A Comparative Study of Two Technical Analysis Tools: Moving Average Convergence and Divergence V/S Relative Strength Index: A Case Study of HDFC Bank ltd listed in National Stock Exchange of India (NSE)

Subject Areas : General Management

M. Hashemi Tilehnouei ¹ , B. Shivaraj ²

1 - B N Bahadur Institute of Management Sciences, University of Mysore, India.
2 - B N Bahadur Institute of Management Sciences, University of Mysore, India.

Received: 2013-10-29 Accepted : 2013-10-29 Published : 2013-07-01

Keywords: Technical Analysis, MACD, RSI, Trading Strategy, National Stock Exchange of Ind,

Abstract :

Technical analysis is the forecasting of future price movement based on an examination of past prices. Some scientist found that the study of historical prices cannot predict future prices. In this research we intend to study which technical analysis tool is better for prediction of future price movement, for this purpose we are studying two the most strongest technical analysis tools is called as Moving Average Convergence and Divergence (MACD) and Relative Strength Index (RSI). To study we are introducing one formula to determine one index for comparing two technical analysis tools. Generally for buy, hold and sell signal MACD is better than RSI, but we cannot skip the important role of RSI in overbought and oversold signals and simply we can diagnose the price whether is it undervalued or overvalued or with suitable value.