Index Trends And Stocks In Action For March 20, 2014

Indian Equity market started on muted note due to lack of triggers from the domestic front and continued to trade sluggish as traders and investors remain on sideline ahead of Fed Meeting. However some action was witness in the metal space and a few frontline stocks from FMCG and Healthcare. The Nifty settled at 6524 gaining 8 points. Nifty in today's session moved in narrow range of 30-40 points and made an inside bar.

The reason why an inside bar pattern forms could be price action is consolidating after a huge impulsive trend move, price action is coming up against a critical resistance level and lastly profit are being taken i.e distribution. Now if we look at momentum oscillators they suggest that it's just a normal consolidation after a big impulsive trending move. Now in order to resume this uptrend and regain its strength Nifty needs to get past the difficult supply zone of 6565-6575, on closing basis. For day trading important support on downside is around 6470 and next support around 6430. 

In a major setback to crisis-hit Jignesh Shah-led Financial Technologies (India) (BSE Code: 526881) group, SEBI ruled that it is not "fit and proper" to own stakes in any stock exchange and directed it to divest existing holdings in MCX-SX and four other entities. Besides MCX Stock Exchange, the group holds equity in its rival NSE, Delhi Stock Exchange (DSE), Vadodara Stock Exchange (VSE) and MCX-SX Clearing Corporation (MCX-SX CCL) and all these holdings would need to be disposed off within 90 days. The stock may witness selling pressure in today's session.

With the Petroleum and Natural Gas Ministry unwilling to relent, BP and Niko Resources may be left with no option but to join partner Reliance Industries (BSE Code: 500325) in its arbitration against the Government to qualify for the revised gas price. RIL-BP-Niko are of the view that as contractor and producer of gas from the D-1 and D-3 fields in the KG-D6 block, off the Andhra coast, the benefit of new price should be available to all three. But the Ministry is insisting that the two foreign partners of RIL will have to become party to the ongoing arbitration between the Indian firm and the Government. RIL has challenged the Government for levying penalties for a shortfall in gas production from the KG-D6 block. The stock may witness volatility in today's trade.

Shares in  Amtek India (BSE Code: 532282) and its parent  Amtek Auto (BSE Code: 520077) in yesterday's session jumped about 6%. This is because the former informed the bourses Tuesday it had completed the acquisition of Germany's Kuepper Group it had announced in December 2013. The Amtek Group is one of the world's largest manufacturers of iron-cast auto components and the acquisition of the Kuepper Group, a supplier of machined castings with operations in central Europe and key clients such as BMW, Renault Nissan and Volkswagen, would serve as synergistic for the Indian company. The street is of the view that buying interest in these two stocks may continue in today's session too.

Dr Reddy's Laboratories (BSE Code: 500124) in the recent past has received approval for three Abbreviated New Drug Application (ANDA) approvals from the US Food and Drug Administration, with a combined market size of USD 500 million.  All three face limited competition, from three to four entities, which should translate into higher margins. This may induce further buying interest among investors in today's session.