IJMSS Vol.03 Issue-06, (June, 2015) ISSN: International Journal in Management and Social Science (Impact Factor )

Similar documents
Corresponding Author: * M. Anitha

CHAPTER V TIME SERIES IN DATA MINING

OSCILLATORS. TradeSmart Education Center

A STUDY ON TECHNICAL ANALYSIS OF STOCKS LISTED IN NSE WITH REFRENCE TO BANKING SECTOR

Schwab Investing Insights Trading Edition Text Close Window Size: November 15, 2007

Intermediate - Trading Analysis

The six technical indicators for timing entry and exit in a short term trading program

Alpesh s guide to using the Alpesh Patel Special Edition Section 4

TECHNICAL INDICATORS

Introduction. Technicians (also known as quantitative analysts or chartists) usually look at price, volume and psychological indicators over time.

Introduction. Technical analysis is the attempt to forecast stock prices on the basis of market-derived data.

Table of Contents. Risk Disclosure. Things we will be going over. 2 Most Common Chart Layouts Anatomy of a candlestick.

Critical Investigation of Performance and Profitability: An Analysis of Axis Bank

International Journal of Business and Administration Research Review, Vol. 2, Issue.17, Jan - March, Page 107

OUT OF THE WOODS? COMMENTARY STRONG FUNDAMENTALS KEY TAKEAWAYS LPL RESEARCH WEEKLY MARKET. February

Profitability of Oscillators used in Technical Analysis for Financial Market

The very first calculations for average gain and average loss are simple 14- period averages.

VALIDITY OF FUNDAMENTAL AND TECHNICAL ANALYSIS Thangjam Ravichandra* 1, Ridhima Mehta 2. India. India.

IJRFM Volume 5, Issue 1 (JANUARY 2015) (ISSN ) IMPACT FACTOR: BOLLINGER BANDS OPTIMAL ALGORITHMIC STRATEGYINSTOCK TRADING ABSTRACT

Chapter 2.3. Technical Indicators

Real-time Analytics Methodology

Impact of Law of Demand & Supply on Stock Market: A Study of Most Active BSE Indices with the Help of RSI

Research Paper A Study on Analysis of Equity Share Price Behavior of the Selected Industries. Management. Mrs. Vimala. S. * Mrs. Saranya P. B.

Technical Analysis. Dealing Room Peter Leonidou. Peter Leonidou

Chapter 2.3. Technical Analysis: Technical Indicators

Chapter 7 RELATIVE STRENGTH INDEX - A CRITERION. 7.1 Introduction Revolutionary changes have taken place in the modern financial market and it

Notices and Disclaimer

Measuring abnormal returns on day trading - use of technical analysis. By Rui Ma

Understanding the Principles of Investment Planning Stochastic Modelling/Tactical & Strategic Asset Allocation

International Journal of Business and Administration Research Review, Vol. 2, Issue.11, July - Sep, Page 187

Technical Analysis and Charting Part II Having an education is one thing, being educated is another.

1. Introduction 2. Chart Basics 3. Trend Lines 4. Indicators 5. Putting It All Together

XML Publisher Balance Sheet Vision Operations (USA) Feb-02

Forexsignal30 Extreme ver. 2 Tutorials

Technical Analysis Workshop Series. Session 11 Semester 2 Week 5 Oscillators Part 2

A study on Market Trend Prediction using Aroon Oscillator with special reference to the Indian private sector banks

20.2 Charting the Market

Stock Prices Our Expectations

Performance Analysis of Top Performing Sectors Stocks in India

FOREX RISK MANAGEMENT STRATEGIES FOR INDIAN IT COMPANIES

Technical Analysis. A Language of the Market

Stock Market Report. January 26, 2005

Technical Indicators

Executive Summary. July 17, 2015

Williams Percent Range

Stock Market Report. August 2, 2006

Maybank IB. Understanding technical analysis. by Lee Cheng Hooi. 24 September Slide 1 of Maybank-IB

Bollinger Trading Methods. Play 1 - The Squeeze

Futures Trading Signal using an Adaptive Algorithm Technical Analysis Indicator, Adjustable Moving Average'

Technical Analysis: Price Behavior of Select Indian Equities

Stock Market Report. December 08, 2004

Spheria Australian Smaller Companies Fund

Relative Strength Index for Developing Effective Trading Strategies in Constructing Optimal Portfolio

Stock Trading Following Stock Price Index Movement Classification Using Machine Learning Techniques

STOCKS TO MONITOR FOR THE SHORT-TERM INVESTORS

AN ANALYSIS OF CAPM MODEL FOR PERFORMANCE OF STOCK MARKET INDIA WITH REFERENCE TO BANKING, IT, AUTOMOBILE SECTOR COMPANIES

A STUDY ON EQUITY ANALYSIS OF SELECTED FMCG COMPANIES LISTED ON NSE

Class 7: Moving Averages & Indicators. Quick Review

International Journal of Management and Social Science Research Review, Vol.1, Issue.18, Dec Page 61

A Comparative Study of Various Forecasting Techniques in Predicting. BSE S&P Sensex

Impact of Dividends on Share Prices of Select It Firms

Sector. Industrials - Transportation USD41.10 & Logistics - 31 May 2018

PART 3 - CHART PATTERNS & TECHNICAL INDICATORS

Rivkin Momentum Strategy

Equity Share Price Behaviour of Selected Companies with Reference to Construction Industries in NSE

Stock Market Report Review

Sector. Industrials - Farm & Construction Machinery -

Interpreting Technical Indicators

INTERMEDIATE EDUCATION GUIDE

The risk of losses because the fair value of the Group s assets and liabilities varies with changes in market conditions.

IVGraph Live Service Contents

Certified Portfolio Manager VS-1094

Common Factors in Trend Following: Some Research In Progress. George Martin Associate Director, CISDM September 19, 2005

Review of Registered Charites Compliance Rates with Annual Reporting Requirements 2016

EQUITY ANALYSIS OF BANKING SECTOR LISTED IN NSE

Thomas Gith Day Trader

Journal Of Financial And Strategic Decisions Volume 7 Number 2 Summer 1994 INTEREST RATE PARITY IN TIMES OF TURBULENCE: THE ISSUE REVISITED

Last Gasp in the Dollar. Market Update May 18, Seattle Technical Advisors

Andrew s Trade Ideas Scanners

Analyze the Market for a Seasonal Bias. It is recommended never to buck the seasonal nature of a market. What is a Seasonal Trend?

OTHER DEPOSITS FINANCIAL INSTITUTIONS DEPOSIT BARKAT SAVING ACCOUNT

Level II Learning Objectives by chapter

EUR-USD USD-JPY AUD-USD USD-SGD. Spot Support

TRADING QUALIFIED TRENDS. L.A Little (Author, Professional Trader) Founder of Technical Analysis Today

GUIDE TO STOCK trading tools

The goal for Part One is to develop a common language that you and I

A STUDY ON TESTING OF EFFICIENT MARKET HYPOTHESIS WITH SPECIAL REFERENCE TO SELECTIVE INDICES IN THE GLOBAL CONTEXT: AN EMPIRICAL APPROACH

A COMPLETE STUDY OF THE HISTORICAL RELATIONSHIP BETWEEN INTEREST RATE CYCLES AND MLP RETURNS

FIXED INCOME UPDATE 1

Index. long-term 200-day, 45 market cycle, myths, very long-term, weekly-based longer-term, 46-47

Barry M. Sine, CFA, CMT

Stock Market Basics Series

THE B E A CH TO WN S O F P ALM B EA CH

Secrets of Forex Trading

Financial & Business Highlights For the Year Ended June 30, 2017

EUR-USD USD-JPY AUD-USD USD-SGD XAU-USD. Spot (2-4 weeks) Support Support

WESTWOOD LUTHERAN CHURCH Summary Financial Statement YEAR TO DATE - February 28, Over(Under) Budget WECC Fund Actual Budget

What is Technical Analysis

Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. December 21, Daily CTI. Swing

Go No Go Indicators: Part 2

Transcription:

(Impact Factor- 4.358) A Comparative Study on Technical Analysis by Bollinger Band and RSI. Shah Nisarg Pinakin [1], Patel Taral Manubhai [2] B.V.Patel Institute of BMC & IT, Bardoli, Gujarat. ABSTRACT: The Bollinger Bands are indicated volatility by upper and lower band with 21 days simple moving average. Relative Strength Index is a momentum oscillator that indicates change of price movement and speed of stock. Both tools ultimately determine overbought and oversold signals. In this comparative study of Bollinger Band and RSI, we measures which method generates highest buying and selling signals, profit and best return. KEYWORDS: RSI (Relative Strength Index), SMA (Simple Moving Average), BB (Bollinger Band). INTRODUCTION: The purpose of Bollinger Band is to determine high and low of stocks. s of stocks are high at upper band and low at lower band. Investor can take systematic trading decision by recognise the pattern of the stock. There are three curves drawn in Bollinger Band. The upper band and lower band is simple moving average and middle band is intermediate band. The volatility determine by interval between upper band, lower band and middle band. The default parameters are 20 periods and two standard deviations. Relative Strength Index is a technical indicator determines strength and weakness of stock on closing price of a recent trading period. RSI measures volatility and magnitude of price movement direction of stock. Momentum is the rate of rise or fall in the price of stock. It computes the ratio of higher and lower closes of a stock. The stock which had higher positive changes has a higher RSI and the stock which had stronger negative changes has lower RSI. RSI used on a 14 days timeframe, measured on a scale of 0 to 100 with a low level mark 30 and high level mark 70. Now, the study using two kinds of technical tool namely RSI and Bollinger Band. In this study, researcher uses secondary data of seven different companies of three different sectors. Researcher generates buying signals for the study and average that buying signals. There is no short sell allowed in study. REVIEW OF LITERATURE: Z. K. Silagadze (2011), in this research paper, "To identify lines of resistance and support, traders usually use some moving average indicator". If the price goes through the local maximum and crosses a moving average, we have a resistance line indicating the price at which a majority of traders expect that prices will move lower. A support line happens when the price crosses a moving average after the local minimum. The support line indicates the price at which a majority of traders feel that prices will move higher. The problem is fluctuations of the price which hampers the identification of both the local extremism and the corresponding crossing points with the moving average. Taylor and Allen (1992) report the results of a survey among chief foreign exchange dealers based in London in November 1988 and found that at least90 per cent of respondents placed some weight on technical analysis, and that there was a skew towards using technical, rather than fundamental, analysis at shorter time horizons. Jagadeesh (July 1990) Journal of Finance article, found predictable pattern in monthly returns for the period 1934 to 1987. His study revealed that stocks with large losses in one month tend to show a http://www.ijmr.net.in email id- irjmss@gmail.com Page 234

(Impact Factor- 4.358) significant reversal in the following month and vice versa. In December 2000 Journal of Finance article, Lo, Mamaysky, and Wang found that several technical indicators have some practical value as they provide incremental information. This study is also based on sector analysis where from 4 industries in that 4-5 companies are analyzed using technical indicators. If the indicators show more than 50% of positive results then the relevance of technical tools in trading increases which will be helpful for investors. Oliver Douglas Williams (2006), Empirical Optimization of Bollinger Bands for Profitability, have chosen a moving average of 20 days for short term analysis and 200 days for long term analysis. Moving averages in relation to profitability is the focus of this study. After testing a simple trading rule on the components of the DOW 30 index there is a revelation that a single moving average window cannot be used to derive an all (security) encompassing trading rule. Rodrigo Alfaro and Andres Sagner (April 2010), Financial Forecast for the Relative Strength Index, this paper provides a closed-form expression for one of the most popular index in Technical Analysis: the Relative Strength Index (RSI). It shows how the standard binomial model for the stock price can be used to predict RSI. The algorithm is as simple as to code a standard European option. In an empirical application to the Chilean exchange rate it shows how the method works having a better out of sample performance than an ARMA(1,1) model. STATEMENT OF THE PROBLEM RSI and Bollinger band is best tool to predict security price movement in technical analysis. The paper studies that by using these different methods of technical analysis, how well 1 method provides prediction compare to other method. This paper also studies that method of technical analysis generates best profit, maximum no of buying and selling signals, best Average return. NEED FOR THE STUDY There are several methods are available in technical analysis to predict price movement of the different securities. But from that I choose two tools for comparing the method which gives highest signal, best profit and highest average return. Several methods of technical analysis are available to predict price of securities. I choose two methods for comparing which tools generates highest profit, highest signals. OBJECTIVE OF THE STUDY: Main Objective: To study trend of security price through study of past market data of securities. http://www.ijmr.net.in email id- irjmss@gmail.com Page 235

(Impact Factor- 4.358) Secondary Objective: To improve the knowledge regarding technical analysis tools such as RSI and Bollinger Band To study and Sell signal of specific securities by technical analysis tools. To study profit of a specific securities generated by technical analysis tools. METHODOLOGY OF THE STUDY: Sampling Design: Sample: Daily closing price of different sectors namely Auto, IT and oil. a. Daily closing price of Bajaj Auto, M&M, Hero Moto Corp from the date 01-03-2014 to 28-02-2015 b. Daily closing of ONGC & Indian Oil from the date 01-03-2014 to 28-02-2015 c. Daily closing of TCS and Infosys from the date 01-03-2014 to 28-02-2015 Nature and Sources of Data: The Present study is of analytical nature and secondary data are used. The data is taken from the website www.nseindia.com. TOOLS AND TECHNIQUES OF DATA ANALYSIS: - 1. Relative Strength Index (RSI): - Developed J. Welles Wilder, the Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. RSI oscillates between zero and 100. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30. RSI has been broken down into its basic components: RS, Average Gain and Average Loss. This RSI calculation is based on 14 periods, which is the default suggested by Wilder in his book. Losses are expressed as positive values, not negative values. The very first calculations for average gain and average loss are simple 14 period averages. First Average Gain = Sum of Gains over the past 14 periods / 14. First Average Loss = Sum of Losses over the past 14 periods / 14 http://www.ijmr.net.in email id- irjmss@gmail.com Page 236

(Impact Factor- 4.358) The second, and subsequent, calculations are based on the prior averages and the current gain loss: Average Gain = [(previous Average Gain) x 13 + current Gain] / 14. Average Loss = [(previous Average Loss) x 13 + current Loss] / 14. RSI is considered overbought when above 70 and oversold when below 30. These traditional levels can also be adjusted to better fit the security or analytical requirements. Rising overbought to 80 or lowering oversold to 20 will reduce the number of overbought/oversold readings. 2. Bollinger Band (BB): - Developed by John Bollinger, Bollinger Bands are volatility bands placed above and below a moving average. Volatility is based on the standard deviation, which changes as volatility increases and decreases. The bands automatically widen when volatility increases and narrow when volatility decreases. DATA ANALYSIS: - Calculation of RSI: The Chart 1.1-4.6 and Table 4.1-4.6 shows the analysis of RSI. It is a momentum indicator that gives the location of the close relative to the high-low range over a set number of periods. It gives overbought and oversold signals to generate Signals of buying and selling what we view in the chart and also helps to generate profit and return as given calculation in the table. Table 1.1 Generates Profit/Loss and from the signals on daily price movement of Bajaj Auto for the year 1-03-2014 to 28-02-2015. Closing 9-May-14 1919.95 1920 1919.95 Avg. Sell Profit/Loss % 8-Jul-14 2226.3 2226.3 306.35 15.96 31-Jul-14 2075.9 2075.9 2075.9 3-Sep-14 2321.15 2321.15 245.25 11.81 Total Profit/Loss & 551.6 27.77 Avg. 13.88 Signal Generated 2 2 http://www.ijmr.net.in email id- irjmss@gmail.com Page 237

(Impact Factor- 4.358) Chart 1.1: Shows signals on daily price movement of SBI for the year 1-03-2014 to 28-02-2015. 100 90 80 70 60 50 40 30 20 10 0 RSI of BAJAJ AUTO from 1-3-2014 to 28-2-2015 RSI Interpretation: Form the Table 1.1 and chart 1.1, researcher interpret that The "BAJAJ AUTO" daily price movement analysis by RSI generates 2 buying signals and 2 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. 551.6/- per share, providing total return of 27.77 % and average return of 13.88% per trading transaction. Table 1.2 Generate profit/loss and return from the signals on daily price movement of M&M by RSI for the year 1-03-2014 to 28-02-2015. Closing Avg. Sell Profit/ Loss % 14 1230.75 1230.75 11-Jun-14 1227.1 1227.1 1228.9 18-Aug-14 1326.05 1326.05 97.15 7.9 4-Sep-14 1410.75 1410.75 23-Sep-14 1347.6 1347.6 1379.1 11-Nov-14 1260.55 1260.55-118.55-8.59 1-Dec-14 1295.1 1295.1 1295.1 20-Jan-15 1224.15 1224.15-70.95-5.79 Total Profit/Loss & -92.35-6.48 Avg. -2.16 Signal Generated 5 3 http://www.ijmr.net.in email id- irjmss@gmail.com Page 238

(Impact Factor- 4.358) Chart 1.2: Shows profit/loss and return from the signals on daily price movement of M&M by RSI for the year 1-03-2014 to 28-02-2015. 100 RSI of M&M from 1-3-2014 to 28-2-2015 80 60 40 20 0 Series1 RSI Interpretation: Form the Table 1.2 and Chart 1.2, researcher interpret that The "M&M" daily price movement analysis by RSI generates 5 buying signals and 3 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. -92.35/- per share, providing total return of -6.48% and average return of -2.16% per trading transaction. Chart 1.3: Generates profit/loss and return from the signals on daily price movement of ONGC by RSI for the year 1-03-2014 to 28-02-2015. Close 10-Nov-14 394.2 394.2 13-Nov-14 385.8 385.8 18-Nov-14 390.65 390.65 20-Nov-14 385.75 385.75 Avg. 27-Nov-14 382.3 382.3 387.74 Sell Profit/ Loss % 3-Feb-15 346.5 346.5-41.24-10.63 Total Profit/Loss & -41.24-10.63 Avg. -10.63 Signal Generated 5 1 http://www.ijmr.net.in email id- irjmss@gmail.com Page 239

(Impact Factor- 4.358) Chart 1.3: Shows profit/loss and return from the signals on daily price movement of ONGC by RSI for the year 1-03-2014 to 28-02-2015. 100 90 80 70 60 50 40 30 20 10 0 RSI of ONGC from 1-3-2014 to 28-2-2015 Series1 RSI Interpretation: Form the Table 1.3 and Chart 1.3, researcher interpret that The "ONGC" daily price movement analysis by RSI generates 5 buying signals and 1 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs.-41.24 /- per share, providing total return of -10.63% and average return of -10.63% per trading transaction. Table 1.4: Generates profit/loss and return from the signals on daily price movement of Indian Oil by RSI for the year 1-03-2014 to 28-02-2015. Close 10-Sep-14 639.3 639.3 Avg. 27-Nov-14 608.7 608.7 624 Sell Profit/ Loss % 15-Dec-14 535.1 535.1-88.9-14.25 Total Profit/Loss & -88.9-14.25 Avg. -14.25 Signal Generated 2 1 http://www.ijmr.net.in email id- irjmss@gmail.com Page 240

(Impact Factor- 4.358) Chart 1.4: Generates profit/loss and return from the signals on daily price movement of Indian Oil by RSI for the year 1-03-2014 to 28-02-2015. 110 100 90 80 70 60 50 40 30 20 10 0 RSI of Indian OIL from 1-3-2014 to 28-2-2015 R Interpretation Form the Table 1.4 and Chart 1.4, researcher interpret that The "Indian Oil" daily price movement analysis by RSI generates 2 buying signals and 1 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. -88.9/- per share, providing total return of -14.25% and average return of -14.25% per trading transaction. Table 1.5: Generates profit/loss and return from the signals on daily price movement of TCS by RSI for the year 1-03-2014 to 28-02-2015. Close 16-Apr-14 2196.3 2196.3 21-Apr-14 2221.75 2221.75 Avg. 29-Apr-14 2194.25 2194.25 2204.1 Sell Profit/Lo ss 11-Jun-14 2206.95 2206.95 2.85 0.13 1-Aug-14 2516.4 2516.4 2516.4 % 22-Aug-14 2464.2 2464.2-52.2-2.07 26-Nov-14 2627.3 2627.3 2627.3 16-Dec-14 2443.05 2443.05-184.25-7.01 Total Profit/Loss & -233.6-8.95 Avg. Signal Generated 5 3 http://www.ijmr.net.in email id- irjmss@gmail.com Page 241

(Impact Factor- 4.358) Chart 1.5: Shows profit/loss and return from the signals on daily price movement of TCS by RSI for the year 1-03-2014 to 28-02-2015. 90 80 70 60 50 40 30 20 10 0 RSI of TCS from 1-3-2014 to 28-2-2015 Series1 RSI Form the Table 1.5 and Chart 1.5, researcher interpret that The "TCS" daily price movement analysis by RSI generates 5 buying signals and 3 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. -233.6/- per share, providing total return of -8.95% and average return of -2.98% per trading transaction. Table1.5: Generates profit/loss and return from the signals on daily price movement of Infosys by RSI for the year 1-03-2014 to 28-02-2015. Close 3-Apr-14 3322.05 3322.05 2-May-14 3180.8 3180.8 3251.425 Avg. Sell Profit/Loss % 24-Jun-14 3232.55 3232.55-18.875-0.58051 29-Dec-14 3904.5 3904.5 3904.5 20-Jan-15 4205 4205 300.5 7.696248 Total Profit/Loss & 281.625 7.115733 Avg. 3.557867 Signal Generated 3 2 http://www.ijmr.net.in email id- irjmss@gmail.com Page 242

(Impact Factor- 4.358) Chart 1.5: Shows profit/loss and return from the signals on daily price movement of Infosys by RSI for the year 1-03-2014 to 28-02-2015. 100 90 80 70 60 50 40 30 20 10 0 RSI of Infosys from 1-3-2014 to 28-2-2015 RSI Interpretation: Form the Table 1.6 and Chart 1.6, researcher interpret that The "Infosys" daily price movement analysis by RSI generates 3 buying signals and 2 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. 281.625/- per share, providing total return of 7.12 and average return of 3.56 per trading transaction. 2. Bollinger Band Table 1.7.-1.12 and Chart 1.7-1.12 shows the analysis of Bollinger Band is a momentum indicator that shows the location of the close relative to the high-low range over a set number of periods. It gives overbought and oversold signals to generate Signals of buying and selling what we view in the chart and also helps to generate profit and return as given calculation in the table. Table 1.7 Generates Profit/Loss and from the signals of overbought and oversold of Bajaj Auto by Bollinger Band for the year 1-03-2014 to 28-02-2015. Closing 5-May-14 1918.85 1918.85 Avg. Sell 8-May-14 1879.25 1879.25 1899.05 Profit/ Loss % 13-Jun-14 2170.7 2170.7 271.65 14.3 Total Profit/Loss $ 271.65 14.3 Avg. 14.3 Signal Generated 2 1 http://www.ijmr.net.in email id- irjmss@gmail.com Page 243

(Impact Factor- 4.358) Chart 1.7: Shows Profit/Loss and from the signals of overbought and oversold of Bajaj Auto by Bollinger Band for the year 1-03-2014 to 28-02-2015. BOLLINGER BAND of BAJAJ AUTO from 1-3-2014 to 28-2-2015 2800 2600 2400 2200 2000 1800 1600 CLOSE PRICE MIDDLE BAND UPPER BAND LOWER BAND Interpretation: Form the Table 1.7 and chart 1.7, researcher interpret that The "BAJAJ AUTO" daily price movement analysis by Bollinger Band generates 2 buying signals and 1 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. 271.65/- per share, providing total return of 14.30 % and average return of 14.30% per trading transaction. Table 1.8: Shows Profit/Loss and from the signals of overbought and oversold of M&M by Bollinger Band for the year 1-03-2014 to 28-02-2015. Close Avg. Sell 23-Jun-14 1161.2 1161.2 1161.2 Profit/ Loss % 11-Aug-14 1308.6 1308.6 147.4 12.69 24-Sep-14 1357.25 1357.25 17-Oct-14 1253.75 1253.75 1305.5 1-Dec-14 1295.1 1295.1-10.4-0.79 Total Profit/Loss & 137 11.9 Avg. 5.95 Signal Generated 3 2 http://www.ijmr.net.in email id- irjmss@gmail.com Page 244

(Impact Factor- 4.358) Chart 1.8: Shows Profit/Loss and from the signals of overbought and oversold of M&M by Bollinger Band for the year 1-03-2014 to 28-02-2015. 1500 1400 1300 1200 1100 1000 900 BOLILINGER BAND of M&M from 1-3-2014 to 28-2-2015 CLOSE PRICE MIDDLE BAND UPPER BAND LOWER BAND Interpretation: Form the Table 1.8 and chart 1.8, researcher interpret that M&M" daily price movement analysis by Bollinger Band generates 3 buying signals and 2 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. 137/- per share, providing total return of 11.9 % and average return of 5.95% per trading transaction. Chart 1.9: Generates Profit/Loss and from the signals of overbought and oversold of ONGC by Bollinger Band for the year 1-03-2014 to 28-02-2015. Close 9-Jul-14 404.95 404.95 Avg. Sell 4-Aug-14 392.75 392.75 398.85 Profit/ Loss 20-Aug-14 424 424 25.15 6.3 17-Sep-14 407.55 407.55 14-Nov-14 393.25 393.25 3-Dec-14 371.45 371.45 10-Dec-14 361.1 361.1 15-Dec-14 343.05 343.05 7-Jan-15 338.05 338.05 369.04 5-Feb-15 356.65 356.65-12.39-3.36 Total Profit/Loss & 12.76 2.94% Avg. 1.47% Signals Generated 8 2 % http://www.ijmr.net.in email id- irjmss@gmail.com Page 245

(Impact Factor- 4.358) Chart 1.9: Shows Profit/Loss and from the signals of overbought and oversold of ONGC by Bollinger Band for the year 1-03-2014 to 28-02-2015. BOLLINGER BAND of ONGC from 1-3-2014 to 28-2-2015 500 450 400 350 300 250 CLOSE PRICE MIDDLE BAND UPPER BAND LOWER BAND Interpretation: Form the Table 1.9 and chart 1.9, researcher interpret that ONGC" daily price movement analysis by Bollinger Band generates 8 buying signals and 2 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. 12.76/- per share, providing total return of 2.94 % and average return of 1.47% per trading transaction. Chart 1.10: Generates Profit/Loss and from the signals of overbought and oversold of Indian Oil by Bollinger Band for the year 1-03-2014 to 28-02-2015. Close Avg. 4-Aug-14 569.45 569.45 569.45 Sell Profit/ Loss % 22-Aug-14 598.1 598.1 28.65 5.03 17-Oct-14 575 575 575 5-Nov-14 621.7 621.7 46.7 8.12 Total Profit/Loss & 75.35 13.15 Avg. 6.57 Signal 2 2 http://www.ijmr.net.in email id- irjmss@gmail.com Page 246

(Impact Factor- 4.358) Chart 1.10: Shows Profit/Loss and from the signals of overbought and oversold of Indian Oil by Bollinger Band for the year 1-03-2014 to 28-02-2015. BOLLINGER BAND of OIL from 1-3-2015 to 28-2-2015 700 650 600 550 500 450 400 CLOSE PRICE MIDDLE BAND UPPER BAND LOWER BAND Interpretation: Form the Table 1.10 and chart 1.10, researcher interpret that The OIL" daily price movement analysis by Bollinger Band generates 2 buying signals and 2 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. 75.35/- per share, providing total return of 13.15 % and average return of 6.57% per trading transaction. Table 1.11: Generates Profit/Loss and from the signals of overbought and oversold of TCS by Bollinger Band for the year 1-03-2014 to 28-02-2015. Close Avg. Sell 21-May-14 2082.85 2082.85 2082.85 Profit/ Loss % 12-Jun-14 2237.35 2237.35 154.5 7.42 22-Oct-14 2451.85 2451.85 2451.85 2-Dec-14 2657.3 2657.3 205.45 8.38 12-Dec-14 2450.7 2450.7 16-Dec-14 2443.05 2443.05 2446.87 9-Feb-15 2512.9 2512.9 66.03 2.69 11-Feb-15 2459.9 2459.9 2459.9 24-Feb-15 2704.75 2704.75 244.85 9.95 Total Profit/Loss & 670.83 28.44 Avg. Signal 5 4 http://www.ijmr.net.in email id- irjmss@gmail.com Page 247

(Impact Factor- 4.358) Chart 1.11: Shows Profit/Loss and from the signals of overbought and oversold of TCS by Bollinger Band for the year 1-03-2014 to 28-02-2015. 3000 2800 2600 2400 2200 2000 BOLLINGER BAND of TCS from 1-3-2014 to 28-2-2015 CLOSE PRICE MIDDLE BAND UPPER BAND LOWER BAND Interpretation: Form the Table 1.11 and chart 1.11, researcher interpret that TCS" daily price movement analysis by Bollinger Band generates 5 buying signals and 2 selling signals from 1-3-2014 to 28-02-2015. The index has given profit in trading transactions is Rs. 670.83/- per share, providing total return of 28.44 % and average return of 7.11% per trading transaction. Table 1.12: Generates Profit/Loss and from the signals of overbought and oversold of Infosys by Bollinger Band for the year 1-03-2014 to 28-02-2015. Closing Avg. Sell 25-Apr-14 3172.65 3172.65 3172.65 Profit/ Loss % 15-May-14 3254.1 3254.1 81.45 2.57 21-May-14 3122.2 3122.2 3-Jun-14 2993.15 3057.68 3089.93 11-Jul-14 3292.7 3292.7 202.76 6.56 5-Jan-15 4026.4 4026.4 4026.4 23-Feb-15 4566.2 4566.2 539.8 13.41 Profit/ Loss & % 824.012 22.54 Avg. 7.51 Signals Generated 4 3 http://www.ijmr.net.in email id- irjmss@gmail.com Page 248

(Impact Factor- 4.358) Chart 1.12: Shows Profit/Loss and from the signals of overbought and oversold of Infosys by Bollinger Band for the year 1-03-2014 to 28-02-2015. 4900 Bollinger Band of Infosys from 1-03-2014 to 28-02-2015 4400 3900 3400 2900 Middle Band Upper Band Lower Band 2400 FINDINGS Table 2.1: Comparison of RSI and Bollinger BAND with No. of signals, Total Profit, Total and Average from 1-03-2014 to 28-02-2015. Company No. of Signal (ing, Selling) RSI Total Profit Total (in %) BAJAJ AUTO (2,2) 551.6 27.77 13.88 M&M (5,3) -92.35-6.48-2.16 (7,5) 459.25 21.29 11.72 ONGC (5,1) -41.24-10.63-10.63 OIL (2,1) -88.9-14.25-14.25 (7,2) -130.14-24.88-24.88 TCS (5,3) -233.6-8.95-2.98 INFOSYS (3,2) 352.25 7.12 3.56 (8,5) 119-1.83 0.58 Total (22,12) 448.11-5.42-12.58 BOLLINGER BAND Avg. http://www.ijmr.net.in email id- irjmss@gmail.com Page 249

(Impact Factor- 4.358) Company No. of Signal (ing, Selling) Total Profit Total (in %) BAJAJ AUTO (2,1) 271.65 14.30 14.30 M&M (3,2) 137 11.9 5.95 (5,3) 408.65 26.2 20.25 ONGC (8,2) 12.76 2.94 1.47 OIL (2,2) 75.35 13.15 6.57 (10,4) 88.11 16.09 8.04 TCS (5,4) 670.83 28.44 7.11 INFOSYS (4,3) 856.28 23.66 7.89 (9,7) 1527.11 52.1 15 Total (24,14) 2023.88 94.39 43.29 Avg. From the table 2.1 we can find that Bollinger Band generates more signals than RSI. The total profit of six companies by RSI & Bollinger Band is Rs. 448.11/- and Rs. 2023.88 respectively. Total return of six companies by RSI & Bollinger Band is -5.42% and 94.39% respectively. Bollinger Band gives higher avg. return than RSI, which is 43.29%. SBI gives good profit and return in both MACD and Stochastic Oscillator in last two years. Auto sector and IT sector gives good profit & return by both of the tools. CONCLUSION In this study, I take two methods for finding ing and Selling signal and for finding return. Out of two methods Bollinger Band comparatively give good return and profit than RSI. RECOMMENDATION By analysis, we can find that Bollinger Band give accurate signal, better profit and higher return compare to RSI. http://www.ijmr.net.in email id- irjmss@gmail.com Page 250

(Impact Factor- 4.358) BIBLIOGRAPHY Reference: Lo, Andrew W., Harry Mamaysky and Jiang Wang. "Foundations Of Technical Analysis: Computational Algorithms, Statistical Inference, And Empirical Implementation," Journal of Finance, 2000, v55(4,aug), 1705-1765. Jinwook Lee, Joonhee Lee, Andras Prekopa,"-Bands: A Technical Tool for Stock Trading", Rutcor Research Report, RRR 8-2013, Aug 21, 2013 G. B. Sabari Rajan ** Dr. S. Parimala, Stock Movement through Technical Analysis: Empirical Evidence from the Fast Moving Consumer Goods (FMCG) Sector, Volume : 2, Issue : 2, February 2013 C. Boobalan, Technical Analysis in Select Stocks of Indian Companies, International Journal of Business and Administration Research Review, Vol.2, Issue.4, Jan-March, 2014 Mrs.J.Nithya, Dr.G.Thamizhchelvan, "Effectiveness of Technical Analysis in Banking Sector of Equity Market", IOSR Journal of Business and Management (IOSR-JBM), Vol 16, Issue 7, July 2014. Websites 1. http://www.nseindia.com/ 2. http://www.etintelligence.com 3. http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:moving_average_ conve 4. http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:stochastic_oscilla tor http://www.ijmr.net.in email id- irjmss@gmail.com Page 251