Index Trends And Stocks In Action For January 07, 2014

Indian Equity markets opened with marginal gains but the index shed all the gains in first 10 minutes of trading session. Once again the rate sensitive stocks like banking stocks and Realty stocks were in firing line. Healthcare and FMCG stocks saw some grip in today's trading session. However small cap stocks really were in explosion as it ended with smart gain of about 1%. In our last write up we mentioned that 6230-6240 will act as roadblock for Nifty and Nifty in today's session reversed back from this zone. Now on daily chart if we analyze last two trading session candlestick its shows Nifty have made double bottom around 6170 and double top around 6230 and both candlesticks are identical in range but we have closed on lower side from previous candlestick which again hints some diminishing momentum on buying side and RSI has reversed from level of 55 so it may be marked as lower top lower bottom formation on RSI if we don't break 60 level in coming trading session. Going ahead Nifty has rock-solid resistance around 6235-6240 as its 21-day EMA is around 6235 and it has formed double top around 6230. So market needs to sustain above this zone for upward moment. What has been disappointing that the heavyweights are not showing any kind of contribution and without strong contribution from these heavyweights stocks it would not be possible for Nifty to cross this roadblock of 6235-6240. For intraday strong support is around 6165 and next support is around 6110. On upside 6235-6240 will act as resistance.

Ashok Leyland (BSE Code: 500477) plans to launch up to 18 different types of trucks this year under its new brand for commercial vehicles, 'Captain'. The company unveiled the tipper model Captain 2523, priced Rs 24 lakh upwards, is increasing the prices of the existing small trucks by up to Rs 30,000 this month. It has invested about Rs 600-700 crore in the development of the new range of medium and heavy commercial vehicles under the Captain range. The stock may witness some buying activity in today's trade.

Blue Star (BSE Code: 500067) plans to invest nearly Rs 150 crore in the next fiscal for setting up a manufacturing facility in South India. The company felt the need for a manufacturing unit since 40% of its total business comes from the region. The stock may trade with a positive bias in today's trade.

A study by Bernstein Research suggested that Reliance Industries (BSE Code: 500325) may more than double natural gas production to 50 million standard cubic meters per day by 2018 if gas prices are increased from April. The projected output will come from satellite fields in the eastern offshore KG-D6 block as well as North East Coast block NEC-25, off the West Bengal coast. The stock which witnessed selling in yesterday's trade may witness some buying in today's session based on this report.