The markets have crashed on a week-on-week basis with a jump in volumes as the players focussed on expiry of the April series. The volumes were higher primarily due to expiry / rollover considerations. The outstanding net long positions are down approx 19 % on a week-on-week basis. This is a routine development on expiry. The outlook appears to be cautious as the markets are trading near the short term support at the 1900 levels which points towards a possibility of 1880 - 1888 levels if more selling occurs. The Nifty near month futures trade at Rs 20 discount to cash - as against at Rs 16 discount to cash last weekend. The stocks of the week are likely to remain Reliance Inds, SBI & Tisco.

Outstanding positions - week on week

Market internals - outstandings - all Rs crores

Description	Rupees crores	Call options	Put options	Net position
Index Futures	3,821 99
Stock futures	7,056 1385
Index options		432 1050	378 566	54 484
Stock options		489 1330	113 360	376  970
Total Futures	10,877 1286	Total options - net	430 1454
Gross longs ( F+O )	11,798 3666	Net longs ( F+O )	11,307 2740

Observation - The net out-standings have fallen significantly as the above table indicates. This is a routine development on expiry. Click here to view previous weeks file.

Note - Previous weekend gross long positions Rs 15,464 crs, net long positions Rs 14,047 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 9,812 crs in open interest which is a substantial portion of the entire market open interest. The FII's seem to be concentrating on stock futures and then Index futures in that order of preference. Please note that FII's have sold more futures than they bought on April 28, 2005. That indicates a selling bias in the near term. Sales of Rs. 325 Crs are seen in the cash segment on that day.

Source - The National Stock Exchange.

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The traded volumes have jumped. The traded turnover was higher in the futures segment. Higher volumes were higher primarily due to expiry / rollover considerations. We want the volumes and prices to rise in the coming week if the markets are to see retail participation. The combination of traded volumes, open interest and put / call ratios are a reliable indicator of the undercurrents. The outlook appears cautious in the short term. Click here to view previous weeks file

Description	Previous week - Rs. crores	Current - Rs. crores	Change - Rs crores
Index Futures	17,444	19,713	2,269
Stock futures	26,059	35,005	8,946
Totals - a	43,503	54,718	11,215
Index calls	2,159	1,548	611
Stock calls	2,063	2,242	179
Totals - b	4,222	3,790	432
Index puts	1,796	1,516	280
Stock puts	835	878	43
Totals - c	2,631	2,394	237
Grand totals ( a+b+c)	50,356	60,902	10,546

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	0.88 : 1	Previous week	0.65: 1
PCR - Stocks	0.22 : 1	Previous week	0.26 : 1
PCR - Total	0.27 : 1	Previous week	0.30 : 1

Observation - The PCR shows a tilt towards the bulls as the ratios are showing a decrease in shorts on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have seen a hefty increase. The individual stocks show a decrease in short positions. This ( PCR ) will be the one of the most reliable indicator of market trends. The total PCR has remained below the equilibrium point. The equilibrium point is 0.50 : 1. Click here to view previous weeks file

Source - The National Stock Exchange.

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Directional guidance - week on week

Market internals - Nifty put / call trends - 5 highest open interest contracts

Calls	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1950  CE	38	141	103
1900  CE	10	121	111
2000  CE	17	62	45
2050  CE	22	32	10
2100  CE	25	29	04
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1900  PE	30	159	129
1950  PE	62	88	26
1880  PE	00	38	38
2200  PE	01	26	25
2000  PE	09	20	11

Observation - The index contracts show which way the players are tilting. The outstanding positions seem to have increased in the previous week. The bulls have added Rs 273 Crs - showing a preference for the 1900 - 1950 strikes. Our inference is - watch the 1880 / 1888 support levels in the coming days. The bears have increased Rs. 229 Crs. That shows a tendency towards the 1880 - 1900 strikes. The undertone appears cautious for now. Click here to view previous weeks file.

Source - The National Stock Exchange.

Open interest I FII positions I Volumes I PCR I Nifty puts / calls I open int changes I OI - stocks I Top calls / puts I Volatility I Recos I Print this page I Close Window

Source - The National Stock Exchange.

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The center stage - week on week

5 Highest outstanding scrips

Futures	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
Reliance	958	880	78
Tisco	991	841	150
NTPC	327	276	51
Infosys	377	328	49
SBI	414	324	90

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 85 calls	10	28	18
TISCO 350 calls	02	24	22
TISCO 360 calls	08	23	15
NTPC 90 Calls	08	18	10
RELIANCE 560 calls	01	18	17

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in all the stocks has fallen - a routine phenomena after expiry. Infosys is the new kid on the block. Watch Reliance & Tisco for directional guidance in the coming week. Click here to view previous weeks file.

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The activity is polarised around the Nifty between the 1880 - 2000 on the long side and NTPC, Reliance Inds, SBI & Tisco in individual stocks.

 

Source - The National Stock Exchange.

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Volatility is a F&O traders best friend. We have split the volatility readings of the stocks in two segments - above the market average and below the market average. It is obvious that higher than average volatility will see a larger move in either direction and therefore benefit a savvy intraday / short term trader. It is wiser to avoid those stocks which show lower volatility readings if you want short term profits. Keep watching this space for regular updates.

This segment is for paid subscribers only

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Have a profitable day.

 

Vijay L. Bhambwani

Ceo :- Bsplindia.com

The author is a Mumbai  based investment consultant and invites feedback at Vijay@BSPLindia.com and  (022) 23438482 / 23400345.

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