Move to facilitate feedstock procurement for the company's power units
Tata Power, the country’s largest private sector power company, plans to foray into the shipping and logistics business in order to facilitate coal procurement for its power plants. The Tata group’s power arm also plans to raise Rs 4,000 crore from the international markets.
The proposed move would also mark the group’s entry, which is present in a wide range of businesses from salt to steel, in the burgeoning shipping and logistics business.
Tata Power will raise Rs 4,000 crore either through sale of equity via the GDR route or issue of foreign currency convertible bonds (FCCB). The company had raised Rs 800 crore through FCCBs two years ago.
The company will seek the shareholders’ approval for getting into the logistic business through a postal ballot.
Sources said an entry into the shipping business would help it reduce the cost of transporting coal from abroad. “With coal becoming scarce in the country, power utilities will have to rely more on imported coal from countries like Indonesia, China and other south Asian countries,” said an industry analyst.
The company recently acquired 30 per cent stake in Indonesian coal firm, Bumi, and is eyeing more entities overseas. Singapore-government owned Tuas Power is reportedly on its radar.
According to sources, the company will quadruple its generation capacity from 2,400 mw in five years. “The targeted capacity will not be achieved without having a coal commitment from foreign countries. So, the entry into shipping business is actually a logical step forward,” said an expert.
The company’s major projects within the country include the 4,000 mw plant at Mundra, 1,050 mw at Maithon, 2,400 mw in Shahpur, Maharashtra and expansion of its Trombay capacity by 250 mw.
The Tata Power stock today closed 3.15 per cent lower at Rs 1,255 in a weak Mumbai market.
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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