The markets have dropped on a week-on-week basis with a rally in volumes as the bears seem to have participated well in trading short in the week gone by. The outstanding net long positions are up approx 3 % on a week-on-week basis. This is a positive development as the bulls show a higher risk appetite. The outlook appears to be cautiously optimistic as the markets are trading below the short term support at the 2064 levels which points towards a possibility of 2044 - 2034 levels if more selling occurs. The Nifty February futures trade at Rs 2 premium to cash - as against at Rs 12 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	3,154 407
Stock futures	9,691 83
Index options		1308 218	1375 209	(-) 67  09
Stock options		2018 270	668 111	1350  159
Total Futures	12,845 324	Total options - net	1283 168
Gross longs ( F+O )	16,171 812	Net longs ( F+O )	14,128 492

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 15,359 crs, net long positions Rs 13,636 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 9741 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 17, 2005. That indicates a selling bias in the near term. Purchases of Rs. 233 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 almost all the segments. That is a negative development as the fall last week was on higher 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	15,992	15,605	387
Stock futures	33,626	34,621	995
Totals - a	49,618	50,226	608
Index calls	1,296	1,790	494
Stock calls	3,026	3,374	348
Totals - b	4,322	5,164	842
Index puts	1,055	1,489	434
Stock puts	696	875	179
Totals - c	1,751	2,364	613
Grand totals ( a+b+c)	55,691	57,754	2,063

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.08 : 1	Previous week	1.09: 1
PCR - Stocks	0.30 : 1	Previous week	0.29 : 1
PCR - Total	0.35 : 1	Previous week	0.34 : 1

Observation - The PCR shows a tilt towards the bears as the ratios are showing increase in shorts on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have seen a slight decrease. The individual stocks show an increase 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	265	332	67
1950  CE	151	145	06
2000  CE	179	143	36
2050  CE	134	136	02
2150  CE	104	114	10
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2000  PE	234	241	07
2050  PE	218	237	19
1900  PE	173	159	14
1950  PE	139	135	04
2100  PE	115	121	06

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 37 Crs - showing a preference for the 2100 - 2150 strikes. Our inference is - watch the 2034 support levels in the coming days. The bears have added Rs. 14 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	842	861	19
Tisco	1131	1183	52
NTPC	567	526	41
Infosys	582	476	106
SBI	498	557	59

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 95  Calls	79	86	07
NTPC 90  calls	76	63	13
TISCO 410 calls	39	56	17
RELIANCE 540 calls	48	53	05
SATYAM 420  calls	22	51	29

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 2000 - 2100 on the long side and NTPC & Tisco in individual stocks.

 

Source - The National Stock Exchange.

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This segment is for paid subscribers

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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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