Index Trends And Stocks In Action For January 2, 2014

Indian Equity markets remained completely listless on the first trading day of 2014. The Nifty traded in very tight range of 25 points and closed near the 6300 mark. The broader markets saw lot of action and it outshined the benchmark indices. Advance-decline ratio was in favor of bulls. In our last write up we mentioned we don't expect much action on first day of year 2014, due to lack of participation and lack of cues from global market so this was in line with our expectation. Now if we analyze last 7 days candlesticks we have seen strong consolidation with strong support around levels of 6260 and resistance in zone of 6330-6345 and volume have been diminishing on every candlestick. Due to lack of volumes and lack of volatility there is no clear signal as in which direction market is heading.  So for next few days we feel market will spend some more time in this range and once the participation picks up and as soon as some important cues flow in market there will be some volatility in market.  For now traders approach should be stock specific as midcap and small cap stocks are seeing good buying and participation. But once we break this distressing range of 70-80 points than it would be ideal time to play in index. Till than traders should focus on broader market.  For intraday key levels on downside is 6280-6255. On upside stiff resistance is around 6330-6345.

In a first of its kind initiative, Tamil Nadu Newsprint and Papers (BSE Code: 531426) has set up a paper pulp machinery with an investment of Rs 164 crore at its plant in Karur district to reduce the use of paper-dye. The machinery would produce 300 tonnes of paper pulp on a day and the usage of 100 tonnes wood paper pulp would be reduced. Similarly, the company as part of meeting its power requirements, has set up boilers at an investment of Rs 167 crore which would increase the power generation to 103.62 MW from 81.12 MW. The stock is likely to witness some buying interest in today's trade.

Following the successful drilling of the country's first shale gas exploratory well near Jambusar about 60 km from here, ONGC (BSE Code: 500312)  has decided to drill more wells in Cambay region of Gujarat. The first well drilled by the company in October 2013, to exploit the natural gas trapped within the shale formations located in Cambay basin, is estimated to have a shale gas potential of 20 TCF (trillion cubic feet). The stock is likely to remain in limelight in today's trade.

The Cabinet Committee on Economic Affairs is expected to take up tomorrow the Power Ministry's proposal to amend the Mega Power Policy. The policy was introduced in November 1995 to provide impetus to the setting up of large power projects and derive benefits from economies of scale. Thermal power projects of 1,000 MW and hydel plants of 500 MW are eligible for benefits under the policy. Companies like Tata Power (BSE Code: 500400) and Reliance Power (BSE Code: 532939) may witness some buying interest among investors in today's trade.

Jet fuel or ATF prices were today hiked by over 2.7%, the second increase in rates in one month. Aviation Turbine Fuel, or ATF, price at Delhi was hiked by Rs 2,036.59 per kilolitre, or 2.74%, to Rs 76,241.33 per kl, according to BPCL (BSE Code: 500547). The increase follows a marginal Rs 597.48 per kl or 0.8% hike in rates effected from December 1, 2013. Aviation stocks like Jet Airways India (BSE Code: 532617) and SpiceJet (BSE Code: 500285) are likely to trade with a negative bias in today's trade following this news that came post market hours yesterday.