While I was star gazing yesterday in the night time I observed a celestial body( probably a star ) flaunting various colors and was residing near the moon from the angle I saw it. It appeared to be stationary. Any plausible explanations for this phenomenon? Thanks.
Judging by the time of your post, I would probably say the star you saw was Aldebaran as it was very close to the moon on that night. It's the brightest star in the constellation Taurus so is easily seen close to the moon, where the moonlight washes out the dimmer stars around it. It is normally seen red/orange to the naked eye but atmospheric interference can cause it to 'twinkle' and the influence of the moon's light could possibly make it appear to look slightly different colours depending on its height in the sky.
This to me seems to be the most logical explanation and also seems that this was the most probable star you were seeing that night.
To be sure in future, get a star atlas or even download some apps on your phone to tell you the positions of stars in the sky. It will make stargazing more fun aswell!