The Closing values of NSE Nifty from 2 nd January, 2024 to 12 th January, 2024 were as follows: Days Date Day Nifty 1 2 TUE 21,742 2 3 WED 21,665 3…

CA Final · Advanced Financial Management · PYQS · May 2024
The Closing values of NSE Nifty from 2 nd January, 2024 to 12 th January, 2024 were as follows: Days Date Day Nifty 1 2 TUE 21,742 2 3 WED 21,665 3 4 THU 21,517 4 5 FRI 21,462 5 6 SAT No Trading 6 7 SUN No Trading 7 8 MON 21,238 8 9 TUE 21,182 9 10 WED 20,997 10 11 THU 20,926 11 12 FRI 20,901 You are required to: (i) Calculate Exponential Moving Average (EMA) of Nifty during the above period. The previous day exponential moving average of Nifty can be assumed as 21,500, The value of exponent for 31 days EMA is 0.062 (ii) Give brief analysis on the basis of your calculations. * In question paper mistakenly, it got typed as 11 th .

Suggested Answer and Working Notes:

(i) 1 2 3 4 5 Date Nifty EMA for Previous Day 1 - 2 3 x0.062 2 ± 4 2 21742 21500.00 242.00 15.00 21515.00 3 21665 21515.00 150.00 9.30 21524.30 4 21517 21524.30 -7.30 -0.45 21523.85 5 21462 21523.85 -61.85 -3.83 21520.02 8 21238 21520.02 -282.02 -17.49 21502.53 9 21182 21502.53 -320.53 -19.87 21482.66 10 20997 21482.66 -485.66 -30.11 21452.55 11 20926 21452.55 -526.55 -32.65 21419.90 12 20901 21419.90 -518.90 -32.17 21387.73 (ii) Conclusion The market is bearish. The market is likely to remain bearish for short term to medium term if other factors remain the same. On the basis of this indicator (EMA) the investors/brokers can take short position.

Topics: Security Analysis

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