Posts Tagged ‘overseas market’

Additional Directional Movement (ADX) Final Part

Hello Friends here we come up with an extension of our previous blog “Additional Directional Movement (ADX)” Part 1.

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Additional Directional Movement (ADX) Final Part

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In this blog we would read about the features of ADX and the current scenario of the ADX in the market.

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ADX On PRACTICE

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The great feature of ADX is the ability to see buying and selling pressure at the same time.

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Values above 40 indicate very strong trending while values below 20 indicate non-trending or ranging market conditions.

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The indicator does not grade the trend as bullish or bearish, but merely assesses the strength of the current trend.

When ADX begins to strengthen from below 20 and moves above 20, it is a sign that the trading range is ending and a trend is developing.

The current scenario of ADX falling from the levels of 32 & now continuing at 25, tells that the momentum of price is toward a weaker section with a sideways movement.

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It shows that the sellers are stronger than the buyers,this is seen in a downtrend.

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The lesser volumes of trade & the bearish fundamentals also confirm that the overall sentiments are not supportive to the prices.

The factors are as follows:

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· Fresh arrivals are coming to the spot market with harvesting in Idukki.

· Commencement of fresh arrivals with higher moisture content is likely to keep check on the price.

· Indian production is also expected to be higher by 10% to 55,000 tonnes.

· Indian parity in the international market quoting at $3,200-3,225 a tonne (c&f).

· Spot prices have plunged by 9% within a span of 4 weeks, quoting near the levels of 14K.

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The investors are being cautious to enter the trade, which is hence keeping the price in a range between Rs. 13800-14800.

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However, the current tight stock levels in pipeline, & demand from the overseas and domestic market is adding support to prices.

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The DMI lines are good reference for price volatility.

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In a nutshell, values of the ADX can be used to confirm the strength of an upward/down trend & also give the investor the confidence to enter into the trade.

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Govt Not to Impose Restrictions on Foreign Borrowings

Govt Not to Impose Restrictions on Foreign Borrowings

 

The government ruled out limiting companies from borrowing money from overseas market stating that the rise in foreign money is not a matter of concern at present and there is no such proposal.

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However, companies are permitted to raise $500 million annually under the automatic route while infrastructure firms under the approval route can remit up to $100 million for rupee expenditure and for other companies the cap on approval route remittance is set at $50 million.

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Meanwhile, capital inflows reached record levels as investors borrow cheap from advanced countries and invest in high-yielding assets in developing countries while this led to speculations that government may put in place a system of auctioning ECBs.

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In India, foreign inflows through foreign institutional investors (FIIs), ECBs and foreign currency convertible bonds (FCCBs) have been on the rise, while FDI is not picking up as fast.

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On the other hand, on a quarterly basis, the funds raised through ECBs and FCCBs increased by 70% in the September quarter to $4.61 billion while FIIs have put in a record over Rs 71,900 crore in the equities market.

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