A Report On Forecasting Of Security Price Using Relative Strength Index” At Ventura Securities Pvt Ltd

Abstract

Security analysis is the analysis of traceable financial instruments called securities. These can be classified into debt securities, equities, or some hybrid of the two. More broadly, futures contracts and traceable credit derivatives are sometimes included. Security analysis is typically divided into fundamental analysis, which relies upon the examination of fundamental business factors such as financial statements, and technical analysis, which focuses upon price trends and momentum. Quantitative analysis may use indicators from both areas. Investment in stock market is common scenario for making capital gains. One of the major concerns of today’s investor’s is regarding choosing the right securities for investment, because selection of inappropriate securities may lead to losses being suffered by the investor. In order to reduce the risk of incurring losses and increase the return many tools are available, of which RSI is a powerful analytical tool which will help the investor choose the right combination of securities for their portfolio construction thus reducing the risk and increasing the return. The relative strength index (RSI) is one of the best known widely used technical analysis indicators. The study is aim to empirically test the functioning of RSI in its classic form asset of data and to reconfigure the indicator by also taking in to account of the trading volume in its calculation formula. After adjusting the RSI with the trade volume the study will test a set of data. The study intended to analyse whether higher yields can be obtained by using RSI compared to those which result from applying the buy and hold the strategy