Within a week of the Tamil Nadu government's threat of taking over cement factories in the state if the companies did not cut prices, cement manufacturers have offered to sell 20 lakh bags of blended cement every month in all districts of Tamil Nadu at a subsidised price of Rs 200 per 50 kg bag.
Top officials of cement companies like India Cements, Madras Cements, Grasim Industries, Associated Cement Companies, Ultratech Cement, Dalmia Cement and Chettinad Cement met Tamil Nadu Chief Minister M Karunanidhi today, and submitted their joint acceptance letter stating their intention to make available cement at reduced prices.
Each cement company in the state will adopt certain home districts near their place of opeations, and extend the benefit of subsidised cement to economically backward sections and lower middle class in these areas.
District-wise quantities offered by each company will be submitted separately, according to the letter submitted to the Chief Minister by the cement companies.
The cement bags will be delivered to consumers against permits to be issued by district officials. Cement producers located outside the state but supplying cement to Tamil Nadu will also participate in the scheme, the statement said.
To procure cement at Rs 200 per bag, consumers need to get their approved plan verified by district officials. Based on a thumb rule, which defines that construction projects up to 500 sq ft in area will require about 200 bags of cement, the official will issue permits to cement companies for the quantity required for each construction. Purchases will be in minimum lots of 50 bags.
Since the purpose is mainly to cater to the economically backward sections and the lower middle class, maximum permit quantity for any individual may be limited to 400 bags for constructing a structure of maximum 1,000 sq.ft area. It has also been said that district officials may hold a review meeting with cement producers at the end of every month.
Cement manufacturers have also agreed to reduce the price of cement bags committed to the Tamil Nadu Cements Corporation (Tancem). The companies will supply 14 lakh bags of cement per month to Tancem at Rs 220 per bag as against the earlier price of Rs 230 per bag.
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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