RESEARCH REPORTON

SHARE MARKET ANALYSIS

MASTER OF BUSINESS ADMINISTRATION(U.P Technical University, Lucknow)

2008-10

SUBMITTED BY

…………

Roll No……….

SUBMITTED TO:-

Ms. Alka Aggarwal

MEWAR GIRLS BUSINESS SCHOOLSEC-4C Vasundhara, Ghaziabad, UP

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ACKNOWLEDGEMENT

A work of this magnitude and nature would have been quite impossible to get together

without a host of helping hands. I consider myself fortunate for having such people

around me and with me who did not think twice about sparing their valuable time and

efforts.

The work now completed bears testimony to the kind support I availed of at each

stage of the conduct of my study. The study wouldn’t have been completed, however

without the support of some people who continually helped me during the completion of

this research project, I would like to thank all my faculty members for their guidance and

support..

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TABLE OF CONTENT

1. INTRODUCTION 5

2. OBJECTIVE 10

3. IMPORTANCE OF STUDY 12

4. SHARE MARKET 15

5. FLUCTUATION AND REASON OF FLUCTUATION

IN SHARE MARKET 19

6. GRAPHICAL STUDY 33

7. RESEARCH METHODOLOGY 62

8. SUGGESTIONS 68

9. CONCLUSION 71

10. BILIOGRAPHY 74

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Introduction

Shares

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When you buy shares in a company, you are buying a part of that company. This means

you share in the company's performance in the form of profits which can be given to you

as dividends and/or capital growth through the value of your shares increasing.

The company you are investing in benefits by using your money and that of other

investors to finance its business or its expansion, without having to borrow money.

Benefits of investing in shares

Outperforms other investments over the longer term: -

Although past performance is no indication of future performance, history suggests that

Australian shares have outperformed other types of investment over the longer term. To

find out more you can read the Russell report which compares asset classes over the past

10 years.

Tax benefits: -

Where companies have already paid tax on their profits, tax credits known as franking

credits may be attached to the dividends the company pays to you. These franking credits

can be used to offset tax payable by you on other income. In addition, shares held for

more than 12 months qualify for a 50% discount on any capital gains tax payable.

Diversification: -

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Many people know the saying “doesn’t put all your eggs in one basket". The Australian

share market helps you to do this by offering a wide choice of companies in which

to invest. There are over 1700 companies listed on ASX. These companies are involved

in a wide range of industries covering most sectors of the economy including financial

services, industrials and healthcare. By investing in a range of companies you can spread

your risk.

Flexibility: -

You can buy and sell shares quickly. You can sell shares and generally have access to

your money in no more than three days. Other investments often take longer to sell and

get your money back. This concept is known as liquidity. Remember some shares can be

traded quicker than others due to their increased liquidity.  (Liquid investments have the

benefit of greater flexibility).

Control over your financial future: -

You can decide exactly how your money is invested, enabling you to have a lot of control

over your finances. You can of course choose to share this responsibility with a stock

broker who can advise you on what shares to buy and sell.

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What is Shares Market?

Market share, in strategic management and marketing, is the percentage or proportion of

the total available market or market segment that is being serviced by a company.

It can be expressed as a company's sales revenue (from that market) divided by the total

sales revenue available in that market. It can also be expressed as a company's unit sales

volume (in a market) divided by the total volume of units sold in that market.

It is generally necessary to commission market research (generally desk/secondary

research, although sometimes primary research) to estimate the total market size and a

company's market share

In the market which shares are issued and traded either through exchanges or over-the-

counter markets. Also known as the equity market, it is one of the most vital areas of a

market economy as it provides companies with access to capital and investors with a slice

of ownership in the company and the potential of gains based on the company's future

performance.

Market share refers to the percentage of the overall volume of business in a given market

that is controlled by one company in relation to its competitors.

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"The important factor in computing relative market share is not the exact number

associated with the sales volume, " Kenneth J. Cook wrote in his book The AMA

Complete Guide to Strategic Planning for Small Business. "Your position relative to the

competition is more important. You want to know basically if they dominate you, if you

are relatively equal in size, or if you dominate them."

To calculate market share, a small business owner first needs to determine the total sales

of a product in a target market over a specific time period, usually one year. Then the

small business owner needs to calculate the total sales achieved by his or her company in

that market over the same time period. It may also be useful to find out the sales level

achieved by the company's largest competitors and then use that information to compute

relative market share. Information on the overall size of markets is usually available

through industry associations, which commonly track both sales and growth rates. If

competing firms happen to be publicly owned, their sales figures can usually be gleaned

from their annual reports. Otherwise, the small business owner may be need to make an

educated guess based on his or her knowledge of each competitor and on information

provided by the company's customers and sales staff.

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Objective

Increasing market share is one of the most objectives used in business. The main

advantage of using market share is that it abstracts from industry-wide macro

environmental variables such as the state of the economy, or changes in tax policy.

According to the national environment, the respective share of different companies

changes and hence this causes change in the share market values, reason can be political

ups and downs, any disaster, any happening or miss happening.

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Other objectives

Other objectives include return on investment (ROI), return on assets (ROA), and target

rate of profit. Market share has the potential to increase profits as profit leads to more

customers with a higher demand of a particular product. As the forces of supply and

demand interact to all the business to have market shares.

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Moving.

Basically, the stocks perform their best, up to investors which one they believe in. Let’s

go deeper to understand better.

Demand and Supply

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In stock market investing, the stock price falls if sellers overrule the buyers. Conversely,

if there are more investors who want to buy the stock than the number of shareholders

who are willing to sell their holdings, the price will go up, and up, and up…. As a result,

stock prices fluctuate daily.

This is a classic example on law of demand and supply in economics. Next question

would be what forces the demand and supply?

Market Psychological Effect

Demand and supply for the available shares to be traded is due to market sentiment

effect. Every time investors feel that the stock will not able to meet their expectation,

they sell their equities and leave the company.

On the other hand, if they are optimistic of its future growth, they will buy more shares of

that stock to get better return on investment. What cause the market sentiment, you may

ask.

Unfortunately, there is no single answer to that one question.

However, the most obvious factors are interest rates, inflation, quarterly earnings reports,

news on corporate events, crime and fraudulent, energy prices, war and terrorism as well

as local and worldwide political stability.

Bear in mind though, when it comes to market sentiment, media is the king.

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To make the news popular and gain the most viewers, great things can be interpreted as

bad actions sometimes. Therefore, filter the information with extra cautious and do not let

media control your investment logic.

Individual Investor Needs

This is the most difficult one to identify but is the most reason why stock prices fluctuate

daily. Look, every now and then, investors who buy the stock can have variety of

reasons, and that reasons won’t be the same from one investor to another.

They buy and sell stocks according to their strategy and needs on daily basis. The fact is

there are traders who make living out of stock trading. Therefore, the price will fluctuate

based on their trading activities.

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What is Sensex ?

The Sensex is an "index". What is an index? An index is basically an indicator. It gives

you a general idea about whether most of the stocks have gone up or most of the stocks

have gone down. The Sensex is an indicator of all the major companies of the BSE.

(Bombay Stock Exchange)

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The Nifty is an indicator of all the major companies of the NSE.

If the Sensex goes up, it means that the prices of the stocks of most of the major

companies on the BSE have gone up. If the Sensex goes down, this tells you that the

stock price of most of the major stocks on the BSE have gone down.

Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top

stocks of the NSE.

Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage.

Popularly known as "BSE", it was established as "The Native Share & Stock Brokers

Association" in 1875. It is the first stock exchange in the country to obtain permanent

recognition in 1956 from the Government of India under the Securities Contracts

(Regulation)

Act, 1956.The Exchange's pivotal and pre-eminent role in the development of the Indian

capital market is widely recognized and its index, SENSEX, is tracked worldwide. Earlier

an Association of Persons (AOP), the Exchange is now a demutualised and corporatised

entity incorporated under the provisions of the Companies Act, 1956, pursuant to the

BSE (Corporatization and Demutualization) Scheme, 2005 notified by the Securities and

Exchange Board of India (SEBI).Bombay Stock Exchange Limited received its

Certificate of Incorporation on 8th August, 2005 and Certificate of Commencement of

Business on 12th August, 2005.

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The 'Due Date' for taking over the business and operations of the BSE, by the Exchange

was fixed for 19th August, 2005, under the Scheme. The Exchange has succeeded the

business and operations of BSE on going concern basis and its recognition as an

Exchange has been continued by SEBI.

With demutualization, the trading rights and ownership rights have been de-linked

effectively addressing concerns regarding perceived and real conflicts of interest. The

Exchange is professionally managed under the overall direction of the Board of

Directors. The Board comprises eminent professionals, representatives of Trading

Members and the Managing Director of the Exchange. The Board is inclusive and is

designed to benefit from the participation of market intermediaries.

In terms of organization structure, the Board formulates larger policy issues and exercises

over-all control. The committees constituted by the Board are broad-based. The day-to-

day operations of the Exchange are managed by the Managing Director & CEO and a

management team of professionals. The Exchange has a nation-wide reach with a

presence in 417 cities and towns of India. The systems and processes of the Exchange are

designed to safeguard market integrity and enhance transparency in operations. During

the year 2004-2005, the trading volumes on the Exchange showed robust growth.

The Exchange provides an efficient and transparent market for trading in equity, debt

instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietary

system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing &

settlement functions of the Exchange are ISO 9001:2000 certified.

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We think it will become a shopping arcade," says the chairman of a large stock broking

house, only half-joking. He is referring not to the possible fate of his run-down office

building, but to that of a pearl white edifice a few blocks away.

Just in case you are confused, the BSE is the Bombay Stock Exchange and the NSE is the

National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at

Delhi. These are the major stock exchanges in the country. There are other stock

exchanges like the Calcutta Stock Exchange etc. but they are not as popular as the BSE

and the NSE.Most of the stock trading in the country is done though the BSE & the NSE.

Besides Sensex and the Nifty there are many other indexes. There is an index that gives

you an idea about whether the mid-cap stocks go up and down. This is called the “BSE

Mid-cap Index”. There are many other types of indexes.

There is an index for the metal stocks. There is an index for the FMCG stocks (Fast

Moving Consumer Goods). There is an index for the automobile stocks etc.

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Stock prices change every day as a result of market forces. By this we mean that share

prices change because of supply and demand. If more people want to buy a stock

(demand) than sell it (supply), then the price moves up. Conversely, if more people

wanted to sell a stock than buy it, there would be greater supply than demand, and the

price would fall.

Understanding supply and demand is easy. What is difficult to comprehend is what

makes people like a particular stock and dislike another stock. This comes down to

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figuring out what news is positive for a company and what news is negative. There are

many answers to this problem and just about any investor you ask has their own ideas and

strategies.

That being said, the principal theory is that the price movement of a stock indicates what

investors feel a company is worth. Don't equate a company's value with the stock price.

The value of a company is its market capitalization, which is the stock price multiplied by

the number of share outstanding. For example, a company that trades at $100 per share

and has 1 million shares outstanding has a lesser value than a company that trades at $50

that has 5 million shares outstanding ($100 x 1 million = $100 million while $50 x 5

million = $250 million). To further complicate things, the price of a stock doesn't only

reflect a company's current value, it also reflects the growth that investors expect in the

future.

The most important factor that affects the value of a company is its earnings. Earnings are

the profit a company makes, and in the long run no company can survive without them. It

makes sense when you think about it. If a company never makes money, it isn't going to

stay in business. Public companies are required to report their earnings four times a year

(once each quarter). wall Street watches with rabid attention at these times, which are

referred to as earning seasons. The reason behind this is that analysts base their future

value of a company on their earnings projection. If a company's results surprise (are

better than expected), the price jumps up. If a company's results disappoint (are worse

than expected), then the price will fall.

Of course, it's not just earnings that can change the sentiment towards a stock (which, in

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turn, changes its price). It would be a rather simple world if this were the case! During

the dotcom bubble, for example, dozens of internet companies rose to have market

capitalizations in the billions of dollars without ever making even the smallest profit. As

we all know, these valuations did not hold, and most internet companies saw their values

shrink to a fraction of their highs. Still, the fact that prices did move that much

demonstrates that there are factors other than current earnings that influence stocks.

Investors have developed literally hundreds of these variables, ratios and indicators.

Some you may have already heard of, such as the price/earnings ratio, while others are

extremely complicated and obscure with names like Chaikin oscillator or moving average convergence divergence.

So, why do stock prices change? The best answer is that nobody really knows for sure.

Some believe that it isn't possible to predict how stock prices will change, while others

think that by drawing charts and looking at past price movements, you can determine

when to buy and sell. The only thing we do know is that stocks are volatile and can

change in price extremely rapidly.

As we know, stocks are one of the riskiest investment tools in the market. Of course,

different types of stocks have different level of risks, but when you talk about buying

stocks, you simply cannot get away with fluctuations.

Why are stock prices fluctuate? There are basically 3 main factors which affect them:

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Simple Theory of Economics - The Demand and The Supply

To a particular stock, if there are more people who want to sell than people who want to

buy, excessive supply happens. In the free market, the price of the stock will go down

until it hit the equilibrium, where supply equals to demand. On the other hand, if demand

is more than the supply, there is excessive demand in the market. Therefore, the price will

be adjusted automatically until the quantity of demand matches the quantity of supply.

Market Sentiment

Market sentiment plays a very important role in stability of the stock price. If investors

speculate that the market is going to be weak, or the corporation they hold the stocks with

will not perform up to their expectations, they will sell their stocks. On the other hand, if

they are full of confidence with the market or the corporation, they will start buying.

What actually affects the market sentiment? Media report is the most influential. How

medias interpret an issue will result in how the market responses. Besides, there are other

factors like war, terrorism, political stability, unemployment etc which can affect the way

investors feel.

Technical Factors

Technical factors can also make stock prices fluctuate. For instance, under circumstances

of strong economic growth and low inflation rate, the overall prices tend to go up.

Meanwhile, factor like interest rate may also affect stock prices. A hike in interest rate

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would see drop in stock prices and vice versa.

High oil a threat to price stability: RBI

MUMBAI: India's financial system is on a sound footing, although risks to stability from

external sources persist and high and volatile oil prices are a key danger for inflation, the

Reserve Bank of India (RBI) said on Tuesday. In its annual report on the banking sector,

the central bank said the domestic financial system was largely shielded from the U.S.

subprime mortgage crisis, although it was was difficult to know how the problem would

evolve.

"However, should the current subprime mortgage crisis in the U.S. aggravate, its impact

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on the Indian markets may not be significant," the report said. It said a worsening of the

crisis could impact Indian corporates who were looking to raise money in overseas

markets.

Foreigners could pull money of the the stock market to cover losses elsewhere, which

would also see the exchange rate weaken. Governments and households may not feel any

direct impact as they do not borrow from the international capital market, the report said.

And while readjustments in currencies might have some impact, the overall impact would

not be great as the Indian economy was largely domestic driven.

"Thus, there will be some impact. However, it may not be significant," it said. In the

report the central bank said no Indian bank had a direct exposure to the U.S. subprime

market. While some banks with overseas operations had some exposure via credit

derivatives, their mark-to-market losses would be limited, it said.

RBI Governor Yaga Venugopal Reddy said India could not be immune to global

developments despite not being directly exposed to the subprime sector. While largely

historical, the 397-page document contained an assessment on the banking sector and has

some forward looking comments on the economy and the markets.

The report said since India imported about 70 percent of its crude requirements, oil prices

were critical in sustaining growth and maintaining price and financial stability. "Given

that pass-through from international oil prices to domestic petroleum products remains

incomplete, it is a source of upside risk to inflation," it said.

Global crude prices have risen by more than 53 percent from February 2007. State-set

fuel prices have not been raised for more than one-and-a-half years, and the last revision

was a cut in February. The central bank said the state-set prices would hurt public-sector

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oil companies, who are forced to sell oil at below market prices.

That in turn would lead to an increase in fiscal costs and had negative implications for the

current account deficit and the exchange rate. "Monetary instability by distorting

allocative efficiency of resources can be a major threat to financial stability," the central

bank said.

Gold climbs to new high; silver surges

Mumbai: Gold continued its north-bound journey to breach its overnight peak on the

back of sustained buying spree by stockists and speculators in view of wedding season as

well as firming trend in the overseas markets.

Silver also shot up on persistent industrial buying.

Standard gold (99.5 purity) rose byRs 185 per ten grams to end at an all-time high of

Rs18,660 from overnight closing level of Rs18,475.

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Pure gold (99.9 purity) also finished by a similar margin to a fresh historic high of

Rs18,745 from Rs18,560 previously.

Silver ready (.999 fineness) strengthened by Rs445 per kilo to Rs29,710 from Rs29,380.

Gold rose more than 1% in Europe over volatility in currency markets amid fears for the

Euro prompting gold buying as safe haven.

Spot gold was bid at $1,212.85 an ounce early Wednesday as against $1,200.10 late in

New York on Tuesday.

In the US, gold futures for June delivery rose by $15.30 to finish at $1,213.30 an ounce

on the Comex division of the NYMEX.

Spot silver was bid at $18.25 an ounce as against $17.86.

Equity Analysis

Decisions like whether you should buy or sell when trading in the share market is a

difficult task to do. It requires split-hair analysis of the market. To do so one also needs to

have excellent understanding of the market. Equity analysis forms an integral part of the

share trading experience. Equity analysis decides the stance one would take in the share

trading industry. Finding out the highs and lows in the market and analyzing the equity is

of utmost importance before making any sort of investment. Technical analysis,

fundamental analysis and others form a part of the equity analysis.

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National Stock Exchange of India is one of the most trusted names in the market. They

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Markets recover partially after statement of Finance Minister Pranab Mukherjee

Finance Minister pranab mukherjee issued a statement that

there is no plan to ban P-Notes issued by FIIs to their clients and sub accounts. Finance

Minister said that there is no reason for alarm. The markets are trading near their all-time

highs, but there is nothing to worry. The valuations of Indian Stocks are still looking

good as the companies are showing decent growth in numbers.

The recommendation of SEBI caused biggest ever intra-day fall in stock markets.

Securities and Exchange Board of India recommended on Tuesday evening that the P-

Notes to be removed over a period of time.

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Stock market revives following Pranab Mukherjee’s statement (Update-Stock

Market)

Finance Minister Pranab Mukherjee remarks on

investment in the stock markets via Participatory Notes (PN) has given a new momentum

to them, as the Bombay Stock Exchange’s 30-share Sensex and the Nifty have started

reflecting positive signals.

Earlier in the day, the Finance Minister has ruled out any ban on the investment via PN

and had assured that the Securities and Exchange Board of India's (SEBI) proposal on the

PN is to moderate investment coming from abroad.

Welcoming investment via the PN, Pranab Mukherjee said that he was surprised to see

that the certain section of media was raising alarm over the performance of the stock

markets, adding, there is no need to raise an alarm, and that he expected that the initial

sense of alarm would “quieten” by the end of the day.

He went on to say that the move is the culmination of measures discussed between the

SEBI, the Reserve Bank of India (RBI) and the Central Government.

Expectation from Stock Market

A lot of people are now saying that we're way overbought here and we should start to

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drop, but the old adage that the market can stay irrational for longer than most people can

stay liquid seems to be prevailing.

Be that as it may, I'm not convinced that it's blue sky ahead. We may continue nudging

higher to squeeze as many of the shorts out as possible but the tide will turn soon and I

remain confident that the short side will prevail.

What seems to be happening now is a case of "expectations", after what we went through

last year, the expectations were for Armageddon. But with governments all around the

world throwing huge sums of cash at their economies, financial Armageddon was averted

and so when data begins to flow that things are not as bad as first thought, everyone starts

to feel better about entering the market again.

Having said this, what do you think will happen now that expectations are being adjusted

higher? The human psyche is fickle and the more you understand it the better you'll trade.

When expectations and reality meet there is often a reaction that gives rise to a positive or

negative sentiment. One of the keys to trading (and life) is to flow with whatever is

happening right now.

For the week ahead we may see a drop as the S&P has now cleared the 1000 level. The

psychology is that people will be feeling that resistance has been broken now, which

could make a good case for catching out the fresh bulls.

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COME AND INVEST

Pranab Mukherjee urged U.S. firms to invest in the power sector as the government plans

to add 78,000 megawatts (MW) of additional capacity by 2012.

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India suffers severe power shortages and the government wants to build seven new 4,000

MW power plants as part of an ambitious plan to meet the growing energy needs of its

1.1 billion people.

But the government, saddled with improving the lives of more 210 million poor and

limited finances, is finding it difficult to fund infrastructure projects on its own.

"What we find to our surprise and dismay is that U.S. companies are not coming forward

to bid for these projects. We want U.S. companies to bid either on standalone basis or in

partnership with Indian companies for these projects," Pranab Mukherjee said.

He said in July the government alone would not be able to meet the growing funding

need for infrastructure and the country would need $18-$20 billion a year in private

investment.

"Financing infrastructure is a major challenge. We have identified some steps that have to

be taken. Firstly, we think that external commercial borrowings for infrastructure must be

made more flexible," the minister said.

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Technical Analysis of Indian stock market BSE Sensex Index

The BSE SENSEX is not only scientifically designed but also based on globally

accepted construction and review methodology. First compiled in 1986,

SENSEX is a basket of 30 constituent stocks representing a sample of large,

liquid and representative companies. The base year of SENSEX is 1978-79 and

the base value is 100. The index is widely reported in both domestic and

international markets through print as well as electronic media.

Technical Analysis of Indian stock market BSE Sensex Index

The Index was initially calculated based on the "Full Market Capitalization"

methodology but was shifted to the free-float methodology with effect from

September 1, 2003. The "Free-float Market Capitalization" methodology of

index construction is regarded as an industry best practice globally. All major

index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the Free-

float methodology.

Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to

be the pulse of the Indian stock market. As the oldest index in the country, it

provides the time series data over a fairly long period of time (From 1979

onwards). Small wonder, the SENSEX has over the years become one of the

most prominent brands in the country.

Technical Analysis of Indian stock market BSE Sensex Index

1 Day Technical Analysis Chart of Indian stock market BSE Sensex Index

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5 Day Technical Analysis Chart of Indian stock market BSE Sensex Index

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1 Year Technical Analysis Chart of Indian stock market BSE Sensex Index

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Share Charts for HSBC (HSBA)

Share Price: 641.60 p

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Market Wrap,

The FTSE ended up on the day, nearly 63 points, in fact, finishing at 6,721. The FTSE

250 was up a healthy 187 points at 11,666.

Over the pond there were smiles as the Feds announced that GDP was up 3.9per cent in

the 3rd quarter, which was up a percent, call it, on what the clever bean counters and

economists predicted. Yep, smiles all round as everyone waits for a now expected 1/4 per

cent cut in interest rates by the Feds too. This should help domestic growth in US, so the

bulls rolled their sleeves up yet again. We'll need oxygen if we go any higher, at this rate.

By the time London closed the DJI was up about 66.5 points at 13,859 and the SandP 500

was up a more modest 11 points at 1,542, but up all the same. Tech bias Nasdaq was also

up nearly 97 points at 10,262.

As mentioned this morning, and last night we think (?!), the Irish race horse guys,

Magnier and McManus have been building a stake in Mitchell and Butler, who closed up

40.5 points at 665.5.

Also reported this morning was the DSG International possible deal (rumours), which

saw them finish top of the leaders, up 8.6p at 129.5 on the 2-quid bid from US firm Best

Buy.

Housebuilders did well today, with news that prices had been fairly even last month,

despite the scaremongering. Taylor Wimpey was up 14p at 247.5, despite telling us all

that sales would be 5% less this year. Looks like the bad news was already built in there.

persimmons was up over 50p at 1,049 and Bovis was up over 25p at 663.

Supermarket leader Tesco was up over 16p at 488 after the Competition Commission said

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that Tesco wasn't being anti-competitive by buying up most of the green belt in the

country. Well, maybe not most of it, but apparently they are within the realms of being

fair, even though they are stockpiling the decent bits of land on town bounderies, ready to

pounce.

Home Retail Group, the Argos store owner, took on nearly 8p, finsihing at almost 436 on

news that about £70m quid's worth of stock was being placed to client s and institutions

by Merrill Lynch.

The heavyweight miners turned up again, possibly on US interest rate speculation, with

Vedanta up 79p at 2,200, BHP up 13p at 1,830 and Lonmins up 88p at 6,436.Unilever

was down 27p at 1,625 on expected slowdown of sales for the 3rd quarter. bad weather

affected ice cream sales this summer, which is a big part of sales in this quarter usually.

Premier Oil finished up 72p higher at 1,240 on consolidation in the mid-cap sector.

Posted by Top Trades - use the Market Analyser at 23:00 0 comments  

EUR and GBP dominating the market

The pound has started to consolidate after yesterday’s sharp fall lower on the back of

disappointing mortgage approvals. Signs that credit markets remain tight have fueled

speculation that the BoE will add to their asset purchase program at Thursday’s policy

meeting. The focus on monetary policy has seen yield expectations grow in influence

from 17% to 20% in the past week. Risk trends remain the main driver of price action

explaining 40% of volatility, but have seen its influence diminish from 50% a month ago

as it begins to take a back seat to interest rate expectations.

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Market Wrap,

The FTSE closed down 47 points today at 6,659, slightly up from its low of 6,654. The

FTSE 250 was down almost 74 points at 11,479.

New York also fell after opening, with concern over the Fed's interest rate decision

tomorrow. By London's close the DJI was down a similar amount as the FTSE's

performance for the day - about 47 points.

GBP keeps strong ahead..

Cable remains strong ahead of wednesdays Fed announcement. There are rumours of a

25Bps reduction, which should keep the strength in the pound...

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The 15 minute chart picked up the intraday retracement indictaor at 7am this morning and

so far we have seen a 120 point bounce off the 200MA.

Morning Market,

The FTSE was down a little this morning, and by 9am was at about 6,690, 15points off

yesterday's close. The FTSE 250 was down 30 points at 11,523.

The US had a good day in the end yesterday, with everyone expecting a further

interestrate cut by the Feds on Wednesday. They start their 22-day deliberation on the US

economy today. The DJI finished up over 63 points at 13871, the SandP 500 was up a

little, just under 6 points at 1,541, and the Overnight in the Far East the Nikkei was down

47 points at 16,651 and the Hang Seng was down 39 points at 31,626 by the middle play.

After yesterday's high oil decided it had run fast enough and New York's Light Sweet

Crude was down 84cents at USD 92.7 bbl. Our very own Brent North Sea crude (dec

delivery also) fell by 71 cents to USD 89.61. It hit been up at an all-time record on

Monday of US$ 93.80.

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This morning in London we saw Imperial Tobacco down 34p at 2,409 as profit taking

came in after expected year end figures were received. Investors aren't too keen on the

planned Altadis acquisition, either. Profits were up 9 pcnt at just under £1.5 bln, and a

69.5p divi was the full year payout to holders. British American Tabacco fell in

sympathy, down 15p to 1,801. BAT also received a broker downgrade.

Market Wrap,

The FTSE was back above the 6,700 level, with miners leading the way. The US was also

forward, but not with as much gusto with the interest rate news coming Wednesday.

the FTSE closed at 6,706, which was up nearly 45 points on the session. The high of

theday was just shy of 6,727. The FTSE 250 closed at 11,552.8, up 43.2 points on the

day. Volume wasn't very heavy, which is worth noting.

GBP/JPY 178 Point Breakout...

GBP/JPY had a perfect triangle breakout today. The currency has been contained for the

whole of last week. The daily chart shows the reversal in the trend and the hourly gave us

the entry point at 235.00 with a strong breakout of 178 points...

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Gold Proving to be a Strong Buy...

The Gold price has rallied strongly since August. The idea is to follow the Indictaors with

the Trend and the last indicator appeared on the 21st Aug with the Gold price rallying

from 650.00 to 795.00...

More recently on wednesday last week, the retracement indicator alerted us to a potential

buy at 750.00 with a solid move up to 795.00 in 2 1/2 days.

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Morning Market,

The FTSE was up early doors after the US's nice end to the week on Friday and the

suspected further cut in interest rates by the Fed on Wednesday. By 10am the FTSE was

at 6,691, with volume healthy.

Royal Bank of Scotland was also lower, down 4.5p at 503, with brokers marking it as a

'sell' and 450p target. This is nearly half the previous buy recommendation of an 800p

target. Contrast in views, now, then...?

Cairn Energy, a mid-cap favourite, also had bad talk by brokers dowing the rounds as it

fell 30p to 2,433.

AUDUSD still strong...

The AUDUSD still looks very strong, even though it has been extremely overbought...

Be patient as there has to be a retrenchment before it continues upwards. On Wednesday

last week we saw the cross above the 200MA and a green conductor alerted us to this

reversal. The AUDUSD is now 250 points higher!!!

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FTSE Bounces off 6,500

The FTSE has risen consistently since wednesday last week. The Green conductor alerted

us to the move on the 25th Oct and if you had held the position from wednesday to friday

you would be sitting here 200 points in profit. There is an old high at 6,750 so there will

be obvious resistance at this level. Look for a breakout at some point this week with a

move to the all time high at 6,921...

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DOW Rallies ...

The DOW Jones rallied 134 point on Friday. The Green conductor appeared on the Daily

chart on Thursday and on friday at 5.15pm the Green conductor confirmed the reversal,

leading the move from 13,700 to over 13,800...

Remember to always look at the Daily chart for the overall trend!!!

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Market Wrap,

The FTSE closed up a healthy 85 points higher at 6,661.3, 20-odd points short of the

day's high of 6,684. The low of the day was 6,567, but the charts screamed a long trade

when it was down there (check out the previous post). The FTSE 250 was a shade over

29 points up at 11,509.6.

Other news was a negative broker comment on BAE Systems caused the stock price to

fall down to 503p on the day, 12p lower than yesterday's close.

FTSE

This morning i showed you the breakout of the downtrend and today was always going to

show a positive upturn. The Dow is expected to open strongly, so enjoy the friday

afternoon of trading...

GBPJPY - 100 Point move this morning

GBPJPY saw a Doji candle at 7.00am this morning which indicates a potential reversal.

The conductors turned red at 9.00am and a lovely short trade back through 235.00 with

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no stress...

Morning Market, Friday

The FTSE gapped up 15 points this morning and carried on up to 6,605 in the first 15

minutes of trading this morning. By 10am we were back at 6,570, where it looks like

we'll be settling down for now. In the US last night the Dow had a fairly late run back up

from a session low of 13,548 up to a close of 13,671, thus giving London something to be

pleased about. The Dow had been up and down, unsure of a direction, during the day.

The other end of the leader board, i.e.- the bottom, we saw Sainsbury's down 2.75% on

poor feeling on the potential middle east bid, with Morrison's falling in sympathy 2% as

well.

The builders were also poor, with Taylor Wimpey down 6p at 237.25 and Barratts down

9.5p at 641.5.

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NZD USD looking strong...

The NZDUSD has bounced off it's 200MA after a perfect hammer candle on the 22nd

October. The hourly gave us the perfect buying opportunity on monday with a double

bottom and as it crossed above the 50MA the reversal was set from 0.7400. We are now

sitting above the 200MA, 250 points higher...Always look at the Daily for the trend and

then look for an entry point on the 60 minute...

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FTSE Momentum...

The FTSE has gathered good momentum off the 6,400 support level. The Daily chart

shows the trend changing and as you can see from the 60 minute chart, the Retracement

Indicator's told us perfectly when to enter the trade on monday. That's nearly 200 points

in under a week... The FTSE has now broken out of the resistance line and should hold

the 200 MA as a support level on the 60min chart...

Market Wrap,

The FTSE was up today, pasting over previous session's losses with a 94.3 point rise on

the day, finishing at 6,576.3. This was down from an intra-day high of 6,587.6, but in

contrast to the low of 6,482, which it left in its wake. The FTSE 250 was 202 points

higher at 11,480.5 on fairly strong volume. Not a bad session.

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By the time London closed the US was fairly even, even though US house sales figures

showed a more than healthy 4.8% rise in the annual figure for September. Weaker than

expected employment was in contrast, given a neutral stance by tea time in London.

Morning Market,

The FTSE was up, early doors, a jerk reaction to yesterday's poor day in UK and the rise

over the pond in US last night, we feel.

At 10am, as we are typing, the FTSE is at 6,546, up about 65 points on the day. Volume

is quite firm so far.

GBPJPY and Dow Jones

Good morning...Its been a quiet 24 hours. GBPUSD keeps trying to attack the 2.0500

level but with it being so over bought it doesn't seem to have the strength at this moment

to make that final push. You often see this consolidation before the next move...

GBPJPY saw a nice breakout today on the 60 minute chart. The conductor came in at

7am this morning and broke out at 233.40 for a quick 90 points...

Yesterday saw the Dow push back to the top of the Channel at 13,700. The conductor

appeared at 7.30pm our time and had a late 175 point rally from 13,500. This was a

double bottom formation with a higher low, which is a keen signal for a change in

direction. Should be an interesting day ahead, with a possible break above this level or

will we see a fall back down again!!! Be patient and wait for the move...

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Market Wrap,

The FTSE finished the day at 6,482. down 32 points on the day. The US also had a poor

run during its morning, plummeting in early deals. By London's close the DJI was off

some 147 points at 13,529.

The Pharmas were down today, with Glaxo off 11p at 1,248.5 as it announced its 3rd

quarter priifts were down, and AstraZeneca was also down , finishing at 2,408.5 (down

49p) at Merrill Lynch downgraded the firm on EPS forecasts.

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DOW and FTSE continue down trend

The Dow and the FTSE have continued their down turn today with the Dow already

down 150 points today. You can see from the Dow chart below that it fell through it's

support line and with the CCI falling into the negative the DOW collapsed.

The FTSE followed this morning with a Double top formation below the 200MA and

ended up 32 points down for the day. Remember to always trade the conductors with the

Trend!!!

Otherwise its been a very quiet day in the FX market...

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Market Wrap,

After having a decent start and suprising most of us the FTSE still closed up at 6,514,

some 54.7 points higher, but off the high of the day. Housebuilders and miners both did

well.

Morning Market,

The FTSE pushed up in early trading after the US late rally last night. By 9am it was up

over 50 points with more volume than yesterday.

The DJI did a 100point reversal after being down 40points before their lunch but

finishing up on the day about 45 points higher. The close was at 13,567, a bit of an

unexpected bounce, to say the least, especially after the 300 point fall on Friday.

Meanwhile world oil prices slipped further in Asia on Tuesday as worries over slowing

economic growth in the US shadowed the market. New York's main oil futures contract,

light sweet crude for delivery in December, was 26 cents lower at 85.76 US dollars a

barrel in late morning trade.

DOW Bounces off 13,400

The DOW bounced strongly yesterday off 13,400. After last weeks aggressive selling and

falling from above 14,000, the DOW was potentially going to find support at this

psychological level. It bounced off it twice, showing its strength and then rallied back up

156 points to 13,566...

The next few days promise to be interesting and today, with a strong open, may see a pull

back towards the resistance level at 13,800 level...

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USDCAD Retrenchment off old resistance level...

The USDCAD had an excellent breakout play yesterday for a 120 point move. The old

high from Wednesday 17th, at 0.9825, was always going to be hard to break and we have

seen it fall back 100 points to 0.9720...

Remember to watch the market conductors and see how they slow down and level off

before they change direction...

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GBP Open Channel

Cable has seen a bounce off its old support level at 2.0275. The Open Channel alerted us

to this and we have seen a 175 point rise since yesterday afternoon...

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FTSE Retracement Pre Alerts

The Ftse retracement indicators picked our trade perfectly over the last 24 hours. The old

support level of 6,400 held firm and we are now sitting 144 points higher.

Market Wrap

After a scare this morning, London shares closed weaker but well off the low of the day.

New York trimmed losses once open.

Leading shares did close weaker again (that's 5 days from the last 6), with the

heavyweight mining sector taking a a thumping, but a relatively mild fall on Wall Street

helped ensure that the FTSE 100 finished well off session lows.

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Morning Market,

After the press at the weekend and early today one might be releaved at the actual fall

back of the market not being as bad as one expected. Aftre the poor end to Friday's New

York market one would have thought the drop could have required a parachute this

morning, but London shares were down fairly sharply, but not freefall.

The heavyweight swere down early on following Friday's fairly hefty fall on Wall

SStreet, with most sectors down on the realism settling in and being absorbed that the US

economy, and the rising oil prices, together with weaker earnings by the US majors AND

the US housing situation hit investors' confidence.

By 9am the FTSE was down over 92 points.

GBPJPY falls 450 points...

GBPJPY has fallen 450 points this am. The trend has been falling since the end of last

week and when the red conductor came in at 07.00 this morning it gave us a great

opportunity. Keep it simple and trade with the trend to maximize your profits.

Pay attention to the CCI as this also fell through the 0.00 level to confirm our short

trade...

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Research methodology

The term research methodology is made up of two sub term namely: research and

methodology

Research is a diligent inquiry and careful search for new knowledge aids in the

construction of a theory or in practice of an art. It is systematic method of discovering

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new facts or verifying old facts, their sequence in the relationship, casual explanation and

the natural laws ,which govern them.

Methodology refers to first an approaches toward inquiry and later evolves in particular

methods or techniques. It deals with various method used by the researcher right from

data collection and various techniques used for the same for interpretation and inferences.

Thus research methodology is a procedure designed to plan and evaluate before

conducting the research.

Research design

A research design is a framework or blueprint for conducting the research project. It

entails the procedures necessary for obtaining for the information needed to structure or

solve research problems. The problem domain is the phenomena of the recent past at the

advent of the information technology and global competition, which is not duly supported

by sufficient empirical research by academicians. Under these circumstances, the

researcher has to look for more qualitative information about the nature of the problems

present status of the research work in order to have more comprehensive knowledge

about the various dimension of the problem domain. In order to achieve the main

objective of the research strategically, it was realized that the more qualitative

information should be collected with regard to various contemporary issues pertaining to

the problems. Therefore it was realized to collect primary data for the identification.

Secondary data is used in my research report of share market analysis. This research

report is based on secondary data.

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Important for project…,

India on Sunday became the 20th nation in the world to have seen its stock market

benchmark enter the league of bourses that have touched the 20,000-point milestone.

The bellwether index Sensex breached the 20k level in intra-day trade for the first time in

its over two-decade history. As many as 32 indices spanning across 19 countries have

already crossed this mark.

After crossing the magical figure in late afternoon trade, the Sensex, however, fell to

close at 19,977.67.

In Asia, the bellwether index is second only to Hong Kong's Hang Seng to achieve this

feat, while markets like China and Japan are yet to see any of their indices touching 20k

points.

Even in the West, markets like the US, UK, Canada, Germany and France have not seen

their indices reaching this mark.

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The countries whose stock market indices have crossed 20k level include Mexico, Brazil,

Argentina, Venezeula, Peru, Costa Rica, Jamaica, Italy, Poland, Russia, Hungary,

Ukraine, Turkey, South Africa, Egypt, Morocco, Nigeria and Hong Kong.

Italy and Hong Kong have four indices each trading above 20k level, while South Africa

and Peru have three such indices each. Mexico and Russia have two such indices each,

while others have one index each to have crossed 20k level.

Argentina's Indice Bolsa General is trading above 1, 28,300 points, while Jamaica's JSE

Market Index is near 99,000 level.

Other big indices in terms of sheer value include Egypt's Hermes Index, Russia's ASP

General, Brazil's Bovesta Index, Poland's WSE WIG Index, Turkey's ISE National 100

Index and benchmark index of Nigeria stock exchange, all of which are quoted above 50k

points.

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Suggestions to control stock market fluctuations

Pay special attention to controlling inflation.

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Eight groups of measures, including tightening monetary policy, strengthening

market price management, saving public expenses, boosting exports, controlling

trade surplus and providing continued support to the poor, should be followed.

The banking and financial sector to manage the monetary and credit policies in a

tight, active and flexible manner to support inflation control efforts and mobilize

capital resources for economic development.

The ministries and sectors to ensure supply and demand of essential commodities

for production and people’s daily lives such as petrol, oil, rice, medicines,

cement, steel and fertilisers. Once again proposed no increase in the prices of

coal, electricity and petrol in several coming months and said the State will

continue to incur losses of these products to stabilise market prices.

Ministries, sectors, localities and craft associations should keep a close watch on

market fluctuations and adopt effective measures to control market prices.

Businesses were required not to capitalise on the situation to corner the market.

Boosting the exports of competitive products such as seafood, garments and

footwear is one of the solutions for balancing budget deficit

“The Government should control trade deficit through both market and

administrative measures for the benefit of people and the nation. 

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Efforts should be made to boost industrial production and services, particularly

agricultural production following the severe drought, cold spell and recurrence of

bird flu in the past months.

Re-examine policies and programmes to support low-income earners and the

poor who have been badly affected by market fluctuations.

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CONCLUSION

This study shows nature of stock market and nature of gain in stock market could lead to

rise and fall in prices…

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In summary reinforcing and balancing loops stock market fluctuations are as follows:

Increasing attractiveness causes rise and fall in demand and price.the growth of price in

capital…

The market has crushed the bones of many a sure-fire scheme under the

iron heel of its random walk. This is not to deny that there are many good

investment opportunities available, but only to emphasize that pitfalls exist

as well. A better appreciation of the forces driving market fundamentals

may give investors (and policymakers) the sagacity to find one and avoid

the other.

A stock market fluctuation is a sudden dramatic decline of stock prices across a

significant cross-section of a stock market. Crashes are driven by panic as much as by

underlying economic factors.

Stock market crashes are social phenomena where external economic events combine

with crowd behaviour and psychology in a positive feedback loop where selling by some

market participants drives more market participants to sell. Generally speaking, crashes

usually occur under the following conditions[citation needed]: a prolonged period of rising stock

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prices and excessive economic optimism, a market where P/E ratios exceed long-term

averages, and extensive use of margin debt and leverage by market participants.

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BIBLIOGRAPHY

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I have taken the reference of the journals and websites to collect information related my project..

Websites:

www.google.com

www.bseindia.com

www.nseindia.com

www.moneycontrol.com

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