Bajaj Auto, the country’s second-largest two-wheeler maker, today unveiled the prototype of its small car with the promise that it will run 34 km for every litre of fuel. That is about twice the fuel efficiency of the most fuel-efficient small car in the market.
Unlike Tata Motors, whose forthcoming low-cost car has come to be known by its anticipated price tag of Rs 1 lakh, Bajaj says its car will not sell on the basis of the price.
Small car sales, which make up more than two-thirds of India's domestic market, are expected to nearly double to 2 million units a year by 2010 helped by rising middle-class income.
Unveiling the prototype two days before Tata Motors is slated to show its car, Rajiv Bajaj, managing director, Bajaj Auto, said: "This is not a Rs 1 lakh car. It will be priced competitively but not sell on the pricing. Offering the customer twice the fuel economy is more effective than offering half the price."
He indicated that the car, which will take two to four years in the making and come in both diesel as well as petrol versions, will be fitted with a "unique" two-cylinder engine. Its gear system, too, will be unusual. "It will have a unique transmission system that will strike a balance between geared transmission, which is very efficient but not every convenient, and automatic transmission, which is convenient but not very efficient," said Bajaj.
The company is in talks with French car maker Renault and Nissan, in which Renault is the single-largest shareholder, to develop the car for mass production.
"In the very, very-very-very-very unlikely event (that talks with Renault and Nissan fail) we have every intent to move forward on our own," Bajaj said, adding he was confident the talks would be successful.
The car project will be undertaken by a new company in which all three will hold equity. The new company will also spearhead Bajaj Auto’s foray into light commercial vehicles, which it unveiled today.
The car will be manufactured at Chakan near Pune. The plant, which is being built with an initial capacity of 250,000 units, will also produce the light trucks, which Bajaj expects to launch in 2009.
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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