Index Trends And Stocks In Action September 22, 2014

The Indian market opened in green on Friday, however just when it seemed that the nifty index would cross the upward resistance and will break into new life time high, profit booking dragged the market and the indices closed near day’s low. Buying was seen in IT, Telecom and Select pharma stocks. On other hand Oil & gas, Capital goods, Realty and Metals ended in red. The broader market continues to prosper and managed to end with reasonable gains.  On daily charts nifty has formed a Gravestone Doji candlestick pattern. This candlestick pattern is a bearish reversal candlestick and its success rate is greatly increased when the candlestick pattern is formed at a market top. The Psychology behind the candlestick is that the bulls pushed the security up to an unsustainable level and the bears are able to sell the security down to its low level by end of the session. Currently the set-up on daily chart indicates the index is likely to continue its consolidation-correction phase. On downside the bulls need to guard the level of 8030, once this level is taken out the bears will get an upper hand and aggressive selling can trigger. On the upside nifty need to cross hurdle of 8170 for fresh up move.

Aegis Logistics (BSE Code: 500003) will sell a 40% stake in its Singapore based wholly owned subsidiary, Aegis Group International to ITOCHU Petroleum Co. (Singapore), a wholly owned subsidiary of ITOCHU Corporation for a total consideration of USD 5.85 million. Further, the Company's management proposes to establish a joint venture with ITOCHU Corporation to enable the Company to significantly expand and scale up its LPG division. The stock may trade with a positive bias in today’s trade.

Aban Offshore (BSE Code: 523204) plans to strengthen its balance sheet by refinancing its debt for a longer tenure resulting in repayment capability and also for comfortable cash flows. The company intends to strengthen its balance sheet by refinancing debt for a longer tenure resulting in a comfortable interest cover. The company refinanced its debt for a longer tenure of 15 years which aligned debt tenures with the long term nature of the company’s assets and reduced considerable stress on the company’s repayment capability and projected cash flows. The stock may remain in focus in today’s trade.

Rashtriya Chemicals and Fertilisers (BSE Code: 524230) (RCF) is scouting for opportunities abroad, including a joint venture to set up fertiliser plant in Iran. The company is looking for an Iranian partner to build a USD 800-million urea plant in Iran, which has the second largest reserves of gas in the world. The plant will have 1.27 MT of urea production capacity. With this project, RCF and Gujarat Narmada Valley Fertilisers & Chemicals Ltd (GNFC) seek to tap cheaper gas offered by Iran to produce the farm nutrient and ship it to India. RCF is also exploring possibilities of entering into long-term offtake agreements for potash with suppliers in Canada. Commenting on domestic projects, the company has drawn up a capex plan, which includes investment of Rs 300 crore in the current year and Rs 1,000 crore in the next year. The stock may remain in focus in today’s trade.