Smart DISHA -Workshop-06 April 2017- Basics on Stock Market Education

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Workshop on Basics of Stock Market, Intriduction to Technical Analysis and Fundamental Analysis

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1 2 Days Workshop -Part-I AT G. H. Patel College of Engineering and Technology Anand 06-07 April 2017

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BULL BEAR: Game called - INVESTMENT- M- 70436 90580 www.smartdisha.com

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www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780 DAY-1- 06 April 2017 Session-1 Basics for Securities Market Session-2 Fundamental Analysis Session-3 Technical Analysis DAY-2- 07 April 2017 Session-4 Risk management through Derivatives Session-5A/B Commodity Currency Market The Game called “I NVES TMENT”

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www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780 Session-1 Basics for Securities Market The Game called “I NVES TMENT”

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INVESTMENT BASICS INVESTMENT BASICS www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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BASICS BASICS What is Saving What is Investment Why should one invest When to start invest What care should one take while investing What is interest Determinants of interest rate www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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INVESTMENT OPTIONS INVESTMENT OPTIONS PHYSICAL ASSETS FINANCIAL ASSETS www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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SHORT TERM INVESTMENT OPTIONS SHORT TERM INVESTMENT OPTIONS Saving bank account Liquid funds Fixed deposits www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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LONG TERM INVESTMENT OPTIONS LONG TERM INVESTMENT OPTIONS Post office saving scheme PPF Company FD Bonds Debenture Mutual Funds Equity Shares www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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OTHER CONCEPTS OTHER CONCEPTS What is Index What is depository What is dematerialization Stock exchange Derivative market www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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SECURITIES PRIMARY AND SECURITIES PRIMARY AND SECONDARY MARKET SECONDARY MARKET www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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PRIMARY MARKET PRIMARY MARKET What is Primary Market IPO FPO Right Issue Preferential Issue www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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IPO PROCESS IPO PROCESS Who is Merchant Banker Pricing Of Issue Face value Premium and Discount to Face Value Book Building Process www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780 Cut-off Price Prospectus Abridged Prospectus Listing of Securities Delisting of Securities

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SECONDARY MARKET SECONDARY MARKET What is Secondary market Diff. between Primary and Secondary market What is Stock Exchange Products in Secondary Market Shares / Debentures / Bonds What is Trading member What is Clearing Member What is Clearing Corporation What is Rolling Settlement What is Pay-in and Pay-out What is Auction www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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REDRESSAL MECHANISM REDRESSAL MECHANISM Investor grievances cell of stock exchange Arbitration through stock exchange Investor protection fund www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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CORPORATE ACTIONS CORPORATE ACTIONS Dividend Stock Splits Bonus Buy back of shares www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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End Of Session-1 17 www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780 Session-2 Fundamental Analysis

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WHAT IS TIME VALUE OF MONEY WHAT IS TIME VALUE OF MONEY Future value of single cash flow Future value of annuity Present value of single cash flow Present value of annuity www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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ANALYZING RETURN ANALYZING RETURN Simple Return I Prt Compounded Return FV PV 1+it www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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RATIO ANALYSIS RATIO ANALYSIS www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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LIQUIDITY RATIO LIQUIDITY RATIO Current Ratio Current Assets / Current Liability Acid – Test Ratio Current Assets – Inventory / Current Liability www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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TURNOVER RATIOS TURNOVER RATIOS Inventory Turnover Ratio Cost of good sold / average inventory Debtors turnover ratio Net credit sales / Average Account Receivable Average collection period average debtors / avg. daily credit sales www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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Average collection period 365 days / debtors turnover Fixed assets turnover ratio net sales / net fixed assets Total assets turnover ratio net sales / average total assets www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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LEVERAGE/CAPITAL STRUCTURE LEVERAGE/CAPITAL STRUCTURE RATIOS: RATIOS: Debt – equity ratio total debt / total equity Debt asset ratio total debt / total assets www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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PROFITABILITY RATIOS: PROFITABILITY RATIOS: Gross Profit Ratio gross profit /net sales 100 Net Profit Ratio net profit /net sales 100 www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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PROFITABILITY RATIOS: PROFITABILITY RATIOS: Return on Total Assets PBIT / Total Assets Return on Capital Employed PAT / Total Capital Employed Return on Shareholders Equity PAT / Net worth www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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PROFITABILITY RATIOS PROFITABILITY RATIOS EPS Profit available to shareholder / no. of equity share outstanding Price-earnings ratios P/E Ratio Market Price / EPS www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780 End Of Session-2

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www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780 Session-3 Technical Analysis

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 How to select stocks or Commodities for trading.  How to generate profits in intra-day short-term and long-term trading by using Technical Analysis.  When to buy and sell stocks or commodities.  Trend Identification  Trend Strength  Over Bought / Over Sold area  How to minimise the risk. BENEFITS OF TECHNICAL BENEFITS OF TECHNICAL ANAL YSIS ANAL YSIS www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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TYPES OF CHARTS TYPES OF CHARTS   Line Line Chart Chart   Bar Bar Chart Chart   Candlestick Candlestick Chart Chart   Kagi Kagi chart chart   Point Point and and figure figure   Renko Renko Chart Chart   Three Three Line Line Break Break Charts Charts www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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WHAT IS THE PURPOSE OF DRAWING TREND WHAT IS THE PURPOSE OF DRAWING TREND LINES LINES The purpose of drawing trend lines is to identify where possible reversals will take place. They can also signal that a change in trend may occur. Types Types of of trend trend: : • Up Trend • Down Trend • Sideways Trend www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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CANDLESTICK FORMATION CANDLESTICK FORMATION www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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DO DOJI JI BULLISH / BULLISH / BEARISH BEARISH • . www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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THREE THREE BLACK BLACK CROWS CROWS BEARISH BEARISH HAMMER/INVERTED HAMMER/INVERTED- -HAMMER HAMMER BULLISH BULLISH / /BEARISH www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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ENGULF ENGULF BEARISH BEARISH HARAMI HARAMI BULLISH BULLISH www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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SUPPORT RESISTANCE SUPPORT RESISTANCE www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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RESISTANCE CONVERT INTO RESISTANCE CONVERT INTO SUPPORT SUPPORT VICE VICE- -VERSA VERSA

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CHART CHART PATERN PATERN - -HEAD HEAD AND SHOULDERS AND SHOULDERS BEARISH BEARISH

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INVERTED HEAD AND SHOULDERS INVERTED HEAD AND SHOULDERS BULLISH BULLISH

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DOUBLE TOPS DOUBLE TOPS BEARISH BEARISH

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DOUBLE BOTTOMS BULLISH DOUBLE BOTTOMS BULLISH

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RSI Overbought / Over sold zone

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Readings below 20 considered oversold and readings above 80 considered overbought. These levels can be adjusted to suit analytical needs. Default is 14 days or also known as 14 period. The stochastic oscillates between 0 and 100 with The Stochastic Oscillator can be used like any other oscillator by looking for overbought/oversold overbought/oversold readings positive positive / / negative negative divergences divergences and centerline centerline crossovers crossovers. STOCHASTIC READING STOCHASTIC READING www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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STOCHASTIC STOCHASTIC Selling and Buying calls generate in the graph stochastic signalling buy/sell at the same time on price reversal candle form at higher and lower levels STOCHASTIC EXTREME VALUES STOCHASTIC EXTREME VALUES

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The procedure for calculating the MACD lines is as follows: Step Step 1 1. . Calculate a 12 period exponential moving average of the close price. Step Step 2 2. . Calculate a 26 period exponential moving average of the close price. Step Step 3 3. . Subtract the 12 period moving averages from the 26 period moving averages. This is the fast fast MACD MACD line line. . Step Step 4 4. . Calculate a 9 period exponential moving average of the fast MACD line calculated above. This is the slow slow or signal signal MACD MACD line line. . MACD CALCULATION

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MOVING AVERAGE CROSSOVER MOVING AVERAGE CROSSOVER www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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THE DOW THEORY THE DOW THEORY Dow Dow theory theory was was developed developed by by the the father father of of Technical Technical Analysis Analysis. . Charles Charles Dow Dow developed developed the the Dow Dow Theory Theory from from his his analysis analysis of of market market price price action action in in the the late late 19 19th th century century. . The The basic basic of of Dow Dow theory theory is is more more than than 100 100 years years old old yet yet even even in in todays todays volatile volatile and and technology technology- -driven driven markets markets the the basic basic components components of of Dow Dow theory theory still still remain remain valid valid. . The The Dow Dow Theory Theory addresses addresses not not only only technical technical analysis analysis and and price price action action but but also also market market philosophy philosophy. . These These are are broad broad concepts concepts and and best best applied applied to to stocks stocks as as a a group group or or index index. . www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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ELLIOT WAVE THEORY ELLIOT WAVE THEORY www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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ELLIOT WAVE THEORY ELLIOT WAVE THEORY www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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Retracement: To calculate the Fibonacci Retracement levels a significant low to a significant high should be found. From there prices should retrace the initial difference low to high or high to low by a ratio of the Fibonacci sequence generally the 23 23. .6 6 38 38. .2 2 50 50 61 61. .8 8 or or the the 76 76. .4 4 retracement. Retracement is based on the numbers identified in Fibonacci sequence to define area of support support and and resistance resistance. Traders use the Fibonacci retracement levels as potential support and resistance areas. Since so many traders watch these same levels and place buy buy and and sell sell orders orders on on them them to to enter enter trades trades or or place place stops stops the support and resistance levels tend to become a self-fulfilling prophecy. FIBONACCI RETRACEMENT www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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EXAMPLE IN THE UPTREND EXAMPLE IN THE UPTREND www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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EXAMPLE IN THE DOWNTREND EXAMPLE IN THE DOWNTREND www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780 End Of Session-3

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ALL THE BEST ALL THE BEST www.smartdisha.com infosmartdisha.com M-70436 90580 LL- 079 4800 7780

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