Technical Analysis of Cement Sector in India Executive Summary The main aim of the investor is to minimize the risk involved in investment & maximize the return. Today there are number of options available to investor like Post Office investment, Bank Deposit, Insurance, Mutual Fund, Stock Market etc... Technical analysis is a financial markets technique that claims the ability to forecast the future direction of security prices through the study of past market data, primarily price and volume. This project is about a brief introduction to Technical Analysis, different price patterns and trends in financial markets and attempt to exploit that patterns.etc… The contents in this project are made simple so as to make a layman understands the terms used in the Technical Analysis. The core area of this project focuses what a technical analysts may employ models and trading rules based, for example, on price transformations, such as the Relative Strength Index, moving averages, through recognition of chart patterns. This project contains some elementary statistics which are used in calculation which help in drawing inferences. The objective of the study helps to predict or forecast the short, intermediate & long term price movements. When The Administrative management college, Bangalore. 1
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Technical Analysis of Cement Sector in India
Executive Summary
The main aim of the investor is to minimize the risk involved in investment &
maximize the return. Today there are number of options available to investor like Post
Office investment, Bank Deposit, Insurance, Mutual Fund, Stock Market etc...
Technical analysis is a financial markets technique that claims the ability to forecast
the future direction of security prices through the study of past market data, primarily
price and volume.
This project is about a brief introduction to Technical Analysis, different price
patterns and trends in financial markets and attempt to exploit that patterns.etc… The
contents in this project are made simple so as to make a layman understands the terms
used in the Technical Analysis.
The core area of this project focuses what a technical analysts may employ models
and trading rules based, for example, on price transformations, such as the Relative
Strength Index, moving averages, through recognition of chart patterns. This project
contains some elementary statistics which are used in calculation which help in
drawing inferences.
The objective of the study helps to predict or forecast the short, intermediate & long
term price movements. When to buy and sell stock by analyzing technical indicators.
And helps to measure to the rate of change between the current price and price in
past and to identify overbought& oversold region. The art of technical analysis for it
is an art is to identify trend changes at an early stage and to maintain an investment an
investment posture until the weight of the evidence indicates that the trend has been
reversed.
Technical Analysis also provides a comprehensive study on stock historical price
charts and predicts the future trend in the market. But still there is much controversial
opinion on the validity of technical trading rule. It requires more study to prove the
usefulness of technical analysis in investor’s buy/sell/hold decision making.
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Technical Analysis of Cement Sector in India
INTRODUCTION
ABOUT TECHNICAL ANALYSIS:
Technical analysis is a financial markets technique that claims the ability to forecast
the future direction of security prices through the study of past market data, primarily
price and volume. In its purest form, technical analysis considers only the actual price
behavior of the market or instrument, on the assumption that price reflects all relevant
factors before an investor becomes aware of them through other channels.
Technical analysts may employ models and trading rules based, for example, on price
transformations, such as the Relative Strength Index, moving averages, regressions,
inter-market and intra-market price correlations, cycles or, classically, through
recognition of chart patterns.
General description
Technical analysts (or technicians) seek to identify price patterns and trends in
financial markets and attempt to exploit those patterns. While technicians use various
methods and tools, the study of price charts is primary. Technicians especially search
for archetypal patterns, such as the well-known head and shoulders reversal pattern,
and also study such indicators as price, volume, and moving averages of the price.
Many technical analysts also follow indicators of investor psychology.
Critics argue that these 'patterns' are simply random effects on which humans impose
causation. They state that human see patterns that aren't there and then ascribe value
to them.
Technical analysts also extensively use indicators, which are typically mathematical
transformations of price or volume. These indicators are used to help determine
whether an asset is trending, and if it is, its price direction. Technicians also look for
relationships between price, volume, and in the case of futures, open interest.
Examples include the relative strength index, and MACD. Other avenues of study
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Technical Analysis of Cement Sector in India
include correlations between changes in options [implied volatility] and put/call ratios
with price.
Technicians seek to forecast price movements such that large gains from successful
trades exceed more numerous but smaller losing trades, producing positive returns in
the long run through proper risk control and money management.
Technical analysis is frequently contrasted with fundamental analysis, the study of
economic factors that some analysts say can influence prices in financial markets.
Pure technical analysis holds that prices already reflect all such influences before
investors are aware of them, hence the study of price action alone. Some traders use
technical or fundamental analysis exclusively, while others use both types to make
trading decisions.
Lack of evidence
Critics of technical analysis include well known fundamental analysts. For example,
Peter Lynch once commented, "Charts are great for predicting the past." Warren
Buffet has said, "I realized technical analysis didn't work when I turned the charts
upside down and didn't get a different answer" and "If past history was all there was
to the game, the richest people would be librarians”.
Most academic studies say technical analysis has little predictive power, but some
studies say it may produce excess returns. For example, measurable forms of technical
analysis, such as non-linear prediction using neural networks, have been shown to
occasionally produce statistically significant prediction results. A Federal Reserve
working paper regarding support and resistance levels in short-term foreign exchange
rates "offers strong evidence that the levels help to predict intraday trend
interruptions," although the "predictive power" of those levels was "found to vary
across the exchange rates and firms examined."
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Technical Analysis of Cement Sector in India
Efficient market hypothesis
The efficient market hypothesis (EMH) contradicts the basic tenets of technical
analysis, by stating that past prices cannot be used to profitably predict future prices.
Thus it holds that technical analysis cannot be effective. Economist Eugene Fame
published the seminal paper on the EMH in the Journal of Finance in 1970, and said
"In short, the evidence in support of the efficient markets model is extensive, and
contradictory evidence is sparse”. EMH advocates say that if prices quickly reflect all
relevant information, no method (including technical analysis) can "beat the market."
Developments which influence prices occur randomly and are unknowable in
advance.
Technicians say that EMH ignores the way markets work, in that many investors base
their expectations on past earnings or track record, for example. Because future stock
prices can be strongly influenced by investor expectations, technicians claim it only
follows that past prices influence future prices.
Random walk hypothesis
The random walk hypothesis may be derived from the weak-form efficient markets
hypothesis, which is based on the assumption that market participants take full
account of any information contained in past price movements."The problem is that
once such regularity is known to market participants, people will act in such a way
that prevents it from happening in the future”.
History
The principles of technical analysis derive from the observation of financial markets
over hundreds of years. The oldest known example of technical analysis was a method
used by Japanese traders as early as the 18th century, which evolved into the use of
candlestick techniques, and is today a main charting tool. Many more technical tools
and theories have been developed and enhanced in recent decades, with an increasing
emphasis on computer-assisted techniques.
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Principles of technical analysis
Technicians say that a market's price reflects all relevant information, so their analysis
looks more at "internals" than at "externals" such as news events. Price action also
tends to repeat itself because investors collectively tend toward patterned behavior --
hence technicians' focus on identifiable trends and conditions.
Market action discounts everything
On most of the sizable return days the information that the press cites as the cause of
the market move is not particularly important. Press reports on adjacent days also fail
to reveal any convincing accounts of why future profits or discount rates might have
changed. Our inability to identify the fundamental shocks that accounted for these
significant market moves is difficult to reconcile with the view that such shocks
account for most of the variation in stock returns.
Prices move in trends
Technical analysts believe that prices trend. Technicians say that markets trend up,
down, or sideways (flat). An example of a security that had an apparent trend is AOL
from November 2001 through August 2002. A technical analyst or trend follower
recognizing this trend would look for opportunities to sell this security. AOL
consistently moves downward in price. Each time the stock rose, sellers would enter
the market and sell the stock; hence the "zig-zag" movement in the price. In other
words, each time the stock edged lower, it fell below its previous relative low price.
History tends to repeat itself
Technical analysts believe that investors collectively repeat the behavior of the
investors that preceded them. Technical analysis is not limited to charting, yet is
always concerned with price trends. For example, many technicians monitor surveys
of investor sentiment.. Technicians use these surveys to help determine whether a
trend will continue or if a reversal could develop; they are most likely to anticipate a
change when the surveys report extreme investor sentiment.
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Rule-based trading
Rule-based trading is an approach to make one's trading plans by strict and clear-cut
rules. Unlike some other technical methods or most fundamental analysis, it defines a
set of rules that determines all trades, leaving minimal discretion. For instance, a
trader might make a set of rules stating that he will take a long position whenever the
price of a particular instrument closes above its 50-day moving average, and shorting
it whenever it drops below.
Combining Technical Analysis with other Market Forecast Methods
John Murphy in his book "Technical Analysis of the Financial Markets", says that the
principal sources of information available to technicians are price, volume and open
interest. Other data, such as indicators and sentiment analysis are considered
secondary. Technical analysis is also often combined with quantitative analysis and
economics. For example, neural networks may be used to help identify inter market
relationships. A few market forecasters combine financial astrology with technical
analysis.
Charting terms and indicators
Widely-known technical analysis concepts include:
Breakout - when a price passes through and stays above an area of support or
resistance
Commodity Channel Index - identifies cyclical trends
Momentum - the rate of price change
Moving average - lags behind the price action
Relative Strength Index (RSI) - oscillator showing price strength
Resistance - an area that brings on increased selling
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AN OVERVIEW OF STOCK MARKET:
A stock market is a private or public market for the trading of company stock and
derivatives of company stock at an agreed price; both of these are securities listed on
a stock exchange as well as those only traded privately.
Definition:
The expression 'stock market' refers to the market that enables the trading of company
stocks (collective shares), other securities, and derivatives. Bonds are still
traditionally traded in an informal, over-the-counter market known as the bond
market. Commodities are traded in commodities markets, and derivatives are traded in
a variety of markets (but, like bonds, mostly 'over-the-counter').
Market participants:
Many years ago, worldwide, buyers and sellers were individual investors, such as
wealthy businessmen, with long family histories to particular corporations. Over time,
markets have become more "institutionalized"; buyers and sellers are largely
This chapter includes Introduction of Technical analysis and Cement sector.
Chapter 2: Research design
Research design is the blue print of the study. It provides a framework under which
the research has been conducted. It includes title of the study, problem statement,
objectives, scope & limitations of the study, methods used for data collection and
interpretation and an overview of chapter scheme.
Chapter 3: Industry profile
This chapter covers the industry profile.
Chapter 4: Analysis and Interpretation of data
This chapter includes the data collected for the purpose of research and the
interpretation of the data, tables and graphs are used wherever necessary.
Chapter 5: Summary of Findings, Conclusions &Recommendations
This chapter provides major findings and conclusions of the study for it also includes
the recommendation made by the researcher.
Bibliography
Annexure
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3. INDUSTRY PROFILE
INTRODUCTION TO CEMENT SECTOR
India is today the second largest producer of cement in world with an installed
capacity of close to 155 million tonnes per year. 95 % is consumed domestically and
only 5% is exported. Demand is growing at more than 10 % per annum. More than
90 % of production comes from large cement plants. There are a total of 130 large and
more than 350 small cement manufacturing units in the country. More than 80% of
the cement-manufacturing units use modern environment friendly “dry” process.
The forms of cement produced:
Ordinary Portland Cement
Portland Pozzolana Cement
Portland Slag Cement
Blended Cement
Major players in Indian cement sector:
Heidelberg
Lafarge
Italcementi
Holcim
Gujrat Ambuja Cement
ACC
Ultratech Cement
India Cements
Century Cements
Jaypee Group
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Madras Cements
Dalima cements
India’s per capita cement production: 130 kg per annum. World average of per capita
cement production: More than 280 kg per annum.
Bottlenecks of Cement Industry:
A comparison of the energy efficiency of Indian cement industry with that of
other developed nations shows Indian companies are lagging.
Regional imbalances in cement production.
High transportation cost involved.
I have taken five Cement Sector Companies which are as follows:
1. ACC
2. ULTRATECH.
3. GRASIM.
4.BIRLA SUPER
5.AMBUJA
1. ACC:
ACC Limited is India’s foremost manufacturer of cement and ready mix concrete
with a countrywide network of factories and marketing offices. Established in 1936,
ACC has been a pioneer and trendsetter in cement and concrete technology. ACC’s
brand name is synonymous with cement and enjoys a high level of equity in the
Indian market. It is the only cement company that figures in the list of Consumer
SuperBrands of India. Among the first companies in India to include commitment to
environment protection as a corporate objective, ACC has won several prizes and
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Technical Analysis of Cement Sector in India
accolades for environment friendly measures taken at its plants and mines. The
company has also been felicitated for its acts of good corporate citizenship.
ACC was the first recipient of ASSOCHAM’s first ever National Award for
outstanding performance in promoting rural and agricultural development activities in
1976. Decades later, PHD Chamber of Commerce and Industry selected ACC as
winner of its Good Corporate Citizen Award for the year 2002. Over the years, there
have been many awards and felicitations for achievements in Rural and community
development, Safety, Health, Tree plantation, afforestation, clean mining,
Environment awareness and protection.
2. ULTRATECH:
Ultratech Cement Limited, a Grasim subsidiary has an annual capacity of 17 million
tonnes. It manufactures and markets Ordinary Portland Cement, Portland Blast
Furnace Slag Cement and Portland Pozzolana Cement.
UltraTech has five integrated plants, five grinding units and three terminals — two in
India and one in Sri Lanka. These include an integrated plant and two grinding units
of the erstwhile Narmada Cement Company Limited, a subsidiary, which has been
amalgamated with the company in May 2006.UltraTech is the country's largest
exporter of cement clinker. The company exports over 2.5 million tonnes per annum,
which is about 30 per cent of the country's total exports. The export markets span
countries around the Indian Ocean, Africa, Europe and the Middle East.
The cement division of L&T was demerged in 2004 after Grasim made the 30 per
cent open offer for equity shares, gaining control over the new company, christened
UltraTech. Ready Mix Concrete is likely to see substantial growth in the coming
years. Recognizing the opportunities that this business will offer, UltraTech has
commenced setting up of Ready Mix Concrete plants at various places in the country.
UltraTech's subsidiaries are: Dakshin Cements Limited and UltraTech Ceylinco
(Private) Limited.
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3. GRASIM:
Grasim Industries Limited, a flagship company of the Aditya Birla Group, ranks
among India's largest private sector companies, with consolidated net revenues of
Rs.141 billion and a consolidated net profit of Rs.20 billion(FY2007).
Starting as a textiles manufacturer in 1948, today Grasim's businesses comprise
viscose staple fiber (VSF), cement, sponge iron, chemicals and textiles. Its core
businesses are VSF and cement, which contribute to over 90 per cent of its venues and
operating profits.
The Aditya Birla Group is the world’s largest producer of VSF, commanding a 21 per
cent global market share. Grasim, with an aggregate capacity of 270,100 tpa has a
global market share of 11 per cent. It is also the second largest producer of caustic
soda (which is used in the production of VSF) in India.
In cement(grey cement and white cement), Grasim along with its subsidiary
UltraTech Cement Ltd. has a capacity of 30 million tpa and is a leading cement player
in India. In July 2004, Grasim acquired a majority stake and management control in
UltraTech Cement Limited. One of the largest of its kind in the cement sector, this
acquisition catapulted the Aditya Birla Group to the top of the league in India.
All of Grasim's units have earned ISO 9002 and 14001 certifications.
Product quality, innovation and eco-friendliness are a hallmark of all the company's
divisions.
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4. BIRLA SUPPER
It is a unit of Grasim Birla Super Cement is a grinding unit of 1.5 Million Tons capacity with a modern technology manufacturing process involves a level of sophistication & new to the Cement industry.
The technology was supplied by 'Krupp Polysis" of Germany such as Roller Press, Grinding Mill. Electronic Packer enables for automatic packing & weighing of Cement Bags. Unloading of raw material (Clinker), which is being received from railway, Wagons are unloaded by atomised 'Wagon Tippler'. All the process of manufacturing and packing are atomized & is controlled through electronic devices & PLC at Central Control Rooms Plant, Packing Plant & Wagon Tippler. Three grades of Products i.e. OPC 43 Grade, OPC 53 & PPC are manufactured. The brand names of these qualities are 'Rajashree', 'Birla Super' & 'Birla Plus' respectively.
The plant power is connected to 132 KV Power supply of MSEB grid & having connected load of 12650 KW. All Electrical & Instruments equipment is of latest design & high efficiency. The unit has won the National Award for the "Excellence in Energy conservation" from the CII for the 2000-'00 & 2001-'02 consecutively for the outstanding saving in energy. The unit has bagged 'National Award' for 'Energy Conservation & Energy Management' organised by CII for twice i.e., 2000-'00 & 2001-'02. Management of 'Birla Super Cement' takes keen interest in reduction of 'energy cost' by implementing energy conservation activities and managing plant operating times to avail the maximum benefits from the State Electricity Board in 'Power factor', 'Night Consumption rebate& 'Bulk discount'.
Following are the major Environmental & Safety Activities done at our plant. • Inclusion of PPC grade Cement to utilize waste fly ash from power plant. • Atomized handling of fly ash through air tight tankers to avoid fugitive natural
escape of fly ash to environment. • Pneumatic unloading systems for dust free unloading of fly ash from tankers. • Installation of additional two dust collectors at W/T to avoid dust emission. • Installation of gypsum shed of 2*5000 MT to avoid land contamination. • Development of rain water harvesting reservoir. • Covering of belt conveyors to avoid dust emission during transportation
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AMBUJA CEMENT
Ambuja Cements was set up in 1986. In the last decade the company has grown tenfold. The total cement capacity of the company is 18.5 million tonnes.
Its plants are some of the most efficient in the world. With environment protection measures that are on par with the finest in the developed world.
The company's most distinctive attribute, however, is its approach to the business. Ambuja follows a unique homegrown philosophy of giving people the authority to set their own targets, and the freedom to achieve their goals. This simple vision has created an environment where there are no limits to excellence, no limits to efficiency. And has proved to be a powerful engine of growth for the company.
As a result, Ambuja is the most profitable cement company in India, and one of the lowest cost producer of cement in the world.
environment policy is built around two simple truths. One, no cement plant can flourish at the cost of the environment. As one of the countrys largest producers of cement, with a large presence around the country, we have an obligation to protect the environment we function in.
Also, as we discovered, being environmentally conscious, almost never interfered with running a profitable business. In fact its quite the contrary.
Our efforts to achieve world standards in environment protection, for instance, have had the happy outcome of substantially improving efficiency and profitability. The fact is, a cleaner environment isnt just better for the people, it reduces wear and tear on plants and machinery as well. Thus directly contributing to the bottom line. Besides dust in cement plants is nothing but cement itself, which we capture and bag.
Our approach has made us the one of the worlds most environment friendly cement companys. And the most profitable.
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SUM 61.576 16.559 AVERAGE 4.105067 1.103933 RS 3.718582 RSI 78.807
ANALYSIS & INTERPRETATIONS :
1) ACC: Moving Average
Short Term Moving Average:
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In the above chart blue color shows the closing price and red color shows the Moving average(i.e. 3months)
Moving averages are used along with the price of the scrip.
In the above chart, downward penetration of the rising average indicates the possibility of a further fall. Hence, the sell signal is generated during J, February , July& October.
Upward penetration of a falling average would indicate the possibility of the further rise. Hence, the buy signal is generated during April, May & December
The moving average is continuously falling from October to January.
The moving average is continuously rising from August to November.
Long Term Moving Average:
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This chart is similar to previous chart but it is long term moving average.
In the above chart, blue color indicates closing price. Red color indicates long
term moving average (i.e., 12months MV).
Moving averages are used along with the price of the scrip.
In the above chart, downward penetration of the rising average indicates the
possibility of a further fall. Hence, the sell signal is generated during
December & October.
Upward penetration of a falling average would indicate the possibility of the
further rise. Hence, the buy signal is generated during September & January.
The moving average is continuously rising from October to January.
The moving average is continuously falling from October to August .
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Technical Analysis of Cement Sector in India
2) GRASIM:
Short Term Moving Average:
In the above chart, X axis indicates month and the Y axis indicates the price of scrip.
In the above chart, blue color indicates closing price. Red color indicates long term moving average (i.e., 3 months MV).
Moving averages are used along with the price of the scrip.
In the above chart, downward penetration of the rising average indicates the possibility of a further fall. Hence, the sell signal is generated during December, October & June.
Upward penetration of a falling average would indicate the possibility of the further rise. Hence, the buy signal is generated during July, may ,& August
From January to October there is a rising trend and from March to December there is a falling trend.
Long Term Moving Average:
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This chart is similar to previous chart but it is long term moving average.
In the above chart, blue color indicates closing price. Red color indicates long term moving average (i.e., 12 months MV).
Moving averages are used along with the price of the scrip.
In the above chart, downward penetration of the rising average indicates the possibility of a further fall. Hence, the sell signal is generated during August, October and June.
Upward penetration of a falling average would indicate the possibility of the further rise. Hence, the buy signal is generated during March & January.
The moving average is continuously rising from May to October.
The moving average is continuously falling in the month of March to January..
3) Ultratech: MOVEING AVERAGE
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Technical Analysis of Cement Sector in India
Short Term Moving Average:
In the above chart, X axis indicates month and the Y axis indicates the price of scrip.
In the above chart, blue color indicates closing price. Red color indicates long term moving average (i.e.,3months MV).
Moving averages are used along with the price of the scrip.
In the above chart, downward penetration of the rising average indicates the possibility of a further fall. Hence, the sell signal is generated during January, October & December.
Upward penetration of a falling average would indicate the possibility of the further rise. Hence, the buy signal is generated during July & November.
The moving average is continuously rising from June to January.
Long Term Moving Average:
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Technical Analysis of Cement Sector in India
This chart is similar to previous chart but it is long term moving average.
In the above chart, blue color indicates closing price. Red color indicates long term moving average (i.e., 12months MV).
Moving averages are used along with the price of the scrip.
In the above chart, downward penetration of the rising average indicates the possibility of a further fall. Hence, the sell signal is generated during December,& January.
Upward penetration of a falling average would indicate the possibility of the further rise. Hence, the buy signal is generated during July, May & January.
The moving average is continuously rising from July to January.
.
BIRLA SUPER
MOVING AVERAGE
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Technical Analysis of Cement Sector in India
Short term moving average
In the above chart ‘X’ axis shows the months and ‘Y’ axis shows the price scrip
In the above chart Blue colour indicates the closing Price and red shows the average
In the above chart, downward penetration of the rising average indicates the possibility of a further fall. Hence, the sell signal is generated in February and December
Upward penetration of a falling average would indicate the possibility of the further rise. Hence, the buy signal is generated August and April.
The moving average continuously falling in July and December
The Moving average continuously rising in April and December
Long term
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Technical Analysis of Cement Sector in India
This chart is similar to previous chart but it is long term moving average.
In the above chart, blue color indicates closing price. Red color indicates long term moving average (i.e., 10months MV).
Moving averages are used along with the price of the scrip.
In the above chart, downward penetration of the rising average indicates the possibility of a further fall. Hence, the sell signal is generated during April,& December.
Upward penetration of a falling average would indicate the possibility of the further rise. Hence, the buy signal is generated during August, &,April
The moving average is continuously rising from April to December
AMBUJA CEMENT
MOVING AVERAGE
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Technical Analysis of Cement Sector in India
Short term
In the above chart, X axis indicates month and the Y axis indicates the price of scrip.
In the above chart, blue color indicates closing price. Red color indicates long term moving average (i.e.,3months MV).
Moving averages are used along with the price of the scrip.
In the above chart, downward penetration of the rising average indicates the possibility of a further fall. Hence, the sell signal is generated during June,July, August
Upward penetration of a falling average would indicate the possibility of the further rise. Hence, the buy signal is generated during May & September.
The moving average is continuously rising from July to September.
Long term
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Technical Analysis of Cement Sector in India
In the above chart, X axis indicates month and the Y axis indicates the price of scrip.
In the above chart, blue color indicates closing price. Red color indicates long term moving average (i.e.,12months MV).
Moving averages are used along with the price of the scrip.
In the above chart, downward penetration of the rising average indicates the possibility of a further fall. Hence, the sell signal is generated during ,July &, August
Upward penetration of a falling average would indicate the possibility of the further rise. Hence, the buy signal is generated during May & September.
The moving average is continuously rising from July to September.
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Technical Analysis of Cement Sector in India
5. Summary of Findings, Suggestions & Conclusion:
FINDINGS
ACC:
In the chart, moving average (short term & long term) was fluctuating month
by month. It was rising from July to October & falling from november to
January.
During the month of April the shares were overbought, so it is the right time to
sell the share.
During the month of January the shares were oversold, so it is right time to
buy the share
GRASIM:
The moving average of 3 months & 12 months, shows It shows rising trend
from December to October. It shows falling trend from November to January.
The January month was overbought region; the investor can sell the scrip.
The March month was over sold region, the investor can buy the scri.
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Technical Analysis of Cement Sector in India
ULTRATECH:
The moving average of 3 months & 12 months was rising from April to
December. It was falling from October to January.
The April Month was overbought region; the investor can sell the scrip.
The January month was oversold, region, the investor can buy the scrip.
BIRLA SUPER:
The moving average of 3 months & 12 months was rising from April to
December. It was falling from May to December.
The December Month was overbought region the investor can sell the scrip.
The September month was oversold, region, the investor can buy the scrip.
AMBUJA:
The moving average of 3 months & 12 months was rising from April to
December. It was falling from May to December.
The August Month was overbought region the investor can sell the scrip.
The June month was oversold, region, the investor can buy the scrip.
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Technical Analysis of Cement Sector in India
SUGGESTIONS
It is very difficult for an investor to select any scrip for investment in stock
market. Before investing, the investor should go for a detailed study of the
scrip, which includes: Fundamental analysis of the company & its return for
past 3 years.
ACC:
o According Moving-Average, the prices of the scrip is falling from
October to January & the Short-Term Average intersect in June So, in
future the investor is been advised to sell the share.
o According to Relative Strength Index (RSI), the RSI lies between 80 &
90 region & is been in decreasing trend. There fore in future the prices
may come down very drastically, so investor is been advised to sell the
share.
GRASIM:
o According Moving-Average, the prices of the scrip is falling from
October to January & the Short-Term Average intersect in June so, in
future the investor is been advised to sell the share.
o According to Relative Strength Index (RSI), the RSI lies between 63 &
81 region & is been in increasing trend. There fore in future the prices
may come up very drastically, so investor is been advised to buy the
share.
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Technical Analysis of Cement Sector in India
ULTRATECH:
o According Moving-Average, the prices of the scrip is falling from
October to January & the Short-Term Average intersect in june So, in
future the investor is been advised to sell the share.
o According to Relative Strength Index (RSI), the RSI lies between 64 &
94 region & is been in decreasing trend. There fore in future the prices
may come down very drastically, so investor is been advised to sell the
share.
BIRLA SUPER:
o According Moving-Average, the prices of the scrip is falling from June
to December & the Short-Term Average intersect in September So, in
future the investor is been advised to sell the share.
o According to Relative Strength Index (RSI), the RSI lies between 58 &
66 region & is been in decreasing trend. There fore in future the prices
may come down very drastically, so investor is been advised to sell the
share.
AMBUJA:
o According Moving-Average, the prices of the scrip is falling from July
to September & the Short-Term Average intersect in october So, in
future the investor is been advised to sell the share.
o According to Relative Strength Index (RSI), the RSI lies between 44 &
78 region & is been in increasing trend. Therefore in future the prices
may come up very drastically, so investor is been advised to buy the
share.
The Administrative management college, Bangalore. 60
Technical Analysis of Cement Sector in India
CONCLUSION
In Indian scenario the investments are spread over Bank Deposits, Savings Certificate,
Post Office, Equity Markets and the latest Mutual Fund. Since Mutual Funds are
subject to market risk the investor take help of advisory services for financial
planning which helps the investor to take calculated risk. Technical analysis is a good
indicator that shows the trend movement as well as the varying degree of moving
average movement, Rate of change and Relative strength indicates. Technical analysis
may be used for more than supplement of fundamental analysis.
The recent correction in the stock market has left many investors unsettled. It is quite
common to see many investors moving to side lines every time the market turns
volatile or corrects itself. It is sure as the market starts rallying again, some of them
will move back quickly but would be willing to move out even more quickly at the
next sign of downside volatility.
Technical analysis can offer great insight, but if used improperly, they can also
produce false signals. While trend lines have become a very popular aspect of
technical analysis, they are merely one tool for establishing, analyzing, and
confirming a trend. Trend lines should not be the final arbiter, but should serve merely
as a warning that a change in trend may be very useful.
In this project, the market is falling tremendously in the month of June & July. So, the
tools which were used also showing the downward trend. We can predict that the
investor can sell the share.
The Administrative management college, Bangalore. 61