Technical analysis "Reliance" stock

Rushikesh Vinubhai Dhameliya

Master's thesis

Abstract:

Technical analysis makes an effort to forecast future price changes, giving traders the knowledge, they need to turn a profit. The two most popular types of technical analysis are statistical indicators and chart patterns. Important predictors of a stock's future price swings include prior trading activity and price fluctuations. The purpose of this master’s thesis is to evaluate the profitability of the trading strategies of Reliance Industries Limited stock using technical analysis. Trading should always apply the rule of using multiple indicators. Profitable trades occur, when the many indicators like candlesticks, moving averages, MACD and RSI align to communicate the same message, which a stock is about to rise or fall in the future. The trading strategy using MACD and RSI is tested using the price data from the last five years from 01/01/2019 to 31/12/2023 and a detailed analysis is conducted to conclude which trading strategy is profitable for a trader. On a capital of INR 10,000 the MACD strategy generated a loss of INR 13741.77431, while the RSI strategy generated a profit of INR 3811.14142 from the trading signals generated from both the strategies over the five- year period. The MACD strategy generated a profit factor of 0.2310 while the RSI generated profit factor was 2.5786, which is well above the 2.5 benchmark of the industry.

Keywords

Reliance Industries Limited, RSI, MACD, Momentum Indicator, Technical Analysis, Stock, Stock Market

Language used: English

Date on which the thesis was submitted / produced: 30. 3. 2024

Thesis defence

• Date of defence: 31. 5. 2024
• Supervisor: Ing. Karel Malec, Ph.D.
• Reader: Jana Skřivánková, B.E., externi

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme:
Economics and Management