The markets have rallied on a week-on-week basis on higher volumes growth as the players seem to have rolled over significant open contracts to the December series and lent additional support at all levels. The outstanding net long positions are up  approximately 30 % on a week-on-week basis. This is a positive development as bulls show higher risk appetite. The outlook appears to be optimistic as the markets are likely to test the previous top on the Nifty in the coming week. The Nifty is trading above a short term support at the 1982 levels which if violated during the week,  will see 1956 - 1965 levels. The Nifty December futures trade at Rs 1 premium to cash. The stocks of the week are likely to be NTPC, Reliance Inds, TCS & Tisco.

Outstanding positions - week on week

Market internals - outstandings - all Rs crores

Description	Rupees crores	Call options	Put options	Net position
Index Futures	2,325 610
Stock futures	8,637 1616
Index options		743 369	824 430	(-) 81  61
Stock options		1538 837	419 283	1119  554
Total Futures	10,962 2226	Total options - net	1038 493
Gross longs ( F+O )	13,243 3432	Net longs ( F+O )	12,000 2719

Observation - The net out-standings have increased as the above table indicates. This is a positive development as outstanding positions have not shrunk as much as they have in the recent times after expiry. The bulls show a higher risk appetite. Click here to view previous weeks file

Note - Previous weekend gross long positions Rs 9,811 crs, net long positions Rs 9,281 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 7,686 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 bought more futures than they have sold on Dec 02, 2004. That indicates a buying bias in the near term. Purchases of Rs 994 Crs are seen in the cash segment on that day.

Source - The National Stock Exchange.

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The traded volumes have improved. The traded turnover was higher in all the segments. That is a positive sign as the markets are rising on higher volumes. We want the volumes 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  optimistic in the short term. Click here to view previous weeks file

Description	Previous week - Rs. crores	Current - Rs. crores	Change - Rs crores
Index Futures	11,519	11,729	210
Stock futures	33,970	39,581	5,611
Totals - a	45,489	51,310	5,821
Index calls	1,290	1,375	85
Stock calls	3,142	3,686	544
Totals - b	4,432	5,061	629
Index puts	898	1,174	276
Stock puts	844	831	13
Totals - c	1,742	2,005	263
Grand totals ( a+b+c)	51,663	58,376	6,713

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.13 : 1	Previous week	1.07: 1
PCR - Stocks	0.24 : 1	Previous week	0.18 : 1
PCR - Total	0.29 : 1	Previous week	0.23 : 1

Observation - The PCR shows a tilt towards the bears as the ratios are showing slight bearishness on a week-on-week basis. Bears have enhanced exposure on their positions. The Nifty PCR remaining outright bearish, the shorts have seen a slight increase. The individual stocks show increase in short positions too. This ( PCR ) will be the one of the most reliable indicator of market trends. The total PCR has remained above 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	NA	92	92
1900 CE	144	127	17
1990 CE	NA	62	62
1970 CE	NA	49	49
1910 CE	65	68	03
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1800 PE	38	47	09
1900 PE	119	244	25
1920 PE	25	34	09
1850 PE	109	122	13
1950 PE	NA	76	76

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 189 Crs. Our inference is - watch the 1980 support levels in the coming days. The bears have added Rs 132 Crs. That shows a tendency towards selling at the 1900 - 1950 strikes. The undertone appears optimistic 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
Tisco	804	814	10
TCS	434	506	72
Reliance	597	688	91
NTPC	418	523	105
SBI	354	456	102

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 80 calls	52	95	43
NTPC 85 calls	21	53	32
ONGC 840 Calls	10	42	32
Reliance 540 calls	29	42	13
TCS 1260 calls	30	50	20

Observation - The action remains polarised around the same big counters - Tisco, Reliance, TCS & SBI. Outstanding open interest in all the stocks has risen - a routine phenomena after expiry. NTPC 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 1970 - 2030 on the long side and Satyam Computers, Reliance, ONGC, ACC & Tisco in individual stocks.

 

Source - The National Stock Exchange.

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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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