A STUDY ON FORECASTING THE SECURITY PRICES BY USING TECHNICAL INDICATOR ANALYSIS WITH REFERENCE TO SENSEX LISTED COMPANIES

This research work has been designed to forecast security price by using technical indicator analysis method. Investors and financial advisors use this method for analyzing the future buying and selling of securities in the capital market. This study helps the investor to understand and examine the position of the stock market and make a decision over securities.The present work has been devoted to the explanation of the concept of investment, analysis of investment, application of technical indicators, the profile of selected companies and other parts related to forecasting in the securities marketplace.


Objectives of security analysis
The following are the objectives of security analysis: 1. To forecast the risk and return of securities of a company 2. To find out the intrinsic value of the securities with regard to a trading decision. 3. To analyze the stock market trends in order to know the market position and behaviour 4. To forecast the future prices and earnings of securities 5. To use various charts, diagrams, and application of various market indicators in order to predict the bull and bear market.

Forecasting of portfolio
Capital markets have witnessed the growth of several market indicators. These indicators are computed on the stock market on a whole rather than on a specific share. There are certain market indicators which help in forecasting the trend of the share market. The application of statistical analysis and econometric to forecasting is based on past data are indicators of future performance. Forecasting of statistical tools of moving averages is used in the research.

Moving average
The term moving average refers to the method of calculation that takes the average value over a fixed period of time and adds the latest period data for the calculation of the average while dropping the first period of the calculation.
Moving averages are used to help identify the trend of prices by rearing an average of prices that move with the addition of new data. The price action on the security being analyzed is curved. By using and calculating the average value of a share or indicator, day to day fluctuations are reduced in importance and what remains is a stronger indication of the trend of prices over the period being analyzed.
Examples -In order to find out the moving averages, first of all, the moving average period is selected; say a period of 5 weeks, 10 weeks, 50 weeks, or 10 days, 50 days or 100 days or a year. Suppose a period of 10 weeks is selected for calculation of weekly averages, each week the moving average is calculated by dropping this oldest week and adding a new week. Every time, the average of 10 weeks is calculated. This research has taken 20 days prices and 5 days moving average.

Need for the study
The capital market has been involved with various activities such as allowing companies for listing and computing the Sensex, buying and selling of securities, trend of the market, settlement etc.., Therefore, it is unable to predict the prices of securities for a future period.
Hence the investors or the potential investors would like to know the future prices of their Page 154-160 investment in a particular company. For this purpose, the research paper has decided to conduct a study.

Scope of the study
There are a lot of companies registered as listed company under the BSE.BSE is one among the many securities exchanges over the world and in India. The BSE -Sensex is the barometer of Indian capital market and the selected companies of SENSEX are well established and financially sound.

Selected companies in the study
Though so many companies listed are in BSE, this research has taken only two car manufacturing companies namely MARUTI and TATA Motors. As these car companies have built a good name among the car driving aspirants. Hence the research has selected and done forecasting analysis of the two afore mentioned companies.

Object of the study
The objectives of the study are: 1. To identify the trend in prices of securities in a particular company 2. To identify when the market trend will end 3. To identify if the share prices will move in the opposite direction.

Introduction
The share prices of stock and a moving average of the stock are plotted on the graph. The trends are then compared. When the share price is above the moving average line; the stock concerned has a bullish trend. So the investors could BUY the shares. On the other hand, if the share price line is below the moving average, the stock concerned has a bearish trend. So the investors could SELL the shares.
Secondary data collected from the 02 sample companies are analyzed. The analysis and interpretation of data are important research processes in any research because these stages bring out the findings of a research.
The present parts deals with Share prices for 20 Days by using 5 days moving average  The rest of the days show bearish trend when the share price line is below the moving average.

Diagram -1.1
The value of 20 days share prices and 5-Days moving average

Diagram -2.2
The value of 20 days share prices and 5-Days moving average

Findings
Marti Suzuki India Ltd.

Suggestions
On the basis of the findings and observations made during the study, the following points have been suggested in order to improve the market trend/ behaviour position of the companies.
 On the basis of the findings of the study, the researcher finds that only selected two companies. So the followers could select other companies too.
 On the basis of the findings of the study, the researcher used 20 days share prices and used 5 days moving average. So others may use 50 days and 200 days share prices.
 On the basis of the findings of the study, the researcher applied moving average.  13 days of bearish market can be seen in the same company. During this period, investors could sell the shares. If not, only a few investors may invest in that company.
Thus the company should exhibit the past years financial performance activities including dividend declaration.

Conclusion
Securities markets do not rise or fall in straight line. Since the fluctuations are wide and frequent, no meaningful decision can be made. An investor should predict the trend of share prices, application market/technical indicators of the whole market as well as individual companies' share prices. Before buying or/ and selling of any securities, through BSE or NSE, they should examine recent trends of share price and market behaviour of the company.
Thus, the investor needs to be familiar with various statistical tools that are used in the security market to predict the future price.