Understanding the Price Behaviour of selected banks from banking sector in Bombay Stock Exchange

DOi:10.34047/MMR.2020.10209

Abstract

Over the past two decades, the globalisation trend has led to a significant increase in financial markets, particularly the stock market. Stock markets play an important role as an indicator of the economy's overall performance. Analyzing past price movements is how Technical Analysis predicts future price movements. It encourages the mobilization of funds, provides equity capital to the banking sector, and offers adequate returns for investors. The Indian banking sector has undergone significant changes in recent years, with banks diversifying from traditional deposit-taking and lending activities to more complex activities such as investment banking, insurance, and wealth management. Therefore, understanding the price behavior of banks listed on the Bombay Stock Exchange (BSE) is crucial for investors, policymakers, and researchers. By using stock market indicators, investors can observe significant market movements. The main objective of this paper is to analyze a top 5 bank within the banking sector and forecast its stock price behavior. Additionally, the paper aims to test the effectiveness of technical indicators such as RSI and MACD in predicting the stock's behavior. The study focuses on analyzing the stock price trends of selected banks over a period of five years (2017-2022).