Index Trends & Stocks In Action For 11th April 2013

The Indian markets broke their 5-day losing streak to end near day’s high on Wednesday. Amid firm cues from European markets and buying seen in Software and Financial stocks the indices traded firmly particularly in the latter part of the day. The Nifty closed at 5559, up 64 points. On the daily charts the Nifty has formed a bullish harami candlestick pattern, which is a reversal pattern. In the bullish harami pattern the first day has a big red candlestick and the second day is followed by a white body which is closely within the range of the first red candlestick. This signals a trend reversal since the second day’s real body shows the bearish power to be diminishing. Going forward the Nifty has immediate resistance around levels of 5580 and the second level of resistance kicks in at 5610. The first level support for the Nifty will come in at 5530 and next will come in around the 5500 mark.

RPG Life Sciences has received a GMP certificate from Hamburg Health Authority, Germany for its API manufacturing facility located in Navi Mumbai. This new development, reported after market hours is a significant one and will help the company increase sales in the European markets. We expect some positive trades in the stock for today.

Reliance Industrial Infrastructure reported its Q4 results yesterday. The Company saw a 48% jump in its revenues to Rs 23.32 crore while net profit was up 6% to Rs 6.6 crore. EBITDA margins were down from 49% a year ago to 37%, which dulls the results. During the quarter, it has revalued its plant and machinery which increased its depreciation cost. We expect some volatility in this stock following the fluid results that it has come up with.

NTPC and Coal India’s dispute over the coal valuation has now touched a new low. The coal miner is seeking Rs 1000 crore of receivables from its biggest customer NTPC which is denying the payment blaming the lower quality of coal supplied by Coal India. NTPC has said that on an average 36% of the total coal supplied by Coal India contains ash, dirt and even stones which cost it Rs 11000 crore a year. The government is trying to resolve the issue, but nothing firm has yet come out. We expect Coal India particularly show some negative bias following this development.