The markets have crashed on a week-on-week basis on good volumes growth as the players seem to have participated well in the weeks trading. The outstanding net long positions are up approx 9 % on a week-on-week basis. This is a positive development as the bulls show higher risk appetite. The outlook appears to be cautiously optimistic as the markets are trading below the short term support at the 2028 levels which points towards a possibility of 1965 - 1980 levels if unwinding occurs. The Nifty January futures trade at Rs 4 premium to cash. 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	2,680 277
Stock futures	10,692 436
Index options		1012 401	909 424	103  23
Stock options		2099 885	446 222	1653  663
Total Futures	13,372 713	Total options - net	1550 640
Gross longs ( F+O )	16,483 1999	Net longs ( F+O )	15,128 1353

Observation - The net out-standings have risen 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 14,484 crs, net long positions Rs 13,775 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 9,932 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 and bought equal amounts on Jan 06, 2005. That indicates a neutral bias in the near term. Sales of Rs 32 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 segments. That is a negative sign as the markets have fallen on higher volumes. 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  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	13,896	21,315	7,419
Stock futures	48,387	45,430	2,957
Totals - a	62,283	66,745	4,462
Index calls	1,532	1,967	435
Stock calls	4,740	3,859	881
Totals - b	6,272	5,826	446
Index puts	937	1,636	699
Stock puts	947	718	229
Totals - c	1,884	2,354	470
Grand totals ( a+b+c)	70,439	74,925	4,486

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	0.92 : 1	Previous week	0.81: 1
PCR - Stocks	0.21 : 1	Previous week	0.19 : 1
PCR - Total	0.24 : 1	Previous week	0.22 : 1

Observation - The PCR shows a tilt towards the bears as the ratios are showing ramping up of shorts on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have seen a marginal rise. The individual stocks show an 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
2100 CE	136	213	77
2050 CE	165	197	32
2000 CE	36	108	72
2150 CE	NA	78	78
2090 CE	51	55	04
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2000 PE	123	212	89
2050 PE	106	128	22
2070 PE	23	84	61
1950 PE	41	77	36
2100 PE	12	64	52

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 263 Crs. Our inference is - watch the 1985 support levels in the coming days. The bears have added Rs 260 Crs. That shows a tendency towards selling at the 2000 - 2100 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	866	944	78
Tisco	902	961	59
NTPC	678	692	14
Infosys	506	702	196
TCS	576	639	63

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 90 calls	78	116	38
NTPC 85 calls	50	71	21
Reliance 540 Calls	34	63	29
NTPC 95 calls	35	58	23
Tisco 400 calls	38	56	18

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in all the stocks has risen - a positive phenomena. TCS 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 Infosys, NTPC, Reliance & 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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