The government today asked the steel industry to justify the frequent price hikes and said that failure to do so could attract a price regulatory mechanism. The warning comes a day after major domestic steel makers raised prices of their products,
Steel Minister Ram Vilas Paswan said today.the usual alibi given by steel makers for raising the prices was an increase in rates globally.
"We will meet the steel companies within a week to seek a justification for frequent price hikes. If it's not justified, we will ask them to cut prices,”
“The per capita steel consumption of 45 kgs in the country is much lower compared to that in most developed nations. Prices should be reasonable to increase our consumption”, the minister said.
The cement industry had also drawn the same reactions from the government when they increased prices after last year’s Budget. The government had then termed the hikes unwarranted.
Paswan, however, gave the steel industry something to cheer about by saying that the ministry has proposed reduction in import duties of some critical inputs consumed by the steel producers.
The ministry has proposed reduction in customs duty of iron ore from the current level of two per cent for the next budget. It has also proposed complete abolition of custom duties on coking coal and scrap.
Currently, coking coal attracts a duty of five per cent while scrap has a duty of three per cent. Exuding confidence that the steel sector was moving forward, Paswan pointed out that if the capacity-expansions announced by the steel major fructify in time, India was likely to have a steel production of around 124 million tonnes (mt) by 2012 and 275 mt by 2019-20.
He said steel demand was likely to grow 10 per cent in the next few years. The Planning Commission's Working Group on steel has projected a demand of 70.34 mt for finished steel and 80.23 mt for crude steel by the end of the 11th Plan.
According to a steel ministry note, the country is likely to rope in investment to the tune of Rs 2,76,880 crore by 2012 and Rs 8,70,640 crore by 2020 in the sector.
On the contentious issue of iron ore export, Paswan said ore export should only be allowed after meeting the domestic requirement.
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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