| Swedish behemoth Volvo has charted out an aggressive strategy to become a leader in the country’s heavy commercial vehicle sector, following its alliance with the Delhi-based Eicher Motors. |
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| Volvo signed a letter of intent (LoI) with Eicher Motors last year for a joint venture company to expand its truck presence in the country. |
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| Volvo India managing director Eric Leblanc, said, “We want to be a leader in the heavy commercial vehicle segment. We have a larger and better product offering than our competitors. We can bring in products which are already the best in the world.” |
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| Leblanc added, “Some products belonging to our competitors do not match even half of Volvo’s performance on the roads. Volvo has already clocked more than 1 million kms in its lifetime.” |
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| “Our products can be compared with any of the Indian ones and we will come out tops with regard to the total cost of ownership, serviceability, maintenance, comfort and satisfaction levels,” he asserted. |
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| The company plans to bridge the huge gap between its products and those of Eicher through the introduction of Nissan diesel vehicles. The company is currently conducting a market study for such vehicles. |
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| Nissan platforms may be used for the product development of Eichers Motors at a later stage of the alliance. |
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| Volvo has realigned its operations in India with two separate entities, which are Volvo Bus Body Technologies and Volvo India. The bus and truck segments of company will now be two separate entities. |
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| According to plan, the Volvo’s technological superiority will help Eicher Motors to build its own range of advanced medium and heavy trucks, which will be launched in the Indian and overseas market. Volvo will help to distribute and market Eicher trucks in the international markets. |
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| Although Tata Motors and Ashok Leyland together account for more than 80 per cent of the market share in the goods carrier segment, Volvo is optimistic of gaining significant market share by 2010 through the introduction of its range of commercial vehicles and those of Eicher’s. |
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| Like many international automotive components, Volvo is also looking to tap into Eicher’s component supplier base for sourcing inexpensive components to feed its mother plants overseas. |
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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