Executive Summary
India has huge capital market and
it growing rapidly. In Indian capital market commodity market gaining lot of
importance from last decade. In India organized market is small compared to the
unorganized one. Two big commodity exchanges i.e. NCDEX & MCX, facilitate
for trading in different commodity, some of the commodities include precious
metals, base metals , pulses , spices, oil and oil seeds, energy, plantation
etc.
This project is about brief
introduction of commodity market in India, evolution of commodity market,
different exchanges involved in commodity trading, commodity derivatives,
profile of each commodity, factors affecting each commodity and brief about
assumption, advantage and disadvantage of technical analysis.
This project is done at BMA wealth creators
it is a one of the well-known equity and commodity broking firm. BMA wealth
creator is a financial multiplex involved in rendering different types of
services like commodity trading, stock broking, portfolio management, security
broking, merchant banking and mutual fund advisory etc.
This project is done for two months
from 1 Jul 2011 to 31 Aug 2011 on the topic of “Technical analysis on commodity future “This project focuses on
Gold, silver, copper and crude oil. Data collected for the study from 20th
Apr 2011 to 20th Aug 2011. This study is limited to four months and
four commodities.
The objective of the study is to understand
capital market, commodity market, and broking organization, technical analysis
and help the investor to take decision while trading in commodity market based
on technical analysis.
For this project I have collected
Primary data from observation and interaction with branch manager, staff and
clients and secondary data collected from websites and books.
By
using secondary data I have done Technical analysis on commodity future which
helps the investor to trade in commodity market to earn profit. Some tools like
relative strength index, Williams’s%R, simple moving average and rate of change
which used in project to find out buy and sell signal, find trend, support and
resistance level and future price of the commodity.
By study it is found that commodity
market is highly volatile so technical analysis work only in strong trend and
most of brokers use relative strength index a tool of in buying and selling decision
in commodity market and inventory news strongly affects the price of the
commodity in short term. According to simple moving average copper and crude
oil in selling trend and gold and silver buying trend.
Silver and gold is in over bought
region so it’s better to investor exit from the market. Crude oil is highly
volatile so holding is not good to customer. Technical analysis is based on
historical data so Investor must take decision based on technical analysis as
well as fundamental analysis in commodity trading.
