Summer Internship Project

Fundamental and technical market analysis of

Consumer durables sector
Finoability Pvt Ltd

Submitted by

Corporate Mentor -

Mr. Piyush Agarwal

Co-Founder & Director

 Declaration

I do hereby declare that this project entitled, “Fundamental &

Technical Analysis on Information Technology sector” with
Finoability Pvt Ltd. at Kolkata (Live/Online) has been completed
by me and it is an original work. This report is being submitted for
fulfilling the requirement of Summer Internship Project, at Lovely
Professional University.

It has never been submitted nor been published elsewhere.

Name of the student: Jayant Gupta

Date: 10-06-21

Place:

Acknowledgement

Summer Internship is an integral part of any Post-Graduate

Diploma Program and I take this opportunity to express my
gratitude to Finoability Pvt Ltd, Kolkata which helped me to
accomplish this project. I am highly grateful to my industry
mentor Mr. Piyush Agarwal, (Co-Founder & Director) for
providing me the opportunity to have such a good experience of
the Internship program. It was indeed very gracious of him to
spare his valuable time and to give an elaborate insight into the
functioning of the department.

I would like to thank my faculty mentor for their help and constant
supervision throughout the project. Their opinions and deep
insight on the subject matter and various parts of the SIP report
helped in successful completion of this project.

At last I am also thankful to my friends, all known and unknown

individuals who have given me their constructive advice,
encouragement, co-operation, and motivation during this project
and while preparing this report.

I thank Lovely Professional University who gave me an

opportunity to show my skills and work with such big
organization.

Thank You,
Research Methodology

Type of Study – Secondary Research

Sources – moneycontrol.com
Sampling Unit – Stock of Information Technology
 ABOUT THE COMPANY

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Contents

Title Pg.
No.
1. Executive Summary 07
2. Consumer durables Sector 09
2. Introduction to Consumer durable 09
1. Sector
2. Consumer durables industry outlook: 10
2. 2021
2. Key domestic and international 11
3. Consumer durable companies
 3. Fundamental Analysis
3. Introduction to Fundamental Analysis 12
1.
3. Advantages of Fundamental Analysis 13
2.
3. Disadvantages of Fundamental Analysis 14
3.
4. Fundamental Analysis of Consumer
durables Large Cap Stocks
4. Valuation of Stocks 16
1.
4. Selection of Growth Picks 17
2.
4. Ranking of Selected Stocks 18
3.
5. Technical Analysis
5. Long Term Technical Analysis 20
1.
5. Long Term Technical Analysis of 27
2. Consumer durables Large Cap Stocks
5. Short Term Technical Analysis 29
3.
8. Conclusion
9. References
 1. EXECUTIVE SUMMARY

This project report is about the “fundamental analysis in

Consumer durables- Large Cap sector”. Fundamental and
Technical Analysis have been adopted as the methodologies to
analyse the sector.

Valuation is done as a part of Fundamental Analysis and

certain stocks are chosen as the “Value Picks” and certain
stocks as “Growth Picks”.

The Value Picks have been chosen as those stocks which are
undervalued and have shown a growth in Earnings per Share
(EPS) on a Year on Year (YOY) basis.

Some overvalued stocks have been chosen as Growth Picks

which have the P/E Growth ratio (PEG Ratio) as positive and
less than or equal to 1.

Further, using some financial ratios which are important to the

Consumer durables sector, the value picks and growth picks
have been ranked. According to the ranks, funds have been
allocated to these selected stocks.

Finally, a portfolio consisting of the selected Consumer

durables sector stocks is created and the Net Asset Value
(NAV) of the portfolio is calculated. Performance of the entire
portfolio is analysed with respect to the BSE index (which acts
as a benchmark) on daily basis to see if the portfolio of the
Consumer durables sector stocks beats the benchmark of BSE
index.
It will be helpful for investors who are looking for an investment
in Consumer durables sector companies.

As a part of Technical Analysis, two types of Technical

Analysis namely Short-Term Technical Analysis and Long-
Term Technical Analysis have been performed on the selected
Consumer durables sector stocks (Growth Picks and Value
Picks).

Various Patterns have been observed as a part of Long-Term

Technical Analysis and points at which the investors can buy
and sell the stocks have been spotted. Also, the current trend of
the stocks has been found out.

Various Candlesticks have been used as a part of Short-Term

Analysis and also various Candlesticks positions have also
been observed. The Candlesticks give us an idea regarding
trends and trend reversals for the selected Consumer durables
sector stocks (Growth Picks and Value Picks).
 2. Consumer Durables Sector

2.1. Introduction to Consumer durables Sector

Introduction
Indian consumer durables market is broadly segregated into urban
and rural markets and is attracting marketers from across the
world. The sector comprises of a huge middle class, relatively
large affluent class and a small economically disadvantaged class.
Global corporations view India as one of the key markets from
where future growth is likely to emerge. The growth in India’s
consumer market would be primarily driven by a favorable
population composition and increasing disposable income.
Market Size
 Appliances and consumer electronics industry is expected to
double to reach Rs. 1.48 lakh crore (US$ 21.18 billion) by
2025.
 Electronics hardware production in the country increased
from Rs. 4.43 trillion (US$ 72.38 billion) in FY19 to Rs. 5.47
trillion (US$ 89.38 billion) in FY20.
 In FY20, TV penetration in India stood at 69%, driven by the
DTH market. The total count of DTH subscribers in the
country stood at 70.58 million in the country in 2020.
 As of FY20, electronics, domestic appliances and air
conditioner market in India were estimated to be around Rs.
5,976 crore (US$ 0.86 billion), Rs. 17,873 crore (US$ 1.80
billion) and Rs. 12,568 crore (US$ 2.56 billion), respectively.
 According to India Cellular & Electronics Association
(ICEA), India has the potential to achieve a value of US$ 100
billion in manufacturing of laptops and tablets by 2025.
 Smartphone shipments in India increased eight% y-o-y to
reach 152.5 million units in 2019, thereby making it the
fastest growing among the top 20 smartphone markets in the
world.
2.2. Consumer durables sector industry outlook: 2021

Production-Linked Incentive (PLI) Scheme:

On November 11, 2020, Union Cabinet approved the
Production-Linked Incentive (PLI) scheme in 10 key sectors
(including electronics and white goods) to boost India’s
manufacturing capabilities, exports and promote the
‘Atmanirbhar Bharat’ initiative.
India is on a path to become a US$ 1 trillion digital
economy by 2025. In addition, projects such as ‘Smart Cities’
and ‘Digital India’, coupled with factors such as the
government's push for data localisation, Internet of Things
(IoT) market in India, are expected to increase the demand for
electronic products. The PLI scheme aims to boost the
production of electronic products in India.
A PLI scheme for white goods (air conditioners and LEDs)
will lead to more domestic manufacturing, employment
opportunities and increased exports.

Electronics/Technology products will be allotted nearly Rs

5000 Cr and White goods like (ACs, LEDs) will be allotted
Rs 6238 Cr over the next Five year.

Recent key Investment plans:

Micromax: To invest $89.45 million for transforming itself
into a consumer electronic company
Foxconn: Plans to invest up to $ 1 Billion to expand a factory
in southern India where it assembles Iphones.
Dyson: will invest around $200 million in Indian consumer
durables sector by 2023.
Thomson: plans to invest $141.6 million to strengthen its
position in Indian consumer electronic market.
Vivo: will invest $1.07 billion to expand its production
capacity in India.
Voltas: is expecting a double-digit growth in sales of air -
conditioners in 2021 on account of the country’s buoyant
summer and hybrid working model adopted by companies
amid the COVID-19 pandemic.
Following are some recent investments and developments in the
Indian consumer market sector.
 In January 2021, Panasonic India announced its plan to
double its residential air-conditioning business by 2024.
 In January 2021, the Indian smartphone firm, Lava Mobiles
released the world's first customisable smartphone that
enables users to select components, such as camera, memory,
storage space and colour, from the company's website on their
own.
 In November 2020, Saudi Arabia's Public Investment Fund
invested Rs 9,555 crore (US$ 1.29 billion) in Reliance Retail,
taking the total fundraise in the last two months to Rs 47,265
crore (US$ 6.37 billion).
 In November 2020, three private equity funds—Investcorp,
Norwest Venture Partners and Gaja Capital together invested
~Rs. 800 crore (US$ 110 million) to acquire ~ 31% stake in
Xpressbees, the e-commerce focussed end-to-end supply
chain solutions provider.
 In November 2020, Pegatron Corp., an iPhone assembler in
Taiwan, announced its plans to invest US$150 million in
building a plant in India.
 In October 2020, the Karnataka government approved a Rs.
3,540 crore (US$ 482.63 million) investment by Aequs SEZ
Private Limited to develop a consumer electronics and
durables goods (CEDG) cluster in Hubballi—about 430 kms
from Bengaluru.
 In October 2020, Amazon India launched new specialised
fulfilment centre with a storage capacity of 1.2 million cubic
feet in Bengaluru, which is specialised to store and manage
customer orders from the large consumer appliances and
furniture categories in their portfolio.
2.3. Key
domestic and international Consumer durable
companies :

1. Bluestar: AC, refrigerators, specialty cooling products

including mortuary chambers and cold storage.

2. Daikin: AC and cooling equipment.

3. Godrej: Refrigerators, AC, washing machines, microwave

ovens, DVD players, digital-imaging products and audio-
visual products.

4. Titan: Watches, jewelry, etc.

5. Crompton: Fans, ACs, Coolers, etc.

6. Symphony: Coolers, LEDs, fans, etc.

7. Bata India: Footwear.

8. Whirlpool: Washing machine, Refrigerators, appliances,

microwave ovens, water purifiers and power backup solutions
 etc.

9. Samsung: Electronics, smart devices, etc.

10. Sony: TVs, Appliances, Gadgets, etc.

11. Voltas: ACs, Coolers, washing machines, Geysers.

12. Bajaj electronics: Geysers, LEDs, Fans, electronics.

 3. Fundamental Analysis

3.1. Introduction to Fundamental Analysis

It is a method used to evaluate a security on the basis of its

intrinsic value by examining related economic, financial and
other qualitative and quantitative factors.

Fundamental analysis is about using real data to evaluate a

security's value. Although most analysts use fundamental
analysis to value stocks, this method of valuation can be used
for just about any type of security. It assumes that over the
long term, a stock price will reflect the company's intrinsic
value.

A Fundamental analyst attempts to study everything that can

affect the security's value, including macroeconomic factors
(like the overall economy and industry conditions) and
company-specific factors (like financial condition and
management).

An investor, for instance can perform fundamental analysis on

a bond's value by looking at economic factors, such as interest
rates and the overall state of the economy, and information
about the bond issuer, such as potential changes in credit
ratings. For assessing stocks, this method uses revenues,
earnings, future growth, return on equity, profit margins and
other data to determine a company's underlying value and
potential for future growth.

It is critical for an investor to separate the daily short-term

noise in the stock prices and concentrate on the underlying
business performance. Over the long term, the stock prices
of a fundamentally strong company tend to appreciate,
thereby creating wealth for its investors.

The end goal of performing fundamental analysis is to

produce a value that an investor can compare with the
security's current price, with the aim of figuring out what
sort of position to take with that security (Undervalued =
buy, Overvalued = sell).

Growth is also considered as an important factor in the

fundamental analysis because if the security does not grow or
if there is a negative growth (loss making company) then
irrespective of whether it is an overvalued or undervalued
security, there is no point in analysing it further for
fundamental analysis.

In case of stocks, Undervalued stocks can be considered for

further analysis only if they grow Year on Year. The
undervalued securities with positive Year on Year growth are
considered as ‘Value Picks’. Overvalued stocks can be
considered for further analysis only if their PEG ratio (also
known as Price to EPS growth ratio) lies between 0 and 1
including those having PEG ratio near or equal to 1. Such
overvalued stocks are known as ‘Growth Picks’
Fundamental analysts focus on the underlying business of the
company being evaluated and specifically look at quantitative
measures such as:

 Revenues
 Earnings
 Assets
 Debts

These financial measures are often combined to produce

fundamental or financial ratios that analysts can use to
compare the company they are analysing to:

 Other companies in the same industry

 The overall market
 Previous periods result for the same company

Analysts use a variety of ratios to compare the two companies or

the stocks of the two companies like Net Income margin, ROE,
Debt to Equity ratio, etc. The ratios used for comparison vary
from sector to sector.

3.2. Advantages of Fundamental Analysis

 It uses sound mathematical and statistical principles to

produce ratios so that there is no room for personal bias.

 The markets are usually driven by fundamental factors over

 the long term. Fundamental analysis can look at long-term
economic, demographic, technologic or consumer trends.

 By determining an intrinsic value, fundamental analysts

can determine appropriate buy prices that represent 'good
value'.

 Research into fundamentals provides the investor with a

better understanding of the company and its business.
3.3. Disadvantages of Fundamental Analysis

 Fundamental analysis can be hard work and be overly

complicated. Given the time and difficulty constraints, it
may be difficult to get an edge

 In the short term, markets will not always move in the same
direction as fundamental value meaning that often short-
term momentum will override the fundamentals

 Six monthly issuing of financial information may mean a

company's fundamentals have
significantly changed and means a time lag for investment
decisions. This applies especially to a lack of opportunity to
react quickly to exit stocks

 Fundamental analysis for future estimated value can only

be based on assumptions so a best- and worst-case
valuation model may need to be considered.

 No valuation model can take into account any unexpected

negative economic, political or legislative changes.

 Another important point to consider is that most

information considered in fundamental analysis comes
from the company itself and assumptions have to be
made that the company is providing accurate and true
information.
 4. Fundamental Analysis of Consumer durable -Large Cap
Stocks

For conducting fundamental analysis for the stocks in

Consumer durables Sector, we have taken into consideration
only large cap stocks i.e. stocks with market capitalization
greater than 5000 crore rupees. Table below shows the stocks
of the companies having market capitalization greater than
5000 crore rupees and listed under the Nifty 500 Index (as on
6th April, 2021).

Company Market cap (Cr)

₹ 1,35,431.78
Titan Company
₹ 65,853.44
Havells India
₹ 32,252.99
Voltas
₹ 23,845.99
CG consumer
Dixon Technologies ₹ 20,397.95
Bata India ₹ 17,864.69
₹ 15,325.07
Kajaria Ceramics
Whirlpool ₹ 27,741.16
Rajesh Exports ₹ 14,197.58
Relaxo Footwears ₹ 23,639.27
Total ₹ 3,76,549.92
 4.1. Valuation of stocks

The P/E ratio of each stock is then compared with the

sectorial P/E ratio to determine whether the stock is
Undervalued or Overvalued. For instance, if P/E ratio
of a stock is lesser than the sectorial P/E ratio then that
stock is considered as an Undervalued stock on the
other hand if the P/E ratio of a stock is greater than the
sectorial P/E ratio then that stock is considered as an
Overvalued stock. (As shown in Table below). The
Long-Term Price Target (LTPT) is then determined by
multiplying the average sector P/E with the stock EPS.
All the Undervalued stocks are considered as ‘Value
Picks’.

Name P/E ratio Under/Over valued

Titan Company 179.86 Overvalued
Havells India 69.79 Undervalued
Voltas 71.09 Undervalued
CG consumer 49.18 Undervalued
Dixon Technologies 144.06 Overvalued
Bata India 54.35 Undervalued
Kajaria Ceramics 62.16 Undervalued
Whirlpool 88.17 Overvalued
Rajesh Exports 17.65 Undervalued
Relaxo Footwears 92.9 Overvalued
Index p/e 82.921

Note1: Market Price in the above table has been

considered as price of the stocks as on April, 2019.

Note2: Info edge is greyed is not considered for further

analysis as it has an outstandingly high PE ratio. Hence
it is greyed out.
 4.2. Selection of Growth Picks and Value Picks

After the selection of Undervalued and overvalued

stock, the next step is to analyse the Overvalued and
undervalued stocks and derive determine the Growth
and value Picks. For determining the Growth Picks, P/E
Growth value (PEG value) is calculated for each
Overvalued stock by dividing P/E ratio of each of these
stocks by the percentage change in earnings per share
Year on Year and the stocks with positive PEG values
and less than or equal to 1 are selected as Growth Picks.
The Overvalued stocks with negative PEG values or
with PEG values greater than 1 are rejected. For
determining the value pick first identifying top line and
bottom line of the stock, ones for with both are
decreasing for two consecutive year are rejected and the
remaining ones are further analysed.

Growth Picks and Value pick have been determined as shown

in the Table below.

Overvalued stock: -
Overvalued stocks P/E Peg Select/reject
Titan Company 179.86 14.1 REJECT
Dixon Technologies 144.06 2.57 REJECT
Relaxo Footwears 92.9 5.4 REJECT
Whirlpool 88.17 5.17 REJECT

Undervalued stock: -
Undervalued Select/
Stocks P/E Sales Pat reject
Increasin Decreasin
Rajesh Exports 17.65 g g SELECT
Increasin Increasin
CG Consumer 49.18 g g SELECT
Decreasin Decreasin
Kajaria Ceramics 62.16 g g REJECT
Decreasin Increasin
Havells India 69.79 g g SELECT
Increasin Increasin
Voltas 71.09 g g SELECT
Increasin Increasin
Bata India 54.35 g g SELECT
Growth pick and value pick: -
Growth pick Value pick
Non Rajesh Exports
CG Consumer
Havells India
Voltas
Bata India

4.3. Ranking of Selected Stocks

After selecting the stocks, they are ranked based on the

EV to Sales ratio, gross refinery margin, debt equity ratio,
PBT margin, Price to sale ratio to decide the fund
allocation in each stock.

Debt Net
Qui Intrest Retu Tot Fin
Curre -to- profi
Share ck covera rn on al al
nt equi t
name rati ge Equit Ran Ran
ratio ty marg
o ratio y k k
ratio in
Havells 7.85 17.41 Ran
1.68 1.05 0.22 22.9 14
India % % k2
7.23 13.11 Ran
Voltas 1.63 1.19 0.10 28.9 20
% % k5
CG
10.98 38.70 Ran
Consu 1.90 1.62 0.18 16.5 13
% % k1
mer
Bata 10.83 18.20 Ran
2.46 1.35 0.12 0.12 16
India % % k3
Rajesh 0.62 12.40 Ran
1.98 1.41 0.08 6.67 19
Exports % % k4

Rank
1
Rank
2
Rank
3
Rank
4
Rank
5
 5. Technical Analysis

Technical analysis is the examination of past price

movements to forecast future price movements where the
price is influenced by the forces of supply and demand.

The objective of analysis is to forecast the direction of the

future price. By focusing on price and only price, technical
analysis represents a direct approach while Fundamentalists are
concerned with why the price is what it is.

Based on the duration of analysis, technical analysis can be

categorized into two types:

1. Long term technical analysis (2-5 years)

2. Short term technical analysis (<1 year)

There are various patterns to analysis whether the movement

of a particular stock is in upward trend or downward trend.

Upward trend signifies when demand is greater than supply

resulting in increase in prices. An uptrend line has a positive
slope and is formed by connecting two of more low points.
The second low must be higher than the first for the line to
have a positive slope.

Downward trend signifies when supply exceeds the

demand resulting in decrease in prices. A down trend
line has a negative slope and is formed by connecting
two or more high points. The second high must be
lower than the first for the line to have a negative slope.

Support is the price level at which demand is thought to be

strong enough to prevent the price from declining further. The
logic dictates that as the price declines towards support and
gets cheaper, buyers become more inclined to buy and sellers
become less inclined to sell. By the time the price reaches the
support level, it is believed that demand will overcome supply
and prevent the price from falling below support. A decline
below support indicates a new willingness to sell and/or a lack
of incentive to buy.

Resistance is the price level at which selling is thought to be

strong enough to prevent the price from rising further. The
logic dictates that as the price advances towards resistance,
sellers become more inclined to sell and buyers become less
inclined to buy. By the time the price reaches the resistance
level, it is believed that supply will overcome demand and
prevent the price from rising above resistance.
Long Term Technical Analysis

a) Rounding Bottom
i. The rounding bottom is a long-term reversal

pattern that is best suited for weekly charts. It is

also referred to as a saucer bottom, and represents
a long consolidation period that turns from a
bearish bias to a bullish bias.

b) Cup with Handle

a. The Cup with Handle is a bullish continuation pattern

that marks a consolidation period followed by a

breakout. It was developed by William O'Neil and
introduced in his 1988 book, How to Make Money in
Stocks.
b. As its name implies, there are two parts to the pattern:

the cup and the handle. The cup forms after an

advance and looks like a bowl or rounding bottom. As
the cup is completed, a trading range develops on the
right-hand side and the handle is formed. A
subsequent breakout from the handle's trading range
signals a continuation of the prior advance.
c) Bump & Run Reversal
a. A Rising trendline is drawn which connects at least 3
lows of a price series (troughs) of 3 different periods
respectively as shown in the below Figure 5.3. Then a
Bump is seen which can be observed as a bullish
pattern and finally the point where the trendline is
broken, the pattern enters into a Run phase. This point
is called as a sell point i.e. Investor is supposed to sell
the stock at this point.

d) Double Top
a. The double top is a major reversal pattern that forms
after an extended uptrend. As its name implies, the
pattern is made up of two consecutive peaks that are
roughly equal, with a moderate trough in between as
shown in Figure 5.4. At least an intermediate change,
if not long-term change, in trend from bullish to
bearish as soon as the support is broken. Many
potential double tops can form along the way up, but
until key support is broken, a reversal cannot be
confirmed.
 Key Points Regarding Double Bottom Chart Pattern:

o Resistance break: Even after trading down to

support, the double top and trend reversal are still not
complete. Breaking support from the lowest point
between the peaks completes the double top.

o Resistance turned support: Broken support becomes

potential resistance and there is sometimes a test of
this newfound resistance level with a reaction rally.
Such a test can offer a second chance to exit a position
or initiate a short.

o Price Target: The distance from support break to

peak can be subtracted from the support break for a
price target. This would infer that the bigger the
formation is, the larger the potential decline

e) Double Bottom
a. The double bottom is a major reversal pattern that
forms after an extended downtrend. As its name
implies, the pattern is made up of two consecutive
troughs that are roughly equal, with a moderate peak
in between.
 b. Although there can be variations, the classic double
bottom usually marks an intermediate or long-term

change in trend when the resistance is broken. Many

potential double bottoms can form along the way
down, but until key resistance is broken, a reversal
cannot be confirmed.

 Key Points Regarding Double Bottom Chart Pattern:

o Resistance break: Even after trading up to
resistance, the double top and trend reversal are still
not complete. Breaking resistance from the highest
point between the troughs completes the double
bottom. This too should occur with an increase in
volume and/or an accelerated ascent.
 o Resistance turned support: Broken resistance
becomes potential support and there is sometimes a
test of this newfound support level with the first
correction. Such a test can offer a second chance to
close a short position or initiate a long.

o Price Target: The distance from the resistance

breakout to trough lows can be added on top of the
resistance break to estimate a target. This would
imply that the bigger the formation is, the larger the
potential advance.

f) Head & Shoulders Top

a. A head and shoulders reversal pattern forms after an
uptrend, and its completion marks a trend reversal.
The pattern contains three successive peaks with the
middle peak (head) being the highest and the two
outside peaks (shoulders) being low and roughly
equal. The reaction lows of each peak can be
connected to form support, or a neckline.
b. As its name implies, the head and shoulders reversal
pattern are made up of a left shoulder, head, right
shoulder and neckline. Other parts playing a role in
the pattern are volume, the breakout, price target and
support turned resistance.

 Key Points Regarding Double Bottom Chart

Pattern:

o Neckline: The neckline forms by connecting low

points 1 and 2. Low point 1 marks the end of the left
shoulder and the beginning of the head. Low point 2
marks the end of the head and the beginning of the
right shoulder. Depending on the relationship between
the two low points, the neckline can slope up, slope
down or be horizontal. The slope of the neckline will
affect the pattern's degree of bearishness: a downward
slope is more bearish than an upward slope.
Sometimes more than one low point can be used to
form the neckline.
 o Neckline Break: The head and shoulders pattern
are not complete and uptrend is not reversed until
neckline support is broken.

o Support turned resistance: Once support is broken; it

is common for this same support level to turn into
resistance. Sometimes, but certainly not always, the
price will return to the support break and offer a
second chance to sell.

o Price Target: After breaking neckline support, the

projected price decline is found by measuring the
distance from the neckline to the top of the head. This
distance is then subtracted from the neckline to reach
a price target.

g) Head & Shoulders Bottom

a. The head and shoulders bottom is sometimes referred

to as an inverse head and shoulders. The pattern

shares many common characteristics with its
comparable partner, but relies more on volume
patterns for confirmation.
b. As a major reversal pattern, the head and shoulders

bottom forms after a downtrend, and its completion

marks a change in trend. The pattern contains three
successive troughs with the middle trough (head)
being the deepest and the two outside troughs
(shoulders) being shallower. Ideally, the two
 shoulders would be equal in height and width. The
reaction highs in the middle of the pattern can be
connected to form resistance, or a neckline.
c. The price action forming both head and shoulders
top and head and shoulders bottom patterns
remains roughly the same, but reversed.

 Key Points Regarding Double Bottom Chart

Pattern:

o Neckline: The neckline forms by connecting reaction

highs 1 and 2. Reaction high 1 marks the end of the left
shoulder and the beginning of the head. Reaction high 2
marks the end of the head and the beginning of the right
shoulder.
 Depending on the relationship between the two reaction
highs, the neckline can slope up, slope down or be horizontal.
The slope of the neckline will affect the pattern's degree of
bullishness: an upward slope is more bullish than downward
slope.

o Neckline Break: The head and shoulders pattern is

not complete and the downtrend is not reversed until
neckline resistance is broken.

o Resistance turned support: Once resistance is broken; it

is common for this same resistance level to turn into
support. Often, the price will return to the resistance break
and offer a second chance to buy.

o Price Target: After breaking neckline resistance, the

projected advance is found by measuring the distance from
the neckline to the bottom of the head. This distance is
then added to the neckline to reach a price target.

h) Triple Top
a. The triple top is a reversal pattern made up of three

equal highs followed by a break below support. In

contrast to the triple bottom, triple tops usually
form over a shorter time frame and typically range
from 3 to 6 months. Generally speaking, bottoms
take longer to form than tops.
  Key Points Regarding Triple Top Chart Pattern:
 Support break: As with many other reversal
patterns, the triple top is not complete until a
support break. The lowest point of the formation,
which would be the lowest of the intermittent lows,
marks this key support level.

 Support turns resistance: Broken support

becomes potential resistance, and there is
sometimes a test of this newfound resistance level
with a subsequent reaction rally.

 Price Target: The distance from the support

break to highs can be measured and subtracted
from the support break for a price target.

i) Triple Bottom
a. The triple bottom is a reversal pattern made up of

three equal lows followed by a breakout above

resistance. While this pattern can form over just a few
months, it is usually a long- term pattern that covers
many months.
  Key Points Regarding Triple Bottom Chart Pattern:

o Resistance break: As with many other reversal

patterns, the triple bottom is not complete until a
resistance breakout. The highest point of the
formation, which would be the highest of the
intermittent highs, marks resistance.
o Resistance turns support: Broken resistance
becomes potential support, and there is sometimes a
test of this newfound support level with the first
correction. Because the triple bottom is a long-term
pattern, the test of newfound support may occur
many months later.

o Price Target: The distance from the resistance

breakout to lows can be measured and added to
the resistance break for a price target.
5.2. Long Term Technical Analysis Consumer durables-
Large Caps

1- Havells India – Touchs support

2- Voltas: Support
3- Crompton:

4- Bata India: long term support

5- Kajaria:
6- Bata India – Double bottom
5.3 Short Term Technical Analysis

Candlestick Chart: Originating in Japan over 300 years ago,

candlestick chart requires all the open, high, low and close
prices. A daily candlestick is based on the open price, the
intraday high and low, and the close. A weekly candlestick is
based on Monday's open, the weekly high-low range and
Friday's close.

Candlestick Patterns for Reversal of trend:

1. Doji: The relevance of a Doji depends on the preceding
trend or preceding candlesticks. Doji indicate that the
forces of supply and demand are becoming more evenly
matched and a change in trend may be near.

2. Hammer: The hammer is a bullish reversal pattern that

forms after a decline. After a decline, hammers signal a
bullish revival. The low of the long lower shadow implies
 that sellers drove prices lower during the session.

3. Hanging Man: The hanging man is a bearish reversal

pattern that can also mark a top or resistance level.
Forming after an advance, a hanging man signals that
selling pressure is starting to increase. The low of the long
lower shadow confirms that sellers pushed prices lower
during the session.
4. Shooting Star: The shooting star is a bearish reversal
pattern that forms after an advance and in the star
position, hence its name. A shooting star can mark a
potential trend reversal or resistance level.
5. Inverted Hammer: The inverted hammer looks exactly
like a shooting star, but forms after a decline or
downtrend. Inverted hammers represent a potential trend
reversal or support levels. After a decline, the long upper
shadow indicates buying pressure during the session.

Candlesticks position: -

1. Star Position:
A candlestick that gaps away from the previous candlestick is
said to be in star position. The first candlestick usually has a
large real body, but not always, and the second candlestick in
star position has a small real body. Depending on the previous
candlestick, the star position candlestick gaps up or down and
appears isolated from previous price action. The two
candlesticks can be any combination of white and black. Doji,
hammers, shooting stars and spinning tops have small real
bodies and can form in the star position. Later we will examine
2- and 3-candlestick patterns that utilize the star position.
2. Harami Position:
A candlestick that forms within the real body of the previous
candlestick is in Harami position. Harami means pregnant in
Japanese and the second candlestick is nestled inside the first.
The first candlestick usually has a large real body and the
second a smaller real body than the first. The shadows
(high/low) of the second candlestick do not have to be
contained within the first, though it's preferable if they are.
Doji and spinning tops have small real bodies and can form in
the harami position as well. Later we will examine candlestick
patterns that utilize the harami position.
 Conclusion
Equity research plays a very crucial role in order to make wise
investment decisions. After having accessed your risk capacity
and tolerance followed by time horizon and intention of
investment, the individual portfolio can fetch your systematic
returns.

Relative valuation model is one such method for value

analysis. One can use long term and short-term technical
analysis along with fundamental analysis to determine a
confirm trade signal. By calculating long term target price
investor one can achieve maximum profit and also get an idea
for how much period they should hold the stock.

1
 Reference
s:

1. www.equitymaster.com
2. www.investopedia.com
3. www.ibef.org
4. www.stockschart.com
5. www.wikipedia.com
6. www.tradingview.com