Index Trends And Stocks In Action For January 31, 2014

Indian Equity markets continued its downward journey for the fifth successive day as investors and traders pressed sell button on back of weak lead from global peers. Market was pretty range bound all through the day; however some action in last half an hour was seen due to short-covering ahead of expiry of January month. Banking, Realty and Metal stocks were among the worst hit in the sell-off. Capital goods stocks recovered well and ended off their lows. Oil and FMCG stocks closed in red. The Nifty closed at 6073 recording a loss of 46.55 points. On daily chart Nifty has formed a hammer candlestick pattern this candlestick has a long lower wick and a short body at the top of the candlestick with little or no upper wick. This is a sign of a potential reversal in the market as the long lower wick represents a period where the sellers were initially in control but the buyers were able to reverse the control and drive prices back up to close near the day's high. Market may see a bounce back but it will be short lived and bounced should be used to create fresh short position as short term trend is in favor of bear's. The range between 6045 and 5970 is the most critical support zone for the Nifty in short term the 200-day EMA is stationed around this level of 6024. If this zone gets taken out then we should be bracing for more weakness. For intra-day Nifty has strong support around levels of 6040 and next support level is around 6000 levels. On upside 6105 will act as resistance and if bulls sustains above this levels next resistance is around 6145. 

In yet another action against Coal India (BSE Code: 533278), the Competition Commission has ordered fresh probe into the state-run miner and its subsidiary for alleged abuse of dominant market position in fuel supplies. The probe would also look into the role of executives who were in-charge of business if violations of competition norms are found. The stock may remain volatile in today's trade.

Cadila Healthcare (BSE Code: 532321) has received US health regulator's nod to market Etodolac extended release tablets, used in the treatment of arthritis, in the American market. The company has received final approval from the USFDA to market Etodolac extended release tablets in strengths of 400mg, 500mg and 600 mg. The drug is prescribed for treatment of juvenile arthritis, rheumatoid arthritis and osteoarthritis. The stock may remain in limelight in today's session.

India's drug regulator has ordered Ranbaxy Laboratories (BSE Code: 500359) to furnish a comprehensive explanation for the violation of manufacturing practices at its Toansa plant, discovered by the USFDA, which earlier this month banned the export of drugs manufactured at the unit. The Drug Controller General of India has also dispatched a team of officials to inspect the plant. Selling pressure in the counter in today's trade cannot be ruled out.

A ministerial panel on disinvestment today approved the sale of a 10% stake in Engineers India (BSE Code: 532178) through a follow-on public offer (FPO) by the government, which may fetch the exchequer Rs 500 crore. The Department of Disinvestment has already held overseas road shows to attract foreign investors to the EIL stake sale. The stock may trade with a positive bias in today's trade.