Index Trends & Stocks In Action For 4th March 2013

On Friday markets recovered after the bloodbath they witnessed on budget day. The Nifty closed near an important level of 5720 with marginal gains of 0.47%. Friday saw the formation of Bullish Harami candlestick. The Bullish Harami candlestick signals a trend reversal as it shows that selling power is diminishing. It will be a good time to enter into a long position if it is followed by a white candlestick in the next trading session. The ADX (average directional index) has shown a positive divergence. We could witness some consolidation in the coming days. The recent low of 5670 can act as an immediate support for the Index. On the upside, the index may face a stiff resistance around levels of 5760, it may witness a bounce back if it sustains above levels of 5760.

Videocon Industries has announced, that it will be entering the banking space and that it has set aside Rs1000 crore for the same. The Company is already present in the financial sector through a joint venture with Liberty Mutual Insurance. On back of this announcement we expect the stock of Videocon Industries to remain volatile in today’s trading session.

MMTC a PSU stock needs to be watched closely today. The government’s offer for sale for a offloading 9.33% stake sale in the trading giant is likely to hit the market on March 14. This is expected to yield around Rs 300 crore to the exchequer. The floor price for the proposed stake sale is to be fixed in the meeting that is scheduled on March 12. We expect the stock of MMTC to remain in action for a couple of days starting today.

According to media reports, Jindal Steel and Power (JSPL) has increased the prices of its flat products by Rs1000 per tonne and long products by about Rs 500 per tonne. Earlier it had cited a lower demand for products as the main reason for weaker margins and hence this decision. Following this announcement, the stock of JSPL is likely to remain in action in today’s trading session.

According to the media reports, the Essar Group plans to expand its presence in Africa as the company is planning to set up 10 million tonne port in Mozambique at an estimated cost of around Rs 1496 crore. The Company intends bringing iron ore from Zimbabwe to India. The work of this project has been under taken by the groups African subsidiary , Essar  Africa Holdings. On back of this news, we expect the stock of Essar Group to remain in focus for the day.