A STUDY ON TECHNICAL ANALYSIS WITH RESPECT

TO B N RATHI SECURITIES
Submitted to JNTU-Anantapur University for the partial
Fulfillment of the requirements for the award of degree of

MASTER OF BUSINESS ADMINISTRATION

By
Mr. D.DASTAGIRI BABU
(Reg. No: 19L21E0015)

Under the esteemed guidance of

Mr. N.RAJA SEKHAR REDDY
Asst. professor of M.B.A Dept,
VITS, PDTR.

DEPARTMENT OF MANAGEMENT STUDIES

VAAGDEVI INSTITUTE OF TECHNOLOGY & SCIENCE
(Affiliated to JNTU – Anantapur and Approved by AICTE, New Delhi)
PEDDASETTY PALLI (VI), PRODDATUR-516361(A.P)
JUNE -2021
 VAAGDEVI INSTITUTE OF TECHNOLOGY & SCIENCE
DEPARTMENT OF MANAGEMENT STUDIES

CERTIFICATE
This is to certify that the project was entitled “A STUDY ON TECHNICAL
ANALYSIS WITH RESPECT TO B N RATHI SECURITIES” isa bonafide work of
Mr. D.DASTAGIRI BABU (19L21E0015), submitted to VAAGDEVI INSTITUTE OF
TECHNOLOGY & SCIENCE, Proddatur , in partial fulfillment of the requirements for the
award of degree of MASTER OF BUSINESS ADMINISTRATION. The work reported here
in does not form part of any other this is on which a degree has been awarded earlier.
This is to further that they have worked for a period of one semester for preparing their work
under our supervision and guidance.

PROJECT GUIDE HEAD OF THE DEPARTMENT

Mr. N.RAJA SEKHAR REDDY Dr.M.V.V. PRASAD
Asst. Professor of M.B.A Dept, PROFESSOR &HOD of MBA Dept,
VITS, PDTR. VITS, PDTR-516361.
 Date : 15-07-2021

Certificate by the Organization

This is certify that Mr.D.Dastagiri Babu, pursuing MBA at Vaagdevi Institute of Technology
and Science , Proddatur . has worked Under Supervision And Guidence on his Project
Entitled “A STUDY ON TECHNICAL ANYALASIS at B.N. RATHI SECURITIES Limited ,
Proddatur from 01-06-2021 to 10-07-2021 . to the best of my knowledge this an original piece
of work.
 DECLARATION

I hereby declare that this project report entitled “A STUDY ON

TECHNICAL ANALYSIS WITH RESPECT TO B N RATHI SECURITIES”
“Submitted by me under the guidance of Mr.N.RAJA SEKHAR REDDY,
MBA, for the award of Master of Business Administration, VAAGDEVI
INSTITUTE OF TECHNOLOGY & SCIENCE, PRODDATUR affiliated to
Jawaharlal Nehru Technological University – Anantapur.
I also declare that this project is a result of my own and it has not been
submitted to any other University or published any time before.

Place: PRODDATUR D.DASTAGIRI BABU

Date: (19L21E0015)
 ACKNOWLEDGEMENT
Developing a project is not a single person’s effort but it is a combined of a group of
people. So many contributions from different category of people are required to develop a
project successfully with all the functionalities fulfilled. During the development of this project,
right from the initiation stage to implementation stage, so many people have helped us in doing
the right things in right time. We feel grateful to all the persons who helped us in studying the
system, researching, developing and at last preparing the documentation.
I am thankful to Sri G. HUSSAIN REDDY, Chairman of VAAGDEVI INSTITUTE
OF TECHNOLOGY & SCIENCE, PRODDATUR, for making it convenient to undertake a
project work.
I am thankful to Sri Dr.S.D.GOVARDHAN B.E,M.E,Ph.D,MISTE, Principal of
VAAGDEVI INSTITUTE OF TECHNOLOGY & SCIENCE, PRODDATUR, for making it
convenient to undertake a project work.
I am thankful to Sri Dr. M.V.V.PRASAD MBA. PhD, Head of the management studies
in VAAGDEVI INSTITUTE OF TECHNOLOGY & SCIENCE, PRODDATUR, for making
it convenient to undertake a project work.
I sincerely acknowledge my thanks to Mr. N RAJA SHAKAR REDDY, MBA Assistant
professor in M.B.A dept., for giving the help & guidance in completing my project work.

I would like to acknowledge my sincere thanks to college for giving me this opportunity.
My hurtful thanks to my parents & my friends whose suggestion resulted in successful
completion of this project work.

D.DASTAGIRI BABU
(19L21E0015)
 A STUDY ON TECHNICAL ANALYSIS WITH RESPECT TO BN RATHI SECURITIES
LTD

INTRODUCTION
An investor in the stock market would be interested in analyzing the stock price
movements. Prices in the stock market fluctuate due to continuous buying and selling in the
market. There are basically two approaches used in analyzing the share price movements.
They are fundamental approach and technical approach. Both these approaches have the same
objective of buying at lower price and selling at a higher price to gain good return on
investment. It can be said that the end goal of these two methods are one and the same.
However, there exists vast difference between the fundamental concepts of these two methods.
In fundamental analysis the analyst would be concerned with the fundamental factors. He
would be interested in determining the true worth or intrinsic value of a share based on its
current and future earning capacity. They would buy the share when its market price is below its
intrinsic value.
The term "Technical Analysis'' is a general heading for myriad of trading techniques.
Technical analysis attempts to forecast future prices by the study of past prices and a few other
related summary statistics about security trading. A technical analyst is always concerned with
the direction of price movements Demand and supply equation is the basis of technical
analysis. If the demand for a share is greater than its supply the chances of price showing an
upward trend is more which prompts the analyst to buy. On the other hand if the supply is
more than demand he would sell the particular share or book his profits.
Technical analysis is considered by many to be the original form of investment
analysis, dating back to the 1800s. It came in to widespread use even before the period of
extensive and fully disclosed financial information, which, in turn enabled the practice of
fundamental analysis to develop. In the United States, the use of trading rules to detect patterns
in stock prices is probably as old as the stock market itself.
Technical analysis is the process of identifying trend reversal at an early stage and to ride the
trend until the weight of evidence suggests that the trend has reversed the directions. The first
task of a technical analyst is to ascertain the change in the direction of trend. Trend or direction
of price movement is studied with the help of historic price and volume of data. Majority of the
technical analysts monitor the price movement on either a daily, weekly or monthly basis.

VAAGDEVI INSTITUTE OF TECHNOLOGY AND

SCIENCE
1
 Basic Principles of Technical Analysis
The basic principles on which technical analysis is based on may be summarized follows:
 The most important principle and assumption of technical analysis is that the market
discounts everything. It signifies that the price at which the security is quoted
represents the hopes, fear, inside information and all other fundamental factors.
 The market moves in trends and the trends when established, has a tendency to
continue further for some time and then reverse at some other point of time.
 History keeps repeating itself over and again.
 The market value of a security is related to demand and supply factors operating in
the market.
 Trends in stock prices have been seen to change when there is a shift in the demand
and supply factors.
 There are both rational and irrational factors which surround the supply and demand
factors of a security.
 The shifts in demand and supply can be detected through charts prepared specially
to show market action.
 Patterns which are projected by charts record price movement and these recorded
patterns are used by analysts to make forecasts about the movement of prices in
future.
 Action and reaction resulting from buying and selling pressures lead to corrections
and rallies to the major up trends and downtrends respectively.

Technical analysis is important to from a view on the likely trend of the overall market,
and it is helpful to have some idea of how to go about selecting individual stocks. Naturally, all
investors would like their investments to appreciate rapidly in price, but stocks, which may
satisfy this wish, tend to accompanied by a sustainable greater amount of risk then many
investors are normally willing to accept. However, it is important to understand that investors
can be very conscious when it comes to stock ownership.
 Technical analysis is the use of numerical series generated by market activity, such as
price and volume, to predict future price trends. The techniques applied to any market with a
comprehensive price history. Preliminary, but not exclusively, technical analysis is conducted by
studying charts of past price movement. Many different methods and tools are used in technical
analysis, but they all rely on the assumption that price pattern and trend exist in markets, and
they can be identified and exploited.
DOW THEORY:-
 Charles DOW who was editor of wall street journal in 1900 is known for the most
important theory developed by him with technical indicators. In fact, the theory gained so
much significance that the theory was named after him.

 The Dow Theory has been further developed by other technical analysis and it from the
basis of the technician’s theory.

 The theory predicts trend in the market for individual and total existing securities. it also
shows reversals in stock prices.

 According to ‘Dow Theory’, the market always has three movements and the movements
are simultaneous in the nature. These movement may be described as:-

 The narrow movement which occurs from day to day.

 The short swing which usually moves for short time like two weeks and extend up to a
month; this movement can be called a short term movement, and

 The third movement is also the main movement and it covers for years in its duration.

 According to the type of movement, they have been given special names.

 The narrow movement is called ‘fluctuations’ the short swing is better known as
‘secondary movements’ and the main movement is also called the ‘primary trends’.

 Narrow movements are called ‘fluctuations’. Secondary movements are those which last
only for a short while and they are also known as ‘correction’. Primary trend are,
 therefore, the main movement in the stock market. It is also called ‘bears’ and ‘bulls’
market.

 According to the Dow Theory, the price movements in market can be identified by means
of a line-chart.

 In this chart the technical analysis should plot the price of the share. With it, he should
also mark the market average every day.

 This would help in identifying the primary and secondary movements.

 DOW theories believe in ‘momentum’, which, according to them, keep the price moving
in the same direction.

 They believe in primary trends, which according to them are momentum or bear and bull
markets. The momentum will carry the price further but momentum of primary trend will
be halted by the terminology used by technical analysis called ‘support areas’ and
‘resistance areas’.

Criticism of Dow Theory

 The Dow Theory is subject to various limitations in actual practice.

 Dow has developed this theory to depict the general trend of the market but not with
the intention of projecting the future trend or to diagnose the busy and sell signals in
the market.

 These applications of the Dow Theory have come in the light of analytical studies of
financial analysts.

 This theory is criticized on the ground that it is too subjective and based on historical
interpretation; it is not interpretative ability of the analyst.

 The result of this theory does not also give meaningful conclusive evidence of any
action to be taken in terms of buy and sell operations.
Basic premises of technical analysis:
1. Market prices are determined by the interaction of supply & demand forces.

2. Supply & demand are influenced by variety of supply & demand affiliated factors both
rational & irrational.

3. These include fundamental factors as well as psychological factors.

4. Barring minor devotions stock prices tend to move in fairly persistent trends.

5. Shifts in demand & supply bring about change in trends.

6. This shift can be detected with the help of charts of manual & computerized action,
because of the persistence of trends & patterns analysis of past market data can be used to
predict future prices behaviors.

7. Price styles (charts types)

Price in a chart is displayed in four styles:

1. Bar chart.

2. Line chart.

3. Candlestick chart.

4. Point and figure charts.

5. 1) Bar charts:

The high and lows of a foreign currency are plotted in a diagram and the points are joined
with vertical lines (bars). A small horizontal tick to the left denotes the opening level while a
small horizontal tick to the right represents the closing price of each interval.
 price
time

2) Line charts:
 It gives the detailed information about every aspect.

 The exchange rates for each time period are plotted in a diagram and the points are jointed.
Period on the y-axis, time on the x-axis.

Series 1
3 Series 2
Series 3

0
Category 1 Category 2 Category 3 Category 4
3) Candlestick charts:
A candlestick is black if the closing price is lower than the opening price. A candlestick
is white if the closing price is higher than the opening price.

White & black Japanese candlestick:

In the 1600s, the Japanese developed a method of technical analysis to analyze the price
of rice contract; this technique is called candlestick charting. Steven nelson is credited with
popularizing candlestick charting and has become recognized as the leading expert on their
interpretation. Candlestick charts display the open, high, low, and closing price in a format
similar to a modern-day bar chart, but in a manner that extenuates the relationship between the
opening and closing prices. Candlestick charts are simply a new way of looking at races, they
don’t involve any calculations. Because candlestick display the relationship on securities that
only neither have closing prices, nor were intended to be displayed on securities that lack
opening prices.
The interpretation of candlestick charts is based primarily on patterns.
4. Point and figure charts
The point figure chart is not well known or used by the average investor but it has a long
history of use dating back to the first technical traders. This type of chart reflects price
movements and is not as concerned about time and volume in the formulation of the points. The
point and figure chart removes the noise, or insignificant price movements, in the stock, which
can distort traders view of the price trends. These types of charts also try to neutralize effect that
time has on chart analysis.
When first looking at a point and figure chart, you will notice a series of Xs and Os. The
Xs represent upward price trends and the Os represent downward price trends. There are also
numbers and letters in the chart; these represent months, and given investors an idea of the date.
 Each box on the chart represents the price scale, which adjusts depending on the price of
the stock; the higher the stock’s price the more each box represents. On most charts where the
price is between $100, a box represents’ $1, or 1 point for the stock. The other critical point of a
point and figure chart is the reversal criteria. This is usually set at three but it can also be set
according to the chartist’s direction. The reversal criteria set how much the price has to move
away from the high or low in the price trend to create a new trend or, in other words, how much
the price has to move in order for a column of Xs to become a column of Os, or vice versa.
When the price trend has moved from one trend to another, it shifts to the right, signaling a trend
change.
Types of trend
There are three types of trend:
1. Uptrend

2. Downtrend

3. Sideways / horizontal trend

As the names imply, when each successive peak and through is higher, it’s referred to as
upward trend. If the peak and troughs, it’s a downtrend. When there is little movement up or
down in the peak and troughs, it’s a sideways or horizontal trend. If you want to get really
technical, you might even say that sideways trend is actually not a trend on its own, but a lack of
a well-defined trend in either direction. In any case, the market can really in these three ways: up,
down or nowhere.
Trend Lengths
Along with these three trend directions, there are three trend classifications. A trend of
any direction can be classified as a long-term trend. In terms of the stock market, a major trend is
generally categorized as one lasting longer than a year. An intermediated trend is considered to
last between one and three months and a near-term trend is anything lee than a month. A long
term trend is composed of several intermediate trends, which often move against the direction of
the major trend. If the major trend is upward and there is a downward correction in price
movement followed by a continuation of the trend, the correction is considered to be an
intermediate trend. The short-term trends are components of both major and intermediate trends.
Take a look a figure 4 to get a sense of how these three trend lengths might look

When analyzing trends, it is important that the charts are constructed to best reflect the
type of trend being analyzed. To help identify long-term trends, weekly charts or daily charts
spanning a five-year period are used by chartists to get a better idea of the long-term trend. Daily
date charts are best used when analyzing both intermediate and short-term trends. It is also
important to remember that the longer the trend, the more important it is; for example, a one-
month trend is not significant as a five- year’s trend.

The importance trend

It is important to be able to understand and identify trend so that you can trade with rather
than against them. Two important sayings in technical analysis are ‘the trend is your friend’ and
‘don’t buck the trend,’ illustrating how important trend analysis is for technical traders
CHART PATTERNS:
A chart pattern is a distinct formation on a stock chart that creates a trading signal, or a
sign of future price movements. Chartists use these patterns to identify current trends and trend
reversals and to trigger buy and sell signals. In the first section of this tutorial, we talked about
the three assumptions of technical analysis, the third of which was that in technical analysis,
history repeats itself. The theory behind chart patterns is based on this assumption. The idea is
that certain patterns are seen many times, and that these patterns signal a certain high probability
move in a stock. Based on the historic trend of a chart pattern setting up a certain price
movement, chartists look for these patterns to identify trading opportunities. While there are
general ideas and components to every chart pattern, there is no chart pattern that will tell you
100% certainty where a security is headed. This creates some leeway and debate as to what a
good pattern looks like, and is a major reason why charting is often seen as more of an art than a
science. There are two types of pattern signals that a prior trend will reverse upon completion of
the pattern. A continuation pattern, on the other hand, signals that a trend will continue once the
pattern is complete. This pattern can be found over charts of any timeframe. In this section, we
will review some of the more popular chart patterns.
1. Head and shoulders
This is one of the most popular and reliable chart patterns in technical analysis. Head and
shoulders is a reversed chart pattern that when formed, signals that the security is likely to move
against the previous trend. As you can see, there are two versions of head and shoulders chart
pattern. Head and shoulders top (shown on the left) is a chart pattern that is formed at the high of
an upward movement and signals that the upward trend is about to end. Head and shoulders
bottom, also known as inverse head and shoulders (shown on the right) is the lesser known of the
two, but is used to signal a reversal in a downtrend.
Both of this head and shoulders pattern are similar in that there are four main parts: two
shoulders, a head and a neckline. Also, each individual head and shoulder is comprised of a high
and a low. For explain, in the head and shoulders top image shown on the left side, the left
shoulder is made up of a high followed by a low. In this pattern, the neckline is a level of support
or resistance. Remember that an upward trend is a period of successive rising highs and rising
lows. The head and shoulder chart patter, therefore illustrates a weakening in a trend by showing
the deterioration in the successive movement of the highs and lows
2. Cup and handle
A cup and handle chart is a bullish continuation pattern in which the upward trend has paused
but will continue in an upward direction once the pattern is confirmed.
The price pattern forms what looks like a cup, which is preceded by an upward trend. The handle
fallows the cup formation and is formed by a generally downward/ sideways movement in the
security’s price. Once the price movement pushes above the resistance lines formed in the
handle, the upward trend can continue.
3 .Double tops and bottoms
This chart pattern is another well-known pattern that signals a trend reversal it is considered to be
one of the most reliable and is commonly used. These patterns are formed after a sustained trend
and signal to reverse. The pattern is created when a price movement tests support or resistance
levels twice and is unable to break through. This pattern is often used to signal intermediate and
long-term trend reversals.

A double top pattern is shown on the left, while a double bottom pattern is shown on the right. In
the case of the double top pattern, the price movement has twice tried to move above a certain
price level. After two unsuccessful attempts at pushing the price higher, the trend reverses and
the price movement has tried to go lower twice, but has found support each time. After the
second bounce off of the support, the security enters a new trend and heads upward.
4. Triangles
Triangles are some of the most well-known chart patterns used in technical analysis. The three
types of triangles, which vary in construct and implication, are the symmetrical triangle,
ascending and descending triangle. These chart pattern are considered to last anywhere from a
couple of weeks to several months.
The symmetric is a pattern in which two trend lines converge toward each other. This pattern is
neutral in that a breakout the upside or downside is a confirmation of a
trend in that direction. In an ascending triangle, the upper trend line is flat, while the bottom
trend line is upward sloping. This is generally thought of as a bullish pattern in which chartists
look for an upside breakout. In a descending triangle, the lower trend line is flat the upper trend
line is descending triangle, the lower trend line is flat and the upper trend line is descending. This
is generally seen as a bearish pattern where chartists look for a downside breakout.
4. Flag and pennants
These two short-term chart patterns are continuation patterns that are formed when there is a
sharp price movement followed by a generally sideways price movement. This pattern is then
completed upon another sharp price movement in the same direction as the move that started the
trend. The patterns are generally thought to last from one to three weeks.
 There is little different between a pennant and a flag. The main difference between these
price movements can be seen in the middle section of the chart pattern. In a pennant, the middle
section is characterized by converging trend lines, much like what is seen in a symmetrical
triangle. The middle section on the flag pattern, on the other has, shown a channel pattern, with
no convergence between the trend lines. In both cases, the trend is expected to continue when the
price moves above the upper trend line.
5. Triple tops and bottoms
Triple tops and triple bottoms are another type of reversal chart pattern in chart analysis.
These are not as prevalent in charts s head and shoulders and double tops and bottoms, but they
act in a similar fashion. These two chart pattern are formed when the price movement tests a
level of support or resistance three times and is unable to break through; this signals a reversal of
the prior trend.
Confusion can from with triple tops and bottoms the formation of the pattern because they can
look similar to other chart patterns. After first two support/ resistance tests are formed in the
price movement, the pattern will look like a double top or bottom, which could lead a chartist to
enter a reversal position too soon.
6. Rounding bottom
A rounding bottom, also referred to as a saucer bottom, is a long-term reversal pattern
that signals a shift from a downward trend. This pattern is traditionally thought to last anywhere
from several months to several years.
Rounding Bottom

A rounding bottom chart pattern looks similar to a cup and handle pattern but without the handle.
The long-term nature of this pattern and the lack of a confirmation trigger, such as the handle,
make it a difficult pattern.
MOVING AVERAGES:
Most chart pattern show a lot of variation in price movement. This can make it difficult
for traders to get an idea of security’s overall trend. Once simple method traders use to combat
this is to apply moving averages. A moving average is the average price of a security over a set
amount of time. By plotting a security’s average price, the price movement is smoothed out.
Once the day-to-day fluctuations are removed, traders are better able to identify the trend and
increase the probability that it will work in their favour.
Types of moving averages:
There are a number of different types of moving averages that vary in the way they are
calculated, but how each average is interpreted remains the same. The calculations only differ in
regards to the weighting that they place on the price data, shifting from equal weighting of each
price point to more being placed on recent data. The three most common types of moving
averages are simple, linear and exponential.
1. Simple moving averages (SMS)
This is the most common method used to calculate the moving average of prices. It
simply taken the sum of all of the past closing prices over the time period and divides the result
by the number of princes used in the calculation. For example, in a 10-day moving averages, the
last 10closing prices are added together and then divided by 10. As you can see in figure 1, a
traded is able to make the average less responsive to changing prices by increasing of periods
used in the calculation. Increasing the number of time periods in the calculation is one of the best
ways to gauge the strength of the long- term and the likelihood that it will reverse.

Many individual argue that the usefulness of this type of average is limited because each
point in the data series has the same impact on the result regardless of where it occurs in the
sequence. The critics argue that the most recent data is more important and, therefore, it should
also have a higher weighting. This type of criticism has been one of the main factors leading to
the invention of other forms of moving averages.
2. Linear weighted average
This moving average indictor is the least common out of the three and is used to address the
problem of the equal weighting. The linear weighted moving average is calculated by taking the
sum all the closing prices over a certain time period and multiplying them by the position of the
data point and then dividing by the sum of the number of periods. For example, in a five-day
linear weighted average, today’s closing price is multiplied by five; these numbers are then
added together and divided by the sum of the multipliers.
3. Exponential moving average (EMA)
This moving average calculation uses smoothing factors to place a higher weight on recent data
points and is regarded as much more efficient than the linear weighted average. Having an
understanding of the calculation is not generally required for most traders because most charting
packaged do the calculation for you. The most important thing to remember about the
exponential moving average is that it is more responsive to new information relative to the
simple moving average.
This responsive key factor of why this is the moving average of choice among many technical
traders. A 15-period EMA raises and falls faster that a 15-period SMA. This slight difference
doesn’t seem like much, but it is n important factor to since it can affect returns.
Relative Strength Index
RSI is an oscillator used to identify the inherent technical strength and weakness of a particular
scrip or market. RSI can be calculated for scrip by adopting the following formula.

Formula: RSI  100 100 

 
1 RS
Average gain Per day
Where RS  Average Loss Per day

The RSI can be calculated for any number of days depending on the wish of the Technical
Analysis and the time frame of trading adopted in a particular stock market, RSI is calculated for
5,7,9 and 14days. If the period taken for calculation is more, the possibility of getting wrong
signals is reduced.
The broad rule is, if RSI crosses 70 there may be downturn and it is time to sell. If the RSI
falls below 30 it is time to pick up the script. If the RSI is rising in the overbought zone, it would
indicate the downfall of the price. If RSI falls in the overbought zone, it gives a clear signal of
sell. This condition occurs after a sharp rise in price during a period of heavy buying when the
RSI is in the oversold region, it generates the buy signal. The term oversold is used to describe a
security or market that has declined to an unreasonably low level.
NEED FOR THE STUDY:
The following points will explain the need of the study:
 Technical analysis can help it will help you in deciding the timing for your investment
when you to enter, when to exit whether it will be a short term or long term.

 The investor can know the risk and return of the share by analysis. At the time Technical
Analysis is required.

 The prediction of future price fluctuations of the company can be made only with the
help of Technical Analysis.

 The basic need is to find out the company future trend through method of Technical
Analysis.

 Technical Analysis included the changes in daily price movement and buying and selling
signals to the selected stocks. This helps the investor to take right decisions.
SCOPE OF THE STUDY
The study is related to B N Rathi Securities and the data is restricted only for 5 years. The data is
collected from Stock exchange websites and information is also restricted for 5 years. The study
include the trends of B N Rathi Securities performance only for the last five years.
OBJECTIVES OF THE STUDY
 To know the price variations of B N Rathi Securities
 To know the primary, secondary and minor trends of B N Rathi Securities.
 To provide valuable suggestions to improve the performance of the shares.
 COMPANY PROFILE
B.N.RATHI SECURITIES LIMITED was incorporated as Lark Leasing Limited, under the
Companies Act, 1956 vide Certificate of Incorporation dated 30th September, 1985 with
Registration No. 5838 of 1985-86 in the State of Andhra Pradesh. The Certificate of
Commencement of Business was issued by the Registrar of Companies, Andhra Pradesh on 14th
October, 1985. The name of our Company was changed to B.N. Rathi Securities Limited and
fresh Certificate of Incorporation was issued by the Registrar of Companies, Andhra Pradesh on
15th September, 1994. Our Corporate Identification Number is L65993TG1985PLC005838.

Our Company was incorporated out of the aspirations of Late Shri B N. Rathi, Founder Member
of Hyderabad Stock Exchange and Former Chairman of AP Mahesh Co-operative Bank and
Director of many other companies and nurtured through generations by his son Shri H. N. Rathi
(Managing Director) twice president of HSE and his grandson Mr. Chetan Rathi (Whole-Time-
Director & CFO). The Board consists not only of the highly experienced generational hierarchy,
but also industry stalwarts with a wealth of expertise including Shri Lakshminiwas Sharma –
Chairman and Shri K. Harish Chandra Prasad – Director

B. N. Rathi Securities Limited (BNRSL) is a public listed stock broking firm providing
integrated type of services, encompassing the entire spectrum of activities relating to the
Financial Market Transactions. BNR Group has been into the financial markets for over Five
Decades and this vast experience is put to use for providing the best services in today’s complex
financial markets. Our pedigree lineage, through our parent BNR Group enables us with the
expertise to offer the following range of services.

Well-researched and comprehensive Stock Broking Services.

Operations managed by experienced professionals
Access to extensive Research
An independent Tele-Communication Network linking Major Clients
As a depository participant with Central Depository Services Limited, we have more than 5000
accounts. With an adequate infrastructure, quality manpower, growing clientele and a sound
professional reputation BNRSL is poised to capitalize on the existing and emerging opportunities
as and when they rise. BNRSL’s well diversified clientele represent a wide gamut of the
investors community, which stand as testimony towards our commitment for providing prompt,
reliable and innovative services to our clients and has encouraged us to redouble our efforts
towards servicing our clients, through operational strategies, in an increasingly complex financial
arena. We are proud to be one among the top national brokerage firms served thousands of
 investors over the past three decades and is now present over spread across country across the
Nation and one of the top CDSL participants in South India.

The company is engaged in all spheres of stock Broking which enables the company to cater to a
full range of requirements of a growing and diversified retail and institutional clientele like
Comprehensive Stock Broking Services on NSE & BSE, Depository Services, IPO and Internet
Trading It has a track record of payment of dividend continuously for the past Eleven Years. We
are registered with Life Insurance Corporation of India Ltd., UTI, Bank of India and Bank of
Maharashtra for their secondary market operations. BNRSL has always been a technology driven
company and a strong technology focus has ensured that the company is equipped with
sophisticated ultra modern information technology. We have robust net work system and
connected to all branches/sub-brokers with the latest technology, which has emerged as the
Company’s forte and enabled us to give the best services to its valuable clientele.

Activities
BNRSL is engaged in all spheres of Stock Broking, which enables the company to cater to a full
range of requirements of a growing and diversified retail and institutional clientele. Today,
BNRSL has developed a wide skill base encompassing the entire spectrum of Stock Broking
business. This has enabled the Company to grow in leaps and bound and to date we have more
than 40 sub-brokers operating in various locations in Telangana ,Andhra Pradesh & Maharastra
We also offer following services:
 Internet Trading – Equities and Derivatives
 Depository Participant of CDSL
 Primary Market Services
 Mutual Fund Advisory Services
 IPO Advisory Services
 Comtrade

MILESTONES

2012 Started Subsidiary company named as B.N. Rathi Industries Private Limited.
2010 Obtained membership in Futures & Options segment of BSE
2008 Obtained membership of BSE Cash Segment
2008 Started Subsidiary company named as B.N.Rathi Comtrade Private Limited.
2007 Became a Depository Participant with CDSL
2002Obtained membership of NSE Futures & Option segment
1995Became member of National Stock Exchange (NSE) cash segment
1994Name of the Company changed to B.N.Rathi Securities Limited
1994Issue of equity shares on Rights basis
1986Public Issue and listing of Equity Shares
1985Incorporation of the Company in the name and style of "Lark Leasing Limited"

MANAGEMENT

Shri Laxminiwas Sharma

CHAIRMANHe is a Non-executive Independent Director of B.N. Rathi Securities Limited. He is
a graduate in commerce and a Chartered Accountant.

Shri K. Harish Chandra Prasad

DIRECTORHe is a Non-executive Independent Director of B.N. Rathi Securities Limited. He
joined the Board of B. N. Rathi Securities Limited in 1994.

Smt. Santhi Sree Bolleni

DIRECTORShe is a Non-Executive Independent and women Director of B.N. Rathi Securities
Limited. She is Qualified as Charted Accountant in the year 1984.

Shri Hari Narayan Rathi

MANAGING DIRECTORHe is the Managing Director of B.N. Rathi Securities Limited. He is a
graduate in Science and was twice unanimously elected as President of Hyderabad Stock
Exchange (HSE).
Shri Chetan Rathi
WHOLE TIME DIRECTOR & CFOHe is Whole-time Director Cum CFO of B.N. Rathi
Securities Limited . He is a MBA - Finance graduate. He joined the Board of Directors of B.N.
Rathi Securities Limited in the year 2010.

PRODUCTS & SERVICES

BNRSL offers trading and investment oppertunities across multiple market segments like equity,
mutual funds, IPOs, currency and F&O segments to investors through offices of Sub Brockers,
Authorised Persons and branches across the country. Benefit of Our Clients: You can learn about
the opportunity to trade through high-quality advice relevant and made available on time
(research & strategies);
Online Trading

Market Analysis

Currency Derivatives

Current IPO Issues

Mutual Fund Profile

Research

Investor Alerts

Back Office Login

 Stockbroking - Meaning
Stockbroking is a service which gives retail and institutional investors the opportunity to buy
and sell equities.

Stockbrokers will trade shares both on exchange and over-the-counter, dependent on where they
can find the best price and liquidity. Stock exchanges place strict regulations on who can trade
shares directly on their books, which is why most individual investors hoping to trade shares will
do so via a stockbroker.

Typically, a stockbroking firm will charge commission on the trades it makes on a client’s
behalf, or a fee for retaining its services.

There are several different services a stockbroker can provide:

 Execution-only stockbrokers will complete orders on your behalf, but do not offer any advice
 Advisory stockbrokers will offer advice on where to trade, but only trade on orders submitted by
you
 Discretionary stockbrokers will trade on your behalf, executing trades without your input

INDUSTRY OVERVIEW

The functioning of stock broking in India was started in 1875. The BSE is oldest stock
broking of India. History of Indian stocks trading starts with the 318 person taking
membership in Stock Brokers Association and Native Share, which is known by name as
Bombay Stock Exchange (BSE).

The functioning of stock broking in India was started in 1875. The BSE oldest stock
broking of India. History of Indian stocks trading starts with the 318 person taking membership
in Stock Brokers Association and Native Share, which is known by name as Bombay Stock
Exchange (BSE). In the year 1965, BSE got a permanent acknowledgment from Government of
India which was most required. The National Stock Exchange arrives 2nd to the BSE in the
terms of status. NSE and BSE represent themselves as the synonyms of the Indian stock market.
History of stock market in India is almost same as history of BSE.
An up-beat mood of marketplace was lost abruptly with the Harshad Mehta scam.

This came to the public knowledge that Harshad Mehta, who is also called as big-bull and giant
of Indian stock market which diverted huge fund from banks by fraudulent means. He also
played with millions of shares of many companies. For preventing such frauds, Government
formed SEBI, through Act in 1992. The SEBI is statutory body which regulates and controls
functioning of brokers, stock exchanges, portfolio manager investment advisors, sub-brokers,
etc. SEBI obliged several tough measures to protect interest of investor. Now with inception of
the online trade and every day settlements chances for fraud are nil, top official of SEBI says.

Sensex crossed 5000 mark in year 1999 and 6000 mark in year 2000. Foreign institutional
investor (FII) is investing in stock markets in India on very large scale. Liberal economic policies
pursue by successive Government attracted many foreign institutional investors towards large
scale. The impulsive behavior and action of market dedicated it tag - 'volatile market.' The
factors which affected market in past were the good monsoon, rise to power of Bharatiya Janatha
Party's etc.
The result of cricket matches between Pakistan and India also affected movements of
stock broking in India. National Democratic Alliance which was led by BJP, in 2004 the public
election unsuccessfully tried for riding on market sentiment to power. NDA is voted out of the
power and sensex recorded biggest fall in day amidst fears which Congress-Communist
coalitions would have stall economic reform.

India, after US hosts the large number of the listed companies. The Global investors now seek
India as preferred location for the investment. Stock market now also appeals to the middle class
Indians. Most of the Indian working in foreign country now diverts their savings to the stocks.
This new phenomenon is result of diminished interest rate from banks and opening of the online
trading. Stock brokers based in the India are opening office in different country mainly to cater
needs of the Non Resident Indians.

They can sell or buy stocks online while returning from work places. The recent incidents
which led to the growing interests among all Indian middle class is initial public offer announced
by ONGC, Maruti Udyog Limited, Tata Consultancy Services and many big names like such. A
bullish run of stock market can associated with steady growth of 6% in GDP, growth of Indian
company to MNCs, the large potential of the growth in fields of mass media, telecommunication,
education, IT sectors and tourism backed by the economic reforms ensures that the Indian stock
market continue its bull run.

Industry Overview: Brokers and Exchanges

The Brokers & Exchanges Industry is cyclical and comprised of two distinct types of
businesses. Brokerages, also known as financial services companies, strive to meet the investing
needs of their clients, and exchanges facilitate securities trading. Net profits correlate to the
performance of the broader equity market. Some hold up better than their peers during bear
markets.

Brokerage Basics
Brokerages are fairly diversified. A big chunk of the top line comes from filling buy and sell
orders from clients. There are two ways in which a broker can meet a client's trade request. The
broker can act as an intermediary, matching a customer's buy order with a third-party's sell order
and vice versa. In this capacity, the broker acts as an agent, receiving a "Commission"
(highlighted on the Value Line page). As well, the broker can act as a principal, meeting a
customer's order from its own inventory. Revenue from this activity falls under the heading
"Principal Transactions"; it may include gains and losses on the brokerage's own investments.
We usually classify fee-based revenue as "Other". Fees are calculated as a percentage of a
client's assets, and stem from managed
mutual funds and specialized, high-net-worth accounts.

Brokerages also report on the top line "Interest Income", consisting of interest earned on
investments and dividends, minus interest paid on debt. Lastly, a number companies generate
"Investment Banking" revenue through underwriting and advisory services, involving stock or
bond offerings and mergers or acquisitions. While Principal Transactions, Interest Income, and
Investment Banking revenues are tied to prevailing economic conditions, Commissions can be
more stable during down markets, especially if client trading increases.

The largest non-interest expense for full-service brokerages is workforce compensation.

Employees are rewarded according to the amount of commission, trading and/or investment
banking revenue that they contribute. They may receive either a percentage of revenue generated
or a year-end bonus. Discount brokerages limit their compensation exposure by providing
electronic services. Full-service brokers provide personalized service and in-house research.
Electronic brokers offer more bare-bones service to seasoned clients who are looking to save on
fees. (Note: Our reports on electronic brokers follow the standard industrial format.) A
brokerage's profitability is determined by trading volume, fees charged, worker compensation
and fixed operating costs. In periods of high trading volume, brokers' operating and net margins
can easily expand into double-digit territory.

The companies in this industry have varying levels of debt on their balance sheets. Large
brokers, doing significant investment banking business, often carry heavy debt burdens with the
aim of maximizing leverage. Savvy investments can yield outsized gains, but serious missteps
can lead to hefty losses. Companies dependent on commissions tend to be managed
conservatively and hold lighter debt balances.

The Function of Exchanges

Exchanges provide a marketplace for traders to buy and sell securities. In years past, trading
took place on large open floors, where buyers and sellers engaged in face-to-face transactions.
Today, most exchanges utilize electronic systems, which allow for fast, efficient trading. A few
still use traditional trading floors, but in conjunction with an electronic system.

Exchanges generate revenue in several ways. Those that concentrate on the equities market
collect fees from listed companies. Both equity and derivative exchanges receive a payment for
each trade that takes place on their platform. The top lines of these companies perform quite well
during volatile markets. Another source of revenue comes from supplying market data to
financial information providers. Too, revenue may be produced from developing, marketing and
distributing technology used in trading and information processing. Among other means of
generating revenue, an exchange may clear third-party or in-house trades.

Compared with those of brokerages, the cost structures of exchanges are more fixed in nature.
Operating performance is linked to transaction volume. Margins expand as trading increases, and
the reverse is true when activity slows. Reductions in fixed costs enhance operating leverage.
Generally, exchanges do not assume heavy debt burdens. Substantial debt, however, will be
taken on to complete a promising acquisition. Managements endeavor to quickly lighten the
burden with improved cash flow.

This sector of the industry has, indeed, undergone consolidation. Domestic exchanges have
merged with foreign bourses to gain diversification. Also, many have acquired small competitors
that offer attractive market niches complementing existing operations. For instance, companies
that focus on equity trading have expanded the scope of business by acquiring options
exchanges.

TOP 10 STOCK BROKING COMPANIES IN INDIA

Angel Broking Pvt Ltd

The Indian stock broking firm Angel Broking Pvt Ltd was established in the year 1987. The
leading stock broking company is headquartered in Mumbai, India. Angel Broking Pvt Ltd is
providing a range of services including Equity Trading, Portfolio Management, Mutual Funds,
IPO, Depository Services, Investment Advisory etc. Its subsidiaries are Angel Commodities
Broking Pvt Ltd, Angel Fincap Pvt Ltd, Angel Financial Advisors Pvt Ltd, Angel Securities Ltd.
BSE Ltd
BSE Ltd is one of the top stock broking companies in India. It is located at Dalal Street, Kala
Ghoda, Mumbai (formerly Bombay), Maharashtra, India. Bombay Stock Exchange was
established in the year 1875. Bombay Stock Exchange founded by one of the most influential
businessmen of the 19th century, Premchand Roychand. The Bombay Stock Exchange is the
oldest exchange in Asia.
Edelweiss Financial Services Ltd
Edelweiss Financial Services Pvt Ltd is one of the leading stock broking companies in India. The
company is headquartered in Mumbai, Maharashtra. The company is majorly involved in
following types of business including asset management, life insurance, capital marketing, credit
card, commodities etc. The company mainly focuses on especially mortgages for housing, loans
for agriculture and credit. Edelweiss was founded in November 1995 by Rashesh Shah and
Venkat Ramaswamy. Its operations started from February 1996. It was a small office with 3
employees located near Akbarally’s in the Fountain area of Mumbai.
HDFC Securities Ltd
HDFC Securities Ltd was founded in the year 2000. The leading stock broking company is
headquartered in Mumbai, Maharashtra. It is one of the top stock broking companies in India.
HDFC Securities Ltd has branches all Indian major cities and towns.
Karvy Stock Broking Ltd
Karvy Stock Broking Ltd was founded in the year 1982. The leading stock broking company is
headquartered in Hyderabad, Telangana, India by 5 young men worked for the renowned
chartered accountancy firm. The company offices are located all across India. The top stock
broking company has started the business of commodity trading in the year 2000. It is also into
the business of forex trading. In September 2008, the group launched an online trading and
investment portal offering an extensive range of financial products and solutions across different
classes.
Kotak Securities Ltd
Kotak Securities Ltd was founded in the year 1994. It is headquartered in Mumbai, Maharashtra.
It is one of the top stock broking and financial services company in India. It is the subsidiary of
Kotak Mahindra Group and corporate member of National Stock Exchange of India and Bombay
Stock Exchange.
Motilal Oswal Securities Ltd
Motilal Oswal Securities Ltd is one of the top stock broking companies in India. The company
was founded in the year 1987 and it is headquartered in Mumbai, India. Motilal Oswal Securities
Ltd is a well-diversified financial services firm offering a range of financial products and
services, such as private wealth management, retail broking and distribution, institutional
broking, asset management, investment banking, private equity, commodity broking, currency
broking and principal strategies. The company has a network spread over more than 500 cities
and towns.
National Stock Exchange of India Ltd
National Stock Exchange of India Ltd was founded in the year 1992, located in Mumbai,
India. NSE was the first exchange in the country to provide a modern, fully automated screen-
based electronic trading system. The company is offering to trade into following segments-
Equities- Equities, Indices, Mutual Funds, Exchange Traded Funds, Initial Public
Offerings, Security Lending and Borrowing Scheme
Derivatives- Equity Derivatives, Currency Derivatives, Interest Rate Futures
Sharekhan Ltd
Sharekhan Ltd is one of the top stock broking companies in India. The company is headquartered
in Mumbai. It offers online security broking and portfolio services to institutions and large
corporate houses as well as individual investors. The company operates as a subsidiary of BNP
Paribas SA. Sharekhan Ltd was founded in the year 2000. It is one of the pioneers of online
trading in India. It offers a broad range of financial products and services. The company is
present in over 575 cities through 153 branches, more than 2,500 business partners.
Zerodha
Zerodha, the leading stock broking company in India was founded in the year 2010. It is
headquartered in Bangalore, Karnataka, India. The leading financial services company offers
retail and institutional broking, currencies and commodities trading, mutual funds, and bonds.
The company has its presence in all major Indian cities.

Indian broking industry to post moderate growth of 5-10% in FY19: Icra

"The Indian broking industry is estimated to post a moderate growth of 5-10 per
cent in FY2019 with estimated revenue projected at Rs 19,500-20,000 crore. This is on
the back of a strong FY2018 (2017-18) with industry turnover of Rs 18,000-19,000 crore
and year-on-year growth of over 30 per cent," it said.

While on one hand, the volatility in the markets is expected to encourage trading
turnover, on the other hand, the recent corrections in valuations, coupled with the
cautious investor stance, would have a bearing on industry revenues, the rating agency
said in the report.
Commenting on the industry trend, the rating agency's Vice President and Co-Head
(Financial Sector Ratings) Samriddhi Chowdhary, said: "The recovery in the first half of
this fiscal was not broad-based and remained largely limited to the large-cap segment.
While the flagship indices of the two exchanges touched an all-time high in August,
rising to about five per cent over the earlier high achieved in January, the mid- and
small-cap indices on the two exchanges trailed 5-20 per cent behind the peak level
seen in January."

"The underperformance of mid- and small-cap securities had a bearing on retail investor
participation, particularly in the cash segment, with the investors yet to recoup their
losses. The decline in delivery volumes in the cash segment also points towards the
growing shift towards trading as opposed to investment-oriented transactions," she
added.

The markets reported resurgence in the current fiscal after a slide in February and
March, before witnessing a correction from September.

Concerns like rising interest rates, systemic liquidity tightening, heightened concerns on
the credit quality of non-banking financial companies (NBFCs) and weak investor
sentiment further impacted the markets, the report said.

On an aggregate basis, the equity markets reported a turnover of Rs 1,191 trillion in the
first half of FY2019 (2018-19), registering a growth of 55 per cent over Rs 770 trillion in
the corresponding period in the previous fiscal.

"Going forward, a meaningful revival in corporate earnings and abatement of liquidity

and capital availability issues would be a key for further fillip to the capital markets and
for boosting FPI (foreign portfolio investor) equity inflows. Notwithstanding these, the
near term outlook for the domestic broking industry is stable," Chowdhary added.
 REVIEW OF LITERATURE
This chapter reviews the existing literature on technical analysis with a focus
on general technical analysis, moving averages, relative strength index and trading volume. The
studies in the twentieth century have shown that the role of technical analysis is major in an
investment analysis. However, studies in the dawn of the twentieth century have shown that
technical analysis has some predictive power in the market.
The process of reviewing the literature helps the researcher to understand the subject area
better and thus helps him to conceptualize his research problem clearly and precisely. It also
helps to understand the relationship between their research problem and the body of knowledge
in the area.
How does answers to researcher’s research questions compare with what
others have found? What contribution have researcher been able to make in to the
existing body of knowledge? How are researcher’s findings different from those of others? For
researcher to be able to answer these questions, he needs to go back to literature review. It is
important to place the researcher’s findings in the context of what is already known in his field
of enquiry. The researcher has focused to review the literature related to performances of
Bombay Stock Exchange and National Stock Exchange. Moreover the comparative studies of
worldwide stock exchanges were also studied. Some studies conducted nationwide and
internationally in context with the financial performance, efficiency,
comparative studies of stock exchanges are being reviewed as follows.
However, the technical analysis approach to capital market evaluation has received little
attention and acceptance as compared to fundamental analysis. But in recent years, the popularity
of technical school of thought is increasing among academicians and practitioners. A brief
review of related literature is given below from studies abroad and studies in India. "Technical
analysis is the study of the action of the market itself as opposed to the study of the goods in
which the market deals". "Technical analysis is the science of recording, usually in graphic form,
the actual history of trading (price changes, volume of transaction, etc) in a certain stock or in
"the Averages" and then deducing from the perturbed history the predictable future trend".
 In the words of Charles Dow (1900). Dow Theory - Volume goes with the trend: In a
Bull market, volume increases when prices rise and dwindles as prices decline; in Bear markets,
turnover increases, when prices drop & dries up as they recover. To a lesser degree, this holds for
secondary trend also, especially in the early stages of an extended recovery within a Bear market,
when activity may show a tendency to pick up on the minor rallies & diminish on the minor
setbacks. But to this rule, again, there are exceptions and useful conclusions can seldom be
drawn from the volume manifestations of a few days, much less a single trading session; it is
only the overall & relative volume trend over a period of time may produce helpful indications.
Moreover, Dow theory, conclusive signals as to the market's trend is produced in the final
analysis only by price movement. Volume simply affords collateral evidence, which may aid
interpretation of otherwise doubtful situations.
Blume, L., Easley, D. & O’Hara, M. (1994). Market statistics and technical
analysis: The role of volume. Journal of Finance, 49,153-181.
Lawrence Blume, David Easley and Maureen O’ hara (1994) Show the informational position of
volume and its appropriateness in technical analysis. The major objective of the study is to see
how volume information and price movements relate to each other and how technical analysis is
valuable to traders in an economy where the only uncertainty arises from the underlying
information structure. The study uses alternative equilibrium model for the purpose the study
where volume plays an important role in providing information to traders. The study argues that
volume contains information which is useful in predicting the future price movements and
thereby the volume analysis provides a useful insight to the uninformed traders to
interpret the market situation.
Antoniou, A., Ergul, N., Holmes, P. & Priestley, R. (1997). Technical analysis,
trading volume and market efficiency: Evidence from an emerging market.
Applied Financial Economics, 7, 361-365.
A, Antoniou, N.Ergul, P.Holmes and R.Priestley(1997) provide a clear linkage amongtechnical
analysis, trading volume and market efficiency. Technical analyst believes that the history of
past prices reflects the information on future price movement. Technical analysis is a pervasive
activity and it can be seen in all levels of market analysis. This apparent paradox is analyzed by
considering the past prices and volume. The study observes that volume contains useful
information regarding the market movement and technical analysis must take a note of trading
volume while making an investment decision.

Stevens, L. (2002). Essential technical analysis, New York, USA: John Wiley
&Sons.
Leigh Stevens (2002) investigates about the processing of market information and
profit. This book mainly deals with the tools and techniques of technical analysis. It also shows
how to find good stocks at lowest risk enter and exist strategies, less used technical tools and
techniques, which might be marginal for most of the people in terms of improving trading and
investment decision. The study shows that person’s emotional temperament, work nature, habit
and ability to see ahead are more important in technical analysis. It criticizes the idea of using
high complex mathematical formula to make better investment decision. Literatures mentioned
above describe the role of technical analysis, especially, technical indicators such as moving
averages, relative strength index and trading volume- in the stock market. Profitability of
regression based trading rules, comparison of technical trading rules with buy and hold strategy
are also mentioned in these literatures. However, most of these academic writings argue that for
predicting the trend in the market technical analysis is ineffective. Most importantly, a large
number of earlier studies are based on the U.S and European, and a few on Asian Markets which
are considered to be highly developed. However, in India the application of technical analysis
was perceived to be futile in Indian market and it cannot be used to predict the future price
movements. Resultantly, none of the studies have focused on the applicability of technical
trading rules in Indian Stock Market. Hence, the present study moves away from foreign markets
and provides an evaluation of technical analysis as a predictive tool in Indian stock market.

Kavajecz, K. A. & Odders-White. E. R. (2004). Technical Analysis and

Liquidity
provision. Review of Financial Studies, 17, 1043-1071.
Kenneth A. Kavajecz and Elizabeth. R .Odders-White (2004) examine the
relationship between liquidity provision and technical analysis. The study suggests that technical
analysis, support or resistance level as well as moving average indicators are significantly relates
to the state of liquidity on the limit order book. NYSE data is taken for the period July to
September 1997. A good amount of people in the investment industry are dedicated to technical
analysis and most of the investment institutions and trading firms are using some form of
technical trading strategies. The study concludes that limit order book liquidity measures have
some predictive power for the future returns.
Before the creating a portfolio and evaluating stocks, a brief allusion to the technical
analysis will be held. The term technical analysis refers to the method of evaluating stocks by
analyzing statistics generated by market activity, such as past prices and volume. In technical
analysis a variety of forecasting methods such as chart analysis, cycle analysis, and computerized
technical trading systems (Park and Irwin, 2006) are used to depict certain price-volume factors
that repeat themselves. Most of the technical trading systems include moving averages, channels
and momentum oscillators.
According to Pring (2002), “The technical analysis is a reflection of the idea that prices
move in trends that are determined by the changing attitudes of investors toward a variety of
economic, monetary, political, and psychological forces. The art of technical analysis is to
identify a trend reversal at a relatively early stage and ride on that trend until the weight of the
evidence shows or proves that the trend has reversed”. Technical analysts believe that the
historical performance of stocks and markets can show what will probably happen in future. By
diagramming a market’s movement, they can determine market swings in advance. According to
the theory, the best time to sell (take a short position) is the start of a major downtrend; the best
time to buy is when prices, and trends, are heading upward.

Kenneth A. Kavajecz and Elizabeth R. Odders-White (2004) noted , "There is an

ongoing belief in the investment community that technical analysis, which involves the study of
price and volume data, can be used to infer the direction of future prices. A substantial segment
of the investment industry is dedicated to this form of analysis, v/ith virtually all investment
banks and trading firms employing some technical trading strategies".
 Park and Irwin (2006) segregate all the technical analysis studies in two (2)
different groups: the “early studies” (1960-1987) and the “modern” studies.
Chong and Ng (2008)examined two oscillators – the Moving Average Convergence
Divergence (MACD) and the Relative Strength Index (RSI) – to see if these rules are profitable.
Using 60-year data of the London Stock Exchange FT30 Index, it is found that the RSI as well as
the MACD rules can generate returns higher than the buy-and-hold strategy in most cases.

Ray R. Sturm (2013) in this paper titled “Market Efficiency and Technical Analysis Can the
Coexist?” researcher shows that market efficiency is generally accepted in the academic society
even thought it cannot fully described truth. First and foremost due to noise, prices simply reflect
beliefs about a firm’s unknown true intrinsic value which makes behavioral finance vital.
Technical analysis attempts to determine changes in these beliefs to predicting stock price.
Michael C. Jensen and George A. Benington (September, 2015) in this research
paper titled “Random Walks and Technical Theories: Some Additional Evidence” researcher
studies that random walk and efficient market theories of security price behavior imply that stock
market trading rules based exclusively on the past price cycle cannot make profits bigger than
those generated by a simple buy-and-hold policy.
Hata Peachavanish (March 2016) examined “Stock Selection and Trading Based on
Cluster Analysis of Trend and Momentum Indicators” researcher proposes a technique using
cluster analysis to recognize a group of stocks that has the greatest trend and momentum
characteristics at a given time. This technique applies to preferred stocks from Thai stock market.

Adrin Taran-Morosan (July, 2017)in this paper titled “The relative strength index
revisited” researcher examined that relative strength index (RSI) one of the superlative and
extensively used technical analysis indicators. Researcher study aim to empirically investigation
the function of the RSI in its classic structure.
 Research Methodology
Research Methodology is the specification of methods and procedures for acquiring the
information needed in order to solve the problem at hand. Research has been defined as “a
studious inquiry or examination; especially: investigation or experimentation aimed at the
discovery and interpretation of facts, revision of accepted theories or laws in the light of new
facts, or practical application of such new or revised theories or laws” A broad definition of
research is given by Martin Shuttle worth (2008)
“In the broadest sense of the word, the definition of research includes any gathering of data,
information and facts for the advancement of knowledge.”
Another definition of research is given by Creswell (2008) who states – “Research is a process
of steps used to collect and analyze information to increase our understanding of a topic or
issue”. It consists of three steps: Pose a question, collect data to answer the question, and present
an answer to the question.
Significance of Research
It is very important to understand the importance of research to perform it better and also to
appreciate a research work. So I thought of stating the significance of research.
“All progress is born of inquiry. Doubt is better than overconfidence, for it leads to inquiry and
inquiry leads to invention” is a famous Hudson Maxim in context of which the significance of
research can be well understood. Increased amount of research makes progress possible.
Research inculcates scientific and inductive thinking and it promotes the development of logical
habits of thinking and organization.

The role of research in several fields of applied economics and finance, whether related to
business or to the economy as a whole, has greatly increased in modern times. The increasingly
complex nature of business and government has focused attention on the use of research in
solving operational problems. Research as an aid to policy formation, has gained added
importance, both from the government and the business houses.
Technical analysis have a great significance and importance it is more useful to investors to
identify the price movements of the certain company it is more useful to investor when to buy
and when to sell the shares. My study provides some information about "DR.REDDYS
LABORATORIES " It is useful to future references it act as one tool for the investors, why
because in my project work I am clearly study the 5 years performance of the company so based
on my results the investors will make right decision when to buy and when to sell shares and
when enter in to the market and when to exit from the market .SO that's why "TECHNICAL
ANALYSIS "having a great significance.
Types of Research
1. Descriptive vs Analytical Research
Descriptive Research is a fact finding investigation which is aimed at describing the
characteristics of individual, situation or a group (or) describing the state of affairs as it exists at
present.
Analytical Research is primarily concerned with testing hypothesis and specifying and
interpreting relationships, by analyzing the facts or information already available.
2. Applied vs Fundamental Research Which is also known as Applied basic or pure
research is undertaken for the sake of knowledge without any intention to apply it in practice.
Fundaments research It is undertaken out of intellectual curiosity and is not necessarily
problem oriented.
3. Quantitative vs Qualitative Research

Quantitative Research is employed for measuring the quantity or amount of a particular

phenomena by the use of statistical analysis.
Qualitative Research is a non qualitative type of analysis which is aimed at finding out the
quality of a particular phenomenon.

4. Conceptual vs Empirical Research

Conceptual Research is generally used by philosophers and thinkers to develop new concepts or
to reinterpret existing ones.
Empirical Research is a databased research which depends on experience or observation alone.
It is aimed at coming up with conclusions without due regard for system and theory.
TYPES OF DATA
 Primary data
Primary data means original data that has been collected specially for the purpose in mine. It
means someone collected the data from the original source first hand. Data collected this way is
called Primary data
Secondary data
Secondary Data is the data that have been already collected by and readily available from other
sources.

Data Collection
Primary Data
Primary data means original data that has been collected specially for the purpose in mine. It
means someone collected the data from the original source first hand. Data collected this way is
called Primary data. The primary data is not available for my study because of the prices of the
share will fluctuate in every minute so the primary data is not possible to take.
Secondary Data
Someone else collects secondary data. So, it becomes secondary information for the research.
Secondary data have had least one leave of interpretation inserted between the event and its
recording. Reasons for using the secondary data are listed below
 They fill a need for specific reference or citation on same point

 Secondary data are an integral part of a larger research study

 Secondary data may be used as the sole basis for a research study

 Since in many research situations one cannot conduct primary research because of physical legal
or cost influences. Analyzing the requirement of data it was found that primary data is more
important for achieving research objective. (primary data is collected with the help of
questionnaire)

Mostly the secondary data is collected from the NSE website and Investing.com. The secondary
data is more valuable for my project why because means the price variations of the company will
be fluctuated every minute so primary data is not possible so that's why secondary data is more
valuable and reliable for my project work.

Analytical tools used:

Relative Strength Index

Trend indicators

Chart techniques
1. Price variations for 2019 (all prices in Rs.)

Month Open High Low Close

19-Jan 28 29.6 21.1 24.35

19-Feb 24.5 26.1 20 22
19-Mar 22.95 25 21.8 24
19-Apr 23 24.85 19.6 20.15
19-May 20.2 25 17.8 21.5

19-Jun 22.4 23.25 17.55 20

19-Jul 20.95 22 18 18.45
19-Aug 18.6 21 16.05 18.85
19-Sep 18.85 22.55 18.8 19.25
19-Oct 19 22.8 18.5 19.55
19-Nov 19.75 20.5 16.25 17.8
19-Dec 17.8 18.75 16 18.75

40

35

30

25

20

15

10

5 16-Jan 16-Feb 16-Mar 16-Apr 16-May 16-Jun 16-Jul 16-Aug 16-Sep 16-Oct 16-Nov

0
INTERPRETATION:
The monthly price variations of the B N Rathi Securities are presented in the table and
graphically shown in candlestick chart. In the starting days of the year 2019 the company have
Bullish position (28) and middle of the year i.e June(22.4) and July(20.95) months it have the
bullish position and maintain the same position up to end of the year.
 2. Price variations for 2018 (all prices in Rs.)

Month Open High Low Close

18-Jan 53.9 57.25 42 42.6

18-Feb 43.05 45.75 35 41.4
18-Mar 41 48.8 36 37.6
18-Apr 39.9 48.9 39 43.65
18-May 43.5 44.9 36 42.4
18-Jun 42.7 47 33 34.55
18-Jul 36.35 41.65 33.2 35.3
18-Aug 37 41.95 30.1 32.5
18-Sep 32.5 34.5 27.5 29.85
18-Oct 29.85 32.9 23.05 25.85
18-Nov 28 32 22.15 25
18-Dec 24.45 32 23 27.35

40
35
30
25
20
15
10
5
0

16-Jan 16-Feb 16-Mar 16-Apr 16-May 16-Jun 16-Jul 16-Aug 16-Sep 16-Oct 16-Nov

INTERPRETATION:
The monthly price variations of the B N Rathi Securities are presented in the table and
graphically shown in candlestick chart. In the starting days of the year 2018 the company have
Bullish position (53.9) and from February onwards it has started a bearish trend maintain the
same position up to end of the year.
3. Price variations for 2017 (all prices in Rs.)

Month Open High Low Close

17-Jan 26 29.5 23.85 26.05

17-Feb 24.7 29.75 24.7 27.3
17-Mar 29.85 29.85 24.2 26.5
17-Apr 25.5 28.5 25 27.45
17-May 28.9 34.4 24.6 28.75
17-Jun 29 32.95 27 31.25
17-Jul 31.05 41.65 31.05 36.9
17-Aug 37 37 28.05 33.05
17-Sep 33 38.85 32.5 35.85
17-Oct 36 38.9 33.3 36.1
17-Nov 36.4 45.95 35.25 44.2
17-Dec 45.95 58 36.3 52.5

40

35

30

25

20

15

10

5 16-Jan 16-Feb 16-Mar 16-Apr 16-May 16-Jun 16-Jul 16-Aug 16-Sep 16-Oct 16-Nov

INTERPRETATION:
The monthly price variations of the B N Rathi Securities are presented in the table and
graphically shown in candlestick chart. In the starting days of the year 2017 the company have
Bearish position (26) and from February onwards gradually it started a bearish trend and
maintain the same position up to end of the year.
 4. Price variations for 2016 (all prices in Rs.)

Month Open High Low Close

16-Jan 26.6 36 20.05 20.5

16-Feb 20.05 21.9 15 16.05
16-Mar 17 19 15.5 17.05
16-Apr 17 19.35 16.5 18.15
16-May 19.7 19.7 17.2 18.55
16-Jun 19.4 19.4 15.4 18.25
16-Jul 17.55 19.9 17 18.25
16-Aug 19.2 24.05 17.55 21.25
16-Sep 21 23.75 19.6 21
16-Oct 21.5 28 20.65 26.8
16-Nov 28.5 29.35 20 25.35
16-Dec 26.5 26.5 22 23.3

40

35

30

25

20

15

10

5 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec

0 OpenHighLowClose

INTERPRETATION:
From the above table and graph it is clear that the prices of B N Rathi Securities were in bullish
position in the starting of the year with Rs. 26.6 and later on in the middle of the year it has a
bearish trend in the months June & July with Rs.19.4 & Rs.17.55 respectively and from August
onwards it has started a bullish trend till November and started a bearish trend in the month of
December with a price of Rs.26.
 A STUDY ON TECHNICAL ANALYSIS WITH RESPECT TO BN RAT IHSECURITIES
LTD

4. Dow Theory - Weekly

Date Price(Rs)
30-01-2017 28
12-07-2017 37
22-01-2018 40
20-08-2018 33
13-02-2019 23
10-07-2019 21
27-12-2019 17

INTERPRETATION
The above table and graph shows that the price fluctuations according to the dow
theory of technical analysis. The chart shows the various fluctuations of prices
from 30-01-2017 to 27-12-2019, where the price was in increasing trend in the
beginning stages upto 22 jan 2018 and there onwards the price has started
declining stage and it has maintained the same till end

VAAGDEVI INSTITUTE OF TECHNOLOGY AND

SCIENCE
49
 A STUDY ON TECHNICAL ANALYSIS WITH RESPECT TO BN RATHI SECURITIES
LTD

5. Primary, Secondary and Minor trends for 2016

Month Open High Low Close

16-Jan 26.6 36 20.05 20.5

16-Feb 20.05 21.9 15 16.05
16-Mar 17 19 15.5 17.05
16-Apr 17 19.35 16.5 18.15
16-May 19.7 19.7 17.2 18.55
16-Jun 19.4 19.4 15.4 18.25
16-Jul 17.55 19.9 17 18.25
16-Aug 19.2 24.05 17.55 21.25
16-Sep 21 23.75 19.6 21
16-Oct 21.5 28 20.65 26.8
16-Nov 28.5 29.35 20 25.35
16-Dec 26.5 26.5 22 23.3

INTERPRETATION
The above table and graph shows that the B N Securities for the year 2016 has a minor trend in
the beginning to almost end of the year. From October – 2016 onwards the company has shifted
to secondary trend.

VAAGDEVI INSTITUTE OF TECHNOLOGY AND

SCIENCE
50
 6. Primary, Secondary and Minor trends for 2017

Month Open High Low Close

17-Jan 26 29.5 23.85 26.05

17-Feb 24.7 29.75 24.7 27.3
17-Mar 29.85 29.85 24.2 26.5
17-Apr 25.5 28.5 25 27.45
17-May 28.9 34.4 24.6 28.75
17-Jun 29 32.95 27 31.25
17-Jul 31.05 41.65 31.05 36.9
17-Aug 37 37 28.05 33.05
17-Sep 33 38.85 32.5 35.85
17-Oct 36 38.9 33.3 36.1
17-Nov 36.4 45.95 35.25 44.2
17-Dec 45.95 58 36.3 52.5

INTERPRETATION
The above table and graph shows that in the year 2017 the cpmpany shares are having
only minor & secondary trends. It does not have primary trend. In starting of the year it has
minor trend & immediately it has moved to secondary trend and finally from August onwards it
has continued minor trend till the end of the year.
7. Primary, Secondary and Minor trends for 2018

Month Open High Low Close

18-Jan 53.9 57.25 42 42.6

18-Feb 43.05 45.75 35 41.4
18-Mar 41 48.8 36 37.6
18-Apr 39.9 48.9 39 43.65
18-May 43.5 44.9 36 42.4
18-Jun 42.7 47 33 34.55
18-Jul 36.35 41.65 33.2 35.3
18-Aug 37 41.95 30.1 32.5
18-Sep 32.5 34.5 27.5 29.85
18-Oct 29.85 32.9 23.05 25.85
18-Nov 28 32 22.15 25
18-Dec 24.45 32 23 27.35

INTERPRETATION
The above graph represents that there are only minor trends for the year 2018. There is no
primary & secondary trends in the year. In the above graph we can identify that there are 3 minor
trends present in the year 2018.
8. Primary, Secondary and Minor trends for 2019

Month Open High Low Close

19-Jan 28 29.6 21.1 24.35

19-Feb 24.5 26.1 20 22
19-Mar 22.95 25 21.8 24
19-Apr 23 24.85 19.6 20.15
19-May 20.2 25 17.8 21.5

19-Jun 22.4 23.25 17.55 20

19-Jul 20.95 22 18 18.45
19-Aug 18.6 21 16.05 18.85
19-Sep 18.85 22.55 18.8 19.25
19-Oct 19 22.8 18.5 19.55
19-Nov 19.75 20.5 16.25 17.8
19-Dec 17.8 18.75 16 18.75

INTERPRETATION
From the above table and graph it is clear that in the year 2019 only minor
trends are present without any primary & secondary trends.
 FINDINGS

 I Have Found at in the starting days of the year 2019 the company have bullish position
(28) and middle of the year i.e june (22.4) and july (20.95) months it have the bullish
position and maintain the same position up to end of the year
 I Have found at in the starting days of the year 2018 the company have Bullish position
(53.9) and from februyary onwards it has started a bearish trend maintain the same
position up to end of the year
 I Have found at in the starting days of the year 2017 the company have bullish position
(26) and from February onwards gradually it started a bearish tread andmaintain the same
position up to end of the year
 I have found at in the sarting days to the year 2016 with 26.6 and later on in the middle of
the year it has a bearish trend in the months june & nuly with Rs19.4 & Rs17.55
respectively and from august omwards it has started a bullish trend till November and
started a bearish trend in the month of December with a price of Rs 26.
 SUGGESTIONS

 The company is in bearish trend for the last 3 years so the company should make better
strategies to overcome this bearish trend.
 The company is having only minor and secondary trends company has to focus for maintaining
the long run strategies for getting primary trends.
 CONCLUSION

Technical analysis is about knowing the price variations and technical analysis identifies
the various trends present in the share market. It involves identification of primary, secondary
and narrow trends using dow theory. Technical analysis also involves various indicators known
as technical indicators to represent the various changes or fluctuations in price movements of the
company.

From the above study I conclude that the performance of B N Rathi Securities as a stock
broking company is good. Every year it starts as bullish trend and later stages the company will
have the bearish trends. Under m study I have used candle stick graph to show the price
fluctuations and line chart to represent the trends.

Finally I conclude the company has to focus on the performance of shares because every
year intial stages it has bullish trend and end of the year it is having bearish trend. So the
company should focus on that to have good performance.
 REFERENCES
Books:
1.Investment analysis and portfolio Management –“Reily brown”
2.Investment analysis and portfolio Management –“Prasanna Chandra”
3.Portfolio Management –“subhindraBhat”
4.Investment analysis and portfolio Management
-“M.Ranganatham”and“R.Madhumathi”
Websites:
1.www.technical analysis.com
2.www.investopedia.com
3.www.bseindia.com
4.www.moneycontrol.com
5.BSE & NSE Websites
6.www.B N RATHI SECUR Your fafthfu|ly