FMCG major Hindustan Unilever plans to directly source raw materials for its food brand Kissan from the farmers. The step is HUL’s effort to integrate the company’s brands with its social, environmental and economic agenda.
The company has identified five key platforms like health & nutrition, women empowerment, water conservation, cutting greenhouse gases and enhancing livelihood to drive its long term sustainable strategy. Harish Manwani, chairman, HUL said, “We have made specific choices which are based on the needs of the nation and the capabilities and skills we can bring to bear on these. We have identified five key platforms and have articulated goals, both short term and long term goals, stretching to 2015.”
HUL intends to pass on the entire economic benefit of backward integration for the Kissan brand to the farmers. Amongst the other initiatives it plans to enhance livelihood of 75,000 women in a sustainable manner and undertake water harvesting at around 10 manufacturing units. Addressing the annual general meeting Manwani informed that HUL aims to become water positive across all its operations by 2015. Since 2002, the company has reduced 50 per cent per tonne water usage in its manufacturing operations.
He mentioned that the company has embraced Unilever’s ambitious target to reduce 25% carbon dioxide from energy in manufacturing operations per tonne of production by 2012, against a baseline of 2004. The company has recently developed a new process of manufacturing soap based on ‘plough share mixer’ technology which eliminates the need for steam in soap making.
Manwani stated that competing for non-consumption itself will drive huge growth for HUL. He said, “Our value creating model is simple, competitive and profitable growth. In 2005, Unilever embarked on a new business model - 'One Unilever' that leverages our global scale with sharper strategic clarity and focus on operational excellence.”
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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