TERM PAPER

OF
SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT
ON
GMDC LTD.

Submitted To: Submitted By:

MR. AMARJIT SAINI KARAN VEER SINGH
REG.NO. -10900968
ROLL NO. - RS1902B41
 Gujarat Mineral Development Corporation Ltd.

(A Government of Gujarat Undertaking)

Corporate History

1963
The Gujarat Mineral Development Corporation Limited,
(GMDC) was set up / established / constituted in the year 1963,
with the mandate to develop major mineral resources in the
State of Gujarat. The Company commenced its operations, with
a small sand crushing plant at Surendranagar which supplied
graded sand to consumers all over the State. The sand was used
by various manufacturers of sodium silicate and glass
industries.

1968
The next project, set up by GMDC, in the year 1968 was
beneficiation of fluorspar, a rare mineral essential for basic
industries, like refining of steel manufacturing of aluminium,
hydrochloric acid, foundry flux and welding electrodes among
others.

1970
By early 70's, the Industrialisation of Gujarat took off at a rapid
pace, particularly in the chemical and textile industries, which
required massive quantities of fuel to sustain the growth.
GMDC, therefore commenced mining of lignite in Kutch
district. Availability of lignite as an efficient and cheaper
substitute for coal provided the impetus for industrial growth of
Gujarat. The production of lignite, demand driven, continued to
increase and reached a level of 5 million tonnes by the year
1997-98.

Meanwhile, based on further exploration in other parts of Gujarat, more deposits of lignite were
identified in Bharuch district. GMDC started mining operations at Rajpardi near Ankleshwar in
1984, and has been supplying lignite to majority of the textile industries from this mine.
Though lignite dominates the current activities of the Corporation, GMDC continues to pursue its
path of expansion based on mineral resources, particularly in the fields of lignite based power
generation, as well as continues to look into the development of other minor and major mineral
resources in the State of Gujarat.
Functional Divisions

Name Designation Phone no.Phone No.Email

(Office) (Residenc
e)

Shri A L Thakor GM (P,R and D) and (079) 279 (02717) [email protected]

GM (LP and Sales) 10096 235712

Shri A DGM (Sales) (079) 279 (079) 269 [email protected]

Selvanayagam 12760 24910

Shri B P Pati, IFS C.G.M. (079) (079) [email protected]

27912322 23248362

Shri D GM (Power ) (079) 279 (079) 267 [email protected]

Chattopadhyay 12962 60774

Shri D C Shah GM (IT) (079) (079) [email protected]

27911878 26650661

Shri D K Thakkar DGM(P & M) (079) (079) [email protected],

27911540 26841275

Shri D U Vyas GM (Geo / Tech) (079) (079) [email protected]

27913211 25891890

Shri D S Shah Manager (Civil) (079) 279 (079) [email protected]

13200 30424985

Shri Joel Evans Co. Secretary (079) 279 (079) 232 [email protected]
11151 24860

Shri K N Limbadia GM (HR) (079) (079) [email protected]

27910090 26402005

Shri L Kulshrestha GM (Finance, K ) (079) 279 (079) [email protected]

12746 29296716

Shri P K Soni GM (CSR) (079) 279 (079) 268 [email protected]

12747 72130
Shri S R Bhatt GM (Accounts) (079) 279 (079) 254 [email protected]
12648 30202

HEAD OF PROJECTS

Name Projects Phone No.Phone No.(Residence)

(Office)

Shri A K Makadia Rajpardi (02645) (02645) 240128

240185

Shri Samantarai Mata-No- (02839) 9727792767

Madh 291467

Shri J H Parikh Chher (02839) 9727792609

293022-23

Shri S N Benerjee Kadipani (02669) 9727792806

274221

Shri G K Patel Shivrajpur (02676) 9727792725

243604

Shri G M Dadabhai Gadhsisa (02834) (02834) 282290

282289

Shri H K Joshi Tadkeswar (02623) 9727792766

233052

Shri C R Patel Panandhro (02839) (02839) 282463

284411

Shri A K Garg Bhavnagar (0278) (0278) 2560542

2883802
 Shri Dinesh Prasad Bhatia (02891) 9727792837;
233104

DIFFERENT TYPE OF ANALYSIS

• Technical Analysis
• Fundamental Analysis

TECHNICAL ANALYSIS

Technical Analysis operates on the theory that market prices at any given point in time reflect
all known factors affecting supply and demand for a particular market. Consequently, technical
analysis focuses, not on evaluating those factors directly, but on an analysis of market prices
themselves. This approach theorize that a detailed analysis of, among other things, actual daily,
weekly and monthly price fluctuations is the most effective means of attempting to capitalize on
the future course of price movements. Technical strategies generally utilize a series of
mathematical measurements and calculations designed to monitor market activity. Trading
decisions are based on signals generated by charts, manual calculations, computers or their
combinations.

Fundamental Analysis is based on the study of factors external to the trading markets which
affect the supply and demand of a particular market. It is in stark contrast to technical analysis
since it focuses, not on price but on factors like weather, government policies, domestic and
foreign political and economic events and changing trade prospects.
Fundamental analysis theorizes that by monitoring relevant supply and demand factors for a
particular market, a state of current or potential disequilibrium of market conditions may be
identified before the state has been reflected in the price level of that market.
Fundamental analysis assumes that markets are imperfect, that information is not
instantaneously assimilated or disseminated and that econometric models can be constructed to
generate equilibrium prices, which may indicate that current prices are inconsistent with
underlying economic conditions, and will, accordingly, change in the future.
 No.
of
Ope Oscillat M. M.avg( run
Date n High Low Close ors Avg. 50) GAIN LOSS s
277.
8/1/2008 250 95 246.5 273.9
284.
8/4/2008 277 95 272 275.05 1.15 1
8/5/2008 275 279 266 267.5 -7.55
8/6/2008 272 274 255.2 258.05 -9.45
265. 252.2
8/7/2008 258 8 5 256.4 -1.65 2
256. 256.0
8/8/2008 15 265 5 257.95 1.55 3
8/11/200 263. 267.
8 4 5 255.6 257.5 -0.45
8/12/200 259. 261. 246.9
8 8 05 5 248.7 -8.8 4
8/13/200 264.
8 250 7 242.5 253.85 5.15
8/14/200 251. -
8 3 262 243.9 258.8 0.05513 260.77 4.95
8/18/200 253. 267. 253.1 - 259.58
8 15 7 5 262.05 0.04726 5 3.25 5
8/19/200 261. - 257.75
8 255 85 254.5 256.75 0.04019 5 -5.3 6
8/20/200 259. 263. 256.1 0.00290 256.88
8 9 95 5 258.8 6 5 2.05 7
8/21/200 256. 265. - 256.68
8 55 7 253 256.05 0.00137 5 -2.75
8/22/200 -
8 252 259 252 253.75 0.01628 256.42 -2.3
8/25/200 250.5 -
8 260 260 5 251.75 0.02233 255.8 -2
8/26/200 - 254.84
8 250 254 246.5 247.95 0.00302 5 -3.8
8/27/200 244.1 -
8 258 258 5 245.15 0.03427 254.49 -2.8 8
8/28/200 245. - 253.70
8 5 249 244 246 0.04946 5 0.85
8/29/200 250. -
8 248 4 245 247.85 0.05419 252.61 1.85 9
247. -
9/1/2008 247 9 244.1 245.15 0.04518 250.92 -2.7
247. - 249.36
9/2/2008 247 9 240.4 241.2 0.06801 5 -3.95
- 244.10
9/4/2008 239 242 198 206.2 0.19469 5 -35
219. -
9/5/2008 204 85 192 193.3 0.23823 237.83 -12.9
193. 190.0 - 231.56
MOVING AVERAGE
An indicator frequently used in technical analysis showing the average value of a security's price
over a set period. Moving averages are generally used to measure momentum and define areas
of possible support and resistance.

In this, I have calculate three moving average on the bases of 10 days, and 50 days.

Moving average charts is a tool used by technical analysts to track the price movements of a
security. It plots average daily settlement prices over a defined period of time like 10 days and
50 days.

Interpretation:-

As shown in the above chart, the market price is below the moving average line also both the
market price and moving average is moving along the line, also it has reached the resistance
level, hence it is advisable to long term investors to sell the share and book the profit at the same
time it advisable to the short term investors to buy the share and hold it for mere future and sell
it when it reaches the support level. Thus it is good sign to sell to long term investors

Interpretation:-

As per tree different period moving average charts show the trend of GMDC in BSE.10
days and less than 10 days moving average is helpful for short term investment .For long term
investors 50 days moving average which is helpful for investment in stock market.

Here GMDC market performance was good and its moving average trend is in increasing
form. Moving averages can be used to quickly identify whether a security is moving in an
uptrend or a downtrend depending on the direction of the moving average. As charts when a
moving average is heading upward and the price is above it, the security is in an uptrend.
Conversely, a downward sloping moving average with the price below can be used to signal a
downtrend.
OSCILLATORS
Oscillators is a technical analysis tool that is banded between two extreme values and built with
the results from a trend indicator for discovering short-term overbought or oversold conditions.
As the value of the oscillator approaches the upper extreme value the asset is deemed to be
overbought, and as it approaches the lower extreme it is deemed to be oversold.

Interpretation:-

According to GMDC oscillator chart, company oscillator value 0.78 on 16 Dec 2008. This is the
highest value of last two years, this is the position of over brought so, this is the moment where
investors should sell their investment, and move towards another investment where there is a
great prospect of profitability. When we move further and a glance of data from 1dec 08 to
30sep10 the maximum achievable value is on 16, dec 2008. But when we move towards
minimum level the maximum oversold position is on 8th oct 2008 i.e. -0.543 that is the position
where an investor should invest in the particular stock or if an exist investor then shoud hold the
stock till it reaches it maximum level.

If we talk about 20 may 2009 then we get the value near than over brought so, it is a the time
where investor should sold the stock, and for new investor that not to purchase the particular
stock in the mean time. Because, when the market correction will done the value of stock
definitely decreases.

HEAD AND SHOULDERS

A head and shoulders pattern is also a trend reversal formation. It is formed by a
peak (shoulder), followed by a higher peak (head), and then another lower peak
(shoulder). A "neckline" is drawn by connecting the lowest points of the two
troughs. The slope of this line can either be up or down. Typically, when the slope is
down, it produces a more reliable signal.
Interpretation:-

When we show the head and shoulder chart we find an uneven trend of stock movement,
because there is number of head and shoulders drawn over a period of time, and if we talk about
movement of stock of last two years there is a increasing trend follow by the stock, as we learn
earlier that a upward stock movement is not so reliable due to this the current scenario is not the
positive for the investment. Because, from 9th jan 2010 to 6th feb 2010. The head and shoulder
movement is purely upward so, there is not a good time to investment as this point at 6th jan
2010 of near about 172. So, it is the situation where investor should sale its investment and not
the purchase of the same stock.

CANDLE STICK CHARTS

Candlestick is formed with the help of opening, high, low and closing price of the day. If the
opening price is above the closing price then a filled candlestick is drawn. Normally, black
colour is used for filling the candle. If the closing price is above the opening price, then a hollow
candlestick (normally displayed in white with black border) is drawn. The filled or the hollow
portion of the candle is known as body or real body which can belong, normal or short with
proportionate to the line above or below it. The lines (long or short) above and below the body
or real body represent the high or low price range and these lines are known as shadows, tails or
wicks. For the particular day, the highest price is declared by the top of the upper shadow and
the lowest price is marked by the bottom of the lower tail.

Interpretation:-

The candlestick chart shows the daily price movement of a stock by four ways i.e. Open, High,
Low, Close. So, we get a actual figure of a stock whether the stock is over sold or over brought
in the particular day, and also give a brief of the behavior of sort sellers or speculators in the
intraday and interday transactions. When we talk about the candlestick diagram of last two years
we find that over low high and close is increasing over a period of last two years so, it shows the
growth from company’s prospect but it is not good from new investor’s purpose. As, it is good
for long term investors but vice-versa for short term investor purpose.
V-Formulation

Support and resistance level

Support and resistance is a concept in technical analysis that the movement of the price of a security
will tend to stop and reverse at certain predetermined price levels.

A support level is a price level where the price tends to find support as it is going down. This
means the price is more likely to "bounce" off this level rather than break through it. However,
once the price has passed this level, by an amount exceeding some noise, it is likely to continue
dropping until it finds another support level.
A resistance level is the opposite of a support level. It is where the price tends to find resistance
as it is going up. This means the price is more likely to "bounce" off this level rather than break
through it. However, once the price has passed this level, by an amount exceeding some noise, it
is likely that it will continue rising until it finds another resistance level.

Interpretation:-
If we talk about support and resistance level of GMDC of last two years we find that 150 and
200. As, we show the stock of GMDC cross the support level at 15th Oct,08 and cross the
resistance level 19th nov,08. And from that movement the stock is continuously moving on and
on. So, till 10th apr there was a good investment prospect. But after 25th jan 2010 when stock
cross the Support level again it shows the investment in the particular stock is made some sort of
safe investment so, this would be the time to purchase the stock and it is good stock for long
term investor. As, the last price of stock at 5th Aug,10 is near about 150. So, it is highly risky
stock for new investors and suggestion is not to invest in this particular stock in the mean time.
Conclusion:-
The study is concerned with the relevant features of technical analysis and about its
indicators. Technical analysis is widely accepted worldwide and a very useful tools for the
analysis of share price behavior. The share market is more challenging, fulfilling and rewarding
to resourceful investors willing to learn the art of cyclical timing to study of technical analysis.

The technical approach to invest is essentially a reflection of the idea that price moves in
trends which are determined by the challenging attitudes of investors towards a variety of
economic, monetary, political and psychological forces. By studying the nature of previous
market turning points it is possible to develop some characteristics that can help to identify
major markets top and bottoms. The recognition of top and bottoms is in nutshell of technical
analysis process. Entering the market at the beginning of the up-trend and getting out of it at the
first stroke of the formation in the reversal is the basis of this analysis.

As we do the technical analysis of GMDC Ltd. we find some outcomes i.e. under here-

• Company is having a good growth rate.

• The investor should choose the particular stock wisely.
• The stock is good for long term investors.
• In the current time there is a good time to sell the particular stock and should purchase
the new with same fetures.
• The stock is highly volatile stock as it is a front line stock.
 • In the mean time stock is good for speculators if, they are able to take risks.
• The stock is not good for the new investors as correction is required, and stock is also
overbought.
• The stock is showing its Bullish trend over a period of time.
• There is a positive correlation in between the stock and market (BSE) price.

Bibliography:-
Websites:

• www.forextrading.about.com
• www.investopedia.com
• www.about.com
• www.sify.com/finance
• www.bse.com
• www.capitaline.com
•

Books Referred

• Technical Analysis of the Financial Markets By John J. Murphy

• Investment analysis and portfolio management By Prasanna Chandra.