Index Trends And Stocks In Action For January 16, 2014

Indian Equity markets saw positive opening on back of strong global cues and once the inflation number were out there was party mood on D-street as inflation eased to five month low. The Nifty closed above 6300 mark for the first time since January, 2014 it rallied up 79 points. In our last write up we mentioned as long as Nifty remains above level of 6240, it's likely to touch 6300 mark and this was in line with our expectation. Nifty on daily charts has formed bullish marabuzo candlestick pattern its bullish pattern and it reflects power of bulls as the candles opens near day's low and closes near day's high. Going forward 6360 will act as a road block and we have seen in past as we approach to this historical supply zone Nifty sees strong sell-off. On RSI we have seen smart bounce from levels of 30 and now it's hovering around 55-56 which in past has acted stiff resistance and we have seen some sell off from this level. Now the market are at important juncture and if Nifty manage to close above 6360 level we may see a range expansion along with this the RSI needs to break 60-odd levels. The Bank Nifty has to participate and it has some resistance around 11,250-11,270, once this is clear a 200-300 points rally would be seen in bank Nifty. Next two trading session will provide us a clear picture because it will give us a weekly candlestick and the RSI weather it breaks out of range or not. Intraday Nifty will face resistance around 6340-6365 levels. On downside strong support is around 6280-6255.

The Empowered Group of Ministers, headed by Finance Minister P Chidambaram, will meet today to decide on government's 10% stake sale in Indian Oil Corporation (BSE Code: 530965). The Finance Ministry plans to offload 24.27 crore shares of IOC that is expected to fetch the exchequer around Rs 4,800 crore. The stock may remain in limelight in today's trade.

Cabinet Committee on Investment has cleared Reliance Power's (BSE Code: 532939) Tilaiya ultra mega power project in Jharkhand. RPower, may not have to provide non-forest land to compensate for the loss of forest land acquired for the proposed plant. The company's 4,000 MW Tilaiya plant is now expected to be treated on a par with the other public sector projects and therefore would be exempted from providing compensatory afforestation for the loss of forest land. The stock may witness some buying interest in today's trade backed by this news.

Oriental Carbon & Chemicals (BSE Code: 506579) has informed that the Hon'ble Gujarat High Court has pronounced an order on January 13, 2014 in a PIL against Adani Ports and Special Economic Zone (BSE Code: 532921), located in Mundra, Kutch district and all manufacturing units therein - where the Company has its SEZ Unit to temporarily stop operations till the APSEZ receives environmental clearance from the Ministry of Environment & Forest (MoEF). Pursuant thereto, the Company has suspended operations of its SEZ Unit located at Mundra. The Company plans to approach the apex court shortly seeking necessary redressal in this respect. Both the stocks are likely to trade with a negative bias in today's trade.

The telecoms unit of Reliance Industries (BSE Code: 500325) has applied to bid in a spectrum auction next month. The move by Reliance Jio Infocomm comes as a surprise as the company is working to launch 4G wireless broadband services soon. The stock may remain in focus in today's trade.