TVS Motor Company today relaunched Flame, a 125cc motorbike, with a single-spark plug ignition system.
The move comes in the wake of the Madras High Court restraining the country’s third largest two-wheeler maker from making and selling Flame for using the controversial twin-spark plug system.
A legal tussle is currently on between TVS Motor and Pune-based Bajaj Auto over alleged patent infringement by the former in Flame. The battle between Bajaj Auto and TVS Motor started in September 2007 over a technology called digital twin-spark ignition (DTSi).
Bajaj Auto had accused Chennai-based TVS of illegally replicating its patented DTSi technology in TVS Flame.
However, TVS responded that Flame was fitted with a three-valve engine based on CCVTi (Controlled Combustion Variable Timing Intelligent) technology, which is different from the technology used by Bajaj Auto.
The issue subsequently went to court. On February 19, the Madras High Court passed an interim order barring manufacture and sale of TVS Flame using twin-spark plug ignition technology. TVS Motor went on appeal against the verdict.
The high court ruling came as a major setback for TVS Motor, which has been reeling under falling sales and profit figures.
The company was hoping that Flame, launched on December 13, 2007, would boost sales volumes and strengthen its presence in the executive segment, which constitutes over 50 per cent of the motorcycle market.
The revenue losses for the company on account of this were estimated at Rs 100 crore for the current quarter, according to TVS Motor Chairman and Managing Director Venu Srinivasan.
Addressing reporters at the relaunch of Flame, Srinivasan said that the new Flame was powered by three-valve CCVTi engine technology, developed and patented by Austria-based AVL, which has licensed the technology to TVS in India.
“Nothing has changed in this vehicle except the single-spark plug,” he added.
The modified Flame carries a price tag of Rs 46,000 (ex-showroom). The company expects to sell about 15,000 units this month and aims to take it to 25,000 units a month by October this year. The 600-odd Flame vehicles lying with dealers would be reconfigured with single-spark plug ignition, Srinivasan added.
TVS Motor expects to garner a market share of 12 per cent initially in the executive segment.
Flame is also expected to boost export sales of the company as it plans to export to several countries.
Exports are expected to account for about 10 per cent of the company’s top line by the end of the current financial year, according to a company official.
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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