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A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 1
A STUDY ON TECHNICAL ANALYSIS IN
COMMODITY MARKET (GOLD M) WITH
REFERENCE TO INDIA INFOLINE Ltd
PROJECT REPORT
A project report submitted in partial fulfillment of the requirements for the
degree of MBA in JNTU Anantapuramu
Submitted By
V.RAMANJINEYULU
REGD.NO: 13F21E0062
Under the Esteemed Guidance of
Miss.K.S. HARITHA, MBA
Assistant Professor
DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION
GATES INSTITUTE OF TECHNOLOGY, GOOTY
(Approved A.I.C.T.E, and Affiliate to JNTU Anantapur)
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 2
GATES INSTITUTE OF TECHNOLOGY, GOOTY
CRETIFICATE
This is to certify that project entitled “TECHNICAL ANALYSIS, GOLD (M)”
has been submitted by
V.RAMANJINEYULU
13F21E0062
In the fulfillment of the requirement for the award of degree for the award
of Master of Business Administration in MBA department from “GATES
INSTUTE OF TECCHNOLOGY” Gooty during the academic year 2013-
2015.
Internal Guidance of Head of the Department
Miss. K.S. HARITHA Dr.S. Md.Ghouse
M.B.A. M.A.(Eco), M.B.A, PhD
Assistant professor, Department of MBA,
Department of MBA, GATES Institute of technology,
GATES Institute of technology, Gooty, Anantapuramu (Dist).
Gooty, Anantapuramu (Dist).
EXTERNAL EXMINAR1:
EXTERNAL EXMINAR2:
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 3
DECLARATION
I hereby declare that this project work entitled “TECHNICAL ANALYSIS IN COMMODITY
MARKET GOLD(M) WITH REFRENCE TO INDIA INFOLINE Ltd” carried out under guidance of
my faculty Mss. K.S. HARITHA, M.B,A, Assistant professor this report neither full nor in part has
ever been submitted for award of any other degree of either this university (or) any other university.
V.RAMANJINEYUU
13F21E0062
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 4
ACKNOWLEDGEMENT
This satisfaction and exhilaration that accompanies the successful completion of all my tasks would
be incomplete without mentioning the people who made it possible constant guidance and
encouragement, crowned all my effects with success.
I am thankful to our beloved correspondent sir Sri. V.K. SUDHEER REDDY and Principal Dr.M
RAMESH, M.E, P.H.D of Gates institute of technology, Gooty. For his consistent help and
encouragement to complete the project work.
I am very thankful to Dr.S.Md. GHOUSE, M.A, M.B.A, PhD, HOD of MBA Dept. GATES Institute
of technology, Gooty. For his valuable guidance and suggestions, analyzing and testing throughout
period, till end of the project work.
I wish to heartful sincere thanks to my visiting faculty, guide Miss. K.S. HARITHA, M.B.A,
Assistant professor, GATES Institute of technology, Gooty. For her valuable inputs guide support and
cooperation all along project. This project would not have been possible without her help.
I would like to express our sincere thanks to the faculty member of M.B.A Dept. who had helped me
to complete the project work successfully.
V.RAMANJINEYULU
13F21E0062
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 5
S.NO PARTICULARS PAGE NUMBERS
CHAPTER 1
INTRODUCTION
1.1 Introduction
1.2 Objective of the study
1.3 Scope of the study
1.4 Need of the study
1.5 Limitation of the study
1.6 Research Methodology
2 -16
CHAPTER 2 REVIEW OF LITERATURE
17-18
CHAPTER 3 INDUSTRY AND COMPANY
ANALYSIS 19-34
CHAPTER 4 ANALYSIS AND
INTERPRETAIONS 35 -52
CHAPTER 5
FINDINGS, SUGGESTIONS &
CONCLUSIONS
5.1 Findings
5.2 Suggestions
5.3 conclusion
5.4 Bibliography/References
53-57
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
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CHAPTER 1
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 7
1.1 INTRODUCTION OF GOLD:
India, a commodity based economy where two-third of the population depends on agriculture
commodities, surprisingly has an under developed commodity market. Unlike the physical market,
futures markets trade commodity are largely used as risk management mechanism on either physical
commodity itself or open in commodity stock.
This project report describes the functionality of the commodities market and how the commodities
are traded on the exchange. The idea is to understand the importance of commodity derivatives and
learn about the market till early 70‟s. Its development and growth was shunted due to numerous
restrictions earlier. Now, with most of these restrictions being removed, there is tremendous potential
for growth of this market in the country.
Indian market have recently thrown open a new avenues for retail investors and trades to participate.
For those who want to diversify their portfolio beyond shares, bounds and real estate, commodities
are the best option.
For retail investors could have done very little to actually invest to commodities such as gold and
silver or oil seeds in the future market. This was nearly impossible in commodity except for gold and
silver as there was particularly no retail avenue for putting in commodities.
However, nationally multi-commodity exchange became operational:
 National multi-national commodity exchange of India (NMCE).
 National commodity and derivative exchange (NCDEX).
 Multi commodity exchange (MCX).
With the setting up of these exchanges in the country, retail investors can how trade in commodity
futures without having physical stocks, like any other markets, the one for commodity futures plays a
valuable role in information pooling and risk sharing. The market mediates between buyers and
sellers of commodities, and facilities decision related storage and consumption of commodities.
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
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COMMODITY:
Commodity play important role in our daily lives. They can be found literally all over the world, and
can be traded on the global marketplace as part of a diversified investment portfolio. In fact billions
of dollars are invested in commodity every day.
Where they can be traded on either spot (real-time) or future (optional) markets, most individual
commodities are traded in the form of futures, where what is being traded is not commodity itself but
rather a contract to buy or sell it for a certain price by a stated date in the future. This carrier the
potential for wild market fluctuations, but it also offer exchange opportunities for investors willing to
ride out market volatility in anticipate of rewards, like any investment, the goal in commodities
trading is to” buy low and sell high”. The difference with commodities is that they are highly
leveraged and trade in contract sizes instead of shares.
Investors can buy and sell positions whenever the markets are open, so there‟s no chance of walking
up one morning to find 10,000 bushels of corn the front lawn
COMMODITY MARKET:
A commodity market is a market that trade in primary rather than manufactured products. Soft
commodities are agricultural products such as wheat, coffee, cocoa and sugar; hard commodities are
mined, such as (gold, rubber and oil). Investor‟s access about 50 major commodity markets
worldwide with purely financial transactions increasingly outnumbering physical trades in which
goods are delivered. Future contracts are the oldest way of investing in commodities. Futures are
secured by physical assets. Commodity markets can include physical trading and derivatives trading
using spot prices, forward, futures and options on future. Farmers have used a simple form of
derivative trading in the commodity market for centuries for price risk management.
A financial derivative is a financial instrument whose value is derived from a commodity termed an
underline. Derivatives are either exchange-traded or over-the-counter (OTC). An increasing number
of derivatives are traded via clearing house some with central counterparty clearing, which provides
clearing and settlement services on a futures exchange, as well as off-exchange in the OTC markets.
Derivatives such as future contracts, swaps, exchange-traded commodities (ECT), and forward
contracts have become the primary trading instruments in commodity markets. Futures are traded on
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
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regulated commodities exchanges. Over-the-counter (OTC) contracts are “privately negotiated
bilateral contracts entered into between the contracting parties directly”
Exchange-traded funds (ETFs) began to features commodities in 2003. Gold ETFs are based on
“electronic gold” that does not entail the ownership of physical bullion, with its added costs of
insurance and storage in repositories such as the London bullion market. According to the World
Gold Council, ETFs allow investors to be exposed to the gold market without the risk of price
volatility associated with gold as a physical commodity.
KEY ASSUMPTIONS AND HISTORICAL BACKGROUND:
 Before 1800, gold was the real money, and paper money was a rarity and rather unstable
unless strictly backed by gold or silver.
 Between 1800-1932 it was a largely free, but unregulated market, and gold was treated the
same way as money, paper money was gold or silver backed, and gold was the ultimate
currency
 Between, 1932-1971 the market was a command and control system, a governmental cartel,
along with limited sub-regional black markets. Gold possession is prohibited in several
countries for private persons, unless in jewelry. Gold was not easily traded over state borders
during this period. However, in many countries, gold was seen as the only true kind of money.
 After 1971 it is for most practical purposes, a free market, and movement of gold is relatively
unrestricted. However, for large transactions, the invisible hand of a central bank cartel was
still at times seen there. Trade was internationally free, but fluxes are greatly influenced by
central bank sales and purchases. Some countries, not being free trade countries and several
countries with dictatorship have restrictions on moving gold across their borders: such
countries are United States, Russia, India, China, Brazil, Cuba, North Korea, and in addition
some countries have limitations on private ownership of gold: Russia, Cuba, North Korea. In
many countries with weak, none or chaotic government and economy, gold, Euro and Dollars
remained as the only true currencies.
 Paper gold, which existed through the bank notes being gold certificates since 1830 to around
1935, and was available to the public along with minted gold in most of the great powers. The
old paper gold was to a large degree backed by central bank physical gold holdings for most
of the time. The gold monetary standard was abandoned in Europe in 1925 and in the USA in
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
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1932, when paper monetary volume expansion made it impossible to back every banknote
with physical gold. Gold was used as a clearing currency between national banks until 1971,
when the United States cancelled that system. After 1971, US dollar was only pegged to
global social trust, the gold backing being gone. Paper gold reemerged after 1973 as a separate
market for gold certificates, being like banknotes with only a gold value printed on them, as
well as metal accounts, metal loans and forward contracts for gold. This was originally not
available to the public, but only to gold processing companies and financial institutions.
 There is not full alternatively in the gold market, as only gold is the real magic money Metal
in the eye of the public, and beside silver the only money a government cannot corrupt and
which also survives a governmental collapse.
 There is a limited financial substitute in silver and in modern times by small amounts of
platinum and palladium as bearers of monetary value in solid physical manifestation
 The total physical amounts of all gold, silver and platinum are very limited
 . Gold is sold as physical metal as well as paper gold, ownership to gold as shown on a metal
bank account. The amount on the account is supposed to have a corresponding amount of
physical metals somewhere if the trader is a serious trader.
CHARACERISTICS OF GOLD MARKET:
 Gold market is highly liquid and gold held by central banks, other major institutions and retail
jewelry keep back to the market.
 Due to large stocks of gold as against its demand, it is argued that the core driver of the real
price of gold is stock equilibrium rather than flow equilibrium.
 Economic forces that determine the prices of gold are different from, and in many cases
opposed to the forces that influence most financial assets.
IMPORTANT GOLD MARKETS IN THE WORLD:
 London as the great clearing house.
 New York, the home of futures trading.
 Istanbul, Dubai, Singapore, India, Hong Kong as doorways to high consuming regions.
 Tokyo where TOCOM sets the mood of Japan.
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
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1.2 OBJECTIVE OF THE STUDY:
 To study the performance of gold.
 To predict the future performance of gold by Technical Analysis.
 To suggest the investor to Buy, Sell or Hold the position of gold.
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
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1.3 SCOPE OF THE STUDY:
The scope of the study is limited to Commodity market. Here the study mainly focused on Gold
M. The study is done only based on the information collected by MCX market. The scope of the
study includes only technical analysis with using the indicators of Moving averages and RSI
(Relative Strength Index).
Calculations for 5 months that is Jan-1-2015 to May-15-2015
.
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
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1.4 NEED FOR THE STUDY:
Gold is a precious metal per excellence and remain the ultimate safe haven asset, as well as
traditionally consuming metal. It has been reserved as a symbol of wealth and prosperity. Its
historical significance and electrical conductivity ensures that it will be in demand for long term. The
simple fact that is rare and beautiful metal will always keep it, as an investment, gold has cyclically
come into and out of favor, and has its boom in the market.
Like any investment, the goal of investors to invest in gold is to buy low and sell high. It helps to
reduce the risk, to take buy, sell and hold decisions to the investors.
It also helps to understanding the fluctuations of Gold prices by interpreting the different indicators
like Moving Averages, Rate of Change Indicators and Relative Strength Index (RSI) etc. ultimately
this would help to provide the approximate suggestions to the Gold investors.
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
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1.7 METHODOLOGY:
Research is a systematic gathering, recording, analyzing and interpretations of the data about a
particular area in industries or where to find solutions to different kinds of decisions making
problems.
Source of Data:
The data has been collected in two ways, those are
Primary Data:
The information requirements for solving business problems are identified in the problem formulated
stage. In this stage, the source from which information can be found are identified data for researched
can be collected.
Secondary Data:
Secondary data is defined as existed data; secondary data is collected from already available sources
such as published papers, journals, magazines reports, company literature etc.
For this project I collected data from secondary sources only, mainly I collected data from websites.
TECHNICAL ANALYSIS:
Technical analysis can be defined as an art and science of forecasting future prices based on an
examination of the past price movements. Technical analysis is not astrology for predicting prices.
Technical analysis is based on analyzing the current demand and supply of commodities, stocks,
indices, future or any tradable instruments. Technical analysis involve putting stock information like
prices, volumes and open interest on a chart and applying various patterns and indicators to it in order
to assess the future prices movements. The time framing in which technical analysis is applying man
range from intraday (5-minites, 10-minites, 15-minities, 30-minities, or hourly), daily, weekly or
monthly price data to many years.
There are essential two methods of analyzing investment opportunity in the security market viz
fundamental analysis and technical analysis. Fundamental information likes financial and non-
financial aspects of the company where as technical information ignores fundamental and focuses on
actual price movements only. The technical analyst assumes that it is 90 percent of psychological and
10 percent logical. Technical analysis is a method of evaluating securities by analyzing the statistics
generated by market activity, such as past price and volume. Technical analysis does not attempt to
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
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measures a securities intrinsic value, but instead use charts and other tools to identify patterns that can
be suggested future activity.
TECHNICAL ANALYSIS:
It is process of analyzing the price behavior in the market which influenced by the no of factors and
different information. Technical analysis belies that market is determined by the buying and selling
forces acting in the market and not by any other factor like the company or Industry or Economy.
TECHNICAL ANALYSIS
 TIMING OF INVESTMENT
DECISSION
 DECISSION MAKING
STUDY OF MARKET SENTIMENTS
 BULLISHNESS
 BEARISHNESS, etc.

 LIQUIDITY IN THE
MARKET
 VOLUME TURNOVER
 PRICE TRENDS, etc.
BUY SELL HOLD
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TOOLS USED FOR THIS ANALYSIS:
 MOVING AVERAGES
I. Short term moving averages.
II. Long term moving averages.
 RELATIVE STRENTH INDEX (RSI).
MOVING AVERAGES:
Moving averages of a number specified historical time periods from the point on chart. Moving
averages offer an indicator of the clear directions and scope of the trend in the market.
1. Short Term Moving Averages (SMA) is calculated for 10 to 15 days period.
2. Long Term Moving Averages (LMA) is calculated by 60 days to 125 days period.
CALCULATION PROCESS:
For calculation of a moving average the data for required days will take and a simple average will be
calculated by divining sum of days for which moving averages has to be calculated by number of
days.
Then averages will be floated in the graph and it can be compare with the index moving
averages or stock price of identified the Buy or Sell signal.
In the same manner index moving averages (MEX-SX) has to be calculated then both have to be
shown in the graph.
DECESIONS MAKING:
If stock prices Moving averages interpret the index moving averages from below and goes in upward
direction „Buy‟ signal can be identified investor can „Buy‟ at this movement.
If stock price intercepts the index moving averages from and falls below „Sell‟ signal can be
identified.
Investor sells the shares of the company on this movement. Moving averages can also be compared
with the stock closing prices.
LONG TERM MOVING AVERAGES v/s SHORT TERM MOVING AVERAGES:
Long Term Moving Averages and Short Term Moving Averages can also compared for Buy or Sell
signal decisions.
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Chart1: UPWORD DIRECTIONS of SMA and LMA.
P
` R
I
` C SMA
E
LMA
T I M E
INTERPRETAION:
If Short Term Moving Averages intercept the Long Term Moving Averages from above table and it
goes upward direction „Buy‟ signal can be identified, in these movement investors will be ready to
„Buy‟ signal for investors.
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Chart2: DOWNWORD DIRECTIONS of SMA and LMA.
P
R LMA
I SMA
C
E
T I M E
INTERPRETAION:
If Short Term Moving Averages intercept the Long Term Moving Averages from above table and it
shows downward direction and it can be generated „Sell‟ signals in these movements the investors
will be sold their stocks.
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RELATIVE STRENTH INDEX (RSI):
Relative strength index (RSI), was developed by J.Welles Wilder in 1978 and was later discussed in
his book new concepts in Technical Trading systems. The mane “relative strength index” is slightly
misleading as the RSI does not compare the relative strength of two securities, but rather the strength
of a signal security to past data. It is calculated by measuring the ratio of average price gains against
average price losses over specific rolling period. We have set our default period at 14 days as
recommended by wells wilder but this can be varied to suit particular sock or futures.
The RSI is an oscillator that ranges between 0 and 100. There are two main signals that can be
generated from this indicator.
Oversold/Overbought signals
When the RSI turns up, developing a trough below 30, it suggested the price is oversold and likely to
rally. Conversely, when the RSI turns down, making a peak above 70, it suggested that the price is
overbought and likely to drop.
RSI calculation by using the following formula:
RSI= 100-[100/1+RS]
Where,
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1.5 LIMITAIONS OF THE STUDY:
 This study is limited to Gold M in commodities.
 This study had a limited construction for 60 days.
 Forecasting of future price may or may not accurate.
 The study based on only on performance of gold, not with other commodities.
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CHAPTER II
REVIEW OF LITERATURE
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REVIEW OF LITERATURE:
Several studies have been carried out to apply Technical Analysis in practice in various financial
Markets. A few of them are quoted below:
Kavajecz and Odders-White (2004) show that support and resistance levels coincide with peaks in
depth on the limit order book 1 and moving average forecasts reveal information about the relative
position of depth on the book. They also show that these relationships stem from technical rules
locating depth already in place on the limit order book.
Practitioners‟ reliance on technical analysis is well documented. Frankel and Froot (1990) noted
that market professionals tend to include technical analysis in forecasting the market.
The guiding principle of technical analysis is to identify and go along with the trend. When there is a
trend, whether started by random or fundamental factors, technical methods will tend to generate
signals in the same direction. This reinforces the original trend, especially when many investors rely
on the technical indicators. Thus, even if the original trend were a random occurrence, the subsequent
prediction made by the technical indicator could be self-fulfilling. This self-fulfilling nature leads to
the formation of speculative bubbles (see, for example, Froot et al., 1992). Conrad and Kaul (1988)
found that weekly returns were positively auto correlated, particularly for portfolios of small stocks.
Lui and Mole (1998) report the results of a questionnaire survey conducted in February 1995 on the
use by foreign exchange dealers in Hong Kong of fun-demented and technical analyses. They found
that over 85% of respondents rely on both methods and, again, technical analysis was more popular at
shorter time horizons.
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CHAPTER III
INDUSTRY & COMPANY
ANALYSIS
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MULTI COMMODITY EXCHANGE OF INDIA (MCX-SX)
MCX-SX stock exchange Limited (MCX-SX), India‟s new stock exchange, is recognized by Security
Exchange of India (SEBI) under section 4 of securities contracts (Regulation) Act 1956. The
exchange was notified as a “recognized stock exchange” under section 2(39) of the companies Act
1956 by Ministry of Corporate Affairs, Govt. of India on December 21, 2012. In line with global best
practices and regulation requirements, clearing and settlement of traders on the exchange are
conducted through a separate clearing corporation- MCX-SX clearing Corporation Ltd.
MCX-SX offers an electronic, transparent an hi-tech platform for trading in Capital Market, Future&
Options, and currency Derivatives and Debt Market segments. The exchange has also received in-
principal approval from SEBI for operationalizing SME trading platform MCX-SX commenced
operations in the Currency Derivatives (CD) segment on October 7, 2008, under the regulatory
framework of SEBI and Reserve Bank of India (RBI).
MCX-SX launched Capital Market segment, Future and Options segment and flagship index „SX40‟
on February 9 2013 and commenced trading from February 11 2013. Trading in the „SX40‟ index
derivatives began from May 15 2013 is free-float based index consisting of 40 large cap, liquid stock
representing diverse sector of the economy. Its base value is, 10,000 and base date is March 31 2010.
The debt market segment market segment of MCX-SX was launched on June 7 2013, and trading
commenced from June 10 2013.
MCX has also set up in joint venture the MCX stock Exchange. Earlier spinoffs from the company
include the National Spot exchange for bullion and agriculture commodities, and Bulk Handling
Corporation (NBHC) India‟s largest collateral management company which provides bulk storage
and handling of agricultural products.
In February 2013, MCX has come out with a public issue of 7,427,378 Equity shares of Rs. 10 face
value in price band of 860-1032 Rs. Per equity share to raise around $ 134 million. It is the first ever
IPO by an Indian exchange.
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PRODUCTS OF MCX-SX
MCX-SX currently Futures contracts on MCX-SX enable Indian Imports, Exports, Corporate, banks
and other participate to effectively hedge their risks arising out of volatile currency prices. These
contracts also offer a better flexible than the currency contracts traded on Over-The-Counter (OTC)
market as the structure and pricing of an exchange-traded contract is more transparent.
PRODUCTS OF MCX-SX
Oil & Oil Seeds Others Fiber Energy Bullions Metals
Crude oil Almond Kapas ATF Gold Aluminum
Kapasia Khail Guar Gum Cotton (29mn) Breant Oil Gold M Aluminum M
Refined soya oil Gaur Seed Spices Crude Oil Platinum Copper
Soya bean Melted Method Caramon Gasoil Silver Copper M
Flakers Coniander Heating Oil Sliver M Iron Ore
Fiber Mentha Oil Planation Imported Thermal coal Lead
Kapas Potato (Agri) Rubber Natural Gas Weather Lead M
Cotton(29) Potato (Takeshwar) Carbon(CER) Silver Micro
Cereals Sugar M Carbon (CFI) Silver 1000
Barley Nickel
Wheat Nickel M
Maize-Feed Industrial
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Trading System in MCX-SX:
The trader work station (TWS) is the application through which members access the trading platform,
place order and execute trades. The TWS offers a multitude of user friendly trading features which
includes commodity price ticker, market watch screen displaying best buy, best sell, last trade price,
volume for the day, open interest etc,, top gainer and looser contracts, net position, on-line backup
facility etc.
1. Trading System:
The best five buy and sell orders for every contract available for trading are visible to the
market and orders are matched based on price time priority logic. Orders can be placed with
time conditions and or price conditions.
2. Margins:
MCX follows a comprehensive and strength margining system for all futures contracts trade
on the Exchange platform. Actual margining and position monitoring is done on an on-line
basis. For the purpose of computing and levying the margins, MCX uses SPAN® (Standard
Portfolio Analysis of Risk) system which follows a risk-based and portfolio-based approach.
The initial margin requirements are based on a worst-case loss scenario of portfolio at client
level to cover VAR (Value at Risk) over one day horizon, subject to a minimum base margin
defined by FMC for the respective commodity. The SPAN Risk Parameter File (RPF) is
generated by the Exchange periodically at predefined timings and RPF files so generated to
the members using the FTP service and on the exchange websites. In addition to SPAN
margins, MCX levies Additional margins and or special margins whenever deemed necessary
considering the volatile and price movements in the commodities. Such margins are also
levied as per the direction of FMC Tender Period margins and Delivery period margins are
levied on contracts nearing expiry to ensure non default in commodity delivery.
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NATIONAL COMMODITY STOCK EXCHANGE LIMITED (NCDEX):
National Commodity & Derivatives Exchange Limited (NCDEX) is an online commodity
exchange based in India. It has an independent Board of Directors and professional management, who
have interest in commodity markets. It provides a commodity exchange platform for market
participants to trade in commodity derivatives. It is a public limited company, incorporated on 23
April 2003 under the Companies Act, 1956. It obtained its Certificate for Commencement of
Business on 9 May 2003, and began operations on 15 December 2003. NCDEX is the only
commodity exchange in the country promoted by national institutions. NCDEX is regulated by
the Forward Markets Commission (FMC), and is subject to the Companies Act 2013, Stamp Act,
Contracts Act, Forward Commission (Regulation) Act, and various other laws.
KEY NOTES OF NCDEX:
 NCDEX had 848 registered members and client base of @ 20 Lakh as of 31 July 2013.
 It offers trading on more than 49,000 terminals across 1,000 centers in India as of 31 July 2013.
 It facilitates deliveries of commodities through a network of over 594 accredited warehouses
through eight warehouse service providers, with holding capacity of around 1.5 million tons.
 It offers average deliveries of 1 lakh MT at every contract expiry. Average delivery ratio for Q1
of 2013-14 is 98%.
 NCDEX has offices in Mumbai, Delhi, Ahmedabad, Indore, Hyderabad, Jaipur,
and Kolkata.
PRODUCTS & SERVICES:
 NCDEX offers futures trading in 31 agricultural and non-agricultural commodities.
 NCDEX also offers as an information product, an agricultural commodity index. This is a value-
weighted index called DHAANYA and is computed in real time using the prices of the ten most
liquid commodity futures traded on the NCDEX platform. Dhaanya aims to provide a reliable
benchmark for India's agri-commodities.
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 Introduced N-Charts – a free, web-based charting tool provided to users for technical analysis.
 Launched COMTRACK® - a proprietary electronic warehouse accounting system
 Exchange for Physicals - recently announced EFP (Exchange for Physicals) facility in 18
contracts traded on the NCDEX platform, which they intend to help trade participants address
counter-party and business risks inherent in bilateral transactions in the physical market.
 Launched GOLD HEDGE, a transparent price benchmark of gold to the consumer. The contract,
GOLDHEDGE, is available for trading from Jan 16, 2014. The one-kg gold hedge contract
provides a transparent platform for investors with exposure to the international markets. The final
settlement prices is arrived at after taking into account the gold price in dollar terms, rupee value
against dollar and the conversion ratio.
 Launched Forward market in 25 September, 2014.
SHAREHOLDERS CONSORTIUM:
 Canara Bank
 CRISIL Limited (formerly Credit Rating Information Services of India Limited)
 Goldman Sachs
 Indian Farmers Fertilizers Cooperative Limited (IFFCO)
 Infrastructure Development Finance Company (IDFC)
 InterContinental Exchange (ICE)
 Jaypee Capital
 Life Insurance Corporation of India (LIC)
 National Bank for Agriculture and Rural Development (NABARD)
 National Stock Exchange of India (NSE)
 Punjab National Bank (PNB)
 Renuka Sugars
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COMPANY PROFILE
INDIA INFOLINE LIMITED
(Formerly known as India Infoline Investment Services Limited)
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IIFL Holdings Limited (formerly known as India Infoline Limited) is the apex holding company of
the entire IIFL Group, which is a leading financial services company in India, promoted by first
generation entrepreneurs. We have a diversified business model that includes credit and finance,
wealth management, financial product distribution, asset management, capital market advisory and
investment banking.
We have a largely retail focused model, servicing over 2 million customers, including several lakh
first-time customers for mutual funds, insurance and consumer credit. This has been achieved due to
our extensive distribution reach of over 2,700 business locations and also innovative methods like
seminar sales and use of mobile vans for marketing in smaller areas.
Our evolution from an entrepreneurial start-up to a market leadership position is a story of steady
growth by adapting to the changing environment, without losing the focus on our core domain of
financial services. Our NBFC and lending business accounts for 71% of our consolidated income in
FY14 and has a diversified product portfolio rather than remaining a mono-line NBFC. We are a
leader in distribution of life insurance and mutual funds among non-bank entities. Although the share
of equity broking in total income was only 11% in FY14, IIFL continues to remain a leading player in
both, retail and institutional space.
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Location Mumbai
Corporate office IIFL Center, B Wing, Trade Center, Kamala Mills Compound off
senapati Bapat Marg, Lower parel, Mumbai-400013. Maharashtra.
Registered office Industrial Area, Wagle Estate, Thane- 400 604. Maharashtra
Year of incorporation 1995
Industry Financial Services
Key Business Credit & Finance, Wealth Management, Financial Product Distribution,
Capital market Related.
Employees 14,000+
Business location Around 4,000 locations in 900 cities and towns.
Global reach Singapore, Dubai, New work, Mauritius, UK, Hong Kong, Switzerland.
Listings NSE, BSE
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Financial Performance Track Record from 2005 to 2014
Revenues
EBT
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PAT
NEWWORTH
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ROE
Segmental revenue split
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IIFL Holdings Ltd is divided into 9 companies.
1. India Infoline Ltd.
2. India Infoline Finance Limited: India Infoline housing Finance Limited is under this company.
3. India Infoline Insurance brokers Ltd.
4. India Infoline Commodities Ltd.
5. IIFL Assets management company & IIFL MF
6. IIFL Private Wealth management Ltd.
7. IIFL (Asia) Pte Ltd.
8. IIFL Inc. (US) investment Advisors Ltd.
9. IIFL (UK)
IIFL Business
 Mortgage Loans, which includes Housing Loans and Loans against Property.
 Commercial Vehicle Finance, which includes Loans against new and used commercial
vehicles and buses, this includes loans on small, light and medium and heavy commercial
vehicles
 Gold Loans, which includes finance against security of mainly used gold ornaments.
 Capital Market Finance, which includes Loans against Securities, Margin Funding, IPO
financing and other structured lending transactions.
 Healthcare Finance/Medical Equipment Finance, which includes finance for medical
equipment and project funding in the healthcare sector.
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AWARDS AND RECOGNITION:
 Three of the analysts from the Pharm, Banking and Oil & Gas sector respectively won the
India's Best Market Analyst Awards 2013 by Zee Business
 Best Wealth Management House by The Asset Triple A – 2012
 Best Customer Service in Financial Services, 2013 – Retailer Customer Service Awards
 Best Broking House with Global Presence, 2012 – D&B
 BSE Group felicitated IIFL for being one of the top performers in the 'Equity FI' category on
Mahurat Trading day-to-day
 Mr. Nirmal Jain, Chairman, IIFL received the 'Entrepreneur of the Year' award at the 10th
Franchise India Awards 2012
 IIFL Buzz won the prestigious award for the internal tabloid at the 53rd annual awards night
of the Association of Business Communication of India (ABCI)
 Best Private Banking Services Overall – India – Euromoney Private Banking Survey 2014
 Best Wealth Management company in India - Wealth Briefing Asia Awards 2013
 Fastest Growing Wealth Management Company - CNBC TV 18 Financial Advisor Awards
2013
 Highest asset Growth Champion - The Wealth Forum Advisor Awards 201
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BOARD OF DIRECTORS
1. Mr. Nirmal Jain
Chairman, IIFL Holdings Limited
2. Mr. R. Venkataraman
Managing Director, IIFL Holdings Limited
Mr. Arun Kumar Purwar
Independent Director of IIFL Holdings Limited since March 2008
Mr. Chandran Ratnaswami
Non-Executive Director of IIFL Holdings Limited since May 2012
Mr. Kranti Sinha
Independent Director of IIFL Holdings Limited since January 2005
Mr. Nilesh Vikamsey
Independent Director of IIFL Holdings Limited since February 2005.
Mr. Sunil Kaul
Non-Executive Director of IIFL Holdings Limited since November 2011
Dr. Subbaraman Narayan
Independent Director of IIFL Holdings Limited since July 2012
Ms Geeta Mathur
Independent Director of IIFL Holdings Limited since September 2014
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CHAPTER IV
ANALYSIS AND INTERPRETATIONS
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Moving Averages Analysis:
Table1: GOLD (M) Short term moving average calculation from 1-Jan-2015 to 15-May-2015
Date Close(Rs) SMA
5-Jan-15 27042
6-Jan-15 27385
7-Jan-15 27159
8-Jan-15 26808
9-Jan-15 26806 27040
12-Jan-15 27032 27038
13-Jan-15 27071 26975.2
14-Jan-15 27210 26985.4
15-Jan-15 27493 27122.4
16-Jan-15 27673 27295.8
19-Jan-15 27718 27433
20-Jan-15 28098 27638.4
21-Jan-15 27992 27794.8
22-Jan-15 28055 27907.2
23-Jan-15 27884 27949.4
27-Jan-15 27934 27992.6
28-Jan-15 27795 27932
29-Jan-15 27470 27827.6
30-Jan-15 27911 27798.8
2-Feb-15 28071 27836.2
3-Feb-15 27687 27786.8
4-Feb-15 27814 27790.6
5-Feb-15 27757 27848
6-Feb-15 26968 27659.4
9-Feb-15 27119 27469
10-Feb-15 27016 27334.8
11-Feb-15 26817 27135.4
12-Feb-15 26635 26911
13-Feb-15 26694 26856.2
16-Feb-15 26742 26780.8
17-Feb-15 26241 26625.8
18-Feb-15 26181 26498.6
19-Feb-15 26294 26430.4
20-Feb-15 26317 26355
23-Feb-15 26178 26242.2
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24-Feb-15 26077 26209.4
25-Feb-15 26142 26201.6
26-Feb-15 26239 26190.6
27-Feb-15 26206 26168.4
28-Feb-15 26473 26227.4
2-Mar-15 26541 26320.2
3-Mar-15 26453 26382.4
4-Mar-15 26539 26442.4
5-Mar-15 26551 26511.4
6-Mar-15 26058 26428.4
9-Mar-15 26062 26332.6
10-Mar-15 25960 26234
11-Mar-15 25716 26069.4
12-Mar-15 25690 25897.2
13-Mar-15 25909 25867.4
16-Mar-15 25797 25814.4
17-Mar-15 25635 25749.4
18-Mar-15 25653 25736.8
19-Mar-15 25970 25792.8
20-Mar-15 26195 25850
23-Mar-15 26208 25932.2
24-Mar-15 26350 26075.2
25-Mar-15 26491 26242.8
26-Mar-15 26805 26409.8
27-Mar-15 26564 26483.6
30-Mar-15 26239 26489.8
31-Mar-15 26061 26432
1-Apr-15 26226 26379
2-Apr-15 26548 26327.6
6-Apr-15 26941 26403
7-Apr-15 26829 26521
8-Apr-15 26682 26645.2
9-Apr-15 26452 26690.4
10-Apr-15 26703 26721.4
13-Apr-15 26616 26656.4
14-Apr-15 26454 26581.4
15-Apr-15 26644 26573.8
16-Apr-15 26533 26590
17-Apr-15 26702 26589.8
20-Apr-15 26719 26610.4
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21-Apr-15 26803 26680.2
22-Apr-15 26489 26649.2
23-Apr-15 26777 26698
24-Apr-15 26574 26672.4
27-Apr-15 26944 26717.4
28-Apr-15 27036 26764
29-Apr-15 27096 26885.4
30-Apr-15 26593 26848.6
1-May-15 26483 26830.4
4-May-15 26747 26791
5-May-15 26902 26764.2
6-May-15 26928 26730.6
7-May-15 26951 26802.2
8-May-15 26903 26886.2
11-May-15 26853 26907.4
12-May-15 27180 26963
13-May-15 27539 27085.2
14-May-15 27444 27183.8
15-May-15 27473 27297.8
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Graph1:
GOLD (M) Short term moving from 1-Jan-2015 to 15-May-2015
Interpretations:
The above graph represents the performance of Gold (M) fluctuating short term moving averages
(SMA) from 5-Jan-2015 to 5-May-2015. The SMA intercept the index price from Jan -5- 2015 and it
goes up word directions up to May-14-2015 (2800 high price) and then parley goes a down word
direction up to May-10-2015(26500 low price) and then goes a small up word directions (27473
increasing price) it should be indicated buy signal for investors.
24000
24500
25000
25500
26000
26500
27000
27500
28000
28500
5-Jan-15 5-Feb-15 5-Mar-15 5-Apr-15 5-May-15
Close(Rs)
SMA
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Table2: GOLD (M) Long term moving averages calculation from 5-Jan-2015 to 14-May-2015
Date Close(Rs) LMA
5-Jan-15 27042
6-Jan-15 27385
7-Jan-15 27159
8-Jan-15 26808
9-Jan-15 26806
12-Jan-15 27032
13-Jan-15 27071
14-Jan-15 27210
15-Jan-15 27493
16-Jan-15 27673
19-Jan-15 27718
20-Jan-15 28098
21-Jan-15 27992
22-Jan-15 28055
23-Jan-15 27884 27428.4
27-Jan-15 27934 27487.87
28-Jan-15 27795 27515.2
29-Jan-15 27470 27535.93
30-Jan-15 27911 27609.47
2-Feb-15 28071 27693.8
3-Feb-15 27687 27737.47
4-Feb-15 27814 27787
5-Feb-15 27757 27823.47
6-Feb-15 26968 27788.47
9-Feb-15 27119 27751.53
10-Feb-15 27016 27704.73
11-Feb-15 26817 27619.33
12-Feb-15 26635 27528.87
13-Feb-15 26694 27438.13
16-Feb-15 26742 27362
17-Feb-15 26241 27249.13
18-Feb-15 26181 27141.53
19-Feb-15 26294 27063.13
20-Feb-15 26317 26956.87
23-Feb-15 26178 26830.67
24-Feb-15 26077 26723.33
25-Feb-15 26142 26611.87
26-Feb-15 26239 26510.67
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27-Feb-15 26206 26459.87
28-Feb-15 26473 26416.8
2-Mar-15 26541 26385.13
3-Mar-15 26453 26360.87
4-Mar-15 26539 26354.47
5-Mar-15 26551 26344.93
6-Mar-15 26058 26299.33
9-Mar-15 26062 26287.4
10-Mar-15 25960 26272.67
11-Mar-15 25716 26234.13
12-Mar-15 25690 26192.33
13-Mar-15 25909 26174.4
16-Mar-15 25797 26155.73
17-Mar-15 25635 26121.93
18-Mar-15 25653 26082.87
19-Mar-15 25970 26067.13
20-Mar-15 26195 26048.6
23-Mar-15 26208 26026.4
24-Mar-15 26350 26019.53
25-Mar-15 26491 26016.33
26-Mar-15 26805 26033.27
27-Mar-15 26564 26067
30-Mar-15 26239 26078.8
31-Mar-15 26061 26085.53
1-Apr-15 26226 26119.53
2-Apr-15 26548 26176.73
6-Apr-15 26941 26245.53
7-Apr-15 26829 26314.33
8-Apr-15 26682 26384.13
9-Apr-15 26452 26437.4
10-Apr-15 26703 26486.27
13-Apr-15 26616 26514.33
14-Apr-15 26454 26530.73
15-Apr-15 26644 26550.33
16-Apr-15 26533 26553.13
17-Apr-15 26702 26546.27
20-Apr-15 26719 26556.6
21-Apr-15 26803 26594.2
22-Apr-15 26489 26622.73
23-Apr-15 26777 26659.47
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24-Apr-15 26574 26661.2
27-Apr-15 26944 26661.4
28-Apr-15 27036 26675.2
29-Apr-15 27096 26702.8
30-Apr-15 26593 26712.2
1-May-15 26483 26697.53
4-May-15 26747 26706.27
5-May-15 26902 26736.13
6-May-15 26928 26755.07
7-May-15 26951 26782.93
8-May-15 26903 26796.33
11-May-15 26853 26805.27
12-May-15 27180 26830.4
13-May-15 27539 26900.4
14-May-15 27444 26944.87
15-May-15 27473 27004.8
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Graph2:
GOLD (M) Long term moving averages from 5-Jan-2015 to 14-May-2015
Interpretation:
The above graph represents the Long Term Moving Averages from 5-Jan-2015 to 14-May-2015. The
LMA intercept Index price from 19-Jan-2015 (27800 price level) and it goes down word direction up to
16-May-2015 (25500 mark low) and then goes parley up word directions up to 11-May-2015 (26743
price mark) it would be indicated “Buy” signal for the new investors and gives hold signal for holding
investors.
24000
24500
25000
25500
26000
26500
27000
27500
28000
28500
5-Jan-15 5-Feb-15 5-Mar-15 5-Apr-15 5-May-15
Close(Rs)
LMA
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Graph3:
GOLD (M) Short Term Moving Average and Long Term Moving Average from 5-Jan-2015 to 14-
May-2015
Interpretation
The above graph represents Gold (M) over all Short Term Moving Averages and Long Term Moving
Averages from 5-Jan-2015 to 11-May-2015. The Short term Moving Averages and Long term Moving
Averages intercepts at 27800 mark price and then both goes down word direction up to 16-Mar-2015 at
the value of 25950 market price and then both intercept and goes up direction (SMA&LMA) up to 11-
May-2015 at 27473 market price. Overall Short Term Moving Averages and Long Term Moving
Average‟s goes up word direction it would be indicated “Buy” signal for the investors.
24500
25000
25500
26000
26500
27000
27500
28000
28500
5-Jan-15 5-Feb-15 5-Mar-15 5-Apr-15 5-May-15
SMA
LMA
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RELATIVE STRENTN INDEX (RSI):
Formula
RSI= 100-[100/1+RS]
RS= Average gain per day
Average loss per day
Table1: GOLD (M) RSI calculation from 5-Jan-2015 to 28-Feb-2015
Date Open(Rs) Close(Rs) RSI
5-Jan-15 26845 27042
6-Jan-15 27095 27385
7-Jan-15 27328 27159
8-Jan-15 27150 26808
9-Jan-15 26751 26806
12-Jan-15 26865 27032
13-Jan-15 27118 27071
14-Jan-15 27013 27210
15-Jan-15 27150 27493
16-Jan-15 27540 27673
19-Jan-15 27642 27718
20-Jan-15 27700 28098
21-Jan-15 28071 27992
22-Jan-15 27966 28055 75.3292
23-Jan-15 28015 27884 69.47536
27-Jan-15 27815 27934 67.24947
28-Jan-15 27896 27795 69.2578
29-Jan-15 27782 27470 70.1824
30-Jan-15 27540 27911 72.40284
2-Feb-15 28120 28071 69.0315
3-Feb-15 28071 27687 60.28155
4-Feb-15 27660 27814 59.67597
5-Feb-15 27785 27757 53.44214
6-Feb-15 27498 26968 40.98258
9-Feb-15 27011 27119 41.61693
10-Feb-15 27180 27016 30.51779
11-Feb-15 27050 26817 28.78545
12-Feb-15 26756 26635 23.38034
13-Feb-15 26700 26694 26.58834
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 50
16-Feb-15 26720 26742 23.98119
17-Feb-15 26722 26241 20.8563
18-Feb-15 26280 26181 22.49967
19-Feb-15 26260 26294 13.17862
20-Feb-15 26337 26317 13.33893
23-Feb-15 26281 26178 15.12126
24-Feb-15 26219 26077 7.843137
25-Feb-15 26138 26142 8.127721
26-Feb-15 26200 26239 13.13452
27-Feb-15 26243 26206 6.578073
28-Feb-15 26111 26473 27.06988
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 51
Graph1: Gold (M) Relative Strength Index chart from 5-Jan-15 to 25-
Feb-2015
Interpretation:
The above graph represents RSI of GOLD (M), the RSI crossed 30 lines from below to above and it is
raised in the day of 28-Feb-2015 the RSI indicated buying opportunity in the month of February.
0
10
20
30
40
50
60
70
80
5-Jan-15 12-Jan-15 19-Jan-15 26-Jan-15 2-Feb-15 9-Feb-15 16-Feb-15 23-Feb-15
RSI
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 52
Table2: GOLD (M) RSI calculation from 2-Mar-2015 to 30-Apr-2015
DATE OPEN Rs CLOSE Rs RSI
2-Mar-15 26508 26541 32.8676
3-Mar-15 26527 26453 33.92857
4-Mar-15 26500 26539 35.79584
5-Mar-15 26510 26551 36.60477
6-Mar-15 26485 26058 37.96424
9-Mar-15 26096 26062 39.74082
10-Mar-15 26050 25960 35.84775
11-Mar-15 25979 25716 30.6872
12-Mar-15 25750 25690 31.48936
13-Mar-15 25750 25909 40.73406
16-Mar-15 25945 25797 37.26467
17-Mar-15 25741 25635 33.84944
18-Mar-15 25665 25653 34.30736
19-Mar-15 25712 25970 28.84535
20-Mar-15 25996 26195 34.74121
23-Mar-15 26195 26208 36.60881
24-Mar-15 26180 26350 40.625
25-Mar-15 26313 26491 44.31457
26-Mar-15 26519 26805 62.19083
27-Mar-15 26774 26564 56.88204
30-Mar-15 26468 26239 53.28941
31-Mar-15 26200 26061 56.4712
1-Apr-15 26122 26226 60.06354
2-Apr-15 26601 26548 55.56578
6-Apr-15 26625 26941 65.39045
7-Apr-15 26925 26829 65.69401
8-Apr-15 26842 26682 61.47068
9-Apr-15 26612 26452 54.73411
10-Apr-15 26482 26703 55.73411
13-Apr-15 26703 26616 52.92653
14-Apr-15 26569 26454 46.94138
15-Apr-15 26450 26644 47.29958
16-Apr-15 26644 26533 38.041
17-Apr-15 26530 26702 46.68521
20-Apr-15 26699 26719 52.72074
21-Apr-15 26745 26803 58.11462
22-Apr-15 26778 26489 47.80702
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 53
23-Apr-15 26515 26777 54.97567
24-Apr-15 26734 26574 44.038
27-Apr-15 26624 26944 53.54229
28-Apr-15 26969 27036 58.76565
29-Apr-15 26985 27096 65.15775
30-Apr-15 27056 26593 49.56772
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 54
Graph2: Gold (M) Relative Strength Index chart from 2-Mar-15 to 30-Apr-15
Interpretation:
The above graph represents RSI of GOLD (M), the RSI crossed 60 lines from below to above and it is
fall down in the day of 30-Mar-2015 and then RSI indicated touched 40 line from 20-Apr-2015 and it
goes up word direction so it indicates „Holding‟ signal in the month of April.
0
10
20
30
40
50
60
70
RSI
RSI
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 55
Table3: GOLD (M) RSI calculation from 1-May-2015 to 15-May-2015
DATE OPEN RS CLOSE RS RSI
1-May-15 26572 26483 49.52694
4-May-15 26580 26747 55.2154
5-May-15 26852 26902 52.45832
6-May-15 26950 26928 54.53333
7-May-15 26904 26951 51.85882
8-May-15 26960 26903 50.04625
11-May-15 26898 26853 47.65007
12-May-15 26899 27180 60.95283
13-May-15 27131 27539 63.44556
14-May-15 27465 27444 67.55121
15-May-15 27417 27473 63.00425
Graph3: Gold (M) Relative Strength Index chart from 1-May-15 to 15-May-15
Interpretation:
0
10
20
30
40
50
60
70
80
RSI
RSI
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 56
The above graph represents RSI of GOLD (M), the RSI crossed 60 lines from 12-May-2015 and then it
foes up word direction and it below above and it is fall down in the day of 14-May-2015. Then RSI
indicated „sell‟ signal for the investors in the month of May, as on 15-May-2015.
Grapg4: Overall performance of RSI.
Interpretation:
The above graph represents RSI performance from 5-Jan-2015 to 15-may-2015. The RSI indicator
touched 70 line from in the month of January 2015 it is indicated „sell‟ signal and then the RSI line goes
down word direction touched 10 line it indicated „buy‟ signal in the month of February ending. The
month of March 2015 RSI line goes up word direction flow will continues up 15-May-2015 it is
indicated „sell‟ signal for the investors.
0
10
20
30
40
50
60
70
80
5-Jan-15 5-Feb-15 5-Mar-15 5-Apr-15 5-May-15
RSI
RSI
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 57
CHAPTER V
Findings, Suggestion and Conclusion
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 58
Findings:
 The present performance of gold is bullish. It has been fluctuated from 26845 to 27417 during 5th
January 2015 to May 15th
2015. During this period Gold is goes upward up to Rs 512.
 With help of Moving averages and RSI indicator‟s the price of Gold M is goes bullish trend and
as per overall performance it should be indicated Sell signal for the Investors.
 The overall performance of Gold M indicates the future prediction that the investor to „Sell‟ and
„Hold‟ because Gold M stills it goes bullish direction.
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 59
Suggestions:
 With help of Moving averages and Relative strength index/indicator overall performance goes
upward direction from 26485 to 27417 as per the duration between Jan 5th
2015 to May 5th
2015. It indicates sell signal by Gold M.
 The future performance of Gold M says Sell signal.
 It suggested the investor that, it is right time to invest in Gold M because the future is
expected to be bullish trend will be continued up to next 4 to 5 months.
A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M)
WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com
GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 60
References:
Books
1. Investment and portfolio Management----------S.Kevin
2. Research Methodology--------------Kothari
3. Financial Management------------I.M Pandy
Web sites
www.mcxindia.com
www.moneyconrtol.com
www.yahoofiance.com
www.iifl.com
www.investopedio.com

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Commodity (gold m) projoject 13 15 ramanjineyulu 13 f21e0062

  • 1. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 1 A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd PROJECT REPORT A project report submitted in partial fulfillment of the requirements for the degree of MBA in JNTU Anantapuramu Submitted By V.RAMANJINEYULU REGD.NO: 13F21E0062 Under the Esteemed Guidance of Miss.K.S. HARITHA, MBA Assistant Professor DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION GATES INSTITUTE OF TECHNOLOGY, GOOTY (Approved A.I.C.T.E, and Affiliate to JNTU Anantapur)
  • 2. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 2 GATES INSTITUTE OF TECHNOLOGY, GOOTY CRETIFICATE This is to certify that project entitled “TECHNICAL ANALYSIS, GOLD (M)” has been submitted by V.RAMANJINEYULU 13F21E0062 In the fulfillment of the requirement for the award of degree for the award of Master of Business Administration in MBA department from “GATES INSTUTE OF TECCHNOLOGY” Gooty during the academic year 2013- 2015. Internal Guidance of Head of the Department Miss. K.S. HARITHA Dr.S. Md.Ghouse M.B.A. M.A.(Eco), M.B.A, PhD Assistant professor, Department of MBA, Department of MBA, GATES Institute of technology, GATES Institute of technology, Gooty, Anantapuramu (Dist). Gooty, Anantapuramu (Dist). EXTERNAL EXMINAR1: EXTERNAL EXMINAR2:
  • 3. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 3 DECLARATION I hereby declare that this project work entitled “TECHNICAL ANALYSIS IN COMMODITY MARKET GOLD(M) WITH REFRENCE TO INDIA INFOLINE Ltd” carried out under guidance of my faculty Mss. K.S. HARITHA, M.B,A, Assistant professor this report neither full nor in part has ever been submitted for award of any other degree of either this university (or) any other university. V.RAMANJINEYUU 13F21E0062
  • 4. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 4 ACKNOWLEDGEMENT This satisfaction and exhilaration that accompanies the successful completion of all my tasks would be incomplete without mentioning the people who made it possible constant guidance and encouragement, crowned all my effects with success. I am thankful to our beloved correspondent sir Sri. V.K. SUDHEER REDDY and Principal Dr.M RAMESH, M.E, P.H.D of Gates institute of technology, Gooty. For his consistent help and encouragement to complete the project work. I am very thankful to Dr.S.Md. GHOUSE, M.A, M.B.A, PhD, HOD of MBA Dept. GATES Institute of technology, Gooty. For his valuable guidance and suggestions, analyzing and testing throughout period, till end of the project work. I wish to heartful sincere thanks to my visiting faculty, guide Miss. K.S. HARITHA, M.B.A, Assistant professor, GATES Institute of technology, Gooty. For her valuable inputs guide support and cooperation all along project. This project would not have been possible without her help. I would like to express our sincere thanks to the faculty member of M.B.A Dept. who had helped me to complete the project work successfully. V.RAMANJINEYULU 13F21E0062
  • 5. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 5 S.NO PARTICULARS PAGE NUMBERS CHAPTER 1 INTRODUCTION 1.1 Introduction 1.2 Objective of the study 1.3 Scope of the study 1.4 Need of the study 1.5 Limitation of the study 1.6 Research Methodology 2 -16 CHAPTER 2 REVIEW OF LITERATURE 17-18 CHAPTER 3 INDUSTRY AND COMPANY ANALYSIS 19-34 CHAPTER 4 ANALYSIS AND INTERPRETAIONS 35 -52 CHAPTER 5 FINDINGS, SUGGESTIONS & CONCLUSIONS 5.1 Findings 5.2 Suggestions 5.3 conclusion 5.4 Bibliography/References 53-57
  • 6. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 6 CHAPTER 1
  • 7. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 7 1.1 INTRODUCTION OF GOLD: India, a commodity based economy where two-third of the population depends on agriculture commodities, surprisingly has an under developed commodity market. Unlike the physical market, futures markets trade commodity are largely used as risk management mechanism on either physical commodity itself or open in commodity stock. This project report describes the functionality of the commodities market and how the commodities are traded on the exchange. The idea is to understand the importance of commodity derivatives and learn about the market till early 70‟s. Its development and growth was shunted due to numerous restrictions earlier. Now, with most of these restrictions being removed, there is tremendous potential for growth of this market in the country. Indian market have recently thrown open a new avenues for retail investors and trades to participate. For those who want to diversify their portfolio beyond shares, bounds and real estate, commodities are the best option. For retail investors could have done very little to actually invest to commodities such as gold and silver or oil seeds in the future market. This was nearly impossible in commodity except for gold and silver as there was particularly no retail avenue for putting in commodities. However, nationally multi-commodity exchange became operational:  National multi-national commodity exchange of India (NMCE).  National commodity and derivative exchange (NCDEX).  Multi commodity exchange (MCX). With the setting up of these exchanges in the country, retail investors can how trade in commodity futures without having physical stocks, like any other markets, the one for commodity futures plays a valuable role in information pooling and risk sharing. The market mediates between buyers and sellers of commodities, and facilities decision related storage and consumption of commodities.
  • 8. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 8 COMMODITY: Commodity play important role in our daily lives. They can be found literally all over the world, and can be traded on the global marketplace as part of a diversified investment portfolio. In fact billions of dollars are invested in commodity every day. Where they can be traded on either spot (real-time) or future (optional) markets, most individual commodities are traded in the form of futures, where what is being traded is not commodity itself but rather a contract to buy or sell it for a certain price by a stated date in the future. This carrier the potential for wild market fluctuations, but it also offer exchange opportunities for investors willing to ride out market volatility in anticipate of rewards, like any investment, the goal in commodities trading is to” buy low and sell high”. The difference with commodities is that they are highly leveraged and trade in contract sizes instead of shares. Investors can buy and sell positions whenever the markets are open, so there‟s no chance of walking up one morning to find 10,000 bushels of corn the front lawn COMMODITY MARKET: A commodity market is a market that trade in primary rather than manufactured products. Soft commodities are agricultural products such as wheat, coffee, cocoa and sugar; hard commodities are mined, such as (gold, rubber and oil). Investor‟s access about 50 major commodity markets worldwide with purely financial transactions increasingly outnumbering physical trades in which goods are delivered. Future contracts are the oldest way of investing in commodities. Futures are secured by physical assets. Commodity markets can include physical trading and derivatives trading using spot prices, forward, futures and options on future. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management. A financial derivative is a financial instrument whose value is derived from a commodity termed an underline. Derivatives are either exchange-traded or over-the-counter (OTC). An increasing number of derivatives are traded via clearing house some with central counterparty clearing, which provides clearing and settlement services on a futures exchange, as well as off-exchange in the OTC markets. Derivatives such as future contracts, swaps, exchange-traded commodities (ECT), and forward contracts have become the primary trading instruments in commodity markets. Futures are traded on
  • 9. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 9 regulated commodities exchanges. Over-the-counter (OTC) contracts are “privately negotiated bilateral contracts entered into between the contracting parties directly” Exchange-traded funds (ETFs) began to features commodities in 2003. Gold ETFs are based on “electronic gold” that does not entail the ownership of physical bullion, with its added costs of insurance and storage in repositories such as the London bullion market. According to the World Gold Council, ETFs allow investors to be exposed to the gold market without the risk of price volatility associated with gold as a physical commodity. KEY ASSUMPTIONS AND HISTORICAL BACKGROUND:  Before 1800, gold was the real money, and paper money was a rarity and rather unstable unless strictly backed by gold or silver.  Between 1800-1932 it was a largely free, but unregulated market, and gold was treated the same way as money, paper money was gold or silver backed, and gold was the ultimate currency  Between, 1932-1971 the market was a command and control system, a governmental cartel, along with limited sub-regional black markets. Gold possession is prohibited in several countries for private persons, unless in jewelry. Gold was not easily traded over state borders during this period. However, in many countries, gold was seen as the only true kind of money.  After 1971 it is for most practical purposes, a free market, and movement of gold is relatively unrestricted. However, for large transactions, the invisible hand of a central bank cartel was still at times seen there. Trade was internationally free, but fluxes are greatly influenced by central bank sales and purchases. Some countries, not being free trade countries and several countries with dictatorship have restrictions on moving gold across their borders: such countries are United States, Russia, India, China, Brazil, Cuba, North Korea, and in addition some countries have limitations on private ownership of gold: Russia, Cuba, North Korea. In many countries with weak, none or chaotic government and economy, gold, Euro and Dollars remained as the only true currencies.  Paper gold, which existed through the bank notes being gold certificates since 1830 to around 1935, and was available to the public along with minted gold in most of the great powers. The old paper gold was to a large degree backed by central bank physical gold holdings for most of the time. The gold monetary standard was abandoned in Europe in 1925 and in the USA in
  • 10. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 10 1932, when paper monetary volume expansion made it impossible to back every banknote with physical gold. Gold was used as a clearing currency between national banks until 1971, when the United States cancelled that system. After 1971, US dollar was only pegged to global social trust, the gold backing being gone. Paper gold reemerged after 1973 as a separate market for gold certificates, being like banknotes with only a gold value printed on them, as well as metal accounts, metal loans and forward contracts for gold. This was originally not available to the public, but only to gold processing companies and financial institutions.  There is not full alternatively in the gold market, as only gold is the real magic money Metal in the eye of the public, and beside silver the only money a government cannot corrupt and which also survives a governmental collapse.  There is a limited financial substitute in silver and in modern times by small amounts of platinum and palladium as bearers of monetary value in solid physical manifestation  The total physical amounts of all gold, silver and platinum are very limited  . Gold is sold as physical metal as well as paper gold, ownership to gold as shown on a metal bank account. The amount on the account is supposed to have a corresponding amount of physical metals somewhere if the trader is a serious trader. CHARACERISTICS OF GOLD MARKET:  Gold market is highly liquid and gold held by central banks, other major institutions and retail jewelry keep back to the market.  Due to large stocks of gold as against its demand, it is argued that the core driver of the real price of gold is stock equilibrium rather than flow equilibrium.  Economic forces that determine the prices of gold are different from, and in many cases opposed to the forces that influence most financial assets. IMPORTANT GOLD MARKETS IN THE WORLD:  London as the great clearing house.  New York, the home of futures trading.  Istanbul, Dubai, Singapore, India, Hong Kong as doorways to high consuming regions.  Tokyo where TOCOM sets the mood of Japan.
  • 11. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 11 1.2 OBJECTIVE OF THE STUDY:  To study the performance of gold.  To predict the future performance of gold by Technical Analysis.  To suggest the investor to Buy, Sell or Hold the position of gold.
  • 12. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 12 1.3 SCOPE OF THE STUDY: The scope of the study is limited to Commodity market. Here the study mainly focused on Gold M. The study is done only based on the information collected by MCX market. The scope of the study includes only technical analysis with using the indicators of Moving averages and RSI (Relative Strength Index). Calculations for 5 months that is Jan-1-2015 to May-15-2015 .
  • 13. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 13 1.4 NEED FOR THE STUDY: Gold is a precious metal per excellence and remain the ultimate safe haven asset, as well as traditionally consuming metal. It has been reserved as a symbol of wealth and prosperity. Its historical significance and electrical conductivity ensures that it will be in demand for long term. The simple fact that is rare and beautiful metal will always keep it, as an investment, gold has cyclically come into and out of favor, and has its boom in the market. Like any investment, the goal of investors to invest in gold is to buy low and sell high. It helps to reduce the risk, to take buy, sell and hold decisions to the investors. It also helps to understanding the fluctuations of Gold prices by interpreting the different indicators like Moving Averages, Rate of Change Indicators and Relative Strength Index (RSI) etc. ultimately this would help to provide the approximate suggestions to the Gold investors.
  • 14. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 14 1.7 METHODOLOGY: Research is a systematic gathering, recording, analyzing and interpretations of the data about a particular area in industries or where to find solutions to different kinds of decisions making problems. Source of Data: The data has been collected in two ways, those are Primary Data: The information requirements for solving business problems are identified in the problem formulated stage. In this stage, the source from which information can be found are identified data for researched can be collected. Secondary Data: Secondary data is defined as existed data; secondary data is collected from already available sources such as published papers, journals, magazines reports, company literature etc. For this project I collected data from secondary sources only, mainly I collected data from websites. TECHNICAL ANALYSIS: Technical analysis can be defined as an art and science of forecasting future prices based on an examination of the past price movements. Technical analysis is not astrology for predicting prices. Technical analysis is based on analyzing the current demand and supply of commodities, stocks, indices, future or any tradable instruments. Technical analysis involve putting stock information like prices, volumes and open interest on a chart and applying various patterns and indicators to it in order to assess the future prices movements. The time framing in which technical analysis is applying man range from intraday (5-minites, 10-minites, 15-minities, 30-minities, or hourly), daily, weekly or monthly price data to many years. There are essential two methods of analyzing investment opportunity in the security market viz fundamental analysis and technical analysis. Fundamental information likes financial and non- financial aspects of the company where as technical information ignores fundamental and focuses on actual price movements only. The technical analyst assumes that it is 90 percent of psychological and 10 percent logical. Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past price and volume. Technical analysis does not attempt to
  • 15. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 15 measures a securities intrinsic value, but instead use charts and other tools to identify patterns that can be suggested future activity. TECHNICAL ANALYSIS: It is process of analyzing the price behavior in the market which influenced by the no of factors and different information. Technical analysis belies that market is determined by the buying and selling forces acting in the market and not by any other factor like the company or Industry or Economy. TECHNICAL ANALYSIS  TIMING OF INVESTMENT DECISSION  DECISSION MAKING STUDY OF MARKET SENTIMENTS  BULLISHNESS  BEARISHNESS, etc.   LIQUIDITY IN THE MARKET  VOLUME TURNOVER  PRICE TRENDS, etc. BUY SELL HOLD
  • 16. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 16 TOOLS USED FOR THIS ANALYSIS:  MOVING AVERAGES I. Short term moving averages. II. Long term moving averages.  RELATIVE STRENTH INDEX (RSI). MOVING AVERAGES: Moving averages of a number specified historical time periods from the point on chart. Moving averages offer an indicator of the clear directions and scope of the trend in the market. 1. Short Term Moving Averages (SMA) is calculated for 10 to 15 days period. 2. Long Term Moving Averages (LMA) is calculated by 60 days to 125 days period. CALCULATION PROCESS: For calculation of a moving average the data for required days will take and a simple average will be calculated by divining sum of days for which moving averages has to be calculated by number of days. Then averages will be floated in the graph and it can be compare with the index moving averages or stock price of identified the Buy or Sell signal. In the same manner index moving averages (MEX-SX) has to be calculated then both have to be shown in the graph. DECESIONS MAKING: If stock prices Moving averages interpret the index moving averages from below and goes in upward direction „Buy‟ signal can be identified investor can „Buy‟ at this movement. If stock price intercepts the index moving averages from and falls below „Sell‟ signal can be identified. Investor sells the shares of the company on this movement. Moving averages can also be compared with the stock closing prices. LONG TERM MOVING AVERAGES v/s SHORT TERM MOVING AVERAGES: Long Term Moving Averages and Short Term Moving Averages can also compared for Buy or Sell signal decisions.
  • 17. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 17 Chart1: UPWORD DIRECTIONS of SMA and LMA. P ` R I ` C SMA E LMA T I M E INTERPRETAION: If Short Term Moving Averages intercept the Long Term Moving Averages from above table and it goes upward direction „Buy‟ signal can be identified, in these movement investors will be ready to „Buy‟ signal for investors.
  • 18. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 18 Chart2: DOWNWORD DIRECTIONS of SMA and LMA. P R LMA I SMA C E T I M E INTERPRETAION: If Short Term Moving Averages intercept the Long Term Moving Averages from above table and it shows downward direction and it can be generated „Sell‟ signals in these movements the investors will be sold their stocks.
  • 19. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 19 RELATIVE STRENTH INDEX (RSI): Relative strength index (RSI), was developed by J.Welles Wilder in 1978 and was later discussed in his book new concepts in Technical Trading systems. The mane “relative strength index” is slightly misleading as the RSI does not compare the relative strength of two securities, but rather the strength of a signal security to past data. It is calculated by measuring the ratio of average price gains against average price losses over specific rolling period. We have set our default period at 14 days as recommended by wells wilder but this can be varied to suit particular sock or futures. The RSI is an oscillator that ranges between 0 and 100. There are two main signals that can be generated from this indicator. Oversold/Overbought signals When the RSI turns up, developing a trough below 30, it suggested the price is oversold and likely to rally. Conversely, when the RSI turns down, making a peak above 70, it suggested that the price is overbought and likely to drop. RSI calculation by using the following formula: RSI= 100-[100/1+RS] Where,
  • 20. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 20 1.5 LIMITAIONS OF THE STUDY:  This study is limited to Gold M in commodities.  This study had a limited construction for 60 days.  Forecasting of future price may or may not accurate.  The study based on only on performance of gold, not with other commodities.
  • 21. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 21 CHAPTER II REVIEW OF LITERATURE
  • 22. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 22 REVIEW OF LITERATURE: Several studies have been carried out to apply Technical Analysis in practice in various financial Markets. A few of them are quoted below: Kavajecz and Odders-White (2004) show that support and resistance levels coincide with peaks in depth on the limit order book 1 and moving average forecasts reveal information about the relative position of depth on the book. They also show that these relationships stem from technical rules locating depth already in place on the limit order book. Practitioners‟ reliance on technical analysis is well documented. Frankel and Froot (1990) noted that market professionals tend to include technical analysis in forecasting the market. The guiding principle of technical analysis is to identify and go along with the trend. When there is a trend, whether started by random or fundamental factors, technical methods will tend to generate signals in the same direction. This reinforces the original trend, especially when many investors rely on the technical indicators. Thus, even if the original trend were a random occurrence, the subsequent prediction made by the technical indicator could be self-fulfilling. This self-fulfilling nature leads to the formation of speculative bubbles (see, for example, Froot et al., 1992). Conrad and Kaul (1988) found that weekly returns were positively auto correlated, particularly for portfolios of small stocks. Lui and Mole (1998) report the results of a questionnaire survey conducted in February 1995 on the use by foreign exchange dealers in Hong Kong of fun-demented and technical analyses. They found that over 85% of respondents rely on both methods and, again, technical analysis was more popular at shorter time horizons.
  • 23. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 23 CHAPTER III INDUSTRY & COMPANY ANALYSIS
  • 24. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 24 MULTI COMMODITY EXCHANGE OF INDIA (MCX-SX) MCX-SX stock exchange Limited (MCX-SX), India‟s new stock exchange, is recognized by Security Exchange of India (SEBI) under section 4 of securities contracts (Regulation) Act 1956. The exchange was notified as a “recognized stock exchange” under section 2(39) of the companies Act 1956 by Ministry of Corporate Affairs, Govt. of India on December 21, 2012. In line with global best practices and regulation requirements, clearing and settlement of traders on the exchange are conducted through a separate clearing corporation- MCX-SX clearing Corporation Ltd. MCX-SX offers an electronic, transparent an hi-tech platform for trading in Capital Market, Future& Options, and currency Derivatives and Debt Market segments. The exchange has also received in- principal approval from SEBI for operationalizing SME trading platform MCX-SX commenced operations in the Currency Derivatives (CD) segment on October 7, 2008, under the regulatory framework of SEBI and Reserve Bank of India (RBI). MCX-SX launched Capital Market segment, Future and Options segment and flagship index „SX40‟ on February 9 2013 and commenced trading from February 11 2013. Trading in the „SX40‟ index derivatives began from May 15 2013 is free-float based index consisting of 40 large cap, liquid stock representing diverse sector of the economy. Its base value is, 10,000 and base date is March 31 2010. The debt market segment market segment of MCX-SX was launched on June 7 2013, and trading commenced from June 10 2013. MCX has also set up in joint venture the MCX stock Exchange. Earlier spinoffs from the company include the National Spot exchange for bullion and agriculture commodities, and Bulk Handling Corporation (NBHC) India‟s largest collateral management company which provides bulk storage and handling of agricultural products. In February 2013, MCX has come out with a public issue of 7,427,378 Equity shares of Rs. 10 face value in price band of 860-1032 Rs. Per equity share to raise around $ 134 million. It is the first ever IPO by an Indian exchange.
  • 25. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 25 PRODUCTS OF MCX-SX MCX-SX currently Futures contracts on MCX-SX enable Indian Imports, Exports, Corporate, banks and other participate to effectively hedge their risks arising out of volatile currency prices. These contracts also offer a better flexible than the currency contracts traded on Over-The-Counter (OTC) market as the structure and pricing of an exchange-traded contract is more transparent. PRODUCTS OF MCX-SX Oil & Oil Seeds Others Fiber Energy Bullions Metals Crude oil Almond Kapas ATF Gold Aluminum Kapasia Khail Guar Gum Cotton (29mn) Breant Oil Gold M Aluminum M Refined soya oil Gaur Seed Spices Crude Oil Platinum Copper Soya bean Melted Method Caramon Gasoil Silver Copper M Flakers Coniander Heating Oil Sliver M Iron Ore Fiber Mentha Oil Planation Imported Thermal coal Lead Kapas Potato (Agri) Rubber Natural Gas Weather Lead M Cotton(29) Potato (Takeshwar) Carbon(CER) Silver Micro Cereals Sugar M Carbon (CFI) Silver 1000 Barley Nickel Wheat Nickel M Maize-Feed Industrial
  • 26. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 26 Trading System in MCX-SX: The trader work station (TWS) is the application through which members access the trading platform, place order and execute trades. The TWS offers a multitude of user friendly trading features which includes commodity price ticker, market watch screen displaying best buy, best sell, last trade price, volume for the day, open interest etc,, top gainer and looser contracts, net position, on-line backup facility etc. 1. Trading System: The best five buy and sell orders for every contract available for trading are visible to the market and orders are matched based on price time priority logic. Orders can be placed with time conditions and or price conditions. 2. Margins: MCX follows a comprehensive and strength margining system for all futures contracts trade on the Exchange platform. Actual margining and position monitoring is done on an on-line basis. For the purpose of computing and levying the margins, MCX uses SPAN® (Standard Portfolio Analysis of Risk) system which follows a risk-based and portfolio-based approach. The initial margin requirements are based on a worst-case loss scenario of portfolio at client level to cover VAR (Value at Risk) over one day horizon, subject to a minimum base margin defined by FMC for the respective commodity. The SPAN Risk Parameter File (RPF) is generated by the Exchange periodically at predefined timings and RPF files so generated to the members using the FTP service and on the exchange websites. In addition to SPAN margins, MCX levies Additional margins and or special margins whenever deemed necessary considering the volatile and price movements in the commodities. Such margins are also levied as per the direction of FMC Tender Period margins and Delivery period margins are levied on contracts nearing expiry to ensure non default in commodity delivery.
  • 27. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 27 NATIONAL COMMODITY STOCK EXCHANGE LIMITED (NCDEX): National Commodity & Derivatives Exchange Limited (NCDEX) is an online commodity exchange based in India. It has an independent Board of Directors and professional management, who have interest in commodity markets. It provides a commodity exchange platform for market participants to trade in commodity derivatives. It is a public limited company, incorporated on 23 April 2003 under the Companies Act, 1956. It obtained its Certificate for Commencement of Business on 9 May 2003, and began operations on 15 December 2003. NCDEX is the only commodity exchange in the country promoted by national institutions. NCDEX is regulated by the Forward Markets Commission (FMC), and is subject to the Companies Act 2013, Stamp Act, Contracts Act, Forward Commission (Regulation) Act, and various other laws. KEY NOTES OF NCDEX:  NCDEX had 848 registered members and client base of @ 20 Lakh as of 31 July 2013.  It offers trading on more than 49,000 terminals across 1,000 centers in India as of 31 July 2013.  It facilitates deliveries of commodities through a network of over 594 accredited warehouses through eight warehouse service providers, with holding capacity of around 1.5 million tons.  It offers average deliveries of 1 lakh MT at every contract expiry. Average delivery ratio for Q1 of 2013-14 is 98%.  NCDEX has offices in Mumbai, Delhi, Ahmedabad, Indore, Hyderabad, Jaipur, and Kolkata. PRODUCTS & SERVICES:  NCDEX offers futures trading in 31 agricultural and non-agricultural commodities.  NCDEX also offers as an information product, an agricultural commodity index. This is a value- weighted index called DHAANYA and is computed in real time using the prices of the ten most liquid commodity futures traded on the NCDEX platform. Dhaanya aims to provide a reliable benchmark for India's agri-commodities.
  • 28. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 28  Introduced N-Charts – a free, web-based charting tool provided to users for technical analysis.  Launched COMTRACK® - a proprietary electronic warehouse accounting system  Exchange for Physicals - recently announced EFP (Exchange for Physicals) facility in 18 contracts traded on the NCDEX platform, which they intend to help trade participants address counter-party and business risks inherent in bilateral transactions in the physical market.  Launched GOLD HEDGE, a transparent price benchmark of gold to the consumer. The contract, GOLDHEDGE, is available for trading from Jan 16, 2014. The one-kg gold hedge contract provides a transparent platform for investors with exposure to the international markets. The final settlement prices is arrived at after taking into account the gold price in dollar terms, rupee value against dollar and the conversion ratio.  Launched Forward market in 25 September, 2014. SHAREHOLDERS CONSORTIUM:  Canara Bank  CRISIL Limited (formerly Credit Rating Information Services of India Limited)  Goldman Sachs  Indian Farmers Fertilizers Cooperative Limited (IFFCO)  Infrastructure Development Finance Company (IDFC)  InterContinental Exchange (ICE)  Jaypee Capital  Life Insurance Corporation of India (LIC)  National Bank for Agriculture and Rural Development (NABARD)  National Stock Exchange of India (NSE)  Punjab National Bank (PNB)  Renuka Sugars
  • 29. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 29 COMPANY PROFILE INDIA INFOLINE LIMITED (Formerly known as India Infoline Investment Services Limited)
  • 30. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 30 IIFL Holdings Limited (formerly known as India Infoline Limited) is the apex holding company of the entire IIFL Group, which is a leading financial services company in India, promoted by first generation entrepreneurs. We have a diversified business model that includes credit and finance, wealth management, financial product distribution, asset management, capital market advisory and investment banking. We have a largely retail focused model, servicing over 2 million customers, including several lakh first-time customers for mutual funds, insurance and consumer credit. This has been achieved due to our extensive distribution reach of over 2,700 business locations and also innovative methods like seminar sales and use of mobile vans for marketing in smaller areas. Our evolution from an entrepreneurial start-up to a market leadership position is a story of steady growth by adapting to the changing environment, without losing the focus on our core domain of financial services. Our NBFC and lending business accounts for 71% of our consolidated income in FY14 and has a diversified product portfolio rather than remaining a mono-line NBFC. We are a leader in distribution of life insurance and mutual funds among non-bank entities. Although the share of equity broking in total income was only 11% in FY14, IIFL continues to remain a leading player in both, retail and institutional space.
  • 31. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 31 Location Mumbai Corporate office IIFL Center, B Wing, Trade Center, Kamala Mills Compound off senapati Bapat Marg, Lower parel, Mumbai-400013. Maharashtra. Registered office Industrial Area, Wagle Estate, Thane- 400 604. Maharashtra Year of incorporation 1995 Industry Financial Services Key Business Credit & Finance, Wealth Management, Financial Product Distribution, Capital market Related. Employees 14,000+ Business location Around 4,000 locations in 900 cities and towns. Global reach Singapore, Dubai, New work, Mauritius, UK, Hong Kong, Switzerland. Listings NSE, BSE
  • 32. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 32 Financial Performance Track Record from 2005 to 2014 Revenues EBT
  • 33. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 33 PAT NEWWORTH
  • 34. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 34 ROE Segmental revenue split
  • 35. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 35
  • 36. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 36 IIFL Holdings Ltd is divided into 9 companies. 1. India Infoline Ltd. 2. India Infoline Finance Limited: India Infoline housing Finance Limited is under this company. 3. India Infoline Insurance brokers Ltd. 4. India Infoline Commodities Ltd. 5. IIFL Assets management company & IIFL MF 6. IIFL Private Wealth management Ltd. 7. IIFL (Asia) Pte Ltd. 8. IIFL Inc. (US) investment Advisors Ltd. 9. IIFL (UK) IIFL Business  Mortgage Loans, which includes Housing Loans and Loans against Property.  Commercial Vehicle Finance, which includes Loans against new and used commercial vehicles and buses, this includes loans on small, light and medium and heavy commercial vehicles  Gold Loans, which includes finance against security of mainly used gold ornaments.  Capital Market Finance, which includes Loans against Securities, Margin Funding, IPO financing and other structured lending transactions.  Healthcare Finance/Medical Equipment Finance, which includes finance for medical equipment and project funding in the healthcare sector.
  • 37. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 37 AWARDS AND RECOGNITION:  Three of the analysts from the Pharm, Banking and Oil & Gas sector respectively won the India's Best Market Analyst Awards 2013 by Zee Business  Best Wealth Management House by The Asset Triple A – 2012  Best Customer Service in Financial Services, 2013 – Retailer Customer Service Awards  Best Broking House with Global Presence, 2012 – D&B  BSE Group felicitated IIFL for being one of the top performers in the 'Equity FI' category on Mahurat Trading day-to-day  Mr. Nirmal Jain, Chairman, IIFL received the 'Entrepreneur of the Year' award at the 10th Franchise India Awards 2012  IIFL Buzz won the prestigious award for the internal tabloid at the 53rd annual awards night of the Association of Business Communication of India (ABCI)  Best Private Banking Services Overall – India – Euromoney Private Banking Survey 2014  Best Wealth Management company in India - Wealth Briefing Asia Awards 2013  Fastest Growing Wealth Management Company - CNBC TV 18 Financial Advisor Awards 2013  Highest asset Growth Champion - The Wealth Forum Advisor Awards 201
  • 38. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 38 BOARD OF DIRECTORS 1. Mr. Nirmal Jain Chairman, IIFL Holdings Limited 2. Mr. R. Venkataraman Managing Director, IIFL Holdings Limited Mr. Arun Kumar Purwar Independent Director of IIFL Holdings Limited since March 2008 Mr. Chandran Ratnaswami Non-Executive Director of IIFL Holdings Limited since May 2012 Mr. Kranti Sinha Independent Director of IIFL Holdings Limited since January 2005 Mr. Nilesh Vikamsey Independent Director of IIFL Holdings Limited since February 2005. Mr. Sunil Kaul Non-Executive Director of IIFL Holdings Limited since November 2011 Dr. Subbaraman Narayan Independent Director of IIFL Holdings Limited since July 2012 Ms Geeta Mathur Independent Director of IIFL Holdings Limited since September 2014
  • 39. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 39 CHAPTER IV ANALYSIS AND INTERPRETATIONS
  • 40. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 40 Moving Averages Analysis: Table1: GOLD (M) Short term moving average calculation from 1-Jan-2015 to 15-May-2015 Date Close(Rs) SMA 5-Jan-15 27042 6-Jan-15 27385 7-Jan-15 27159 8-Jan-15 26808 9-Jan-15 26806 27040 12-Jan-15 27032 27038 13-Jan-15 27071 26975.2 14-Jan-15 27210 26985.4 15-Jan-15 27493 27122.4 16-Jan-15 27673 27295.8 19-Jan-15 27718 27433 20-Jan-15 28098 27638.4 21-Jan-15 27992 27794.8 22-Jan-15 28055 27907.2 23-Jan-15 27884 27949.4 27-Jan-15 27934 27992.6 28-Jan-15 27795 27932 29-Jan-15 27470 27827.6 30-Jan-15 27911 27798.8 2-Feb-15 28071 27836.2 3-Feb-15 27687 27786.8 4-Feb-15 27814 27790.6 5-Feb-15 27757 27848 6-Feb-15 26968 27659.4 9-Feb-15 27119 27469 10-Feb-15 27016 27334.8 11-Feb-15 26817 27135.4 12-Feb-15 26635 26911 13-Feb-15 26694 26856.2 16-Feb-15 26742 26780.8 17-Feb-15 26241 26625.8 18-Feb-15 26181 26498.6 19-Feb-15 26294 26430.4 20-Feb-15 26317 26355 23-Feb-15 26178 26242.2
  • 41. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 41 24-Feb-15 26077 26209.4 25-Feb-15 26142 26201.6 26-Feb-15 26239 26190.6 27-Feb-15 26206 26168.4 28-Feb-15 26473 26227.4 2-Mar-15 26541 26320.2 3-Mar-15 26453 26382.4 4-Mar-15 26539 26442.4 5-Mar-15 26551 26511.4 6-Mar-15 26058 26428.4 9-Mar-15 26062 26332.6 10-Mar-15 25960 26234 11-Mar-15 25716 26069.4 12-Mar-15 25690 25897.2 13-Mar-15 25909 25867.4 16-Mar-15 25797 25814.4 17-Mar-15 25635 25749.4 18-Mar-15 25653 25736.8 19-Mar-15 25970 25792.8 20-Mar-15 26195 25850 23-Mar-15 26208 25932.2 24-Mar-15 26350 26075.2 25-Mar-15 26491 26242.8 26-Mar-15 26805 26409.8 27-Mar-15 26564 26483.6 30-Mar-15 26239 26489.8 31-Mar-15 26061 26432 1-Apr-15 26226 26379 2-Apr-15 26548 26327.6 6-Apr-15 26941 26403 7-Apr-15 26829 26521 8-Apr-15 26682 26645.2 9-Apr-15 26452 26690.4 10-Apr-15 26703 26721.4 13-Apr-15 26616 26656.4 14-Apr-15 26454 26581.4 15-Apr-15 26644 26573.8 16-Apr-15 26533 26590 17-Apr-15 26702 26589.8 20-Apr-15 26719 26610.4
  • 42. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 42 21-Apr-15 26803 26680.2 22-Apr-15 26489 26649.2 23-Apr-15 26777 26698 24-Apr-15 26574 26672.4 27-Apr-15 26944 26717.4 28-Apr-15 27036 26764 29-Apr-15 27096 26885.4 30-Apr-15 26593 26848.6 1-May-15 26483 26830.4 4-May-15 26747 26791 5-May-15 26902 26764.2 6-May-15 26928 26730.6 7-May-15 26951 26802.2 8-May-15 26903 26886.2 11-May-15 26853 26907.4 12-May-15 27180 26963 13-May-15 27539 27085.2 14-May-15 27444 27183.8 15-May-15 27473 27297.8
  • 43. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 43 Graph1: GOLD (M) Short term moving from 1-Jan-2015 to 15-May-2015 Interpretations: The above graph represents the performance of Gold (M) fluctuating short term moving averages (SMA) from 5-Jan-2015 to 5-May-2015. The SMA intercept the index price from Jan -5- 2015 and it goes up word directions up to May-14-2015 (2800 high price) and then parley goes a down word direction up to May-10-2015(26500 low price) and then goes a small up word directions (27473 increasing price) it should be indicated buy signal for investors. 24000 24500 25000 25500 26000 26500 27000 27500 28000 28500 5-Jan-15 5-Feb-15 5-Mar-15 5-Apr-15 5-May-15 Close(Rs) SMA
  • 44. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 44 Table2: GOLD (M) Long term moving averages calculation from 5-Jan-2015 to 14-May-2015 Date Close(Rs) LMA 5-Jan-15 27042 6-Jan-15 27385 7-Jan-15 27159 8-Jan-15 26808 9-Jan-15 26806 12-Jan-15 27032 13-Jan-15 27071 14-Jan-15 27210 15-Jan-15 27493 16-Jan-15 27673 19-Jan-15 27718 20-Jan-15 28098 21-Jan-15 27992 22-Jan-15 28055 23-Jan-15 27884 27428.4 27-Jan-15 27934 27487.87 28-Jan-15 27795 27515.2 29-Jan-15 27470 27535.93 30-Jan-15 27911 27609.47 2-Feb-15 28071 27693.8 3-Feb-15 27687 27737.47 4-Feb-15 27814 27787 5-Feb-15 27757 27823.47 6-Feb-15 26968 27788.47 9-Feb-15 27119 27751.53 10-Feb-15 27016 27704.73 11-Feb-15 26817 27619.33 12-Feb-15 26635 27528.87 13-Feb-15 26694 27438.13 16-Feb-15 26742 27362 17-Feb-15 26241 27249.13 18-Feb-15 26181 27141.53 19-Feb-15 26294 27063.13 20-Feb-15 26317 26956.87 23-Feb-15 26178 26830.67 24-Feb-15 26077 26723.33 25-Feb-15 26142 26611.87 26-Feb-15 26239 26510.67
  • 45. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 45 27-Feb-15 26206 26459.87 28-Feb-15 26473 26416.8 2-Mar-15 26541 26385.13 3-Mar-15 26453 26360.87 4-Mar-15 26539 26354.47 5-Mar-15 26551 26344.93 6-Mar-15 26058 26299.33 9-Mar-15 26062 26287.4 10-Mar-15 25960 26272.67 11-Mar-15 25716 26234.13 12-Mar-15 25690 26192.33 13-Mar-15 25909 26174.4 16-Mar-15 25797 26155.73 17-Mar-15 25635 26121.93 18-Mar-15 25653 26082.87 19-Mar-15 25970 26067.13 20-Mar-15 26195 26048.6 23-Mar-15 26208 26026.4 24-Mar-15 26350 26019.53 25-Mar-15 26491 26016.33 26-Mar-15 26805 26033.27 27-Mar-15 26564 26067 30-Mar-15 26239 26078.8 31-Mar-15 26061 26085.53 1-Apr-15 26226 26119.53 2-Apr-15 26548 26176.73 6-Apr-15 26941 26245.53 7-Apr-15 26829 26314.33 8-Apr-15 26682 26384.13 9-Apr-15 26452 26437.4 10-Apr-15 26703 26486.27 13-Apr-15 26616 26514.33 14-Apr-15 26454 26530.73 15-Apr-15 26644 26550.33 16-Apr-15 26533 26553.13 17-Apr-15 26702 26546.27 20-Apr-15 26719 26556.6 21-Apr-15 26803 26594.2 22-Apr-15 26489 26622.73 23-Apr-15 26777 26659.47
  • 46. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 46 24-Apr-15 26574 26661.2 27-Apr-15 26944 26661.4 28-Apr-15 27036 26675.2 29-Apr-15 27096 26702.8 30-Apr-15 26593 26712.2 1-May-15 26483 26697.53 4-May-15 26747 26706.27 5-May-15 26902 26736.13 6-May-15 26928 26755.07 7-May-15 26951 26782.93 8-May-15 26903 26796.33 11-May-15 26853 26805.27 12-May-15 27180 26830.4 13-May-15 27539 26900.4 14-May-15 27444 26944.87 15-May-15 27473 27004.8
  • 47. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 47 Graph2: GOLD (M) Long term moving averages from 5-Jan-2015 to 14-May-2015 Interpretation: The above graph represents the Long Term Moving Averages from 5-Jan-2015 to 14-May-2015. The LMA intercept Index price from 19-Jan-2015 (27800 price level) and it goes down word direction up to 16-May-2015 (25500 mark low) and then goes parley up word directions up to 11-May-2015 (26743 price mark) it would be indicated “Buy” signal for the new investors and gives hold signal for holding investors. 24000 24500 25000 25500 26000 26500 27000 27500 28000 28500 5-Jan-15 5-Feb-15 5-Mar-15 5-Apr-15 5-May-15 Close(Rs) LMA
  • 48. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 48 Graph3: GOLD (M) Short Term Moving Average and Long Term Moving Average from 5-Jan-2015 to 14- May-2015 Interpretation The above graph represents Gold (M) over all Short Term Moving Averages and Long Term Moving Averages from 5-Jan-2015 to 11-May-2015. The Short term Moving Averages and Long term Moving Averages intercepts at 27800 mark price and then both goes down word direction up to 16-Mar-2015 at the value of 25950 market price and then both intercept and goes up direction (SMA&LMA) up to 11- May-2015 at 27473 market price. Overall Short Term Moving Averages and Long Term Moving Average‟s goes up word direction it would be indicated “Buy” signal for the investors. 24500 25000 25500 26000 26500 27000 27500 28000 28500 5-Jan-15 5-Feb-15 5-Mar-15 5-Apr-15 5-May-15 SMA LMA
  • 49. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 49 RELATIVE STRENTN INDEX (RSI): Formula RSI= 100-[100/1+RS] RS= Average gain per day Average loss per day Table1: GOLD (M) RSI calculation from 5-Jan-2015 to 28-Feb-2015 Date Open(Rs) Close(Rs) RSI 5-Jan-15 26845 27042 6-Jan-15 27095 27385 7-Jan-15 27328 27159 8-Jan-15 27150 26808 9-Jan-15 26751 26806 12-Jan-15 26865 27032 13-Jan-15 27118 27071 14-Jan-15 27013 27210 15-Jan-15 27150 27493 16-Jan-15 27540 27673 19-Jan-15 27642 27718 20-Jan-15 27700 28098 21-Jan-15 28071 27992 22-Jan-15 27966 28055 75.3292 23-Jan-15 28015 27884 69.47536 27-Jan-15 27815 27934 67.24947 28-Jan-15 27896 27795 69.2578 29-Jan-15 27782 27470 70.1824 30-Jan-15 27540 27911 72.40284 2-Feb-15 28120 28071 69.0315 3-Feb-15 28071 27687 60.28155 4-Feb-15 27660 27814 59.67597 5-Feb-15 27785 27757 53.44214 6-Feb-15 27498 26968 40.98258 9-Feb-15 27011 27119 41.61693 10-Feb-15 27180 27016 30.51779 11-Feb-15 27050 26817 28.78545 12-Feb-15 26756 26635 23.38034 13-Feb-15 26700 26694 26.58834
  • 50. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 50 16-Feb-15 26720 26742 23.98119 17-Feb-15 26722 26241 20.8563 18-Feb-15 26280 26181 22.49967 19-Feb-15 26260 26294 13.17862 20-Feb-15 26337 26317 13.33893 23-Feb-15 26281 26178 15.12126 24-Feb-15 26219 26077 7.843137 25-Feb-15 26138 26142 8.127721 26-Feb-15 26200 26239 13.13452 27-Feb-15 26243 26206 6.578073 28-Feb-15 26111 26473 27.06988
  • 51. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 51 Graph1: Gold (M) Relative Strength Index chart from 5-Jan-15 to 25- Feb-2015 Interpretation: The above graph represents RSI of GOLD (M), the RSI crossed 30 lines from below to above and it is raised in the day of 28-Feb-2015 the RSI indicated buying opportunity in the month of February. 0 10 20 30 40 50 60 70 80 5-Jan-15 12-Jan-15 19-Jan-15 26-Jan-15 2-Feb-15 9-Feb-15 16-Feb-15 23-Feb-15 RSI
  • 52. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 52 Table2: GOLD (M) RSI calculation from 2-Mar-2015 to 30-Apr-2015 DATE OPEN Rs CLOSE Rs RSI 2-Mar-15 26508 26541 32.8676 3-Mar-15 26527 26453 33.92857 4-Mar-15 26500 26539 35.79584 5-Mar-15 26510 26551 36.60477 6-Mar-15 26485 26058 37.96424 9-Mar-15 26096 26062 39.74082 10-Mar-15 26050 25960 35.84775 11-Mar-15 25979 25716 30.6872 12-Mar-15 25750 25690 31.48936 13-Mar-15 25750 25909 40.73406 16-Mar-15 25945 25797 37.26467 17-Mar-15 25741 25635 33.84944 18-Mar-15 25665 25653 34.30736 19-Mar-15 25712 25970 28.84535 20-Mar-15 25996 26195 34.74121 23-Mar-15 26195 26208 36.60881 24-Mar-15 26180 26350 40.625 25-Mar-15 26313 26491 44.31457 26-Mar-15 26519 26805 62.19083 27-Mar-15 26774 26564 56.88204 30-Mar-15 26468 26239 53.28941 31-Mar-15 26200 26061 56.4712 1-Apr-15 26122 26226 60.06354 2-Apr-15 26601 26548 55.56578 6-Apr-15 26625 26941 65.39045 7-Apr-15 26925 26829 65.69401 8-Apr-15 26842 26682 61.47068 9-Apr-15 26612 26452 54.73411 10-Apr-15 26482 26703 55.73411 13-Apr-15 26703 26616 52.92653 14-Apr-15 26569 26454 46.94138 15-Apr-15 26450 26644 47.29958 16-Apr-15 26644 26533 38.041 17-Apr-15 26530 26702 46.68521 20-Apr-15 26699 26719 52.72074 21-Apr-15 26745 26803 58.11462 22-Apr-15 26778 26489 47.80702
  • 53. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 53 23-Apr-15 26515 26777 54.97567 24-Apr-15 26734 26574 44.038 27-Apr-15 26624 26944 53.54229 28-Apr-15 26969 27036 58.76565 29-Apr-15 26985 27096 65.15775 30-Apr-15 27056 26593 49.56772
  • 54. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 54 Graph2: Gold (M) Relative Strength Index chart from 2-Mar-15 to 30-Apr-15 Interpretation: The above graph represents RSI of GOLD (M), the RSI crossed 60 lines from below to above and it is fall down in the day of 30-Mar-2015 and then RSI indicated touched 40 line from 20-Apr-2015 and it goes up word direction so it indicates „Holding‟ signal in the month of April. 0 10 20 30 40 50 60 70 RSI RSI
  • 55. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 55 Table3: GOLD (M) RSI calculation from 1-May-2015 to 15-May-2015 DATE OPEN RS CLOSE RS RSI 1-May-15 26572 26483 49.52694 4-May-15 26580 26747 55.2154 5-May-15 26852 26902 52.45832 6-May-15 26950 26928 54.53333 7-May-15 26904 26951 51.85882 8-May-15 26960 26903 50.04625 11-May-15 26898 26853 47.65007 12-May-15 26899 27180 60.95283 13-May-15 27131 27539 63.44556 14-May-15 27465 27444 67.55121 15-May-15 27417 27473 63.00425 Graph3: Gold (M) Relative Strength Index chart from 1-May-15 to 15-May-15 Interpretation: 0 10 20 30 40 50 60 70 80 RSI RSI
  • 56. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 56 The above graph represents RSI of GOLD (M), the RSI crossed 60 lines from 12-May-2015 and then it foes up word direction and it below above and it is fall down in the day of 14-May-2015. Then RSI indicated „sell‟ signal for the investors in the month of May, as on 15-May-2015. Grapg4: Overall performance of RSI. Interpretation: The above graph represents RSI performance from 5-Jan-2015 to 15-may-2015. The RSI indicator touched 70 line from in the month of January 2015 it is indicated „sell‟ signal and then the RSI line goes down word direction touched 10 line it indicated „buy‟ signal in the month of February ending. The month of March 2015 RSI line goes up word direction flow will continues up 15-May-2015 it is indicated „sell‟ signal for the investors. 0 10 20 30 40 50 60 70 80 5-Jan-15 5-Feb-15 5-Mar-15 5-Apr-15 5-May-15 RSI RSI
  • 57. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 57 CHAPTER V Findings, Suggestion and Conclusion
  • 58. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 58 Findings:  The present performance of gold is bullish. It has been fluctuated from 26845 to 27417 during 5th January 2015 to May 15th 2015. During this period Gold is goes upward up to Rs 512.  With help of Moving averages and RSI indicator‟s the price of Gold M is goes bullish trend and as per overall performance it should be indicated Sell signal for the Investors.  The overall performance of Gold M indicates the future prediction that the investor to „Sell‟ and „Hold‟ because Gold M stills it goes bullish direction.
  • 59. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 59 Suggestions:  With help of Moving averages and Relative strength index/indicator overall performance goes upward direction from 26485 to 27417 as per the duration between Jan 5th 2015 to May 5th 2015. It indicates sell signal by Gold M.  The future performance of Gold M says Sell signal.  It suggested the investor that, it is right time to invest in Gold M because the future is expected to be bullish trend will be continued up to next 4 to 5 months.
  • 60. A STUDY ON TECHNICAL ANALYSIS IN COMMODITY MARKET (GOLD M) WITH REFERENCE TO INDIA INFOLINE Ltd. mr.ramu009@yahoo.com GATES INSTITUTE OF TECHNOLOGY, MBA 2013-2015 9063457844 Page | 60 References: Books 1. Investment and portfolio Management----------S.Kevin 2. Research Methodology--------------Kothari 3. Financial Management------------I.M Pandy Web sites www.mcxindia.com www.moneyconrtol.com www.yahoofiance.com www.iifl.com www.investopedio.com