Forecasting of Stock Market through Trends and Patterns using Time Series Analysis

The Indian stock market, which mainly consists of the BSE (Bombay stock exchange) and the NSE (National stock exchange), is one of the fastest growing emerging markets in the world. Technical analysis is a method of predicting changing movements of price and future stock trends by studying historical data. The initial data for a technical analysis are prices the highest and the lowest prices, the price of opening and closing within a certain period of time, and adjacent volume of transactions. Technical analyses necessitate that all the information related to the market and its further variation in stock is contained in the price chain. Any tangible or intangible factor, that has some influence on the price, whether economic, political or psychological, has previously been considered by the market and included in the price, technical analysis is more concerned with what has actually happened in the market, rather than what should happen and takes into account the price of instruments and the volume of trading, and creates patterns and trends from that data to use as the primary tool. The prime objective is to understand the trends in the stock prices using technical analysis and to use this information to determine the future direction where the price of a stock is headed in the short run, to learn the basic concepts which an individual should be aware of when he or she enters the stock market, as when to enter the market and when to exit and to understand the day to day fluctuations of stock market