The markets have slipped marginally on a week-on-week basis on negative volumes growth as the players seem to have abstained from big ticket trading in the week gone by. It may also be noted that the week was shorter due to a holiday. The outstanding net long positions are up approx 1.5 % on a week-on-week basis. This is a positive development as the bulls show relatively higher risk appetite - especially in the run up to expiry of the January series. The outlook appears to be cautious as the markets are trading below the short term support at the 1934 levels which points towards a possibility of 1900 - 1905 levels if more unwinding occurs. The Nifty January futures trade at par with cash - as against Rs 5 discount 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	2,613 08
Stock futures	9,338 07
Index options		1643 287	1363 212	280  75
Stock options		2877 203	559 26	2318  177
Total Futures	11,951 15	Total options - net	2598 252
Gross longs ( F+O )	16,471 505	Net longs ( F+O )	14,549 237

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

Note - Previous weekend gross long positions Rs 15,966 crs, net long positions Rs 14,312 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 9,135 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 sold on Jan 19, 2005. That indicates a buying bias in the near term. Sales of Re. 77 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. It may also be noted that the week was shorter due to a holiday. 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 nervous in the short term. Click here to view previous weeks file

Description	Previous week - Rs. crores	Current - Rs. crores	Change - Rs crores
Index Futures	20,334	15,815	4,519
Stock futures	36,018	30,276	5,742
Totals - a	56,352	46,091	10,261
Index calls	2,012	1,486	526
Stock calls	3,418	2,692	726
Totals - b	5,430	4,178	1,252
Index puts	1,610	1,100	510
Stock puts	716	692	24
Totals - c	2,326	1,792	534
Grand totals ( a+b+c)	64,108	52,061	12,047

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	0.85 : 1	Previous week	0.87: 1
PCR - Stocks	0.19 : 1	Previous week	0.20 : 1
PCR - Total	0.22 : 1	Previous week	0.23 : 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 marginal fall. The individual stocks show an slight decrease 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	218	212	06
1950 CE	192	189	03
2000 CE	211	179	33
2050 CE	184	177	07
1900 CE	63	131	68
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1900 PE	187	247	60
1950 PE	191	183	08
2000 PE	171	152	19
1900 24 FEB PE	06	103	97
2050 PE	97	89	08

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 19 Crs - showing a preference for the 1900 strike. Our inference is - watch the 1915 support levels in the coming days. The bears have added Rs. 122 Crs. That shows a tendency towards selling at the 1900 strike. The undertone appears cautious 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
Reliance	847	907	60
Tisco	907	974	67
NTPC	621	597	24
Infosys	599	585	14
TCS	566	493	73

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 90 calls	115	104	11
NTPC 85 calls	92	88	04
Reliance 540 Calls	68	61	07
Infosys 2100 calls	62	60	02
Tcs 1350 calls	61	57	04

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in most of the stocks has fallen - a routine phenomena before expiry. 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 1900 - 2000 on the long side and ACC & 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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