The markets have corrected downwards on a week-on-week basis on negative volumes growth as the players seem to have abstained from large scale trading. The outstanding net long positions are up  approximately 8 % on a week-on-week basis. This is a positive development as bulls show higher risk appetite. The outlook appears to be cautiously 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 1962 levels which if violated during the week,  will see 1935 - 1942 levels. The Nifty December futures trade at Rs 2 discount 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	2,536 211
Stock futures	9,145 508
Index options		939 196	1116 292	(-) 177  96
Stock options		2072 534	549 130	1523  404
Total Futures	11,681 719	Total options - net	1346 308
Gross longs ( F+O )	14,692 1449	Net longs ( F+O )	13,027 1027

Observation - The net out-standings have increased as the above table indicates. This is a positive development as bulls show a higher risk appetite. Click here to view previous weeks file

Note - Previous weekend gross long positions Rs 13,243 crs, net long positions Rs 12,000 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 8,422 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 have bought on Dec 09, 2004. That indicates a selling bias in the near term. Purchases of Rs 152 Crs are seen in the cash segment on that day.

Source - The National Stock Exchange.

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The traded volumes have dived. The traded turnover was lower in almost all the segments. That is a positive sign as the markets are falling on lower 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	11,729	12,937	1,208
Stock futures	39,581	34,542	5,039
Totals - a	51,310	47,479	3,831
Index calls	1,375	1,031	344
Stock calls	3,686	3,214	472
Totals - b	5,061	4,245	816
Index puts	1,174	1,128	46
Stock puts	831	811	20
Totals - c	2,005	1,939	66
Grand totals ( a+b+c)	58,376	53,663	4,713

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.21 : 1	Previous week	1.13: 1
PCR - Stocks	0.24 : 1	Previous week	0.24 : 1
PCR - Total	0.29 : 1	Previous week	0.29 : 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 Nifty short positions. The Nifty PCR remaining outright bearish, the shorts have seen a slight increase. The individual stocks show a minor 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	92	86	06
1900 CE	127	121	06
1990 CE	62	70	08
2000 CE	23	115	92
2030 CE	24	77	53
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1800 PE	47	47	00
1900 PE	244	234	10
2000 PE	17	78	61
1850 PE	122	122	00
1950 PE	76	187	111

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 88 Crs. Our inference is - watch the 1960 support levels in the coming days. The bears have added Rs 162 Crs. That shows a tendency towards selling at the 1950 - 2000 strikes. The undertone appears cautiously optimistic for now. Click here to view previous weeks file.

Source - The National Stock Exchange.

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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	814	802	12
TCS	506	528	22
Reliance	688	782	94
NTPC	523	534	11
Infosy	467	511	44

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 80 calls	95	112	17
NTPC 85 calls	53	69	16
Reliance 520 Calls	28	54	26
Reliance 540 calls	42	62	20
TCS 1260 calls	50	56	06

Observation - The action remains polarised around the same big counters - Tisco, Reliance, TCS & NTPC. Outstanding open interest in almost all the stocks has risen - a positive phenomena. 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 1950 - 2030 on the long side and Reliance, SBI & Tisco in individual stocks.

 

Source - The National Stock Exchange.

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This segment is for paid subscribers only

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

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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