BUY AND SELL POINTS IN THE STOCK MARKET WITH REFERENCE TO PHARMACEUTICAL AND FMCG SECTORS

Abstract

Many people lost their jobs during the COVID-19 Pandemic. As per Centre for Monitoring Indian Economic CEO, Mahesh Vyas, approximately 10 million people lost their jobs during the second wave of COVID-19 alone. At the same time, a report by the State Bank of India (SBI) showed, that approximately 14.2 million retail investors joined the stock market in India alone. Charles Schwab conducted a survey using data from 500 new investors. Approximately 55% of the respondents said that they turned to investing in the stock market during the pandemic because they found the need to have an emergency fund in the midst of this uncertain situation. Also, approximately 53% of the respondents said that their aim was to have an additional source of income.  Through the above survey, this can be concluded that the stock market acts as an additional source of income for everyone. Yet, there are people who lost money and this is solely because people are not able to identify the entry and the exit points in the Stock Market. In this study, the entry, exit and holding points have been analysed for one year, using the technical tools – Relative Strength Index (RSI) and Bollinger Band. This will mainly help new investors who have no prior knowledge in this field, to get started in their stock trading journey. For the study, five companies from the pharmaceutical sector and FMCG sector have been considered. It was found that RSI and Bollinger Band are two of the most efficient technical tools. Using these two technical tools, the entry or buying point and the exit or the selling points can be found.