Equity research analysis #technical & fundamental indicators of spicejet, a BSE listed company.

1. UNDERSTANDING STOCK
MARKET (TRADING IN
CASH)

2. INDEX
• 1. Basics
• 2. FUNDAMENTAL INDICATORS
• - International markets opening & closing.
• - FII’s & DII’s Sentiment in previous close.
• 4. VIX INDEX
• 5. BETA FACTOR
• 6. ANALYSING STOCK TRENDS THROUGH TECHNICAL INDIACTORS

3. ANALYSIS
1. Technical Analysis : Understanding Charts.
2. Fundamental Analysis : Focuses on investor sentiment ( Bullish or Bearish )
INTRODUCTION

4. INVESTORS
• Short Term
• Long Term
• Medium Term

5. TYPES OF STOCKS
• Large Cap
• Mid Cap
• Small Cap
• Penny Stocks.

6. KINDS OF INVESTORS
• Those who invest in stocks on a friends advice & sometimes consider taking common
man’s advice too at places of social/general gathering.
• Those Who Invest On Brokers Advise.
• Those who no matter what educational Background they are from do technical &
fundamental analysis & then invest.

7. STEPS BEFORE MAKING AN INVESTMENT
DECISION
• Invest only the investible surplus that you can afford to loose.
• Patience to invest in right time.
• Let The Market Discount Itself.
• To minimize risk :
• Expose your investments proportionately into debt & equity subject to risk appetite.
• Always Hedge your portfolio into diversified sectors .
• Invest in stocks with negative fundamentals but good technical (Ratios, specifically : ROCE – EPS – P/E).
• Learn The Charts to enter at a bottomed price to earn Maximum return on investment.
• Never loose track of your portfolio.
• Buy when FIIs Sell.

8. BASICS
• Volume – Number of shares traded.
• Understanding candle stick.

9. FUNDAMENTAL INDICATORS

10. INTERNATIONAL INDICATORS
• 1. Foreign indices other than Asian for close.
• 2. Asian market during the pre-opening.
United States Of America Hong kong, China
USA Taiwan Stock Exchange
London stock index Korean Stock Exchange
French index Philippine Stock Index
German Stock Index Chinese stock index
Japan Stock Index Singapore stock exchange

11. FII’S & DII’S SENTIMENT

12. VIX INDEX (VOLATILITY INDEX)

13. BETA FACTOR
• Beta is a measure of a stock's volatility in relation to the market. By definition, the
market has a beta of 1.0, and individual stocks are ranked according to how much
they deviate from the market.
• A stock that swings more than the market over time has a beta above 1.0. If a stock
moves less than the market, the stock's beta is less than 1.0.
• High-beta stocks are supposed to be riskier but provide a potential for higher
returns; low-beta stocks pose less risk but also lower returns.

15. EQUITY RESEARCH ANALYSIS
• Spicejet

16. ABOUT THE COMPANY
• SpiceJet is an Indian low-cost airline headquartered in Gurgaon, India.
• It is India's fourth largest airline by number of passengers carried, with market
share of 12.3% as of July 2015.
• Founded in : May 2005
• Parent Organisation: Sun Group
• Founders: Ajay Singh, Bhupendra S. Kansagra

17. THE SPICEJET CRISIS

19. • SpiceJet saw almost a dozen of its Boeing 737s being taken back by lessors due to
which it had to cancel a large number of flights.
• India’s second largest budget carrier, SpiceJet, seemed to be in danger of joining the
long list of companies that burnt themselves out in the Indian aviation sector.
• SpiceJet had displayed all the symptoms of an eventual collapse—mass flight
cancellations, thinning fleet, delayed staff salaries, lack of investors, dipping stock
prices and mounting losses since March 2014.

20. • The airline was believed to have been facing a financial crunch.
• The crisis started affecting its operations around mid-November when the airline
suddenly cancelled 50 flights, of the 300 that it usually runs, without informing
passengers.
• The airline needed fresh infusion of funds, but the promoter, Sun Group chief
Kalanithi Maran, could not find an investor.
• The cancelled flights came in the wake of the airline selling cheap tickets in flash
sales held earlier in 2014.
• The crisis deepened on 1 December with reports of the airline delaying salary
payment to its 5,000-odd employees for the first time.
• The current crisis is already being seen as a repetition of the Kingfisher fiasco
which began with the same symptoms.
• According to analysts, the losses due to the cancellations were Rs 15-30 crore by
month end, which means the airline was losing anywhere between Rs 1.5 crore and
Rs 2 crore per day.

25. QUARTERLY RESULT ANALYSIS - SPICEJET

28. DID THE RESTRUCTURING PLAN YIELD ?

32. LARGEST SHAREHOLDER

33. ANALYZING STOCK TRENDS THROUGH
TECHNICAL INDICATORS
• Any class of metrics whose value is derived from generic price activity in a stock or
asset. Technical indicators look to predict the future price levels, or simply the
general price direction, of a security by looking at past patterns.

34. TECHNICAL INDICATORS & STOCK
SELECTION
• 10 Days SMA Vs. 30 Days SMA
• Bollinger Bands
• RSI
• Volumes
• MACD
• Quarterly Results
• Historical Trends
• Capital Structure (Current & Historical)
• Operating Margin
• YOY sales
• Expected Government Policies & budget
Declarations
• Expected date of implementation of that policy
• Beta Stocks
• FDI
• Currency Volatility
• Foreign Exposure Of a Company.
• FED Rate Decision
• Company Ratings

35. 10 DAYS SMA VS. 30 DAYS SMA
• DEFINITION of 'Simple Moving Average - SMA'
• A simple, or arithmetic, moving average that is calculated by adding the closing
price of the security for a number of time periods and then dividing this total by the
number of time periods. Short-term averages respond quickly to changes in the price
of the underlying, while long-term averages are slow to react.

37. BOLLINGER BANDS
• standard deviation is a measure of volatility, Bollinger Bands® adjust themselves to
the market conditions. When the markets become more volatile, the bands widen
(move further away from the average), and during less volatile periods, the bands
contract (move closer to the average).
• The tightening of the bands is often used by technical traders as an early indication
that the volatility is about to increase sharply.
• This is one of the most popular technical analysis techniques. The closer the prices
move to the upper band, the more overbought the market, and the closer the prices
move to the lower band, the more oversold the market.

39. RSI (RELATIVE STRENGTH INDEX)
• What is 'Relative Strength Index - RSI'
• A technical momentum indicator that compares the magnitude of recent gains to recent
losses in an attempt to determine overbought and oversold conditions of an asset.
• RSI ranges from 0 to 100. An asset is deemed to be overbought once the RSI approaches
the 70 level, meaning that it may be getting overvalued and is a good candidate for a
pullback. Likewise, if the RSI approaches 30, it is an indication that the asset may be
getting oversold and therefore likely to become undervalued.
• RSI = 100 - 100/(1 + RS*)
• *Where RS = Average of x days' up closes / Average of x days' down closes.

41. MACD
• When the MACD is above zero, the short-term average is above the long-term
average, which signals upward momentum. The opposite is true when the MACD is
below zero. As you can see from the chart above, the zero line often acts as an area of
support and resistance for the indicator.

43. MOMENTUM INDICATOR
• The Momentum indicator compares where the current price is in relation to where
the price was in the past. How far in the past the comparison is made is up to the
technical analysis trader.
• Hence, if the current price is higher than the price in the past, then the Momentum
indicator is positive. In contrast, when the current price is lower than the price in
the past, then the Momentum indicator is negative.

45. ADX (AVG. DIRECTIONAL INDEX)
• An indicator used in technical analysis as an objective value for the strength of
trend. ADX is non-directional so it will quantify a trend's strength regardless of
whether it is up or down. ADX is usually plotted in a chart window along with two
lines known as the DMI (Directional Movement Indicators). ADX is derived from the
relationship of the DMI lines.

47. BOLLINGER %B
• %B quantifies a security's price relative to the upper and lower Bollinger Band.
There are six basic relationship levels:
• %B equals 1 when price is at the upper band
• %B equals 0 when price is at the lower band
• %B is above 1 when price is above the upper band
• %B is below 0 when price is below the lower band
• %B is above .50 when price is above the middle band (20-day SMA)
• %B is below .50 when price is below the middle band (20-day SMA)

49. VOLUME & VOLUME RATE OF CHANGE
INDICATOR