INSIGHTS INTO

STOCK
MARKET
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1.Mohneesh Swami Sir collaborated with Tribhuvan Bisen at the Options Symposium 6.0
Conference, held at the Bombay Stock Exchange(BSE).
2. Our Fintech Club members got 8th position in Inter IIT Tech Meet’23 held at IIT Madras
in the High Prep Problem statement by Worldquant.
3.Team DREAM-WEB, consisting of Mohneesh Kumar Swami, Harshit Agarwal and Digvijay
Anand emerged as the Finalist in Morgan Stanley’s Code-to-Give Hackathon’23. Team
DREAM-WEB secured a spot among the top 4, earning tremendous praise from the
esteemed panel.
4. Club members Vaibhav Kashyap, Aman Agarwal, Manish Rulania, Kchitiz Raj, Pranav Jha,
Karan Negi, Rohan Kumar, Hrushikesh, Rishit Jain, Pranav Nagaram, and Nitin Shekhar have
won a total of $10,000 in prize money in various events. 2
 TECHNICAL ANALYSIS IS THE STUDY OF PAST MARKET DATA,
PRIMARILY PRICE AND VOLUME, TO FORECAST FUTURE PRICE
MOVEMENTS IN FINANCIAL MARKETS. IT INVOLVES ANALYZING
CHARTS, PATTERNS, AND TECHNICAL INDICATORS TO MAKE TRADING
DECISIONS.
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MARKETS DISCOUNT EVERYTHING
THE ‘HOW’ IS MORE IMPORTANT THAN THE ‘WHY’
PRICE MOVES IN TREND
HISTORY TENDS TO REPEAT ITSELF

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LINE CHART
BAR CHART
CANDLESTICK CHART
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THE LINE CHART IS THE MOST BASIC CHART TYPE, AND IT USES ONLY ONE DATA
POINT TO FORM THE CHART. WHEN IT COMES TO TECHNICAL ANALYSIS, A LINE
CHART IS FORMED BY PLOTTING A STOCK’S CLOSING PRICES.

THE BAR CHART, ON THE OTHER HAND, IS A BIT MORE VERSATILE. A BAR
CHART DISPLAYS ALL FOUR PRICE VARIABLES: OPEN, HIGH, LOW, AND CLOSE.
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LINE CHART BAR CHART
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 A CANDLESTICK IS A GRAPHICAL REPRESENTATION OF PRICE
MOVEMENTS IN A GIVEN TIME PERIOD, USED IN TECHNICAL ANALYSIS
TO UNDERSTAND MARKET TRENDS.

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THE WORD MARUBOZU MEANS “BALD” IN JAPANESE. THERE ARE TWO
TYPES OF MARUBOZU – THE BULLISH MARUBOZU AND THE BEARISH
MARUBOZU.

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 WHEN OPEN = LOW AND HIGH = CLOSE, A BULLISH MARUBOZU IS
FORMED.
A BULLISH MARUBOZU INDICATES THAT THERE IS SO MUCH BUYING
INTEREST IN THE STOCK THAT THE MARKET PARTICIPANTS WERE
WILLING TO BUY THE STOCK AT EVERY PRICE POINT DURING THE DAY,
SO MUCH SO THAT THE STOCK CLOSED NEAR ITS HIGH POINT FOR
THE DAY. THE ACTION ON THE MARUBOZU DAY SUGGESTS THAT THE
SENTIMENT HAS CHANGED AND THE STOCK IS NOW BULLISH. 15
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 WHEN OPEN = HIGH AND CLOSE = LOW, A BEARISH MARUBOZU IS
FORMED.
A BEARISH MARUBOZU INDICATES THAT THERE IS SO MUCH SELLING
PRESSURE IN THE STOCK THAT THE MARKET PARTICIPANTS ACTUALLY
SOLD AT EVERY PRICE POINT DURING THE DAY, SO THAT THE STOCK
CLOSED NEAR ITS LOW POINT OF THE DAY. THE ACTION ON THE
MARUBOZU DAY SUGGESTS THAT THE SENTIMENT HAS CHANGED AND
THE STOCK IS NOW BEARISH. 17
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THE PAPER UMBRELLA IS A SINGLE CANDLESTICK PATTERN WHICH
HELPS TRADERS IN SETTING UP DIRECTIONAL TRADES. THE
INTERPRETATION OF THE PAPER UMBRELLA CHANGES BASED ON
WHERE IT APPEARS ON THE CHART.

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 IF THE PAPER UMBRELLA APPEARS AT THE BOTTOM END OF A
DOWNWARD RALLY, IT IS CALLED THE ‘HAMMER’.
THE BULLISH HAMMER IS A SIGNIFICANT CANDLESTICK PATTERN THAT
OCCURS AT THE BOTTOM OF THE TREND. A HAMMER CONSISTS OF A
SMALL REAL BODY AT THE UPPER END OF THE TRADING RANGE WITH A
LONG LOWER SHADOW. THE LONGER, THE LOWER SHADOW, THE MORE
BULLISH THE PATTERN.
THE PRIOR TREND FOR THE HAMMER SHOULD BE A DOWNTREND 20
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 IF THE PAPER UMBRELLA APPEARS AT THE TOP END OF A UPTREND
RALLY, IT IS CALLED THE ‘HANGING MAN’.
THE BEARISH HANGING MAN IS A SINGLE CANDLESTICK AND A TOP
REVERSAL PATTERN. A HANGING MAN SIGNALS A MARKET HIGH. THE
HANGING MAN IS CLASSIFIED AS A HANGING MAN ONLY IF AN
UPTREND PRECEDES IT.
THE PRIOR TREND FOR THE HANGING MAN SHOULD BE A UPTREND.
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THE ENGULFING PATTERN NEEDS 2 TRADING SESSIONS TO EVOLVE. IN
A TYPICAL ENGULFING PATTERN, YOU WILL FIND A SMALL CANDLE
ON DAY 1 AND A RELATIVELY LONG CANDLE ON DAY 2, WHICH
APPEARS AS IF IT ENGULFS THE CANDLE ON DAY 1. IF THE
ENGULFING PATTERN APPEARS AT THE BOTTOM OF THE TREND, IT IS
CALLED THE “BULLISH ENGULFING” PATTERN. IF THE ENGULFING
PATTERN APPEARS AT THE TOP END OF THE TREND, IT IS CALLED THE
“BEARISH ENGULFING” PATTERN. 24
THE BULLISH ENGULFING PATTERN IS A TWO CANDLESTICK PATTERN WHICH
APPEARS AT THE BOTTOM OF THE DOWNTREND. THE PREREQUISITES FOR
THE PATTERN ARE AS FOLLOWS:
1. THE PRIOR TREND SHOULD BE A DOWNTREND
2. THE FIRST DAY OF THE PATTERN (P1) SHOULD BE A RED CANDLE
RECONFIRMING THE BEARISHNESS IN THE MARKET
3. THE CANDLE ON THE 2ND DAY OF THE PATTERN (P2) SHOULD BE BLUE,
LONG ENOUGH TO ENGULF THE RED CANDLE
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THE BEARISH ENGULFING PATTERN IS A TWO CANDLESTICK PATTERN THAT
APPEARS AT THE TOP END OF THE TREND, MAKING IT A BEARISH PATTERN.
THE PREREQUISITES FOR THE PATTERN ARE AS FOLLOWS:
1. THE PRIOR TREND SHOULD BE A UPTREND
2. THE FIRST DAY OF THE PATTERN (P1) SHOULD BE A BLUE CANDLE
RECONFIRMING THE BULLISHNESS IN THE MARKET.
3. THE CANDLE ON THE 2ND DAY OF THE PATTERN (P2) SHOULD BE RED,
LONG ENOUGH TO ENGULF THE BLUE CANDLE.
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TRADING IS THE BUYING AND SELLING OF FINANCIAL ASSETS, LIKE
STOCKS, BONDS, OR COMMODITIES, WITH THE GOAL OF MAKING A
PROFIT FROM PRICE MOVEMENTS.

TRADING INDICATORS ARE TOOLS USED TO ANALYZE MARKET

TRENDS, IDENTIFY POTENTIAL BUY AND SELL OPPORTUNITIES, AND
HELP TRADERS MAKE INFORMED DECISIONS BASED ON HISTORICAL
PRICE AND VOLUME DATA. 30
 FUNDAMENTAL ANALYSIS: A METHOD OF EVALUATING AN ASSET'S INTRINSIC
VALUE BY ANALYZING FINANCIAL STATEMENTS, ECONOMIC INDICATORS, AND
INDUSTRY CONDITIONS TO DETERMINE ITS LONG-TERM GROWTH POTENTIAL.

TECHNICAL ANALYSIS: A METHOD OF PREDICTING FUTURE PRICE

MOVEMENTS BY ANALYZING HISTORICAL PRICE PATTERNS, TRADING VOLUMES,
AND CHART INDICATORS, FOCUSING ON SHORT-TERM MARKET TRENDS.
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 SMA: SIMPLE MOVING AVERAGE
IT IS CALCULATED BY TAKING THE AVERAGE OF PRICES OVER A SPECIFIC PERIOD. SMA
GIVES EQUAL WEIGHT TO EACH PRICE IN THE PERIOD. IT SMOOTHS OUT PRICE DATA TO
REVEAL THE TREND, BUT IT CAN BE SLOW TO REACT TO PRICE CHANGES.

EMA: EXPONENTIAL MOVING AVERAGE

IT GIVES MORE WEIGHT TO RECENT PRICES, MAKING IT MORE RESPONSIVE TO RECENT
CHANGES. THIS SENSITIVITY TO PRICE SHIFTS MAKES EMA VALUABLE FOR IDENTIFYING
RECENT TRENDS AND POTENTIAL REVERSALS MORE QUICKLY THAN SMA.
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 IT IS A MOMENTUM OSCILLATOR USED IN TECHNICAL ANALYSIS TO MEASURE THE
SPEED AND CHANGE OF PRICE MOVEMENTS. IT RANGES FROM 0 TO 100 AND HELPS
TRADERS IDENTIFY POTENTIAL OVERBOUGHT OR OVERSOLD CONDITIONS IN AN ASSET.

( )
100
CALCULATED USING THE FORMULA: RSI = 100 -
AVG. GAIN
1+
AVG. LOSS
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 INTERPRETATION:
ABOVE 70: THE ASSET MAY BE OVERBOUGHT, SUGGESTING A POTENTIAL PRICE PULLBACK.
BELOW 30: THE ASSET MAY BE OVERSOLD, SUGGESTING A POTENTIAL PRICE RISE.

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 THE MOVING AVERAGE CONVERGENCE DIVERGENCE (MACD) IS A TREND-
FOLLOWING MOMENTUM INDICATOR IN TECHNICAL ANALYSIS. IT HELPS TRADERS
IDENTIFY CHANGES IN THE STRENGTH, DIRECTION, MOMENTUM, AND DURATION OF A
TREND IN AN ASSET'S PRICE.

MACD=12-DAY EMA−26-DAY EMA

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12 DAY EMA

26 DAY EMA

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