STOCK PRICE PREDICTION USING

TECHNICAL AND FUNDAMENTAL ANALYSIS

Shivam Kumar Shubham Raj Gupta
CSE Department CSE Department CSE Department
Chandigarh University Chandigarh University Chandigarh University
Mohali, Punjab, India Mohali, Punjab, India Mohali, Punjab, India
[email protected] [email protected] [email protected]
Shekhar Kumar Riya Sharma Er. Parampreet Kaur
CSE Department CSE Department
ASST. PROFESSOR
Chandigarh University Chandigarh University
CSE Department
Mohali, Punjab, India Mohali, Punjab, India
Chandigarh University
[email protected] [email protected]
Mohali, Punjab, India
[email protected]

(Initial Price Offering) for business expansion. The

Abstract— Stock Market Price and Trend Prediction Stock Market works like a big store where people buy
are very Challenging and different tasks in the Stock
and sell ownership of companies. The share price of
Market for every Investor and Trader. Market Repeat
companies depends on volume, demand, and supply.
History itself, Analyze the current and historical data
of the market. Data include Total Volume, LTP (Last Stock market analysis and price prediction will reveal
Trade Price), Closing Price, Opening Price, Total OI the market pattern and predict the right time to
(Open Interest), Last Swing, etc. Machine Learning purchase stock, the stock market repeat history itself.
algorithms Play an important role in the Stock Market Machine learning is a method of more data analysis
for Price Prediction and forecasting. LSTM (Long Sort from historical data and automatically analyzing model
Term Memory) ML Model is the Best Method for building using algorithms, Machine learning allows
Stock Price Prediction. RNN (Recurrent Neural computers to find hidden information.
Network) can remember information over a long Two methods are widely used for stock analysis and
period of time, thus making it extremely useful for
price prediction: Fundamental Analysis and Technical
predicting stock prices. We use Machine Learning to
predict the stock price in various forms. Stock or Analysis. machine learning algorithms application
indices, such as future index, Future value of opening focused on technical analysis and fundamental analysis.
price, the closing price, Volume, etc. This Research
Paper is all about discussing techniques, setup, rules,
and technical and fundamental analysis. This will help
all investors and traders better understand the stock
market and make quick decisions.

Keywords: Stock market Prediction, Fundamental

Analysis, Technical Analysis, Machine Learning
(LSTM), RNN

1. INTRODUCTION Fig.1 Stock Market [1] Source: The Economic Times

A share market is a Place Where to Trade in Public
Listed Companies. Stock Market Price and Trend Fundamental Analysis: Fundamental Analysis is the
Prediction are very Challenging and different tasks in art of value investing in stock to find long-term
the Stock Market for every Investor and Trader. The investing opportunities and study the intrinsic value of
Stock Market is an important part of the economy of a stock and financial statements of the company, also
country and has played a vital role in the growth of
studies whether LTP is higher or lower than the real
industry, and commerce in the country affects the
country's economy. Many people are involved in the value of the stock, Price earning Ratio, and Balance
stock market such as retailer investors, other domestic Sheet. [2]
institutions, foreign investors, and industry. He wants Technical Analysis: Technical Analysis is a method
to know whether some stock prices will rise or fall for identifying the trend of a stock and predicting stock
over a certain period. The Stock Market is the primary movements based on historical data on the market,
source for any company to raise funds through IPO
current price, chart patterns, indicators, and volume.
Also, analyze support and resistance with the help of
forming price action on the market. The trend is your Technical Analysis: Technical Analysis is a method
friend gives you more opportunities to trade or invest for identifying the trend of a stock and predicting stock
movements based on historical data on the market,
in the short term. [3]
current price, chart patterns, indicators, and volume.
Also, analyze support and resistance with the help of
2. LITERATURE REVIEW forming price action on the market. The trend is your
Stock Market Price and Trend Prediction are very friend gives you more opportunities to trade or invest
Challenging and different tasks in the Stock Market for in the short term. [] The market is going on a trend
cycle so wait for your day means if the market is
every Investor and Trader. This literature review
trending then next will be a volatile market and
provides an overview of research papers that have used another next is sideways.
various rules, Strategies, and setups for investing, and
trading in the Stock Market and use machine learning The first step in developing a stock market analysis
algorithms for stock price prediction such as artificial would be to collect historical stock market data chart
neural networks (ANN), LSTM (Long Short-Term Patterns. This chart data would include information
Memory), and decision trees. They discuss the such as stock (LTP) Last traded prices, trading
features used in stock market prediction, such as volumes, last swing, market sentiment, and other
historical stock prices, technical indicators, relevant financial indicators.
fundamental analysis, and market sentiment. They
highlight the challenges associated with stock market various machine learning algorithms can be used for
prediction, such as data scarcity, data quality, fake the prediction of future value of stock prices such as
breakout, fake breakdown, news sentiment, trending linear regression, (SVM) Support Vector Machine,
market, volatility of stock prices, sideways market, LSTM, and Artificial neural networks can be applied
volume, LTP (Last Traded Price), data preprocessing, to the preprocessed data. These algorithms would be
and the efficiency of machine learning algorithms, and trained on historical data to identify patterns and
suggest potential future research directions, such as the relationships between various financial indicators and
use of deep learning techniques, ensemble methods stock prices.
and sentiment analysis for stock market prediction.
Compare the prediction value of stock and backtest the
3. PROPOSED SYSTEM model made by the machine learning algorithms can
be compared to the real value of stock prices. If the
The proposed system would involve the use of various model is accurate, then it can be used for investment
rules, Strategies, and setups for investing, and trading decisions and help investors make accurate decisions
and the use of machine learning techniques to analyze about which stocks to buy, sell, or hold with high
stock market data and make predictions about future accuracy.
stock prices.
Fundamental Analysis: Fundamental Analysis is the In addition to predicting stock prices, the proposed
art of value investing in stock to find long-term system could also be used to identify potential risks
investing opportunities and the true value of a and opportunities in the stock market using different
company, understand the business, study the intrinsic strategies and setups such as 5 EMA, 2.20 setup, RSI,
value of stock and financial statements of the Fibonacci Retracement, VWAP, support, and
company, study whether LTP is higher or lower than
resistance. For example, the system could analyze
the real value of the stock, Price Earning Ratio, and
Balance Sheet. [5] market trends and identify sectors that are likely to
The condition is that the total revenue (sales), profit, perform well or poorly in the future.
net income, cash flow, and total asset of the company
is continuously increasing, and the total liabilities and
debt ratio is continuously decreasing year by year.
Data Analyze and preprocessing (Stock
This indicates the strong fundamentals of the company Historical data)
that make more profit in the long run. Check out
Reliance Industries Ltd on Tickertape. Visit []

Feature extraction and selection (Technical

indicator)
 shareholders' equity.[5] Total assets should have
increased in the last five years, total liabilities should
have decreased in the last three to five years and total
Optimizing and training with setup and strategy equity should have increased in the last five years.
3. Cash Flow: The cash flow statement measures how
well a company generates cash to pay its debt
obligations, fund its operating expenses, and fund
investments. Free cash flow should be in positive and
Testing with setup increasing year by year. If any condition of free cash
flow is negative but income and balance sheet are good
then study the company report.
The Free cash flow allows the investors to understand
how a company's operations are running, where its
Prediction signal money is coming from, and how money is being spent.
Proposed System Flow diagram [5]
Ratio: The ratio provides an overview of whether a
Overall, the stock market analysis has the potential to company's stock value is expensive or cheap. Different
types of ratios in the stock Market, understand the
provide investors with valuable insights and help them
ratios one by one.
make more accurate investment and trading decisions
with low risk. PE (Price earning) ratio is used by investors to
determine the stock's potential for growth. It reflects
Table 1 how much they would pay to receive rs.1 of
earnings.[6]
Stock Prediction PE= Current Stock Price / Earning Per share (EPS)
Sr. N
Read in research paper Now new add
1 Artificial Neural Network 5EMA
EPS = Net Income / weighted average
2 Long Short-Term Memory 2.20 Earnings per share will also be zero or negative if a
company has zero earnings or negative earnings
3 Recurrent Neural Network RSI
representing a loss.
Support
4 Time Series Linear Model
Resistance PE ratio should be lesser as compare to industry PE
ratio.
PB (Price to Book) should be lesser as possible.
4. METHODOLOGY
Debt-to-equity (D/E) ratio measures how much a
The methodology of stock market Fundamental company is funding its operations using borrowed
analysis, Technical Analysis, and Machine Learning money. It should be lesser as possible for low risk
typically involves the following steps: investment.
Fundamental Analysis: Fundamental Analysis is the art Debt-to-equity ratio = total liabilities / total
of value investing in stock to find long-term investing shareholders' equity.
opportunities and study the intrinsic value of stock and
financial statements of the company, also studies Current Ratio = Current Assets / Current Liabilities
whether LTP is higher or lower than the real value of If the current ratio of the stock is as high as possible
the stock, Price earning Ratio, and Balance Sheet.[2] then it will be better for investment.
The first step in Fundamental Analysis Return on equity (ROE) measures profitability and how
Financial Statement: Financial statements are written effectively a company uses shareholder money to make
records that convey the business activities and the a profit. ROE is expressed as a percentage of common
financial performance of the company. There are three- stock shareholders.[6]
term studies in financial statements.[5] Peer & Comparison: Compare the particular sector
1. Income: Study two-term total sales of a company stock in which one company provides more profit
(Revenue) and net income should be an increase in the lesser PE ratio, and lesser debt to equity ratio, and also
last five years this indicates the company's financial compare performance which one is better to perform in
performance is good for investment for the long term. the last 5 years. All those terms were discussed in the
fundamental analysis.
2. Balance Sheet: The balance sheet provides an
overview of a company's total assets, liabilities, and
Technical Analysis: Technical Analysis is a method for minute candle settles above the 5ema line without
identifying the trend of a stock and predicting stock touching the candle body low, it’s the alert candle that
movements based on historical data on the market, breaks the alert candle body low and then signals to fall
current price, chart patterns, indicators, and volume. market, see in Fig. 4.2.
Also, analyze support and resistance with the help of
2.20 Setup: 5min candle settled open at 2.20 and
forming price action on the market. The trend is your
closing at 2.25 it’s an alert candle that breaks the alert
friend gives you more opportunities to trade or invest in
candle body low then the market goes to fall see in Fig.
the short term. [3]
4.3. If it breaks the alert candle body high then goes to
Trend: Trends are the direction of moving stock where an uptrend market, see in Fig.4.4.
to go up-trend, down-trend, and sideways. In uptrend
Overall, the methodology of stock market analysis is a
making higher- high, in downtrend making lower low,
very challenging task and iterative process that requires
and in sideways making sort range up-down.
understanding the fundamental, technical analysis and
Support: Support is made at the bottom of the chart to expertise in both machine learning and finance
reverse the trend, from downtrend to uptrend due to the information related to the stock market. It is important
high demand for stock. to carefully evaluate the performance of the model and
to use caution when making investment decisions based
Resistance: Resistance is made at the top of the chart to
on fundamental, technical analysis, and machine
reverse the trend from uptrend to downtrend due to the
learning predictions.
high supply of stock.
Chart Pattern: The chart pattern is a graphical 5. RESULT
representation of price movement. The most useful Fundamental Analysis
chart pattern is the w pattern, M pattern, and head &
shoulder. They give a signal where the price goes down
or up by using previous trends, and patterns.
Candlestick: Candlesticks are a visual representation of
the price fluctuation of stock that displays the Open,
High, Low, and closing prices of stock. The most
famous candlestick is the Hammer candle, Shooting
Star, Hanging Man, and Doji candle.
Machine Learning Algorithm: There are various
machine learning algorithms that can be used for stock
market prediction, including Artificial Neural
Networks, decision trees, Recurrent neural networks,
and support vector machines. [7,9,11] Income and Balance Sheet Source: Ticktape[12]

Artificial Neural Network: An Artificial Neural

Network is a machine learning technique commonly Technical Analysis
used in the stock market to predict stock prices.The
structure of an artificial neural network like a human
brain and designed to recognize patterns and
relationships in data. In terms of stock market analysis,
an ANN is typically used to predict the stock price
based on historical data. The data collected from the
previous record historical prices, volume, Price earning
ratio, news article, and Patterns. [ 7,10,11]
Recurrent Neural Network: Recurrent Neural Network
is a technique that is used for backpropagation to learn,
this model predicts stock price based on historical data.
[11]
5 EMA Setup: The 5EMA setup is an Exponential
Moving Average setup that predicts the stock market
with high accuracy. It is simple and easy to apply
whenever the 15-minute candle body settles below the Fig.2.1 Support Resistance Source: Upstox
5ema line without touching the candle body high In the
5ema line this candle body is the alert candle when a
candle breaks the alert candle high and then goes to the
up-trend market. See in Fig. 4.1 Whenever the 5-
 Fig.4.2 5EMA Source: Upstox 2023
Fig.2.2 Shooting Star Candle [14]

Fig.2.3 Hammer Candle

Fig.4.3 2.20 Setup

Artificial Neural Network: An Artificial Neural
Network is a machine learning technique commonly
used in the stock market to predict stock prices.

Fig.3 Artificial Neural Network

Fig.4.4 2.20 Setup Source: Upstox 2023

Table 2
Sr. Setup Time Frame Use For Accuracy
N Name in Minutes
1 5EMA 15 Buy CE and 65-72%
Sell PE
2 5EMA 5 Buy PE and 75-80%
Sell CE
3 2.20 5 Buy CE, PE, 82-85%
and Sell CE,
PE
Strategy And Setup with Accuracy
Fig.4.1 5EMA Source: Upstox 2023
 6. FUTURE WORK
4. Tickertape Check out Reliance Industries Ltd on
The future of the stock market is bright, likely to be
Tickertape. Visit
exciting, and full of potential. Encouraging more retail https://ttape.in/lML8xbrdGDb?ref=copy-link-
participation Currently, retail investors make up a share&utm_medium=copied_link
relatively small percentage of the Indian stock market.
According to the January 2023 report, It's found that 11 5. Investopedia (2023) Financial Statement
crore people have opened their demat account. So https://www.investopedia.com/terms/f/financial-
almost 7.86% of the total Indian population has a statements.asp
Demat account but only 3–4% of the total Indian 6. Investopedia (2023) Ratio
population is actually active in the stock market right
now Future work could involve developing more user- https://www.investopedia.com/financial-
friendly platforms for retail investors and increasing edge/0910/6-basic-financial-ratios-and-what-they-
financial literacy to encourage more people to tell-you.aspx
participate in the market By incorporating new data
sources, advanced deep learning models, and
7. ResearchGate (2021) Mr. V. Manoj Kumar's.
reinforcement learning techniques, researchers could
develop more accurate and robust models for predicting https://www.researchgate.net/publication/367874831
stock prices and developing optimal trading strategies. _Stock_Prediction_using_Long_Short-
Term_Memory_Support_Vector_Regression_and_Li
near_Regression_Algorithms

7. CONCLUSION 8. ResearchGate (2017) ML Approach

In conclusion, this research paper provides an https://www.researchgate.net/publication/321990513

_Survey_of_stock_market_prediction_using_machin
overview of the Fundamental analysis, Technical e_learning_approach
Analysis, machine learning technique, and strategy of
9. ResearchGate (2020) Stock Market Prediction
different stocks. ML Algorithm techniques are used to
predict stock market performance and trends based on https://www.researchgate.net/publication/353037452
_STOCK_MARKET_PREDICTION
historical data, and the vast amounts of data available
in the financial industry that can be used to analyze 10. ResearchGate (2020) ML Technique
and predict trends machine learning models such as https://www.researchgate.net/publication/341482418
Artificial Neural Networks, decision trees, and _A_Survey_on_Stock_Market_Prediction_Using_M
achine_Learning_Techniques
Recurrent Neural Network can be used to build models
that can predict stock prices, identify market trends, or 11. ResearchGate (2015) ML Comparision
make investment decisions. These models can be https://www.researchgate.net/publication/280045818
trained on historical data. _A_Comparison_between_Regression_Artificial_Ne
ural_Networks_and_Support_Vector_Machines_for_
Predicting_Stock_Market_Index
Overall, stock market analysis has the potential to
provide investors with new insights, faster decision- 12. Fundamental chart ticker tape
making, and improved returns with high accuracy and https://www.tickertape.in/stocks/reliance-industries-
RELI#financials
low risk.
13. Shooting Star Investopedia
https://www.investopedia.com/terms/s/shootingstar.a
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1. The Economic Time (2023) Market Chart:
https://m.economictimes.com/mf/analysis/interest-
rates-may-go-up-what-should-mutual-funds-
investors-do/slideshow/87481826.cms
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https://www.tickertape.in/blog/a-step-by-step-guide-
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