Bennett, Coleman & Co (BCCL), publishers of The Times of India and The Economic Times, has acquired 3.3 per cent stake in Chennai-based SKC Retail Limited for a consideration of approximately Rs 10 crore.
SKC Retail, which is not a listed company, operates its business under the brandname ‘SKC’, and has 13 showrooms in four states. The company has spent over Rs 65 crore in its expansion in Hyderabad, Bangalore and Pune where it has opened four stores so far. A senior official of SKC Retail said that the deal with BCCL is based on standard investment procedures, but did not rule out expanding it into a full-fledged advertising contract at a later point of time.
“We have been in expansion mode since the first quarter of fiscal 2006, and added over 2 lakh square feet in just Hyderabad, Bangalore and Pune over the past 120 days. These are locations where The Times of India has a substantial and growing presence. A strategic tie-up with BCCL in these locations would help add value to our efforts in aggressively penetrating these markets,” the official added.
For the financial year ending March 2007, SKC Retail saw revenues touching Rs 179 crore on a topline CAGR of 88 per cent. Revenues in 2007-08 are expected to cross Rs 260 crore.
Companies in which BCCL has picked up equity holding over the past year include Emaar MGF, Mantri Realty, Wasserstein India & Co, Abbee Consumables and Mumbai-based Clinical Research Institute.
BCCL’s investment division Private Treaties, is known to have invested in at least 130 companies so far spread across sectors which include retail, real estate, consumer durables, FMCG, floriculture, aviation, textiles and lifestyle.
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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