| Tie-up with world's biggest miner will boost Tatas' ore security |
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| Vale, the world’s largest producer of iron ore and pellets, is in talks with Tata Steel to set up a steel slab plant in Brazil. |
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| The $20 billion mining company, formerly known as CVRD, has three plants under construction in Brazil in partnership with ThyssenKrupp, Dongkuk and Baosteel. Vale has a minority stake in these projects. |
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| According to sources, Vale is in talks with Tata Steel as well as some of its clients for the new steel slab plant. |
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| Replying to a query over a possible partnership with Tata Steel, a spokesperson for the Brazilian company said, “A company as large as Vale is often in talks with several companies, among them Tata Steel from India. But other than that, there is no further information about partnership or anything beyond.” |
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| A Tata Steel spokesperson said, “At this point, there is nothing.” |
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| Tata Steel has a plan to set up a 4.5 million tonnes steel complex in Vietnam in partnership with Vietnam Steel Corporation, the largest steelmaker in the south-east Asian country. |
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| According to industry analysts, a Tata Steel-Vale alliance will be a win-win scenario for both companies. |
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| While Vale is looking to leverage its mineral resources and cash in on the booming steel market, Tata Steel is aiming to set up steel plants close to its raw material base as well as ramp up its raw material security. |
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| Vale’s southern system mines have about 4.5 billion tonnes of iron ore reserves and the production capacity is about 170 million tonnes a year. |
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| In the northern system, the Carajas has a production capacity of 100 million tonnes. The mineral country of Carajas has high iron ore reserves estimated at about 16 billion tonnes. |
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| Tata aSteel, the world’s sixth largest steelmaker, recently signed a joint venture agreement with Sodemi (a state-owned company for mineral development) to develop the Mount Nimba iron ore deposits in Ivory Coast, West Africa. |
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| Tata Steel’s initiatives to step up raw material security is largely on account of Corus, which requires 28-30 million tonnes of iron ore. |
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| Tata Steel has set a target of 50-60 per cent security over the next five years, against the current 20 per cent. |
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| Prior to the Mount Nimba deal, Tata Steel signed a joint venture agreement with Riversdale Mining for a coal project in Mozambique. |
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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