29.71

4 Engineer 95.20 16.26 6015.80 4.20 94.90 37.70 612.61 20.19 22.59

5 Ashoka 119.25 3347.62 0.45 17.87

6 Techno 220.20 15.16 2752.20 0.00 30.84 15.42 18.61 42.52 26.06
Elec
Engg

Quatorly Result:
Jun2017 Sep2017 Dec2017 Mar2018 jun2018 sep2018 Dec2018 Mar2018 Jun2019
Sale+ 23811 26447 28747 40678 27005 32081 35709 43303 29636

Expenses+ 20342 21964 24078 33689 22592 26523 29721 36058 24238

Operating 3469 4483 4670 6989 4413 5558 5988 7246 5398
profit
OPM% 15% 17% 16% 17% 16% 17% 17% 17% 18%

Other 366 536 200 413 313 720 591 813 403
income
Interest 1.758 1913 1889 1997 2019 2187 2511 2473 2665
Deprication 551 431 454 492 605 516 449 435 461

Profit before 1525 2675 2526 4913 2103 3576 3619 5151 2674
tax
Tax % 30% 20% 29% 30% 42% 25% 33% 24% 30%

Net profit 1820 1820 3167 3167 1215 2230 2042 3418 1473

Profit & loss Consolidation in Rs.cr:

TTM
Mar 2016 Mar 2017 Mar 2018 Mar2019

Sales 101,122 109,312 119,683 141,007 140,729

Expenses 85,416 92,972 97,839 117,134 116,539

Operating Profit 15,706 16,339 21,844 23,874 24,190

OPM % 16% 15% 18% 17% 17%

Other Income 999 1,747 -268 2,146 2,527

Interest 6,899 6,829 7,714 9,355 9,837

Depreciation 1,787 2,370 2,223 2,084 1,861

Profit before tax 8,020 8,887 11,639 14,581 15,019

Tax % 30% 23% 27% 30%

Net Profit 4,281 6,041 7,370 8,905 9,163

EPS in Rs 30.63 43.17 52.59 63.48

Dividend Payout % 40% 22% 30% 28%

61
*
Sales is net of excise duty and discounts
Compounded Sales Growth
10 Years: 13.33%
5 Years: 10.64%
3 Years: 11.72%
TTM: 14.53%
Compounded Profit Growth
10 Years: 11.45%
5 Years: 14.29%
3 Years: 27.87%
TTM: 19.12%

Return on Equity

10 Years: 14.12%
5 Years: 13.15%
3 Years: 14.64%
Last Year: 14.56%

Balance Sheet Consolidated Figures in Rs. Crores:

Mar2017 Mar2018 Mar2019

Share Capital 187 1,186 1,257

Reserves 49,877 54,466 61,941

Borrowings 93,954 106,619 124,579

Other Liabilities 71,374 84,415 94,691

Total Liabilities 215,391 245,781 281,492

Fixed Assets 16,677 18,580 21,194

CWIP 13,298 13,443 13,919

Investments 19,753 15,311 21,120

Other Assets 165,663 198,446 225,258

Total Assets 215,391 245,781 281,492

62
Cash Flows Consolidated Figures in Rs. Crores:
Mar2019
Mar 2017 Mar 2018

Cash from Operating

Activity
6,655 -10,031 -4,717

Cash from Investing

Activity
-9,796 3,914 -10,999

Cash from Financing

Activity
2,896 9,370 15,441

Net Cash Flow -245 3,254 -275

Ratios Consolidated Figures in Rs. Crores:

Mar2017 Mar2018 Mar2019

ROCE % 11% 14% 13%

Debtor Days 96 101 96

Inventory Turnover 24.31 26.63 25.04

63
 Jaiprakash Associates Ltd

Jaiprakash Associates Ltd is a diversified infrastructure company. The Company's principal business activities include
engineering, construction and real estate development, and manufacture of cement.The Jaypee Group is an
Indian conglomerate based in Noida, India. It was founded by Jaiprakash Gaur which is involved in well diversified
infrastructure conglomerate with business interests in Engineering & Construction, Power, Cement, Real Estate, Hospitality,
Expressways, IT, Sports & Education (not-for-profit). In November 2017 the Supreme Court of India barred the directors from
selling their assets.

 Market Cap: 583.79 Cr.

 Current Price: 2.40
 52 weeks High / Low 16.25 / 2.30
 Book Value: 4.34
 Stock P/E:
 Dividend Yield: 0.00 %
 ROCE: -3.22 %
 ROE: -73.20 %
 Sales Growth (3Yrs): -27.02 %
 Listed on BSE and NSE
 Face Value: 2.00

Introduction
Jaiprakash Gaur is the founder and was chairman of Jaiprakash Associates Limited. After acquiring a Diploma in Civil
Engineering in 1950 from the now called Indian Institute of Technology Roorkee (IITR) in Roorkee, Uttarakhand, he had a stint
with the Government of Uttar Pradesh. Later he became an entrepreneur, started as a civil contractor in 1958. Now the Jaypee
group is the third largest cement producer in the country. The group's cement facilities are located today all over India in 10
states, with 18 plants having an aggregate cement production capacity of 24 million tonnes and same is poised to become
36 million Tonnes before October 2011.[4]

 1982 – Hotel Vasant Continental was set up

 1986 – Commissioning of first unit of 1 MTPA Jaypee Rewa Plant (JRP) in District Rewa, MP Formation of Jaiprakash
Industries Ltd (JIL)
 1987 – JIL listed on Bombay Stock Exchange
 1991 – Commissioning of 2nd unit of 1.5 MTPA Jaypee Rewa Plant
 1992 – Jaiprakash Hydro Power Ltd established to operate 300 MW Baspa II HE Project, Jaiprakash Power Ventures Ltd
established to operate 400 MW Vishnuprayag HE project
 1993 – JIL signs a memorandum of understanding to develop and operate 1,000 MW KarchamWangtoo Hydroelectric
Plant
 1995 – Bela Cement Ltd incorporated to establish third Cement Plant at Bela, Hotel Jaypee Residency Manor set up
 1996 – Commissioning of the third cement plant 1.7 64
MTPA Jaypee Bela Plant in District Rewa, MP
 1999 – Hotel Jaypee Palace, Agra set up
 2000 – Jaypee Greens Ltd – 458-acre (1.85 km2) golf-centric real estate company comes into being
 2001 – Jaypee Institute of Information Technology (deemed University since 1 November 2004) set up at Noida.
 2002 – Jaypee Karcham Hydro Corporation Ltd established to operate 1,000 MW KarchamWangtoo HE Project, Jaypee
University of Information Technology at Waknaghat, Himachal Pradesh is founded.
 2003 – Jaypee Hotel Training Centre (JHTC) is set up at Agra to train students in hotel management. In 2007 the institute
changed its program from a diploma course to a degree course and increased the length of study from two to three years.
 2003 – Jaypee Institute of Engineering Technology (Constituent Centre of JUIT, Waknaghat) set up at Raghogarh, Guna.
Later this institute was declared first private state university of Madhya Pradesh as Jaypee University of Engineering &
Technology. Also first Captive Thermal Power Plant of 25 MW commissioned at JRP. Formation of Jaiprakash Associates
Ltd (JAL) by merging JIL with Jaypee Cement Ltd
 2004 – Commissioning of second Captive Power Plant of 25 MW at Jaypee Bela Plant
 2005 – Shares of JHPL listed on BSE/NSE. First hydropower company to be listed in the country
 2006 – Setting up of Madhya Pradesh Jaypee Minerals Corporation Ltd (MPJMCL) in JV with MP State
 2007 – Signing of a joint venture agreement with Steel Authority of India Ltd for setting up a 2.0 MTPA slag based cement
plant at Bhilai.
 2008 – Jaypee Ganga Infrastructure Corporation Ltd incorporated for implementation of 1,047 km long, eight-lane,
access-controlled expressway between Greater Noida and Ballia in Uttar Pradesh, Chunar, and Dalla cement plants
(UPPCL) in UP commissioned
 2009 – Amalgamation of four Group Companies, namely, Jaypee Cement Limited, Gujarat Anjan Cement Limited of
Gujarat-based infrastructure conglomerate Anjan Group, Jaypee Hotels Limited and Jaiprakash Enterprises Limited with
flagship company JAL. Acquired Sangam Power Generation Company Ltd. Signing of MOU for setting up a 2 million
tonnes per annum capacity cement plant in joint venture with Assam Mineral Development Corporation Limited (AMDC).
Group is setting up a Jaypee Hitech Casting Centre. Amalgamation of Jaiprakash Power Ventures Ltd. with Jaiprakash
Hydro-Power Ltd.; the name of the Company i.e., Jaiprakash Hydro-Power Ltd. changed to Jaiprakash Power Ventures
Ltd.
 2010 – Commissioning of 1.75 MnTPA Jaypee Himachal Cement Grinding and Blending Plant, Bagheri (H.P.)., 2.2
MnTPABhilai Jaypee Cement Ltd., Satna (Madhya Pradesh)., 1.2 million tonnes Jaypee Roorkee Cement Grinding Unit
(JRCGU) at Roorkee, Uttarakhand.
 2011 – Buddh International Circuit – Greater Noida.
 2012–Yamuna Expressway-New Delhi NOIDA -Agra Express eight-lane highway. Project completed on 9 August 2012,
and opened to general public.
 2014-Himalayan Expressway-Zirakpur - Kalka six-lane highway. Project completed and opened to general public.

Business Segment:

●Engineering
●Construction
●Cement
●Power
●Hospitality
●Real Estate
● Expressways
● Information Technology

Vision:Our vision is to continue to be an environmentally responsible organization making continuous improvements in

the management of the environment. The Group adopts an Integrated Environment Management approach, which focuses
on People, Technology and Facilities, supported by Management Review Group (MRG) as the prime driver of the
Environment Management Policy Initiative.In a nutshell the environmental vision encompasses the following objectives:

● Efficient & optimum utilization of available resources

● Minimization of waste

● Maximization of waste materials utilization

65
● Providing and maintaining of green belts all around production zone.
● Work on philosophy of ‘Zero Discharge’ from the Units
MontlyCandla stick of Jaiprakash associates ltd:

Weekly candle stick of Jaiprakash associates ltd:

66
One month graph with different indicators:

One year chart of Jaiprakash Associates ltd

67
Peer Comparison Sector:

Qtr Qtr
Mar NP Sales
S.No. Name CMP Rs. P/E DivYld % Profit Sales ROCE %
Cap Rs.Cr. Qtr Rs.Cr. Qtr Rs.Cr.
Var % Var %

1. Rail Vikas 23.40 7.71 5139.16 3.25 185.84 7.68 3418.44 28.99 10.94

2. PNC Infratech 183.90 14.94 4854.79 0.26 139.93 25.48 1075.71 41.75 13.64

3. NCC 73.15 7.19 4650.69 1.29 187.57 269.02 3761.08 43.77 13.15

KNR
4. 268.25 14.47 3840.21 0.15 92.15 18.23 715.71 14.63 23.80
Construct.

Gayatri
5. 142.25 2747.85 0.00 12.63
Projects

6. Sadbhav Infra. 68.55 2522.40 0.70 -83.17 -1.11 895.44 18.23 10.02

7. SadbhavEngg. 140.50 2420.84 0.71 11.28

8. JP Associates 2.20 557.43 0.00 -574.62 -38.85 2419.61 -7.84 -3.22

Quarterly Results Consolidated Figures in Rs. Crores

JUN2018MAR2019 JUN2019

Sales 2,625 2,778 2,420

Expenses 2,392 2,570 2,344

Operating Profit 234 208 75

OPM % 9% 8% 3%

Other Income -177 -42 29

Interest 631 652 681

Depreciation 164 245 172

Profit before tax -738 -731 -749

Tax % -0% -25% -0%

Net Profit -606 -729 -575

68
Profit & Loss Consolidated Figures in Rs. Crores

Mar 2016 Mar2017 Mar2018

Sales 18,397 13,759 7,645

Expenses 13,525 12,070 8,394

Operating Profit 4,871 1,689 -750

OPM % 26% 12% -10%

Other Income 75 -2,935 1,421

Interest 7,847 7,469 2,486

Depreciation 1,820 1,888 782

-
Profit before tax -4,721 -10,603
2,597

Tax % 33% 11% 0%

-
Net Profit -2,951 -8,706
1,937

EPS in Rs 0.00 0.00 0.00

Dividend Payout % -0% -0% -0%

* Sales is net of excise duty and discounts

Compounded Sales Growth
10 Years: 6.19%
5 Years: -16.60%
3 Years: -27.02%
TTM: None%
Compounded Profit Growth
10 Years: %
5 Years: %
3 Years: 11.35%
TTM: None%

Return on Equity
10 Years: -12.09%
5 Years: -29.64%
3 Years: -43.84%
Last Year: -73.20%

69
Balance Sheet Consolidated Figures in Rs. Crores:

Mar 2017 Mar 2018 Mar2019

Share Capital 486 486 486

Reserves 3192 4167 569

Borrowings 38953 28814 25718

Other Liabilities 23099 18755 29750

Total Liabilities 65730 52223 56523

Fixed Assets 18589 19151 19779

CWIP 2866 1463 673

Investments 2127 1318 1210

Other Assets 42148 30291 34860

Total Assets 65730 52223 56523

Cash Flows Consolidated Figures in Rs. Crores:

Mar 2017 Mar 2018 Mar2019

Cash from Operating

6676 5793 -855
Activity+

Cash from Investing Activity+ -3608 -1426 15122

Cash from Financing

-518 -45541 -14220
Activity +

Net Cash Flow -430 -187 47

Ratios Consolidated Figures in Rs. Crores:

Mar 2018
Mar 2017 Mar 2018

ROCE % 4% -0% -3%

Debtor Days 84 49 92

Inventory Turnover 1.34 26.63 0.59

70
 Reliance Infrastructure Ltd

Reliance Infrastructure (RInfra) is involved in the infrastructure sector. The Company is a utility company with presence
across the chain of power businesses, such as generation, transmission, distribution and power trading.

 Market Cap: 1,127 Cr.

 Current Price: 42.85
 52 weeks High / Low 489.55 / 37.25
 Book Value: 539.02
 Stock P/E: 0.31
 Dividend Yield: 22.17 %
 ROCE: 13.05 %
 ROE: 1.35 %
 Sales Growth (3Yrs): 17.73 %
 Face value: 10.00
 Listed on BSE and NSE

Introduction
Reliance Infrastructure Limited (R-Infra), formerly Reliance Energy Limited (REL) and Bombay Suburban Electric Supply
(BSES), is an Indian private sector enterprise involved in power generation, infrastructure, construction and defence.[5] It is
part of the Reliance Anil Dhirubhai Ambani Group. The company is headed by its Chairman, Anil Ambani, and Chief Executive
Officer, Punit Garg (since April 06, 2019). The corporate headquarters is in Navi Mumbai.[6] Reliance Infrastructure's interests
are in the fields of power plants, metro rail, airports, bridges, toll roads, and defence. It is a major shareholder in the other
group company, Reliance Power and Reliance Naval and Engineering Limited.In Fortune India 500 list of 2017, Reliance
Infrastructure was ranked as the 47th largest corporation in India with first rank in 'Infrastructure Development' category. As of
March 2018, Reliance Infrastructure has 56 subsidiaries,71 8 associate companies, and 2 joint-ventures. The EPC Business
division of the company in 2018 has bagged various orders, including ₹7,000 crore Versova-Bandra Sea Link project[7],
₹3,647 crore Uppur Thermal Power Project, ₹1,881 crore National Highway projects from NHAI in Bihar & Jharkhand[8],
₹1,585 crore Mumbai Metro Line-4 project[9], ₹1,081 crore Kudankulam Nuclear Power Plant project[10] and others. The
predecessor company, Reliance Energy Limited, came into existence when it took over an 83-year-old government
undertaking, the Bombay Suburban Electric Supply (BSES) in 2002. BSES was originallyfounded in October 1929. In
September 2018, at a time of financial stress, R-Infra sold its power transmission business in Mumbai to Adani Electricity
Mumbai Limited for Rs. 18,800 crores.Meanwhile, in April 2008, Reliance Energy Limited had changed its name to Reliance
Infrastructure Limited.[12][13] The company entered the road building industry in 2006 with two National Highway projects
in Tamil Nadu (Namakkal-Karur and Dindigul-Samayanallur), both sections of National Highway 4 (formerly
NH 7).[14] In 2011, it was announced that the company was planning to buy out licences to build road projects from companies
unable to do so.

Business Segment:
● Electrical Power
● Natural Gas
● Defence
● Infrastructure
● Transport

Mission:Our achievements are a testimony to our mission of attaining excellence in infrastructure. The following
ideas form the cornerstone of our endeavor to realize our goal:

o To attain global best practices and become a world-class utility

o To create world-class assets and infrastructure to provide the platform for faster, consistent growth for India to
become a major world economic power
o To achieve excellence in service, quality, reliability, safety and customer care
o To earn the trust and confidence of all customers and stakeholders, exceeding their expectations and make the
Company a respected household name
o To work with vigour, dedication and innovation with total customer satisfaction as the ultimate goal
o To consistently achieve high growth with the highest levels of productivity
o To be a technology driven, efficient and financially sound organisation
o To be responsible corporate citizens nurturing human values and concern for society, the environment and
above all people
o To contribute towards community development and nation building
o To promote a work culture that fosters individual growth, team spirit and creativity to overcome challenges and
attain goals
o To encourage ideas, talent and value systems
o To uphold the guiding principles of trust, integrity and transparency in all aspects of interactions and dealings

Daily candle stick of reliance infrastructure ltd:

72
73
Three months chart of Reliance infrastructure ltd:

One year chart of reliance infrastructure ltd:

74
Peer Comparison Sector::

Qtr Qtr
Mar Sales
.No. Name CMP Rs. P/E DivYld % NP Qtr Rs.Cr. Profit Sales ROCE %
Cap Rs.Cr. Qtr Rs.Cr.
Var % Var %

1. NTPC 126.55 10.56 125215.62 4.80 4350.32 48.70 21222.39 -8.13 5.79

Power Grid
2. 210.80 11.10 110281.92 2.49 3053.96 51.91 9218.08 17.96 10.21
Corpn

3. Adani Power 61.00 23527.33 0.00 634.64 197.15 6721.72 68.84 9.38

4. Adani Transmissi 207.35 40.77 22804.56 0.00 146.70 -2.38 2545.56 214.29 11.32

5. NHPC Ltd 22.15 8.46 22249.75 6.46 492.29 146.39 1950.34 71.48 9.54

6. Tata Power Co. 60.55 16377.40 2.15 57.58 -56.72 7230.24 0.18 6.55

7. Torrent Power 305.30 16.86 14673.23 1.64 23.95 -88.96 2924.80 4.07 11.89

-
8. Reliance Infra. 47.15 0.35 1240.00 20.15 -3301.00 4012.65 30.48 13.05
1174.32

Quarterly Results Consolidated Figures in Rs. Crores:

Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar
2016 2017 2017 2017 2018 2018 2018 2018 2018 2019

Sales 5,724 4,973 7,656 5,355 4,091 3,075 5,400 5,751 4,116 4,013

Expenses 4,946 4,417 5,805 4,218 3,234 2,809 4,552 4,768 3,425 3,124

Operating
778 556 1,852 1,137 857 266 848 983 691 888
Profit

OPM % 14% 11% 24% 21% 21% 9% 16% 17% 17% 22%

Other -
1,394 1,067 510 968 824 1,596 761 894 1,054
Income 1,351

Interest 1,323 1,427 1,553 1,392 1,230 1,375 1,261 1,236 1,065 1,009

Depreciation 497 537 482 349 316 308 320 318 321 360

Profit before -
353 -341 326 365 135 180 29 323 359
tax 1,832

Tax % 17% 93% 10% -25% -74% 5% -937% 15% -5% -3%

-
Net Profit 375 41 334 544 301 134 272 277 325
3,301

75
Profit & Loss Consolidated Figures in Rs. Crores:
TTM
Mar 2016 Mar 2017 Mar2018

Sales 26,952 25,229 26,408 19,279

Expenses 22,435 21,077 20,649 15,868

Operating Profit 4,518 4,152 5,760 3,411

OPM % 17% 16% 22% 18%

Other Income 2,563 4,061 3,547 1,358

Interest 5,026 5,581 6,341 4,571

Depreciation 1,544 1,688 1,935 1,318

Profit before tax 511 943 1,031 -1,120

Tax % 44% -15% -12%

Net Profit 760 1,425 1,340 -2,427

EPS in Rs 27.08 54.18 50.93

Dividend Payout % 29% 17% 19%

* Sales is net of excise duty and discounts

Compounded Sales Growth
10 Years: 12.53%
5 Years: 3.27%
3 Years: 17.73%
TTM: -4.45%
Compounded Profit Growth
10 Years: -10.07%
5 Years: -29.75%
3 Years: -39.83%
TTM: -284.83%
Return on Equity
10 Years: 5.28%
5 Years: 3.62%
3 Years: 1.95%
Last Year: 1.35%

76
Balance Sheet Consolidated Figures in Rs. Crores

Mar2019
Mar 2017 Mar 2018

Share Capital 263 263 263

Reserves 23,110 23,975 13,913

Borrowings 25,814 23,144 15,860

Other
55,545 59,520 38,347
Liabilities

Total Liabilities 104,732 106,902 68,383

Fixed Assets 36,567 35,999 26,426

CWIP 2,360 3,017 1,115

Investments 13,143 13,615 6,742

Other Assets 52,662 54,272 34,100

Total Assets 104,732 106,902 68,383

Cash Flows Consolidated Figures in Rs. Crores

Mar 2016 Mar 2017 Mar 2018

Cash from Operating Activity 10,296 8,678 8,159

Cash from Investing Activity -5,690 -75 -777

Cash from Financing Activity -4,704 -8,452 -7,463

Net Cash Flow -98 152 -81

Ratios Consolidated Figures in Rs. Crores

Mar 2017 Mar 2018

ROCE % 10% 13%

Debtor Days 82 75

Inventory Turnover 52.25 65.49

77
Finding:

● To improve analytical thinking and ability of decision-making.

● To gain knowledge of infrastructure sector.

Observation:

● Learn how mudrabiz provides complete and proper knowledge about stock market & Research
analysis and also provides proper services to the client.
● To
comparative analysis of Infrastructure sector of different company.i would liketo tell that
now a day online trading is a booming field for investor because they generate more returns as
compare to other fields.

Conclusion:
In the two month internship project,Igot to learn various techniques and the knowhow about how
to execute these techniques,
Following important point must be noted:
● In investment risker the investment higher the chances of making money, however you can
lose all of it too.
● if you invest in the right stock,you can make more money.
● it is not possible to win every day;there will be days where trading may not come out in your
favor.
● There is an old wall street Say that warms investors against excessive greed “Bulls make
money, Bears makemoney,pigs get slaughtered”.

78
Learning from the project benefit to the organisation

“No learning can be complete without practicing”

When we study in the classroom it clears our picture about the work, but it proves to be useful or
thoughtful when it is applied in practical field.Now the time has changed.Practical knowledge for
management student is must to qualify as a potential manager.it is for this reason that summer
training is prescribed as a part of syllabus for Masters of Business Administration.

The two months work in Mudrabiz finance Company were exciting and hardworking.The project
report, which I present after completing my training,consists of “Topic”.

79
Suggestions

● A Stock Exchange plays an important role in the economy.

Most of the people lack knowledge about the stock market,so they should be provided
with the same.
● As technical indicator may or may not give clear signal,one should always use 2-3
indicators to get to a clear picture

80
Scope:

● Capital formation
● Security and Transparency
● Market Regulation
● Facilitate Trading and facilitating company growth
● Raising Money for Business

Limitation:
● It was hard to acquire knowledge about this field in such short span of time.
● share market is very vast & fast sector, it was very difficult to cope- up with the
environment in such short span of time.
● This field require very deep fundamental & technical knowledge.
● Acquiring new client was a tough task to perform.

81
BIBLIOGRAPHY

https://in.investing.com
https://www.moneycontrol.com
https://www.screener.in

https://www.investopedia.com

82