A Performance Analysis of Technical Indicators on the Indian Stock Market

This chapter delves into three powerful and widely-used technical indicators, Bollinger Bands, Moving Average Convergence Divergence (MACD), and the Relative Strength Index (RSI), and makes a comparative study of the effectiveness of these indicators on the Indian stock market. For this study, stocks were chosen from 14 sectors listed on India’s National Stock Exchange (NSE). The top stocks of each sector are identified based on their free-float market capitalization from the NSE’s report published on July 1, 2022 (NSE Website). For each stock in 14 sectors, trading was done for one year from July 1, 2022, to June 30, 2023, with an initial capital of Indian Rupees (INR) 100,000 following the three technical indicators. The technical indicator that yielded the highest return is identified for each stock. A comparative analysis is made based on the overall performance of the three indicators for all 14 sectors.