The markets have rallied smartly on a week-on-week basis on significant volumes growth as the players seem to have participated well in the week gone by. It may also be noted that the volumes were higher due to expiry of the January f&o series. The outstanding net long positions are down approx 20 % on a week-on-week basis. This is a routine development as the expiry of the f&o series usually witnesses a drop in OI. The outlook appears to be optimistic as the markets are trading above the short term resistance at the 1966 levels which points towards a possibility of 2025 - 2064 levels if more buying occurs. The Nifty February futures trade at Rs 3 discount to cash - as against at par with 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	2,289 324
Stock futures	8,416 922
Index options		630 1013	590 773	40  240
Stock options		629 2248	176 383	453  1865
Total Futures	10,705 1246	Total options - net	493 2105
Gross longs ( F+O )	11,964 4507	Net longs ( F+O )	11,198 3351

Observation - The net out-standings have fallen as the above table indicates. This is a routine development after expiry. Click here to view previous weeks file

Note - Previous weekend gross long positions Rs 16,471 crs, net long positions Rs 14,549 crs.

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

It maybe noted that FII's now hold approximately Rs 8,542 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 27, 2005. That indicates a buying bias in the near term. Purchases of Rs. 199 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. It may also be noted that the week was was an expiry one and therefore higher volumes were natural. 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	15,815	15,330	485
Stock futures	30,276	39,488	9,212
Totals - a	46,091	54,818	8,727
Index calls	1,486	1,314	172
Stock calls	2,692	2,762	70
Totals - b	4,178	4,076	102
Index puts	1,100	1,022	78
Stock puts	692	807	115
Totals - c	1,792	1,829	37
Grand totals ( a+b+c)	52,061	60,723	8,662

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	0.95 : 1	Previous week	0.85: 1
PCR - Stocks	0.23 : 1	Previous week	0.19 : 1
PCR - Total	0.30 : 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 sharp rise. The individual stocks show an slight 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 24 FEB CE	104	222	118
2000 24 FEB CE	111	209	98
1900 24 FEB CE	34	52	18
2050 24 FEB CE	03	34	31
2100 24 FEB CE	24	31	07
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1900 24 FEB PE	103	202	99
1950 24 FEB PE	46	121	75
2000 24 FEB PE	42	86	44
1870 24 FEB PE	55	62	07
2050 24 FEB PE	31	33	02

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 272 Crs - showing a preference for the 1950 - 2000 strikes. Our inference is - watch the 1974 support levels in the coming days. The bears have added Rs. 227 Crs. That shows a tendency towards selling at the 1900 - 1950 strikes. The undertone appears 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.

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

The center stage - week on week

5 Highest outstanding scrips

Futures	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
Reliance	907	863	44
Tisco	974	952	22
NTPC	597	588	09
Infosys	585	526	59
TCS	493	413	80

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 85 24 FEB calls	13	44	31
NTPC 80 24 FEB calls	13	34	21
TISCO 380 24 FEB Calls	02	27	25
NTPC 90 24 FEB calls	07	21	14
TISCO 370 24 FEB calls	04	20	16

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in all of the stocks has fallen - a routine phenomena after 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 - 2050 on the long side and NTPC, 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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