INTERNSHIP REPORT 2014

Study on
Analysis of
Trading in Gold Market
Harvest Futures Consultants
India Pvt. Ltd.
Submitted by
AAYUSH KUMAR
Registration No:
13010121218
Under the Guidance of
Prof. NATARAJA N.S.
In partial fulfillment of the Course- Industry Internship Programme- IIP
in Semester II of the Master of Business Administration (Batch of 2013)
Bangalore

Master of Business Administration
Industry Internship Programme (IIP)
Declaration
This is to declare that the Report titled “Analysis of Trading in Gold
Market” has been made for the partial fulfillment of the Course:
Industry Internship Programme(IIP) in Semester II by meat Harvest
Futures Consultants Pvt. Ltd. under the guidance of Prof. Nataraja N.S.
I confirm that this Report truly represents my work undertaken as a
part of my Industry Internship Programme (IIP). This work is not a
replication of work done previously by any other person. I also confirm
that the contents of the report and the views contained therein have
been discussed and deliberated with the faculty guide.
Signature of the Student :
Name of the Student (in Capital Letters) : AAYUSH KUMAR
Registration No : 13010121218

Master of Business Administration
Certificate
This is to certify that Mr. AAYUSH KUMAR Regn. No. 13010121218 has
completed the report titled ‘Analysis of Trading in Gold Market’ under
my guidance for the partial fulfillment of the Course: Industry
Internship Programme (IIP) in Semester II of the Master of Business
Administration.
Signature of Faculty Guide:
Name of the Faculty Guide: Prof. Nataraja N.S.

TABLE OF CONTENTS-
Declaration
Certificate
1.Executive Summary
2. Introduction
2.1. Industry overview
2.1.1. Foreign Exchange Market
2.1.2. Foreign Exchange Market in India
2.1.3. Gold Market
2.1.4. Gold Market: Indian Scenario
2.1.5. Gold Market: Global Scenario
2.2. Company Overview
2.2.1. Company’s Vision and Mission
2.2.2. Corporate Information
2.2.3. Organizational Structure
2.2.4. SWOT Analysis
3. Project Profile
3.1. Objectives of the study
3.2. Research Methodology
3.2.1. Sources of data collection
3.2.2. Type of research
3.2.3. Limitations of the study
3.2.4. Fundamental Analysis
3.2.5. Technical Analysis
4. Observations and Analysis
5. Findings
6. Recommendations
7. Conclusions
7.1. Learning Outcome
8. References
LIST OF CHARTS-
2.2.3.1. Organizational Structure
3.2.5.1. Example of a bar chart
3.2.5.2. Example of a line chart

3.2.5.3. Example of a candlestick chart
3.2.5.4. Example of candlesticks
3.2.5.5. Illustration of moving average
3.2.5.6. Illustration of RSI
3.2.5.7. Illustration of MACD
3.2.5.8. Illustration of Fibonacci Retracements
3.2.5.9. Illustration of Bollinger Bands
3.2.5.10. Illustration of Stochastic Oscillator
4.1. Analyzing the six technical tools on 14/4/2014
LIST OF TABLES-

1. EXECUTIVE SUMMARY:
The work which we were being assigned to work upon was to trade in the
foreign exchange market. We were trading in commodities (gold and silver)
and currencies (usd, jpy, aud, euro and gbp). We weretrained to
understand and implement Technical as well as Fundamental analysis
which would help us to take a call on when to enter the market and when
to leave it. We were being taught to take a ‘sell’ call when the marketwas
bearish and take a ‘buy’ call when the marketwas bullish. We werealso
taught as to how to read the candle stick charts and assess the trends in
markets. The Fundamental analysis included all the news that could affect
the movement of market upwards or downwards. For this purposewewere
advised to refer to several websites such as forexfactoey, bloomberg, etc.
The Technical analysis comprised of use of various tools to understand the
movement of marketin any direction. These tools provided us a method of
evaluating currencies and commodities by analyzing the statistics
generated by marketactivities, such as past volumes and prices. Technical
analysis uses charts and other tools to identify patterns that can suggest
future actuvity. Although these fundamentals and technicals does not
guarantee perfect accuracy yet a careful and precise use of these can help
to assess whether to take a ‘buy’ or ‘sell’ call so that we could maximize our
profits.
At a later stage, during the courseof our internship we wereasked to do
the marketing of the produt by doing warmas well as cold calls and attract
investors to investin our company and wewould be trading on behalf of
them (investors could also trade themselves if they wanted to) and book
profits for them which in turn would fetch commission for us as well as the
firm.

2. INTRODUCTION:
2.1. INDUSTRY OVERVIEW -
The Foreign Exchange Market(FOREX or currency market) is a global,
decentralized financial market for trading currencies. Financial centre in the
world functions as anchors of trading between a wide rangeof different types of
buyers and sellers around the clock with accept of weekends. The foreign
exchange market determines the relative values of different currencies. Currency
trading is the trading of different currencies of the world in forex exchange
market (forex). The forexmarket was established in 1971with theabolishment of
fixed currency exchanges. The forex is made up of about 5000 trading institutions
such as international banks, central governmentbanks (such as FederalReserve),
commercial companies and brokers for all types of foreign currency exchange.
There is no centralized location or place of forex. The major trading centres are
located in New York, Tokyo, London, Hong-Kong, Singapore, Paris and Frankfurt,
and all trading is done by telephone and or over the internet. The Forexmarket is
used for simultaneous buying and selling currencies across the world. The buying
and selling activity is executed in pairs, for example the Euro and the US dollar
(EUR/USD) or the British pound and Japanese yen (GBP/JPY).
The forex market is the world’s largestfinancial trade market. Itis approximately
generating revenue of $5.4 Trillion per day and it is expected that the volume are
estimated to triple that of stocks and other futuremarket combined in the near
future. The Forexmarket includes spottrading as well as the derivativetrading
tools: futures, forwards, options and swaps. Thespotmarket is most commonly
used in Forexbecause spottrading allows financial instruments to be traded at
their current marketprice. Settlement of Forex spottransaction usually occurs
within two business days.
Any currency backed by an existing nation to be traded. The trading volumes of
the major currencies arethe US Dollar (USD), the Euro (EUR), the JapaneseYen
(JPY), the British Pound Sterling (GBP), the Swiss Franc (CHF), theCanadian Dollar
(CAD), and the Australian Dollar (AUD). The remaining currencies are referred as
minors.

The Currencies of the countries that are lesser know arecalled as exotics. They
are as opportunity to trade in these exotic currencies but these currencies require
a detailed research before investigating with them. The most actively traded
exotics are the New Zealand Dollar (NZD), the South Africarand (ZAR), the
SingaporeDollar (SGD), theChinese Yuan (CNY), the Brazilian real (BRR) and South
Korean won (KRW).
There are two main groups that trade currencies. 5% of daily volumes are from
companies and governmentand this is primarily hedging activity. The other 95%
consists of investors trading for profits or speculation. Nowadays importers and
exporters, international portfolio managers, multinational corporations,
speculators, day traders and long term holders and hedge funds all use the Forex
market.
The Continuous fluctuations of Dollar, the gradual decline in global equity markets
and declining world interest rates, haveforced investors to look for newer
opportunities. This has led to many national economies becoming interconnected
with one another. The resulting fluctuations in exchange rates have created a
huge international marketfor Forex. This has created opportunities for existing
and new profit potentials.
Each nation’s governmenthas mechanismin place to control its supply of
currency. In thecurrency marketthe National or the Central banks play a crucial
role. The Central banks which are influential can lower and raiseinterest rates to
control their nation’s money supply. By lowering interest rates, a central bank
makes it easier to borrow moremoney, this stimulating economic growth and
consumption. The market appreciates to lower interest rates and depreciate to
rising interest rates.
2.1.1. Foreign Exchange Market:
The Foreign exchange market is divided into various groups. Bank markets areon
the top of the list like large commercial banks and security dealers. Within the
Inter – Bank Market, the Spreads differ between the Bid and Ask Prices. The
difference between Bid and Ask prices broadens (For Example 0 to 1pip to 1to
2pips and so on for a currency such as EURO) going down the levels to access. This

depends upon the volume, for supposea trader promises huge number of
transactions for large amounts, which are too called to better, spread.
The ranges of access that make up foreign exchange marketare determined by
the sizeof the line. The 53% of all major transactions are fromthe top group of
inter-bank market, and then it’s followed by smaller banks followed by multi-
national corporations, hugehedge funds, and even some of retail FX markets
makers. The central banks participate in the foreign exchange marketso that they
can align the currency according to the need of their economic need.
CENTRAL BANKS
National central banks play an important role in the foreign exchange markets.
They try to controlthe money supply, inflation, interest rates and often have
official or unofficial target rates for their currencies. They can use their often
substantialforeign exchange reserves to stabilize the market. Nevertheless, the
effectiveness of central bank "stabilizing speculation" is doubtfulbecause central
banks do not go bankruptif they make large losses, like other traders would, and
there is no convincing evidence that they do make a profit trading.
FOREIGN EXCHANGEFIXING
Foreign exchange fixing is the daily monetary exchange rate fixed by the national
bank of each country. The idea is that central banks usethe fixing time and
exchange rate to evaluate behaviour of their currency. Fixing exchange rates
reflects the real value of equilibrium in the market. Banks, dealers and traders use
fixing rates as a trend indicator.
The mere expectation or rumour of a central bank foreign exchange
intervention might be enough to stabilize a currency, butaggressiveintervention
might be used severaltimes each year in countries with a dirty float currency
regime. Central banks do not always achieve their objectives. The combined
resources of the market can easily overwhelmany central bank.Severalscenarios
of this nature wereseen in the 1992–93 European ExchangeRate
Mechanism collapse and in more recent times in Asia.

HEDGE FUNDS AS SPECULATORS
About 70% to 90% of the foreign exchange transactions arespeculative. In other
words, theperson or institution that boughtor sold the currency has no plan to
actually take delivery of the currency in the end; rather, they were solely
speculating on the movement of that particular Currency.
Hedge funds have gained a reputation for aggressivecurrency speculation since
1996. They controlbillions of dollars of equity and may borrow billions more, and
thus may overwhelmintervention by central banks to supportalmostany
currency, if the economic fundamentals are in the hedge funds'favour.
INVESTMENTMANAGEMENTFIRMS
Investmentmanagement firms (who typically manage large accounts on behalf of
customers such as pension funds and endowments) usethe foreign exchange
market to facilitate transactions in foreign securities. For example, an investment
manager bearing an international equity portfolio needs to purchaseand sell
severalpairs of foreign currencies to pay for foreign securities purchases. Some
investment management firms also havemore speculative specialist currency
overlay operations, which manage clients' currency exposures with the aim of
generating profits as well as limiting risk. While the number of this type of
specialist firms is quite small, many have a large value of assets under
management and, hence, can generate large trades.
COMMERCIAL COMPANIES
An important partof this market comes fromthe financial activities of companies
seeking foreign exchange to pay for goods or services. Commercialcompanies
often trade fairly small amounts compared to those of banks or speculators, and
their trades often have little shortterm impact on marketrates. Nevertheless,
trade flows are an important factor in the long-term direction of a currency's
exchange rate. Some multinational companies can have an unpredictable impact
when very large positions are covered due to exposures that are not widely
known by other market participants.

NON-BANKING FOREIGN EXCHANGECOMPANIES
Non-bank foreign exchange companies offer currency exchange and international
payments to private individuals and companies. These are also known as foreign
exchange brokers butare distinct in that they do not offer speculative trading but
rather currency exchangewith payments (i.e., there is usually a physicaldelivery
of currency to a bank account).
Itis estimated that in the UK, 14% of currency transfers/payments aremadevia
Foreign Exchange Companies. These companies' selling point is usually that they
will offer better exchange rates or cheaper payments than the customer's bank.
These companies differ fromMoney Transfer/RemittanceCompanies in that they
generally offer higher-valueservices.
MONEY TRANSFER/REMITTANCECOMPANIES AND BUREAUXDECHANGE
Money transfer companies/remittancecompanies performhigh-volumelow-
value transfers generally by economic migrants back to their home country. In
2007, theAlite Group estimated that there were $369 billion of remittances (an
increase of 8% on the previous year). The four largestmarkets
(India, China, Mexico and the Philippines) receive $95 billion. The largest and best
known provider is Western Union with 345,000 agents globally followed by UAE
Exchange Bureaux de change or currency transfer companies providelow value
foreign exchange services for travellers. These aretypically located at airports and
stations or at tourist locations and allow physicalnotes to be exchanged fromone
currency to another. They access the foreign exchange markets via banks or non-
bank foreign exchange companies.
2.1.2. Foreign Exchange Markets in India
The foreign exchange market has grown drastically in trading volumes since the
liberalization. The exchange rate to the Indian economy has gained a greater
importance than ever before. The governmenthas adopted a flexible exchange
rate regime, in practice the rupee is one of the mostefficient trackers of the US
Dollar. Apprehensions of capital driven flow currency crisis haveheld Indian back
fromcapital account convertibility though the debate continues. The rupee‘s
deviations from covered interest parity exhibit relatively long lived savings. An

inevitable side-effect of the Indian exchange rate policy has been the ballooning
of the foreign exchange.
The routines used to examine currencies and commodities and settle on
speculation choices fall into two extremely general classifications: Fundamental
Analysis and and Technical Analysis. Major analysis includes examining the
attributes of an organization so as to understand it’s current market value.
Technical Analysis takes a totally distinctive methodology; it couldn't care less one
bit about the 'worth" of an organization or an item. Technical Analysts are just
intrigued by the price changes in the Market.
Regardless of all the extravagant and outlandish apparatuses it utilizes, Technical
Analysis simply studies supply and demand in a Market trying to figure out what
trend, or pattern, will proceed later on. As such, Technical Analyst endeavors to
comprehend the feelings in the Market by considering the Market itself, instead
of its components. On the off chance that you comprehend the profits and
constraints of Technical Analysis, it can provide for you another set or abilities
that will empower you to be a finer investor or trader.
Technical Analysis is a strategy for assessing securities by examining the detail
summed up by Marketmovement, for example, pastvolumes and price. Technical
Analysis does not endeavor to measure a security's inherent worth, yet rather
utilizes Charts and different instruments to recognize designs that can
recommend future action.
In the same way that there are numerous financing styles on the Fundamentals
side, there are additionally numerous diverse sorts of Technical investors. Some
depend on Chart pattern; others utilize technical indicators and oscillators, and
most utilize some mixture of the two. Regardless, Technical Analysts select
utilization of historic prices and volume information which is the thing that
differentiates them from their Fundamental Analysts. Dissimilar to Fundamental
Analysts, Technical Analysts couldn't care less whether a stock is undervalued –
the main thing that matters is a security's past trade data and what knowledge
this data can give about where the general market may move later on.

2.1.3. Gold Market
Gold is a unique assetbased on few basic characteristics. First, it is primarily a
monetary asset, and partly a commodity. As much as two thirds of gold’s total
accumulated holdings relate to “store of value” considerations. Holdings in this
category include the central bank reserves, privateinvestments, and high-cartage
jewellery bought primarily in developing countries as a vehicle for savings. Thus,
gold is primarily a monetary asset. Less than one third of gold’s total accumulated
holdings can be considered a commodity, the jewellery boughtin Western
markets for adornment, and gold used in industry.
2.1.4. Gold Market: Indian Scenario:
Gold is valued in India as a savings and investment vehicle and is the second
preferred investment behind bank deposits. India is the world’s largestconsumer
of gold in jewellery (much of which is purchased as investment). The hoarding
tendency is well ingrained in Indian society, not least because inheritance laws in
the middle of the twentieth century lent a great desirability to anonymity. Indian
people are renowned for saving for the future and the financial savings ratio is
strong, with a ratio of financial assets-to-GDP of 93%.
Gold’s circulates within the systemand roughly 30% of gold jewellery fabrication
is fromrecycled pieces. India is typically also the largest purchaser of coins and
bars for investment (>80tpa), although last year it had to concede firstplace to
Japan in the wakeof the heavy buying in the first quarter due to fears for the
stability of the Japanese banking system. In 1998-2001 inclusive, annualIndian
demand for gold in jewellery exceeded 600 tons; in 2002, however, dueto rising
and volatile prices and a poor monsoon season, this dropped back to 490 tons,
and coin and bar demand dropped to 67 tons. Indian jewellery off take is sensitive
to price increases and even more so to volatility, although this decline in tonnage
since 1998 is also due in part to increasing competition fromwhite and brown
goods and alternative investment vehicles, but is also a reflection of the increase
in price. The Indian bride’s “Streedhan”, the wealth shetakes with her when she
marries and which remains hers, is still gold, however (thus giving gold an
important role in the “empowerment” of women in India).

The distinction between gold and commodities is important. Gold has maintained
its value in after-inflation terms over the long run, while commodities have
declined.
Some analysts like to think of gold as a “currency withouta country’. Itis an
internationally recognized asset that is not dependent upon any government’s
promiseto pay. This is an important feature when comparing gold to
conventional diversifiers like T-bills or bonds, which unlike gold, do havecounter-
party risk.
2.1.5. Gold Market: Global Scenario
Today's gold marketis a round-the-world, round-the-clock business, played out
largely on dealers'trading screens. The core of the business, however, remains in
the key markets of London, as the great clearing house, New York as the home of
futures trading, Zurich as physicalturntable, Istanbul, Dubai, Singaporeand Hong
Kong as doorways to importantconsuming regions and Tokyo wherethe
Commodity Exchange (TOCOM) sets the mood of Japan. Even Paris still has a small
market, a reminder of the days when the French were great hoarders, while
Mumbai has increasing importance under India's liberalized gold regime that
permits official imports through local markets.

2.2. COMPANY OVERVIEW:
Harvest Futures Consultants India Pvt Ltd
It is a subsidiary company of PT Harvest International Futures of Jakarta,
Indonesia, and Harvest International Consortiums Ltd, Hong Kong with 51 %
shareholder .
HIF-India, is one of the pioneers in India, since 2009, providing information and
training on global financial markets, specializing in Gold trading. HIF-India has
their registered Head Office in Bangalore, with branches in Chennai (Mylapore),
Chennai (Nandanam) , Hyderabad (Banjara Hills 2), Pune (Hadapsar), Mumbai
(Andheri West), Ahmedabad (Satellite), Dubai.
HarvestGroup was founded to providethe best possiblecurrency trading, Indices,
CFD and stock trading experience for online trade. Harvest Group is backed by a
large financial group of companies with over US$ 16 Billion in asset under
management. Harvest Group takes pride in its stringent control as far as its
business infrastructure goes. Utilizing its subsidiary companies or strategic
Alliances of Harvest International Consortiums Ltd in Hong Kong and PT Harvest
International Futures in Indonesia and Harvest Futures Consultants India Pvt Ltd
in India , provide paramount global financial advice network to its clients.
Harvest provides the latest range of trading technology, featuring the powerful,
MT4(Meta Trading 4) Station for individual traders and multi account platforms
for asset managers, PDA and Smartphone solutions for trading on the movie.
HFC- India , is one of the pioneers in India, providing information and trading on
global financial markets, specializing in Foreign Currency Trading , or more
specifically on Online Spot Interbank Currency Trading. The registered head office
is in Bangalore.

RBI, through the provisions in the Master Circular No. 05/2009-10 dated July1
under clause A-13 Liberalized Remittance Scheme have granted permission to
resident individuals to freely remit upto USD200,000 per calendar years for
acquiring and hold immovable property or shares or any other asset outside India
without prior approval from the reserve bank.However, currently the resident
Indians cannot trade in currency pairs not involving the Indian Rupee, (like the
USD/GBP) with any scheduled bank or such other agency falling under the
regulatory purview of the Reserve Bank of India
Therefore to trade in such currency pairs, one will have to transact Foreign
Exchange trades outside India.
Harvest International Consortiums Group
The HIC Group is a leading global financial services firm providing investment
banking, securities and investment management services to a substantial and
diversified client base that includes corporations, financial institutions,
governments and high-net-worth individuals. Founded in 2003, the firm is
headquartered in Hongkong and maintains offices in Hong Kong, Taiwan,
Indonesia, China, India, Vietnam, Singapore, Malaysia, Laos, Brunei and Dubai.
Building on a tradition of innovation and performance, the Group is one of the
fastest growing private financial services providers in the North America and Asia
Pacific regions offering a broad array of innovative financial products.
HIC Group, established in 2003 and headquartered in Hongkong, now has
worldwide operations across 8 countries including Hong Kong, China, Taiwan,
Indonesia, Malaysia, India, Vietnam, Brunei and Dubai. HIC employs over 1,300
finance specialist to serve their clients globally. We offer the full range of
financial services which includes Capital Asset Management, Futures & Options,
Bullion Trading and Unit Trusts Funds. HIC Group has also made significant
investments in non financial services including real estate, cosmetic jewelry and
designer watches.
Bomillion-HIC, a joint venture with Bomillion Investment Ltd, is one of the
“hundred corporations entering Guangxi” and is a significant player in the
strategic planning and development of the “China – ASEAN Youth Industrial
Park”. The total project area is over 4,000 acres of land, and the 1st phase of
project is called “ASEAN Gateway International Business Center”. Bomillion-HIC

will be investing around US$200M (million) for the 1st phase of project. Turning
the area into an ultra modern facility with the following amenities including a
Business Center, Luxurious Villas, an ASEAN Youth Conference Center, an ASEAN
Exhibition Center, Shopping Mall, 5 Star Resort & Spa Center etc. This project is
expected to provide a significant economic stimulus to the local economy.
HarvestGroup was founded to provide the best possible Currency Trading, metal,
indices and stock trading experience for online trade. Harvest group is backed by
large financial group of companies with over US $16 billion in assets under
management.
Harvest Group takes pride in its stringent management control as far as its
business infrastructure goes. Utilizing its subsidiary companies or strategic
Alliances of Harvest International Consortiums (HIC) in Hong Kong and Harvest
Futures consultants India Pvt. LTD (HFC) in India to provide paramount global
financial advice network to our clients.
HarvestGroup has built a strong team in the area of marketing in order to provide
clients professional financial services as well as customer support from senior
management, seasonal financial consultants, and state of art trading platform as
well as professional customer service team.Harvest Group is dedicated in
providing our clients the fastest, best possible financial services.
We offer the latest range of trading technology, featuring the powerful MT4
(Meta Trading 4)station for individual traders and multi account platforms for
asset managers, and PDA and Smartphone solutions for trading on the move.
PT. Harvest International Futures (HIF)
HIC, a group company of HIC,is a registered member of the Indonesia Regulatory
Agency
Further HIF is also registered with :
- BAPPEBTI
- Member of Indonesian Derivatives Clearing House
- Member of Jakarta Futures Exchange

- Member of the Commodity Trading Board
- With sanctions obtained for Overseas Transactions, HIF can now offer our clients
a broader spectrum of trading and investment opportunities.
Regulatory Body
2.2.1. Company’s Mission and Vision:
MISSION
To give the mostcredible advice to individual investors on potential investment
opportunities in FutureExchange, balancing risk and profitability.
To educate the investing public on Futures Exchange and provide the complete
understanding so that they may exploit the maximum benefits.
To engage with all the stakeholders and help create an organized Futures
Exchange that is credible and transparentwhile promoting healthy and fair
competition.
VISION
To become the most credible Futures Broker globally with the widest portfolio of
financial products that the servethe clients globally, investing and transacting in
Futures Exchange, especially with major commodity products and Foreign
Exchange.

2.2.2. CORPORATE INFORMATION:
DATE OF INCORPORATION : 18th November 2009
REGD.OFF : HarvestFutures Consultants India Pvt. Ltd
#17 "Park View", CurveRoad, Tasker
Town, Bangalore - 560051,
Karnataka, India.
BUSINESS ACTIVITIES : Advisory, Consultancy, Analysis, CFD
Futures ContractTransactions
Currency Trading
Stock trading
IndexTrading/CFD Trading
Commodity Bullion
EXECUTIVE DIRECTOR : Mr. Richard Tai SweeKeong (Malaysia)
BUSINESS DIRECTOR : Mr. Rajendran Pillai (Singapore)
COMPLIANCEDIRECTOR : Mr. Abdul Wahab (India)
BUSINESS DEVELOPMENTDIRECTOR : Mr. Naveen Kumar H.M (India)
ADVOCATE : Chambers of JayashriMurali
AUDITOR : C.P Ethirajan
COMPANY SECRETARY : S.P Nagarajan

2.2.3. ORGANIZATIONAL STRUCTURE:
2.2.3.1.: Flow Chart of Organization Structure
Senior
Management
Buisness
Development
Director
Associate
Director
Managing
Director
Senior
Mangement
Branch
Manager
Portfolio
Manager
Asistant
Portfolio
Manager
Business
Consultant
Channel
Partner

2.2.4. SWOT ANALYSIS:
STRENGTHS
 The Harvestis a member of various exchanges and has registered licenses
to run the business.
o Member of Indonesia Regulatory Agency
o Member of Jakarta Futures Exchange
o Member of Indonesian Derivatives Clearing House
o Member of Commodity Trading Board
o Approvalletter of Alternate Trading system
 Harvestis physically present with infrastructureand trained professionals.
 The exposure is very high when compared to other brokeragefirms.
 Brokeragecharge is less when compared to the other firms.
 The client is trained and educated on the Technical and Fundamental
analysis of the market.
 The client is given 24 hours withdrawalfacility wherein he can any time
withdraw his money any time.
 The client does not have any restriction on the operation of the account.
WEAKNESS
 The initial margin investment in Harvestis very high when compared to
other brokeragefirms and the minimum investment is 10,000USD.
 The scope to reach urban and ruralmarkets is very less.
 Small trader cannot enter the marketas the risk is more, there for more
investment is required to sustain in the market.

 Most of the customers cannotdirectly approach the traders they have to go
through the relationship manager in the broking firm.
 Higher targets for the financial advisors.
 Many competitors sell the same productwith differencein brokerageand
returns.
OPPORTUNITIES
 As many number of Clint’s are not able to enter due to lack of access to the
internet facilities, by the improvement of internet access more number of
clients can enter the trading market.
 More competition can increase the volumeof transactions.
 Governmenthas to make favourablepolicies to attract more number of
traders to enter forextrading market.
 Further improvethe online trading experience by fine tuning the trading
platform, and improving the trading platform.
 Continually enhance customer experience by delivering better service
standards.
THREATS
 There are many other companies which provideless brokerage.
 Entry of many other private companies with equally strong experience and
financial strength of foreign partners is making the competition difficult.
 A strict regulation by central banks is limiting traders fromthe entry into
this market.

3.1. OBJECTIVES OF THE STUDY:
 TO ANALYSETHE PERFORMANCEOF VARIOUS TECHNICAL TOOLS AND
INDICATORS
 TO ANALYSEWHICH TECHNICAL INDICATORISMOSTCONSISTENTIN
PREDICTING RIGHTMARKETMOVEMENTINGOLD (COMMODITY)
 T0 ANALYSETHE PREDICTIONACCURACYLEVEL BY USING ONLYTHE BEST
PERFORMING INDICATORINABSENCEOF OTHER NON PERFORMING
INDICATORS
 TO IDENTIFYWHICH INDICATORIS BESTSUITED FOR BULLIONGOLD
MARKET

3.2. RESEARCH METHODOLOGY:
The present study is conducted to provideinformation to the company and its
traders regarding the performanceof various technical tools and the most reliable
tool/indicator for the bullion marketcommodity (gold).
Sample size :-50 days analysis for a bullion marketcommodity i.e. gold.
Type:- Systematic randomsample ( data was collected frommay 1st
to june 10th
)
Tools usedfor analysis:-1. MS excel
2.meta trader 4
Data CollectionApproach:-
PRIMARY DATA:- This research is majory based on primary data where the data
was being noted for each day which includes the open ,high, low ,closeand the
data was analysed with the help of various technical tools namely moving
average,relativestrength index,stochastic oscillator,fibonacciseries,bollinger
bands &Moving averageconvergence and divergence with the help of these tools
the analysis was madewhether the indicator is giving the buy call or sell call
based on this observation the data was collected if the indication given by the
indicator resulted in the positivemarket movement then the obsevation entered
would be one if the indication given by the indicator is wrong then the
observation entered would be 0 as a result we would end up with the
performanceof the indicator in giving the rite indication .thesedata is collected
fromthe trading platform provided by the company ie meta trader 4
3.2.1. Sources of Data collection:
1.PRIMARY DATA:

 Collected manually by personalobsevation and analysis which was also
verified by experienced traders
2.SECONDARY DATA:-
 Secondary data was collected from company and from differentwebsites
 Data was also taken from various text books, journals, magazines, news
papers.
3.2.2. Type of Research:-
Based on the objectives of the study, the exploratory research method is used.
Exploratory research is conducted since wedont know which indicator is most
reliable and which indicator works beston which commodity.Theconclusions are
arrived at from the collected data.statistical tools were used to analyse the data .
3.2.3. Limitations of the study:
 The sample size of observation was limited to 50 days which might not be
reprsenting the performanceof the indicator in long term.
 The results are analysed based on individual and experienced trader but the
interpretation of each trader need not be sameit may differ fromperson to
person.
 Traders interpretation of the indicator may be biased since the trading
stratergy differs fromeach trader.
 Major limitation for most technical analysis methods is the fact that
there are so many people using the basic technical analysis methods
already, and the number is increasing every day, making it harder for a
single trader to make money on the market with the methods.
 Becauseof these methods are so widely spread and there is so much
money riding on the methods, some also claim that technical analysis has
become self-fulfilling prophecy, as people trend to enter the market and
put their stops on the same places, increasing the volatility towards the
technical analysis method being correct.
 Technical analysis systems usually do not take into account correlation
between different markets. If you are analyzing several markets and they

all give similar signals, they may have close correlations, meaning that
the risk profile for each is very similar, and that the prices of the assets
movein close steps with each other.
3.2.4. FUNDAMENTAL ANALYSIS:
Introduction to Fundamental Analysis
Fundamental analysis is a process of looking at a business atthe basic or
fundamental financial level. The primary assumption of fundamental analysis is
that the all the factors are not discounted in the current marketprice. There is
something called the intrinsic value of the currency which is its true value.
Fundamental analysis also assumes thatthe market will reach its true intrinsic
value in the long term and hence the marketvalue and the intrinsic value will
reach equilibrium. Hence if the marketvalue at presentis lower than its intrinsic
value, then it is good time to invest and vice versa.
The steps involvedinfundamental analysis are:
1. Macroeconomic analysis, which involves considering currencies, commodities
and indices.
2. Industry sector analysis, which involves theanalysis of companies that are a
part of the sector.
3. Situational analysis of a company.
4. Financial analysis of the company.
5. Valuation
6. Reading of news and Articles related to the Market

3.2.5. TECHNICAL ANALYSIS:
Introduction to Technical Analysis
Technical analysis is the study of marketaction, primarily through the use of
charts, for the purposeof forecasting futureprice trends. For technical analysts,
the term marketaction includes three sources of information. They are price,
volume and open interest. Open interest is used only in futures and options.
There are three premises on which technical analysis is based. They are
1) Market actiondiscounts everything - Anything and everything that affects
the price is actually reflected in the price of that market. Hence a technical
analystwill only study the price action and not the reasons behind the
change in the price.
2) Prices move in trends - There are three types of trends. They are uptrend,
downtrend and sideways trend. The assumption of technical analysis is that
a trend in motion is more likely to continue than reverseor a trend in
motion will continue in the samedirection until it reverses.
3) History repeats itself - Themeaning of the phrasehistory repeats itself is
that the key to understanding the future lies in the study of the past, or
that the future is just a repetition of the past.
Usually the following tools & instruments are usedtodo the technical analysis:
Price Fields
Technical analysis is based almost entirely on the analysis of price and volume.
The fields which define a security's price and volumeare explained below.

Open- This is the price of the firsttrade for the period (e.g., the first trade of the
day). When analyzing daily data, the Open is especially important as it is the
consensus priceafter all interested parties were able to "sleep on it."
High- This is the highestprice that the security traded during the period. Itis the
point at which there were more sellers than buyers (i.e., there are always sellers
willing to sell at higher prices, but the High represents the highest price buyers
were willing to pay).
Low - This is the lowest price that the security traded during the period. Itis the
point at which there were more buyers than sellers (i.e., there are always buyers
willing to buy at lower prices, but the Low represents the lowest price sellers
were willing to accept).
Close - This is the last price that the security traded during the period. Due to its
availability, the Close is the most often used price for analysis. The relationship
between the Open (the firstprice) and the
Close (the last price) are considered significant by most technicians. This
relationship is emphasized in candlestick charts.
Volume - This is the number of shares (or contracts) thatwere traded during the
period. The relationship between prices and volume (e.g., increasing prices
accompanied with increasing volume) is important.
OpenInterest - This is the total number of outstanding contracts (i.e., those that
have not been exercised, closed, or expired) of a futureor option. Open interest is
often used as an indicator.
Bid- This is the price a marketmaker is willing to pay for a security (i.e., the price
you will receive if you sell).
Ask - This is the price a market maker is willing to accept (i.e., the price you will
pay to buy the security).
Chart Styles:
Price in a chart can be displayed in following styles:

1. Bar Chart.
2. Line Chart.
3. Candlestick Chart.
1). Bar Charts:
The highs and lows of a commodity are plotted in a diagram and the points are
joined with vertical lines (bars). A small horizontaltick to the left denotes the
opening level while a small horizontaltick to the right represents the closing price
of each interval.
Chart 3.2.5.1: Example of a bar chart
2). Line Chart:
Itgives the detailed information about every aspect. The commodity prices for
each time period are plotted in a diagram and the points arejoined. Prices on the
y-axis and time on the x-axis.
The line chart chooses for example the closing price of consecutive time periods,
but can also work with daily, official fixings.

Chart 3.2.5.2: Example of a line chart
3). Candlestick Chart
Although candlestick charts are nearly identical to typical Western bar charts,
there is one important distinction: candlestick charts are far more dramatic in
their presentation. Instead of the standard high-to-low vertical lines accompanied
by horizontal ticks that identify the day's open and close, candlestick charts
employ two-dimensionalbodies to depict the open-to-closetrading rangeand
upper and lower stems (or shadows) to mark the day's high and low. A candlestick
is black if the closing price is lower than the opening price. A candlestick is white if
the closing price is higher than the opening price.

Chart 3.2.5.3: Example of a Candlestick chart

Chart 3.2.5.4: Example of Candlestick
Candlestick Patterns
Bullish Patterns
1. Long white (empty) line. This is a bullish
line. Itoccurs when prices open near the low
and close significantly higher near the
period's high.
2. Hammer. This is a bullish line if it occurs after
a significant downtrend. If theline occurs after a
significant up-trend, it is called a Hanging Man. A
Hammer is identified by a small real body (i.e., a
small range between the open and closing prices)
and a long lower shadow (i.e., the low is
significantly lower than the open, high, and
close). The body can be empty or filled-in.

3. Piercing line. This is a bullish pattern and the
opposite of a dark cloud cover. The firstline is a
long black line and the second line is a long white
line. The second line opens lower than the first
line's low, but it closes more than halfway above
the firstline's real body.
4. Bullishengulfing lines. This pattern is strongly
bullish if it occurs after a significant downtrend (i.e.,
it acts as a reversalpattern). Itoccurs when a small
bearish (filled-in) line is engulfed by a large bullish
(empty) line.
5. Morning star. This is a bullish pattern signifying
a potential bottom. The "star" indicates a possible
reversaland the bullish (empty) line confirms this.
The star can be empty or filled-in.

Bearish Patterns:
1. Long black (filled-in) line. This is a bearish
line. Itoccurs when prices open near the high
and close significantly lower near the period's
low.
2. Hanging Man. These lines are bearish if they
occur after a significant uptrend. If this pattern
occurs after a significantdowntrend, it is called a
Hammer. They are identified by small real bodies
(i.e., a small rangebetween the open and closing
prices) and a long lower shadow (i.e., the low was
significantly lower than the open, high, and close).
The bodies can be empty or filled-in.
6. Bullishdoji star. A "star" indicates a reversaland a
doji indicates indecision. Thus, this pattern usually
indicates a reversalfollowing an indecisive period.
You should wait for a confirmation (e.g., as in the
morning star, above) before trading a doji star. The
firstline can be empty or filled in.

4. Dark cloud cover. This is a bearish pattern.
The pattern is more significant if the second
line's body is below the center of the previous
line's body (as illustrated).
5. Bearishengulfing lines. This pattern is strongly
bearish if it occurs after a significantuptrend (i.e., it
acts as a reversal pattern). Itoccurs when a small
bullish (empty) line is engulfed by a large bearish
(filled-in) line.
6. Evening star. This is a bearish pattern
signifying a potential top. The "star" indicates a
possiblereversaland the bearish (filled-in) line
confirms this. The star can be empty or filled in.

Reversal Patterns:
7. Doji star. A star indicates a reversaland a doji
indicates indecision. Thus, this pattern usually
evening star illustration) before trading a doji star.
8. Shooting star. This pattern suggests a minor
reversalwhen it appears after a rally. The star's
body must appear near the low price and the line
should have a long upper shadow.
1. Long-leggeddoji. This line often signifies a
turning point. It occurs when the open and
close are the same, and the range between
the high and low is relatively large.

2. Dragon-fly doji. This line also signifies a
turning point. It occur when the open and
close are the same, and the low is
significantly lower than the open, high, and
closing prices.
3. Gravestone doji. This line also signifies a
turning point. It occurs when the open, close,
and low are the same, and the high is
significantly higher than the open, low, and
closing prices.
4. Star. Stars indicate reversals. A star is a
line with a small real body that occurs after a
line with a much larger real body, where the
real bodies do not overlap. The shadows may
overlap.

Neutral Patterns
5. Doji star. A star indicates a reversaland a doji
indicates indecision. Thus, this pattern usually
evening star illustration) before trading a doji star.
1. Spinning tops. These are neutral lines. They
occur when the distance between the high
and low, and the distancebetween the open
and close, are relatively small.

Key Technical Indicators:
2. Doji. This line implies indecision. The security
opened and closed at the sameprice. These
lines can appear in severaldifferent patterns.
Double dojilines (two adjacent dojilines) imply
that a forcefulmove will follow a breakout
fromthe currentindecision.
3. Harami ("pregnant"in English). This pattern
indicates a decrease in momentum. Itoccurs
when a line with a small body falls within the area
of a larger body. In this example, a bullish (empty)
line with a long body is followed by a weak
bearish (filled in) line. This implies a decreasein
the bullish momentum.
4. Harami cross. This pattern also indicates a
decrease in momentum. The pattern is similar
to a harami, except the second line is a doji
(signifying indecision).

There are severalindicators that are used in technical analysis. ButI have chosen
to highlight the following indicators as I have used some of these further in the
project.
1. Moving average
2. Relative StrengthIndex (RSI)
3. Moving average Convergence Divergence (MACD)
4. Fibonacci levels
5. Bollinger Bands
6. Stochastic Oscillator
1) Moving average - The moving average essentially a trend following
indicator or a lagging indicator as it is formed after the price movement
occurs. Its purposeis to identify or signal that a new trend has begun or
that an old trend has ended or reversed. Its purposeis to track the progress
of the trend
White candle (shown in picture): Bearish candle
Purple candle (shown in picture): Bullish candle

Chart 3.2.5.5: Illustration of Moving Average
-------- 25-day moving average
-------- 10-day moving average
There are three types of moving averages that are used by technical analysts.
They are
a) Simple moving average - Itis calculated by taking the averageof the previous
10 or 15 closing prices. The weights given to each day is the same i.e. in a 10 day
simple moving average, the weight given for the 10th day closing price is the
same as the weight given for the 1st day closing price. The disadvantageof the
simple moving average is that it reacts slower to the price movement when
compared to an exponential moving average.
b) Linearly weightedmoving average - In this type of moving average weights are
given in a linear proportion to each day’s closing price i.e. the 10th day closing
price is multiplied with 10, the 9th day with 9, and so on. The greater weight is
given to the mostrecent closing.
c) Exponential moving average - The exponential moving average assigns greater
weight to more recent data and it includes in its calculation all of the data in the

life of the instrument. The advantageof using exponential moving averages is that
it reacts quicker to the price movement than a simple moving average.
Analyzing moving averages - There are two ways to analyzemoving averages.
They are as follows:
a) Single moving average and price - A single moving average is used to generate
buy and sell signals. When the price line moves above the moving average, a buy
signal is generated. Conversely, when the price line moves below the moving
average, a sell signalis generated.
b) Double crossover method - In this case two moving averages are used. Oneis a
shorter moving average and the other a longer moving average. When the shorter
moving average crosses abovethe longer moving average, a buy signal is
generated. Conversely, when the shorter moving average crosses below the
longer moving average, a sell signalis generated.
2) Relative StrengthIndex (RSI) –A high RSI, above70 indicates an
overboughtor weakening bull market. Conversely, a low RSI, below 30,
indicates an oversold marketor dying bear market. While you can use
Relative Strength Index as overboughtand oversold indicators, it works
best when a failure swing occurs between the RSI and market prices. For
example, the market makes new highs after a bull market setback but RSI
failed to exceed its previous highs.
Selling when the RSI is above 70 and buying when the RSI is below 30 can
be an expensive trading system. A move to those levels is a signal that
market conditions are ripe for a markettop to bottom. Itdoes not indicate
a top or a bottom.
The formula used for calculating RSI is:
RSI=100-100/1+RS
RS=Average of x days’ up close/Average of x days’ down close

Chart 3.2.5.6: Illustration of RSI
Analyzing Relative StrengthIndex - RSI is plotted on a vertical scaleof 0 to 100.
Movements above 70 are considered overboughtwhile an oversold condition
would be moveunder 30. Because of shifting that takes place in bull and bear
market, the 80 level usually becomes overboughtlevel in bull marketand the 20
level the oversold level in bear market.
3) Moving Average Convergence Divergence (MACD) - MACD is comprised of two
sets of line. Oneis called the faster line and the other the slower line. The faster
line is the difference between two exponential moving averages (usually 12 and
26). Itis also called the MACD line. The slower line is usually a 9 day exponential
moving average of the MACD line. Itis also called the signal line. The buy and sell
signals are based on the crossoversbetween the two lines. Hence it is very similar
to the double crossover method of moving averages.

Chart 3.2.5.7: Illustration of MACD
Analyzing MACD - When the MACD line (faster line) crosses abovethe signalline
(slower line), a buy signal is generated. Conversely, when the MACD line crosses
below the signal line, a sell signal is generated. Another way of interpretation
using MACD is by comparing it with the zero line to indicate overboughtor
oversold conditions. An overboughtcondition is when the lines are well abovethe
zero line and hence indicating a sell signal. An oversold condition is when the lines
are well below the zero line and hence indicating a buy signal.
4) Fibonacci levels - Fibonaccilines utilize special ratios that naturally occur in
nature to help predict points of supportor resistance. Fibonacci numbers are1, 1,
2, 3, 5, 8, 13, 21, 34, 55, 89, etc. The sequence occurs by adding the previous two
numbers (i.e. 1+1=2, 2+3=5) The main ratio used is .618, this is found by dividing
one Fibonacci number into the next in sequence Fibonaccinumber (55/89=0.618).
The logic mostoften used by Fibonacci based traders is that sinceFibonacci
numbers occur in nature and the stock, futures, and currency markets are
creations of nature - humans. Therefore, the Fibonacci sequence should apply to
the financial markets.

Chart 3.2.5.8: Illustration of Fibonacci Retracement
Fibonacci retracements - Arguably themost heavily used Fibonaccitool is the
Fibonacci Retracement. To calculate the FibonacciRetracement levels, a
significant low to a significanthigh should be found. Fromthere, prices should
retrace the initial difference (low to high or high to low) by a ratio of the Fibonacci
sequence, generally the 23.6%, 38.2%, 50%, 61.8%, or the76.4% retracement
4) Bollinger Bands - Commodities are someof the mostspeculative and
volatile markets to trade. For this reason, Bollinger Bands shine in their
ability to predict trends and show relative tops and bottoms in the
commodities markets. Bollinger bands are a kind of trading envelope. They
are lines plotted at an interval around a moving average. Bollinger Bands
consists of a moving average and two standard deviations charted as one
line aboveand one line below the moving average. The line aboveis two
standard deviations added to the moving average. The line below is two
standard deviations subtracted fromthe moving average. Traders generally
use this to determine overboughtand oversold conditions, to confirm

divergence between prices and indicators, and to projectprice targets. The
wider the bands are, the greater the volatility is. The narrower the bands
are, the lesser the volatility is. The moving averageis calculated on the
close.
Chart 3.2.5.9: Illustration of Bollinger Bands
Analysis –The middle band is a measureof the intermediate-term trend,
usually a moving average, which serves as a base for upper band and lower band.
The interval between the upper and lower bands and the middle band is
determined by volatility, typically standard deviation of the same data that were
used for the average. Technically, prices are relatively high when abovethe upper
band and relatively low when below the lower band. However, relatively high
should not be regarded as bearish or as a sell signal. Likewise, relatively low
should not be considered bullish or as a buy signal. Prices arehigh or low for a
reason. As with other indicators, Bollinger Bands are not meant to be used as a
stand alone tool. Chartists should combine Bollinger Bands with basic trend
analysis and other indicators for confirmation.

In the above chart, if we see clearly, initially the middle band act as a support
and the upper band acts as a resistance. The last bearish candle has cut the
middle band fromthe top which clearly indicates that it is a ‘sell’ call and now the
middle band acts as a resistance and the lower band acts as a support.
5) Stochastic Oscillator - The Stochastic Oscillator Technical Indicator
compares where a commodity’s price closed relative to its price range
over a given time period. The Stochastic Oscillator is displayed as two
lines. The main line or the green line is called %K. The second line or red
line, called %D, is a moving average of %K. The %K line is usually
displayed as a solid line and the %D line is usually displayed as a dotted
line. There are several ways to interpret a Stochastic Oscillator. Three
popular methods include:
 Buy when the Oscillator (either %K or %D) falls below a specific level (for
example, 20) and then rises above that level. Sell when the Oscillator
rises above a specific level (for example, 80) and then falls below that
level.
 Buy when the %K line rises above the %D line and sell when the %K line
falls below the %D line.
 Look for divergences. For instance: where prices are making a series of
new highs and the Stochastic Oscillator is failing to surpass its previous
highs.

Chart 3.2.5.10: Illustration of Stochastic Oscillator
Analysis - Buy when the Oscillator (either %K or %D) falls below a specific
level (for example, 20) and then rises above that level. Sell when the Oscillator
rises above a specific level (for example, 80) and then falls below that level.Buy
when the %K line rises above the %D line and sell when the %K line falls below
the %D line. Look for divergences. For instance: where prices are making a
series of new highs and the Stochastic Oscillator is failing to surpass its previous
highs.
As we see in the above figure, both the %k curve and %D curve are cutting the
20 line from bottom, it is a strong ‘buy’ signal.

CHAPTER – 4
OBSERVATIONS AND ANALYSIS

What wehave done here is we have done the analysis of gold based on the
technical indicators and found out for 50 days as to which technical analysis tool
or the combination of tools is most accurate in providing us with right calls(sell or
buy).
Date: 14/04/2014
Chart 4.1 : Analyzing the six technical tools 1
Technical analysis for the prediction of futureprice with the help of
Moving average:- The moving averageis represented by dark blue line and red
line on the main candle stick window. The blue line is a fast moving average and
the red line is a slow moving averagewhere if the fast moving average crosses the

slow moving average it shows thechange in the trends. In this case we haveslow
moving average on top and fastmoving average is approaching slow moving
averagefrom the bottom which shows thatthe bull trend is not yet over it will
continue for few more days
Interpretation fromthis indicator:- trend will continue buy signal
Relative strengthindex:- This indicator is used to find the over bough and
oversold region in this particular date ie on 14th
April wecan see that neither the
indicator is in over bought or over sold region which only indicates that the
indicator is justabove50 which indicates that it has just entered over sold region
Interpretation fromthis indicator:- buy signal
Stochastic oscillator:-Thestochastic levels are justapproaching 50 levels which
indicates that it is about to reach over bought region
Interpretation from this indicator:- buy signal
Fibonacci levels:- Theday candle started with the fibo levels of 38.2 the next
fibo level is 50 but it did not break that resistance which indicates that the price
may fall
Interpretation fromthe tool:-sell signal
Bollinger bands:- The candle formation is above the middle Bollinger band which
suggestthat trend is going to continue and the bull trend will continue for next
day.
Interpretation fromthe indicator:-buy signal
Moving average convergence anddivergence:- This indicator is making lower
trough approaching fromthe bottom which means that the presenttrend will
continue
Interpretation from the indicator:- buy signal

Table 4.1. Comparing all 6 technical indicators on 14/04/2014
Moving average Relative
strength index
Stochastic
oscillator
Fibonacci levels Bollinger
bands
MACD
BUY BUY BUY SELL BUY BUY
Overall prediction:- BUY
15 /4/2014 candlereading O:-1305 H:-1306 L:-12890 C:- 1296
14/4/2014 candlereading O:- 1326 H:-1328 L:- 1286 C:-1302
Indicator which gaveright prediction :- Fibonacci levels
Date: 15/04/2014
Chart 4.2. : Analyzing the six technical tools 2

Moving average:- The past trend is seen continuing which does not give a clear
picture of which side the marketmay go fromhere the fast moving averageis
seen approaching the slow moving average
Interpretation:- neutral
Relative strengthindex:- RSI remains in the same level which does not make any
significant movement
Interpretation:- Neutral
Stochastic oscillator:- There has been a substantialchange in the indicator
reading the stock has left the over bought region and it is proceeding towards
normal it is proceeding towards 50.
Interpretation:-sell
Fibonacci levels:- Thecandle was not able to break the 50 level resistancemark
instead it brokethe lower 38 level as well as 32 level which indicates that the
markets would go down
Interpretation: - strong sell
Bollinger bands:- The candle has closed below the middle Bollinger bands which
indicates that the markets are expected to go down
Moving average convergence anddivergence:- This indicator is pointing towards
reaching the equilibrium as a result we cannotfind a clear picture of where the
markets are heading
Interpretation:- Neutral
Overall prediction:-sell
Moving
average
Relative strength
index
Stochastic
oscillator
bands
MACD
NEUTRAL NEUTRAL SELL SELL SELL NEUTRAL

16/4/2014 candlereading :- O:-1302 H:-1306 L:-1293 C:-1302
Indicators which gaveright predictions:-
stochastic oscillator
Fibonacci levels
Bollinger bands
Date: 16/04/2014
Moving average:- The Fastmoving averagewhich is represented by the blue line
which was about to cross the slow moving average which is represented by the
red line was not able to cross theline which gives the indication that the bear
power is more in the market

Interpretation:-strong sell
Relative strengthindex:- Thersireading is justbelow 50 which gives the
indication that the presentmarket trend is bear
Stochastic oscillator:-Theindicator is approaching the 50 mark and pointing
downwards which gives a clear picture that the market is going down
Interpretation:- sell
Fibonacci levels:-Thecandleclose in between the 23 and 0 mark which shows
that is is still in the lover region and it may approach 0
Interpretation :-sell
Bollinger bands:-Theday candle has closed below the center band of the
Bollinger band this indicates the bear trend is not over
MACD:-MACD is approaching the normallevel which this doesn’t give a clear
picture to where the market is heading
Interpretation:-neutral
Overall prediction :- SELL
Candle reading for next day:- O:-1301 H:-1304 L:-1293 C:- 1294
Moving average Relative strength
index
Stochastic
oscillator
bands
MACD
SELL SELL SELL SELL SELL NEUTRAL

Indicators which gaveright predictions-
MOVING AVERAGE
RELATIVESTRENGTH INDEX
STOCHASTICOSCILLATOR
FIBONACCI LEVELS
BOLLINGERBANDS
Date: 17/04/2014
Chart 4.4. :Analyzing the six technical tools 4
Moving average:- here the fast moving averagewhich is represented by blue line
in the main window is approaching the fastmoving averagewhich is represented
by red line considering the fact that the closing candle was a bearish candle and
the fastmoving average pointing towards up this does not give a clear picture
wherethe market is heading
Interpretation:-neutral signal

Relative strengthindex:-TheRSI reading is justbelow the 50 level which indicates
that the seller strength is more when compared with that of the buyers strength
this does not indicate a major sellers strength but it indicates that the Sellers
strength exists
Interpretation:- SELL
Stochastic oscillator :- Thestochastic level are clearly below 50 levels which
indicates that the market has justentered over sold region and the sellers are
more when compared with that of buyers this means that the marketis in bearish
trends
Interpretation:-SELL
Fibonacci level :- The major supportis 1278 wherethe market tested this on 1st
and 2nd
of april but it could not break that supportlevel which means that 1278 is
a major supportand the days close is 1294 this means that the market may go
further go to this level and fromthere we can expect some corrections
Interpretation :-SELL
Bollinger bands:-therehas been no significant changes in the readings of the
Bollinger bands they are in the same levels and the days close is below the middle
Bollinger band
MACD:-Therehas been significant changes in the MACD reading since the last
reading was approaching normality but in today’s readings it is making a small
vick in the MACD window which indicates that it is going to be a bearish trend.
Overall prediction:- SELL
Moving average Relative strength
index
Stochastic
oscillator
Fibonacci
levels
Bollinger
bands
MACD
NEUTRAL SELL SELL SELL SELL SELL

Candle reading for next day:-O:-1294 H:-1301 L:-1281 C:-1289
Indicators which gavethe right prediction:-
FIBONACCI LEVELS
BOLLINGERBANDS
MOVING AVERAGECONVERGENCEAND DIVERGENCE
Date: 21/04/2014
Chart4.5. : Analyzing the six technical tools 5
Moving average:-In this casewecan see that both the slow moving averageand
the fastmoving average are approaching together to meet and we can also
observethat both the fastmoving average as well as slow moving averageare

pointing downwards which means thatthis indicates that the marketis going to
go down keeping in mind that the major supportis not yet broken
Relative strengthindex:- RSI is in between the 50 and 30 levels which indicates
that this a bearish trend wherethe marketis going to go down since the sellers
power in the market is more than that of the buyers and this trend is expected to
continue since there are no corrections
Stochastic oscillator:-Therehas been a substantial changein the levels the
indicator is pointing steeply downwards which means thatthe marketis still in
the oversold region and this also indicates that the present bearish trend is going
to continue
Fibonacci levels:- thepresentday candle has closed between the 0 and 23 level
which means that the market has tested the supportlevel and it could not break
that supportlevel which does not give a clear picture of what would be the next
market direction.
Interpretation:-Neutral
Bollinger bands:-Themarketis still playing below the middle band of the Bollinger
band which means that the markettrends have not changed and this indicates
that the present trend may continue since the close is below the middle Bollinger
band
MACD:- There has been a substantialchange in the readings of the indicator we
can see that the slight longer Vick has been created when compared with that of
the last day’s vick which means that the bearish trend is becoming much more
prominent

Overall prediction:SELL
Next day candle reading:- O:- 1289 H:-1292 L:-1276 C:- 1283
MOVING AVERAGE
BOLLINGERBAND
MACD
Date: 22/04/2014
strength index
Stochastic
oscillator
Fibonacci
levels
Bollinger
bands
MACD
SELL SELL SELL NEUTRAL SELL SELL

Moving average:- The slow moving average and the fast moving averageare both
in the same level and they are pointing horizontally and which does not give any
clear direction of the marketmovement but keeping the fact that the market is in
potential supportlevel if it breaks the supportthan the prices are expected to go
further down if not then it’s the time where the trend may changeit will the bull
trend
Interpretation :-NEUTRAL
Relative strengthindex:- RSI is moving in a region of below 50 levels which means
that the trend had not yet reversed and the market is following the sametrend
and this shows thatthe marketwill follow the sametrend
Stochastic oscillator:-This indicator clearly shows thatthe marketis in over sold
region and the levels are below 30 which indicates that it is in peak oversold
region
Fibonacci levels :-Thecandle formation is between the 23 level and 0 level which
means that the marketis in the lowestlevels and it is the 0 level is the major
supportlevel which means that we need to wait for the next candle to closeto
get a clear picture of wherethe marketis heading
Interpretation :-NEUTRAL
Bollinger bands:-Bollinger bands havenot changed significantly and it remains in
the samelevel no trend change is indicated and the candle has close below the
middle Bollinger band which indicates bearish trend
MACD:-Therehas been a small increment in the Vick made by the market which
indicates that the market trend will continue again the market is testing the major
supportlevel so this indicates that we should wait for the next candle to close to
get a clear picture
Interpretation:-NEUTRAL

Overall prediction:- NEUTRAL(strong supportlevel)
Next day candle reading:- O:- 1283 H:-1288 L:-1280 C:-1283
MOVING AVERAGE
FIBBONACI LEVEL
MACD
Date: 23/04/2014
strength index
Stochastic
oscillator
Fibonacci
levels
Bollinger
bands
MACD
NEUTRAL SELL SELL NEUTRAL SELL NEUTRAL

SUPPORT:- 1278
RESISTANCE:-1327
Moving average :- we can see that the fastmoving average which is indicated by
the blue line is crossing theslow moving averagewhich is indicated by the red line
which means that the trend is changing and the markets were not able to break
the major supportlevel ie 1278 whcialso indicates the end of bear trend and this
indicates the beginning of bull trend
Interpretation :- BUY
Relative strengthindex:- RSI is moving in a rage below 50 which is still indicating
that the market is in over sold region or the marketis of sells strength wherethe
sellers strength is morewhen compared with that of the buyers
Stochastic oscillator:-stochastic oscillator is still in the same region that is over
sold region which indicates that the bearish trend is not yet complete
Fibonacci levels:-Thecandleformation is still the lover 23 and 0 level this
indicates that the market is not moving in any direction but this also indicates that
the marketwas not able to break a major supportlevel which indicates that there
might be a possiblechange in trend
Interpretation:-BUY
Bollinger bands:-Themarketway too low far from the middle Bollinger band
which indicates that the marketis still in bearish trend
MACD:- This indicator shows a substantialchange in the trend since the average
which is shown by the red line is crossing the green Vick instead of crossing the
Vick from below This shows that the new trend had started
Interpretation:- BUY

Next day candle reading:- O:- 1283 H:-1298 L:- 1268 C:-1293
Indicators which gaveright predictions-
MOVING AVERAGE
FIBONACCI LEVELS
Date: 24/04/2014
strength index
Stochastic
oscillator
Fibonacci
levels
Bollinger
bands
MACD
BUY SELL SELL BUY SELL BUY

Moving average:-Thefastmoving average which is represented by the blue line
has clearly crossed the fastmoving averagewhich is represented by the red line
which is indicative of the change in trends
Interpretation:-BUY
Relative strengthindex:- Therehas been a substantialchange in the readings of
the RSI Indicator wherethe indicator was pointing downwards has changed its
direction which indicatedsthat the trend has changed and it is approaching 50
level mark which shows the beginning of the buyers power in the market over
that of the sellers power
Interpretation:-BUY
Stochastic oscillator:-Thestock level has also changed its path it was pointing
downwards and it was playing in the over sold region ie below 30 level mark now
even stock has changed its path and it is approaching 50 level mark fromthe 30
level mark which means that the it is the end of bearish trend and the new trend
is going to start
Interpretation:-BUY
Fibonacci level:-markets did test the 0 level of the Fibonacci levels which is also a
major supportlevel but it could not break that supportlevel and the close was
above that level which indicates that there is a clear change in trends and the
market is now in bull trend
Interpretation:-BUY
Bollinger bands:- markets madea spiketo the middle band of the Bollinger bands
but it was not able to break that resistance level and it came back and closeat
1293 a few pips below the resistanceof the middle Bollinger band
Interpretation:-BUY
MACD :-The moving average line which is represented by the red line has clearly
crossed the
Vick made by the markets which clearly indicates that the BULL market has begun
Interpretation:-BUY

Next day candle reading:- O:-1293 H:-1304 L:-1290 C:-1302
Indicators which gaveright prediction:-
ALL
Date: 25/04/2014
strength
index
Stochastic
oscillat
or
Fibonacci
levels
Bollinger
bands
MACD
BUY BUY BUY BUY BUY BUY

Moving average:-Thefastmoving average which is represented by the blue line
and the slow moving averagewhich is represented by the red line are both going
together at the same value which means that the value of both 25 days average
and that of the 10 day average are both samewhich gives a oscillating trend we
cannot be sureof which side the market is going to go now
Interpretation:-Neutral
Relative strengthindex:- RSI is approaching the50 level mark from the below
which means that the buyers power is more in the market when compared with
that of the sellers this means that there are moreno of buyers in the market than
that of that of the sellers 50 mark is the equilibrium level where both sells and
buyers arein equal no have sameno of orders
Interpretation:- BUY
Stochastic oscillator:-stockis making a vertical spikewhich means that the over
sold trend is going to get over and it marks the beginning of the new bull trend
Interpretation:-BUY
Fibonacci level:-Fibonaccilevels remain unchanged since the markets have nether
made new lows or new high but the markets havetested the upper 23 level of the
Fibonacci levels which means that the marketwas not able to break that level
which means that there is quite a chance for the trend to change its path and to
enter into a bearish trend
Bollinger bands:-markets havebroken themiddle level band of the Bollinger
bands and havealso close abovethe middle level Bollinger this means that the
present trend will continue
Interpretation:-BUY
MACD:- The MACD level has changed substantially wherethe indicator has
slightly changed its courseand made a dip which means that the trend has
reversed

Overall prediction:- NEUTRAL
Next day candle reading:- O:- 1302 H:- 1306 L:- 1291 C:-1296
MOVING AVERAGE
FIBONACCI LEVELS
Date: 26/04/2014
strength index
Stochastic
oscillator
Fibonacci
levels
Bollinger
bands
MACD
NEUTRAL BUY BUY NEUTRAL BUY NEUTRAL

Moving average:- The fastmoving averagewhich is represented by the blue line
has crossed the slow moving average and it is pointing downwards which means
that the market has changed its path and it is going to be a bearish trend
Relative strength index:-RSI has also changed its path till last day it was seen
approaching the 50 level mark from the bottom which is indicative of the bull
trend but today wecan see that it has changed its path pointing towards bottom
which is indicative of bearish trends
Stochastic oscillator:-This indicator has notchanged substantially the levels are
seen approaching fromthe bottom towards 50 which means that the both sellers
and buyers areequally strong and it does not give a clear picture to which
direction the marketis going to move
Fibonacci levels:-Markets tested the 23 level of Fibonaccilevels but they werenot
able to break the resistanceof 23 level in the Fibonaccilevel and the markets
closed way below the 23 level of Fibonaccilevels so we can say that the trend has
changed fromthe bull to bearish
Bollinger bands:-Markets wereplaying wholeday around the middle level of
Bollinger bands which does not give a clear picture of wherethe markets are
going to head since the candle started below the middle level of Bollinger bands
and close abovethe middle level of Bollinger band
MACD:-Therehad not been any substantialchange in the direction of MACD
moving average and the intersection of the MACD line with the Market Vick so
this does not give a clear picture of wherethe markets are heading

Overall prediction:- NEUTRAL
Next day candle reading:- O:- 1295 H:- 1301 L:- 1286 C:-1295
MOVING AVERAGE
FIBONACCI LEVELS
4.1.GOLD INDICATOR ANALYSIS FOR 50 DAYS-
0 – Wrong Signal
1 – Right Signal
Table 4.1.1. Comparing all 6 technical indicators
S.No moving
average
relative
strrength
index
stochastic
oscillator
fibonacci
levels
bollinger
bands
MACD sum of all
right
prediction
>=3
1 0 0 0 0 0 0 0 0
2 1 0 1 0 0 1 3 1
3 0 0 1 0 0 0 1 0
4 0 0 0 0 0 0 0 0
5 0 0 1 0 0 1 2 0
6 0 1 1 1 1 1 5 1
7 0 0 1 1 1 1 4 1
8 1 0 1 0 1 1 4 1
9 1 0 1 0 1 1 4 1
10 0 0 0 0 0 0 0 0
11 0 1 1 1 1 0 4 1
12 0 0 1 1 1 0 3 1
13 0 1 1 1 1 0 4 1
strength index
Stochastic
oscillator
Fibonacci
levels
Bollinger
bands
MACD
SELL SELL NEUTRAL SELL NEUTRAL NEUTRAL

14 0 1 1 1 1 0 4 1
15 1 0 0 0 0 1 2 0
16 1 0 0 1 1 0 3 1
17 0 1 1 1 1 0 4 1
18 1 0 0 0 0 0 1 0
19 0 1 0 1 0 0 2 0
20 1 0 0 1 1 1 4 1
21 1 0 0 1 1 1 4 1
22 0 0 1 1 0 0 2 0
23 0 1 1 1 0 1 4 1
24 0 0 0 0 0 0 0 0
25 0 0 0 1 1 0 2 0
26 0 1 1 1 1 0 4 1
27 0 0 1 1 1 0 3 1
28 0 0 0 1 0 1 2 0
29 0 0 0 0 0 0 0 0
30 0 0 0 1 0 1 2 0
31 0 0 0 1 1 0 2 0
32 0 0 0 1 0 0 1 0
33 0 0 0 1 0 1 2 0
34 0 0 0 0 0 1 1 0
35 0 0 0 0 0 0 0 0
36 0 0 0 0 0 0 0 0
37 0 0 0 0 0 0 0 0
38 0 0 0 0 0 0 0 0
39 0 0 1 0 0 0 1 0
40 1 1 1 1 1 1 6 1
41 1 1 1 1 1 1 6 1
42 1 1 1 1 1 1 6 1
43 1 1 1 1 1 1 6 1
44 0 0 0 1 0 0 1 0
45 1 1 1 1 1 1 6 1
46 0 0 0 1 1 0 2 0
47 0 0 0 0 0 0 0 0
48 0 0 0 0 0 0 0 0
49 1 0 1 1 1 0 4 1
50 1 1 1 1 1 0 5 1
15 14 24 30 24 19 126 23

4.2. ANALYSIS:
Among the following indicators the indicators are ranked from 1 to 6 based on the
number of times they have helped analyzethe rite movement in the market
1. Fibonacci level
2. Stochastic oscillator & Bollinger band
3. Moving average convergenceand divergence
5. Moving average
6. Relative strength index
Based on the above analysis wecan conclude that the technical parameter of
Fibonacci level is a better technical tool to be considered in building a trading
strategy since it has better rate of predicting the market movement when
compared to other technical analysis used in the trading systemof trading gold.
OVERALL PERFORMANCEOF THETECHNICAL ANAYSIS FOR GOLD COMMODITY:
 Out of 50 days this systemof technical analysis was able to give right
prediction for 23 days ie with the combination of 3 or more than 3
indicators giving the same prediction for the market movement which
turned to be profitable
 By using the top three predictors ie Fibonaccilevels and stochastic
oscillator and Bollinger bands and Appling the majority rule among these
three tools we can increaseour accuracy level by 27 right predictions out
of 50 days sample
 The total number of right predictions made by all the indicators are 126
out of 300 possibleoutcomes which gives a probability of 0.42 % accuracy
 By using only the 3 technical tool we get 79 right predictions out of 150 ie
0.526%
We can increase our prediction accuracy by 0.53-0.42=0.11 % ieby 11 %

4.2.1.: Table using the 3 most reliable indicator
fibonacci
levels
stochastic
oscillator
Bollingerband sum 2 or more indicators
giving same
indication
0 0 0 0 0
0 1 0 1 0
0 1 0 1 0
0 0 0 0 0
0 1 0 1 0
1 1 1 3 1
1 1 1 3 1
0 1 1 2 1
0 1 1 2 1
0 0 0 0 0
1 1 1 3 1
1 1 1 3 1
1 1 1 3 1
1 1 1 3 1
0 0 0 0 0
1 0 1 2 1
1 1 1 3 1
0 0 0 0 0
1 0 0 1 0
1 0 1 2 1
1 0 1 2 1
1 1 0 2 1
1 1 0 2 1
0 0 0 0 0
1 0 1 2 1
1 1 1 3 1
1 1 1 3 1
1 0 0 1 0
0 0 0 0 0
1 0 0 1 0
1 0 1 2 1
1 0 0 1 0
1 0 1 2 1
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 1 0 1 0
1 1 1 3 1
1 1 1 3 1
1 1 1 3 1
1 1 1 3 1

1 0 0 1 0
1 1 1 3 1
1 0 1 2 1
0 0 0 0 0
0 0 0 0 0
1 1 1 3 1
1 1 1 3 1
79 27

FINDINGS:
 The total number of right indications given by all the technical analysis
tools for the commodity (gold) are as
follows-
 The total number of profitable indication given by the combination of
indicators using majority rule out of the sample for 50 days were as follows-
GOLD 23
 The profitable indication given for gold analysis areranked in the order in
such a way that the highest number of right indication is ranked 1 followed
by other indicator in the descending order-
1. Fibonacci level (30)
2. Stochastic oscillator(24)
3. Bollinger band(24)
4. Moving averageconvergenceand divergence(19)
5. Moving average(15)
6. Relative strength index(14)
GOLD 126GOLD 126GOLD

According to the analysis which I havedone in the earlier sections of the report I
would like to recommend the Company (HarvestFutures Consultants India Pvt.
Ltd.) to adopt the following mentioned strategies for trading using Technical
Analysis tools.
 In a trading systemwecan see that instead of using all the indicators we
should make surethat weuse only the bestperforming indicator fromthe
finding we can derive that by using all the indicator we reduceour
probability of finding the rite market movement but if we use only those
best performing indicators for the commodity then we are increasing the
probability of finding the rightmarket movement.
 List of best performing indicators for the commodity and the difference in
probability caused by using only these best performing indicator instead of
all the tools in technical analysis system.
ALL INDICATORS BEST INDICATORS
LIST OF INDICATORS 1 Fibonacci level (30)
2 Stochastic oscillator
& Bollinger band(24)
4 Moving average
convergence and
divergence(19)
5 Moving average(15)
6 Relative strength
1 Fibonacci level (30)
2 Stochastic oscillator
& Bollinger band(24)

index(14)
PROBABILITY OF
PREDICTING RIGHT
MARKETMOVEMENT
23/50=0.46 27/50 = 0.54
We can increase the probability of finding the right market direction by using
only best indicators instead of all to an extent of 0.54-0.46= 0.08% or 8%

Capital market is already matured and reached at high level, every investor
interested to invest but not in Bullion (gold &silver) Market due to lack of
awareness. As per Data analysis most of the investors do not have much idea of
Gold Market, they are required to be given awareness training and knowledge
with the help of workshops and seminars, as investors are willing to know more
about Gold Market i.e. 61% of the respondents are willing to invest in the market.
Looking back from 2014, the past year is still under the impact of the crisis.
Followed by the U.S. debt crisis, the European sovereign debt crisis prolongs the
way of recovery. Due to fear of downgrading of government debt of certain
European states and the negative return of stock markets, investing in gold,
naturally, becomes popular again.
Thus to conclude, after the research done, the technical analysis do play a major
role in analysing the market and to know its direction and yet Fundamental
analysis do have their own benefits. It is wise to go with both Fundamental
analysis and Technical analysis while trading as they both complement each
other. Italso found that when any important financial news in announced its wise
not to trade at that time as the market may/ will mislead the traders which may
lead to a wrong trade.
Internationally trading in Gold has given the investors very safe and very fruitful
option. Today people who earlier feared from entering the market are investing in
Gold as it is the safest asset and also its price is less fluctuating. Gold Market has
developed vastly since it was started. Recently gold prices touched the height of
Rs.30000/- per 10gm which astonished everybody. The reason may be any but
today people willing to invest in Gold rather than stock.

7.1. LEARNING OUTCOME:
The internship at HarvestFutures Consultancy India PvtLtd. provided an insight
into the corporatework culture during the courseof work; learning took place in
the area of day trading using technical indicators & pattern.
I have learnt;
 Analysing the movement of gold market.
 To apply various basic technical analysis techniques to identify trends and
turning points.
 Determine buy and sell signals using supportand resistance.
 Stress management i.e. ability to work under pressure.
 Time management i.e. value of time.
 Taking strictstop loss in trading.
 Avoid worthless rumours.
 I also learnt the importance of acquiring as well as retaining customers
which play an important role in the growth of the company.
 Under the guidance of my industry guide who had given me lot of support
and helped in many ways to gain knowledgeand skills and he had given me
the freedomto explore the trading platform and learn new things which
can be used in the trading. He has also given me good supportand also
given good exposure to the organization culture and environment.
This learning will profoundly help in the professionalcareer in which I am about to
embark.

References:
Books
Technical analysis of the financial markets, Murphy, John J, pg 195-213, pg
239 -255
Technical analysis from A to Z, Achelis, Steven
Candlestick charting explained, Morris, Greg L, pg 19-141
Websites
http://www.hinduonnet.com/archives.htm
http://www.abrahammaslow.com/m_motivation/Hierarchy_of_Needs.asp
http://www.investopedia.com/terms/p/price-earningsratio.asp
http://stockcharts.com/
http://www.candlecharts.com/
http://www.sebi.com/
http://www.moneycontrol.com/
http://www.nseindia.com/
http://www.bseindia.com/

http://dbie.rbi.org.in/
http://www.hifindia.net/

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