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A Study on Efficient Market Hypothesis and Technical Analysis of Automobile and Consumer Goods Industry Stocks

Pavan Kumar*, Renee Namratha

Aim: To help investors to enter and exit good quality of stocks.

Data and methodology: The data for the study are taken from the yahoo finance.com for the period from January 2022 – March 2022.

The present study is to analyze the performance of selected stocks from the automobile industry and consumer industry. The study consider sample of 10 companies listed at NSE, Five top stocks from automobile industry and 5 top stocks from consumer industry which are safe for investors to start investing. To Determining the strength of the stock of automobile and consumer goods Runs test upper limit, lower limit Have been used, to Testing hypothesis by comparing upper limit and lower limit with observed values Hypothesis Testing is been used, for Technical analysis to identify the factors which causes anomaly reaction in the positive and negative earnings.

Technical Analysis: RSI, Stochastic oscillator, Williams% R, MACD is used. And to compare expected earnings from CAPM to the returns CAPM Model is used.

After applying the statistical like run, it can be finish that the price motion of stocks of companies of NSE are random that nobody may be a hit in predicting a future facts on the basis of historical data. The null hypothesis is being accepted. There is no significant difference between observed runs lies between ‘upper’ and ‘lower’ limit in all selected companies. In the study after applying technical analysis we found that all the stocks of automobile industry have bearish condition and consumer goods industry has more number of stocks of bearish condition. The study shows that calculated returns from CAPM for automobile industry shows that two out of five stocks shows negative returns and in consumer goods industry all the stocks shows positive returns. By the support of findings we can conclude that Indian capital market has no significant difference between observed runs lies between upper and lower limit and according to the analysis and tests we can conclude that consumer goods industry stocks especially Nestle, Asian paints, Hindustan Unilever shows are good quality of stocks and are safe for investors to start investing with good returns.