The company's scrip rose 2.6% after it signed a JV with Japan-based J-Power Systems
At a time when the country will receive an additional power capacity of 62,213 MW over the next five years, Finolex Cables will be able to leverage the strong growth conditions in the power sector through a joint venture with Japan-based J-Power Systems to offer turnkey solutions in extra high voltage cable systems.
The latest development helped the stock rise 2.6 per cent to Rs 109.35 on Thursday despite the overall weakness in the market.
Meanwhile, in the September 2007 quarter, Finolex’s operating profit fell marginally on a y-o-y basis to Rs 39 crore, while its net sales rose 21 per cent to Rs 334 crore. Its operating profit margin also declined 260 basis points y-o-y to 11.7 per cent in Q2 FY08.
The pressure on its margins in the last quarter was due to its adjusted raw material costs as a percentage of net sales rising 360 basis points y-o-y to 79 per cent in the last quarter.
Analysts, however, highlight a high base effect in the first half of FY07. That’s because cable companies were able to report strong growth in the operating profit margins due to a sharp rally in copper prices on the London Metal Exchange.
In Q2 FY08, its copper rods division clocked a revenue growth of 30.4 per cent y-o-y and electrical cables business went up 8.4 per cent due to curtailed demand during the monsoon season.
It is understood that Finolex’s power cables plant in Uttarakhand, which was scheduled for commissioning by November 2008, will now go onstream by April 2009. The stock trades at a reasonable 19 times estimated FY08 earnings and 14 times FY09 earnings.
Source - Business Standard
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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