Summer Internship Project

Fundamental and technical market analysis of

IT Sector
Finoability Pvt Ltd

Submitted in partial fulfillment of PGDM

Program

Submitted by

Corporate Mentor - Faculty Mentor-

Mr. Piyush Agarwal

Co-Founder & Director

 Declaration

I do hereby declare that this project entitled, “Fundamental & Technical Analysis on
Information Technology sector” with Finoability Pvt Ltd. at Kolkata (Live/Online) has been
completed by me and it is an original work. This report is being submitted for fulfilling the
requirement of Post Graduate Diploma in Management as a Summer Internship Project, at
K.P.B Hinduja College Of Commerce

It has never been submitted nor been published elsewhere.

Name of the student: Rhythm Kirti Patel

Date: 09/06/21

Place: Mumbai
 Acknowledgement

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

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

At last I am also thankful to my friends, all known and unknown individuals who have
given me their constructive advice, encouragement, co-operation, and motivation during this
project and while preparing this report.

I thank K.P.B Hinduja College Of Commerce who gave me an opportunity to show my skills
and work with such big organization.

Thank You,
 Research Methodology

Type of Study – Secondary Research

Sources – moneycontrol.com

Sampling Unit – Stock of Information Technology

 ABOUT THE COMPANY

As an independent Finance company, we make all our recommendations based solely on

how it best serves your near and long-term goals. By teaching you about the Financial
Market and our principled approach, you can feel confident in your ability to make sound
decisions that will benefit you and your family in the long run. That’s why our approach is
fundamentally different. By combining emotional and intelligence quotient – EQ and IQ –
we can help you build a more secure financial future.
 Contents

Title Pg. No.

1. Executive Summary 07
2. IT Sector 09
2.1. Introduction to IT Sector 09
2.2. What is the largest volume product in IT Sector? 09
2.3. IT industry outlook: 2018 10
2.4. Total world reserves in millions of 11
3. Fundamental Analysis
3.1. Introduction to Fundamental Analysis 12
3.2. Advantages of Fundamental Analysis 13
3.3. Disadvantages of Fundamental Analysis 14
4. Fundamental Analysis of Oil and Gas Large Cap Stocks
4.1. Valuation of Stocks 16
4.2. Selection of Growth Picks 17
4.3. Ranking of Selected Stocks 18
5. Technical Analysis
5.1. Long Term Technical Analysis 20
5.2. Long Term Technical Analysis of Oil and Gas Large Cap Stocks 27
5.3. Short Term Technical Analysis 29
8. Conclusion
9. References
 1. EXECUTIVE SUMMARY

This project report is about the “fundamental analysis in oil and gas- Large Cap sector”. Fundamental and
Technical Analysis have been adopted as the methodologies to analyze the sector.

Valuation is done as a part of Fundamental Analysis and certain stocks are chosen as the “Value Picks”
and certain stocks as “Growth Picks”.

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

Some overvalued stocks have been chosen as Growth Picks which have the P/E Growth ratio (PEG Ratio)
as positive and less than or equal to 1.

Further, using some financial ratios which are important to the oil and gas sector, the value picks and
growth picks have been ranked. According to the ranks, funds have been allocated to these selected
stocks.

Finally, a portfolio consisting of the selected Oil and Gas sector stocks is created and the Net Asset Value
(NAV) of the portfolio is calculated. Performance of the entire portfolio is analyzed with respect to the
BSE index (which acts as a benchmark) on daily basis to see if the portfolio of the oil and gas sector
stocks beats the benchmark of BSE index.

It will be helpful for investors who are looking for an investment in Oil and Gas sector companies.

As a part of Technical Analysis, two types of Technical Analysis namely Short-Term Technical Analysis
and Long-Term Technical Analysis have been performed on the selected Oil and Gas sector stocks
(Growth Picks and Value Picks).

Various Patterns have been observed as a part of Long-Term Technical Analysis and points at which the
investors can buy and sell the stocks have been spotted. Also, the current trend of the stocks has been
found out.

Various Candlesticks have been used as a part of Short-Term Analysis and also various Candlesticks
positions have also been observed. The Candlesticks give us an idea regarding trends and trend reversals
for the selected Oil and Gas sector stocks (Growth Picks and Value Picks).
 2. Information Technology Sector
2.1. Introduction to IT Sector

There has been spur in the demand of IT in India because of:

Breadth of service offerings- Indian players have focused their energy on building domain competencies
and expertise in order to ensure superior value addition to client’s projects and processes. Service offerings
have evolved from low-end application development to high end integrated IT solutions. Worldwide
interest in business process re-engineering, the economic imperatives in developed countries of
outsourcing, cost efficient maintenance of existing mainframe systems and continuous development of new
software for PCs have played significant roles.

Information Technology in India is an industry consisting of two major components: IT

services and business process outsourcing (BPO). The sector has increased its contribution to
India's GDP from 1.2% in 1998 to 7.7% in 2017. According to NASSCOM, the sector aggregated revenues
of US$180 billion in 2019, with export revenue standing at US$99 billion and domestic revenue at US$48
billion, growing by over 13%. As of 2020, India's IT workforce accounts for 4.36 million employees.
[5]
The United States accounts for two-thirds of India's IT services exports.
 2.2. IT industry outlook: 2021

While cloud computing and artificial intelligence continue to dominate the technology industry, edge
computing is also making headlines. Deloitte’s vice chairman and US technology sector leader, Paul
Silverglate, shares his perspectives on the advantages of processing data locally and how partnerships will
play a key role in accelerating growth in the technology industry in 2021.

In 2021, technology organizations should consider three key strategic opportunities both to recover from
the COVID-19 crisis and boldly position themselves to thrive in the future:

1. Redoubling digital transformation efforts, with an emphasis on improving cloud

infrastructure, data and analytics capabilities, cybersecurity, and business model transformation

2. Reorienting and reskilling the workforce to optimize remote work capabilities and take full
advantage of advanced technologies such as artificial intelligence (AI)

3. Re-examining where and how manufacturing happens, with a focus on improving

transparency, flexibility, and resiliency

Rising competitive pressures in the technology industry are placing a premium on speed, agility, and
flexibility, with an emphasis on boosting automation, enabling real-time operations, and reimagining
business models. This can be accomplished through digital transformation, which begins with a move to the
cloud while also embracing critical capabilities in the areas of data and analytics, artificial intelligence, and
edge computing.

Interestingly, digital transformation and the cloud are synergistic: The cloud enables digital transformation,
and digital transformation fuels the importance of moving to the cloud.

Because many companies have already significantly progressed in their efforts to digitize their operations,
first-mover advantage has passed. The key for those that aren’t as advanced is to get started now by using
digital capabilities to make processes more effective and efficient. Once this phase is completed, companies
can shift their focus to harnessing more advanced digital capabilities like AI to boost innovation and their
competitive advantage.

The imperative to digitally transform is driven by the large numbers of companies that have already gotten
started. For example, global public cloud service revenue is forecasted to reach $308.5 billion in 2021 and
$354.6 billion by 2022.

Demand for cloud-driven as-a-service (XaaS) offerings is growing rapidly as well. One recent forecast
estimates that global as-a-service revenue will reach $345 billion over the next few years, with further
growth powered by emerging business models such as content-as-a-service, AI-as-a-service, and Internet of
Things (IoT)-as-a-service.
 2.3. Total Market Size of Information Technology in The World

The IT industry’s revenue is estimated at ~US$ 194 billion in FY21, an increase of 2.3% YoY. The
domestic revenue of the IT industry is estimated at US$ 45 billion and export revenue is estimated at US$
150 billion in FY21.
Indian software product industry is expected to reach US$ 100 billion by 2025. Indian companies are
focusing to invest internationally to expand global footprint and enhance their global delivery centres. In
line with this, in February 2021, Tata Consultancy Services announced to recruit ~1,500 technology
employees across the UK over the next year. The development would build capabilities for TCS to deliver
efficiently to the UK customers.
The data annotation market in India stood at ~ US$ 250 million in FY20, of which the US market
contributed ~ 60% to the overall value. The market is expected to reach ~ US$ 7 billion by 2030 due to
accelerated domestic demand for AI.
 3. Fundamental Analysis

3.1. Introduction to Fundamental Analysis

It is a method used to evaluate a security on the basis of its intrinsic value by examining related
economic, financial and other qualitative and quantitative factors.

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

A Fundamental analyst attempts to study everything that can affect the security's value, including
macroeconomic factors (like the overall economy and industry conditions) and company-specific factors
(like financial condition and management).

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

It is critical for an investor to separate the daily short-term noise in the stock prices and concentrate
on the underlying business performance. Over the long term, the stock prices of a fundamentally
strong company tend to appreciate, thereby creating wealth for its investors.

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

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

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

 Revenues
 Earnings
 Assets
 Debts

These financial measures are often combined to produce fundamental or financial ratios that analysts can
use to compare the company they are analysing to:

 Other companies in the same industry

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

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

3.2. Advantages of Fundamental Analysis

 It uses sound mathematical and statistical principles to produce ratios so that there is no room
for personal bias.

 The markets are usually driven by fundamental factors over the long term. Fundamental analysis
can look at long-term economic, demographic, technologic or consumer trends.

 By determining an intrinsic value, fundamental analysts can determine appropriate buy prices
that represent 'good value'.

 Research into fundamentals provides the investor with a better understanding of the company and
its business.
3.3. Disadvantages of Fundamental Analysis

 Fundamental analysis can be hard work and be overly complicated. Given the time and
difficulty constraints, it may be difficult to get an edge

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

 Six monthly issuing of financial information may mean a company's fundamentals have
significantly changed and means a time lag for investment decisions. This applies especially to a lack
of opportunity to react quickly to exit stocks

 Fundamental analysis for future estimated value can only be based on assumptions so a best-
and worst-case valuation model may need to be considered.

 No valuation model can take into account any unexpected negative economic, political or
legislative changes.

 Another important point to consider is that most information considered in fundamental

analysis comes from the company itself and assumptions have to be made that the
company is providing accurate and true information.
 4. Fundamental Analysis of IT -Large Cap Stocks
For conducting fundamental analysis for the stocks in IT Sector, we have taken into consideration only large
cap stocks i.e., stocks with market capitalization greater than 5000 crore rupees. Table below shows the
stocks of the companies having market capitalization greater than 5000 crore rupees and listed under the
Nifty 50 Index (as on 7th June 2021).

Company MCap (Rs. Cr.)

TCS 1185434.61
Infosys 593829.61
HCL Tech 256495.62
Wipro 295353.10
Tech Mahindra 98922.29
L&T Infotech 68893.67
Mindtree 39439.67
MphasiS 36367.37
Oracle Fin Serv 29890.27
COFORGE LTD. 21385.45
TCS 1185434.61
Infosys 593829.61
4.1. Valuation of stocks

The P/E ratio of each stock is then compared with the sectorial P/E ratio to determine whether
the stock is Undervalued or Overvalued. For instance, if P/E ratio of a stock is lesser than the
sectorial P/E ratio then that stock is considered as an Undervalued stock on the other hand if
the P/E ratio of a stock is greater than the sectorial P/E ratio then that stock is considered as an
Overvalued stock. (As shown in Table below).
 4.2. Selection of Growth Picks and Value Picks

After the selection of Undervalued and overvalued stock, the next step is to analyse the
Overvalued and undervalued stocks and derive determine the Growth and value Picks. For
determining the Revenue profit, PAT and if revenue and PAT both are increasing, we select
stocks or if not then reject stocks. The Overvalued stocks with negative PEG values or with
PEG values greater than 1 are rejected. For determining the value pick first identifying top
line and bottom line of the stock, ones for with both are decreasing for two consecutive year
are rejected and the remaining ones are further analysed.

Growth Picks and Value pick have been determined as shown in the Table below.

Overvalued stock: -

Undervalued stock: -
4.3. Ranking of Selected Stocks

After selecting the stocks, they are ranked based on current ratio, quick ratio, Debt-equity,
interest coverage, net profit margin and Return on Equity. On the basis of ranks give each stocks
different color.
 5. Technical Analysis

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

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

Based on the duration of analysis, technical analysis can be categorized into two types:

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

2. Short term technical analysis (<1 year)

There are various patterns to analysis whether the movement of a particular stock is in upward trend
or downward trend.

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

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

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

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

a) Rounding Bottom
i. The rounding bottom is a long-term reversal pattern that is best suited for weekly
charts. It is also referred to as a saucer bottom, and represents a long
consolidation period that turns from a bearish bias to a bullish bias.

b) Cup with Handle

a. The Cup with Handle is a bullish continuation pattern that marks a consolidation period
followed by a breakout. It was developed by William O'Neil and introduced in his 1988
book, How to Make Money in Stocks.
b. As its name implies, there are two parts to the pattern: the cup and the handle. The cup
forms after an advance and looks like a bowl or rounding bottom. As the cup is
completed, a trading range develops on the right-hand side and the handle is formed. A
subsequent breakout from the handle's trading range signals a continuation of the prior
advance.
c) Bump & Run Reversal
a. A Rising trendline is drawn which connects at least 3 lows of a price series (troughs) of 3
different periods respectively as shown in the below Figure 5.3. Then a Bump is seen
which can be observed as a bullish pattern and finally the point where the trendline is
broken, the pattern enters into a Run phase. This point is called as a sell point i.e. Investor
is supposed to sell the stock at this point.

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

o Resistance break: Even after trading down to support, the double top and trend reversal
are still not complete. Breaking support from the lowest point between the peaks
completes the double top.

o Resistance turned support: Broken support becomes potential resistance and there is
sometimes a test of this newfound resistance level with a reaction rally. Such a test can
offer a second chance to exit a position or initiate a short.

o Price Target: The distance from support break to peak can be subtracted from the
support break for a price target. This would infer that the bigger the formation is, the
larger the potential decline

e) Double Bottom
a. The double bottom is a major reversal pattern that forms after an extended downtrend.
As its name implies, the pattern is made up of two consecutive troughs that are roughly
equal, with a moderate peak in between.
b. Although there can be variations, the classic double bottom usually marks an
intermediate or long-term change in trend when the resistance is broken. Many potential
double bottoms can form along the way down, but until key resistance is broken, a
reversal cannot be confirmed.

 Key Points Regarding Double Bottom Chart Pattern:

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

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

f) Head & Shoulders Top

a. A head and shoulders reversal pattern forms after an uptrend, and its completion marks a
trend reversal. The pattern contains three successive peaks with the middle peak (head)
being the highest and the two outside peaks (shoulders) being low and roughly equal. The
reaction lows of each peak can be connected to form support, or a neckline.

b. As its name implies, the head and shoulders reversal pattern are made up of a left
shoulder, head, right shoulder and neckline. Other parts playing a role in the pattern are
volume, the breakout, price target and support turned resistance.

 Key Points Regarding Double Bottom Chart Pattern:

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

o Support turned resistance: Once support is broken; it is common for this same support
level to turn into resistance. Sometimes, but certainly not always, the price will return to
the support break and offer a second chance to sell.

o Price Target: After breaking neckline support, the projected price decline is found by
measuring the distance from the neckline to the top of the head. This distance is then
subtracted from the neckline to reach a price target.

g) Head & Shoulders Bottom

a. The head and shoulders bottom is sometimes referred to as an inverse head and
shoulders. The pattern shares many common characteristics with its comparable
partner, but relies more on volume patterns for confirmation.
b. As a major reversal pattern, the head and shoulders bottom forms after a downtrend,
and its completion marks a change in trend. The pattern contains three successive
troughs with the middle trough (head) being the deepest and the two outside troughs
(shoulders) being shallower. Ideally, the two shoulders would be equal in height and
width. The reaction highs in the middle of the pattern can be connected to form
resistance, or a neckline.
c. The price action forming both head and shoulders top and head and shoulders
bottom patterns remains roughly the same, but reversed.

 Key Points Regarding Double Bottom Chart Pattern:

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

o Neckline Break: The head and shoulders pattern is not complete and the downtrend is
not reversed until neckline resistance is broken.

o Resistance turned support: Once resistance is broken; it is common for this same resistance
level to turn into support. Often, the price will return to the resistance break and offer a second
chance to buy.

o Price Target: After breaking neckline resistance, the projected advance is found by measuring
the distance from the neckline to the bottom of the head. This distance is then added to the
neckline to reach a price target.

h) Triple Top
a. The triple top is a reversal pattern made up of three equal highs followed by a break
below support. In contrast to the triple bottom, triple tops usually form over a
shorter time frame and typically range from 3 to 6 months. Generally speaking,
bottoms take longer to form than tops.
  Key Points Regarding Triple Top Chart Pattern:

 Support break: As with many other reversal patterns, the triple top is not complete
until a support break. The lowest point of the formation, which would be the lowest
of the intermittent lows, marks this key support level.

 Support turns resistance: Broken support becomes potential resistance, and there is
sometimes a test of this newfound resistance level with a subsequent reaction rally.

 Price Target: The distance from the support break to highs can be measured
and subtracted from the support break for a price target.

i) Triple Bottom
a. The triple bottom is a reversal pattern made up of three equal lows followed by a
breakout above resistance. While this pattern can form over just a few months, it is
usually a long- term pattern that covers many months.

 Key Points Regarding Triple Bottom Chart Pattern:

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

o Price Target: The distance from the resistance breakout to lows can be measured
and added to the resistance break for a price target.
5.2. Long Term Technical Analysis Oil and gas-Large Caps

1. Tata Consultancy Services

2. HCL Tech
5.3 Short Term Technical Analysis

Candlestick Chart: Originating in Japan over 300 years ago, candlestick chart requires all the open,
high, low and close prices. A daily candlestick is based on the open price, the intraday high and low, and
the close. A weekly candlestick is based on Monday's open, the weekly high-low range and Friday's
close.

Candlestick Patterns for Reversal of trend:

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

2. Hammer: The hammer is a bullish reversal pattern that forms after a decline. After a decline,
hammers signal a bullish revival. The low of the long lower shadow implies that sellers drove
prices lower during the session.

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

Candlesticks position: -

1. Star Position:

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

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

1
 References:

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