Export ban will augment domestic availability, soften prices.
With rising prices spoiling the economic growth party, the government is ready to crack the whip beginning with a ban on cement exports.
Simultaneously, efforts are on to increase imports from Pakistan, which is willing to supply up to 11 million tonnes.
Yesterday, in the midst of the government’s multi-pronged crackdown on inflation, the cement producers had announced a rise in prices.
The export ban will augment domestic availability while the cheap imports from Pakistan will soften prices.
“The government is considering a ban on cement exports. This follows the recent increase in prices by the industry,” said a senior government official.
According to All Pakistan Cement Manufacturers’ Association, the country has supplied 457,624 tonnes to India so far. Cement imports picked up only in September last year, when they became viable as a result of a duty cut.
Nearly all imports come from Pakistan at an average landed price of Rs 170-175 for a 50 kg bag. This is much lower than the prevailing domestic prices of Rs 230-235 in north India.
Cement producers in west India have increased prices by Rs 5 a bag, while a similar rise is expected in the north in the next few days. On an average, cement prices have increased by Rs 10 a bag since April 2007.
Cement exports between April last year and February this year stood at 3.33 million tonnes, down 38.78 per cent over the corresponding period of 2006-07 on account of higher price realisation in the domestic market. The major cement exporting companies are Gujarat Ambuja and Aditya Birla group’s Ultratech.
India’s annual cement production is estimated at 165 million tonnes. Cheaper imports of 10-11 million tonnes can soften domestic prices, feel experts. In January 2007, India scrapped duties on cement imports, following it up by abolishing the 16 per cent countervailing duty four months later.
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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