The markets have inched higher on a week-on-week basis with a significant drop in volumes as the players seem to have abstained from hectic trading in the week gone by. The outstanding net long positions are up approx 14 % on a week-on-week basis. This is a positive development as the bulls show a higher risk appetite. The outlook appears to be optimistic as the markets are trading above the short term resistance at the 2064 levels which points towards a possibility of 2085 - 2120 levels if more buying occurs. The Nifty February futures trade at Rs 12 premium to cash - as against at Rs 6 premium to cash last weekend. The stocks of the week are likely to be NTPC, Reliance Inds & Tisco.

Outstanding positions - week on week

Market internals - outstandings - all Rs crores

Description	Rupees crores	Call options	Put options	Net position
Index Futures	2,747 226
Stock futures	9,774 498
Index options		1090 138	1166 171	(-) 76  33
Stock options		1748 354	557 127	1191  227
Total Futures	12,521 724	Total options - net	1115 194
Gross longs ( F+O )	15,359 1216	Net longs ( F+O )	13,636 918

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

Note - Previous weekend gross long positions Rs 14,143 crs, net long positions Rs 12,718 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 8,919 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 Feb 10, 2005. That indicates a selling bias in the near term. Purchases of Rs. 177 Crs are seen in the cash segment on that day.

Source - The National Stock Exchange.

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The traded volumes have slumped. The traded turnover was lower in all the segments. That is a negative development as the rally last week was on poor retail participation. 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	17,554	15,992	1,562
Stock futures	39,078	33,626	5,452
Totals - a	56,632	49,618	7,014
Index calls	1,665	1,296	369
Stock calls	3,797	3,026	771
Totals - b	5,462	4,322	1,140
Index puts	1,419	1,055	364
Stock puts	727	696	31
Totals - c	2,146	1,751	395
Grand totals ( a+b+c)	64,240	55,691	8,549

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.09 : 1	Previous week	1.06: 1
PCR - Stocks	0.29 : 1	Previous week	0.30 : 1
PCR - Total	0.34 : 1	Previous week	0.35 : 1

Observation - The PCR shows a tilt towards the bulls as the ratios are showing squaring up of shorts on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have seen a slight 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 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
2100  CE	200	265	65
2000  CE	183	179	04
1950  CE	171	151	20
2050  CE	114	134	20
2150  CE	68	104	36
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2000  PE	162	234	72
2050  PE	174	218	44
1900  PE	174	173	01
1950  PE	129	139	10
2100  PE	89	115	26

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 97 Crs - showing a preference for the 2050 - 2150 strikes. Our inference is - watch the 2064 support levels in the coming days. The bears have added Rs. 151 Crs. That shows a tendency towards selling at the 2000 - 2100 strikes. The undertone appears cautiously 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
Reliance	829	842	13
Tisco	1050	1131	19
NTPC	611	567	44
Infosys	539	582	43
SBI	492	498	06

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 95  Calls	51	79	28
NTPC 90  calls	72	76	04
TISCO 400 calls	42	59	17
RELIANCE 540 calls	52	48	04
NTPC 100  calls	30	44	14

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in almost all of the stocks has risen - a positive phenomena. SBI 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 - 2050 on the long side and Infosys, Reliance Inds, Satyam Computers, TCS & 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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