Traditional competitors Reliance Industries Ltd (RIL) and Oil and Natural Gas Corporation (ONGC) are now working towards co-optition (where competitors work with each other) by sharing infrastructure and facilitating smooth operations in each other’s exploration and production (E&P) activities.
Indications are that RIL may offer rigs to ONGC in two or three locations in 2008-09. These rigs are mainly for undertaking exploration activities. The shortage of rigs for E&P activities has forced the two major players in India to come to the table for sharing rigs.
rig sharing
Speaking to Business Line, Mr D.K. Pande, Director (Exploration), ONGC, said, “We are interacting with each other to see if mechanisms for rig sharing can be worked out. Besides, we are also trying to see that we facilitate smooth operations in each other’s E&P activities in areas where our blocks are adjacent. “RIL rigs could be available only after the private sector player has finished its exploration activities and enters the development phase. The rig requirements for both the companies are different, as the stages of exploration activities vary for them. ONGC currently requires more exploratory rigs in ultra deepwater, whereas RIL has entered into the development phase at its prolific D6 Krishna Godavari (KG) basin block.
hiring charges
Currently, average rig hiring charges are in the range of $4,75,000-5,00,000 per day. The two companies have, till now, been following the system of hiring their own rigs instead of sharing them. But with the international market dynamics showing scarcity in rig availability, the two players are looking at joining forces.
On how the two propose to facilitate smooth functioning of each other’s operations, sources said, “The two companies have decided to cooperate by not interfering in each other’s activities by adjusting their operations”. While RIL is in the process of constructing its pipeline for transporting its D6 KG basin gas to the delivery point, in the adjacent block in the same basin ONGC is undertaking its seismic activities. Thus, the two have decided to cooperate for facilitating smooth operations, as cost involved are also huge, sources said.
discoveries
ONGC, which has been drawing flak for going slow on its E&P activities, has already made 18 discoveries in its various acreages during the current fiscal. The company, which already has its own fleet of rigs, has been in talks with global oil firms for rigs for drilling appraisal wells in its successful assets in Mahanadi and Krishna Godavari basins including ultra deepwater wells. ONGC has to drill close to six-eight appraisal wells.
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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