The markets have rallied higher on a week-on-week basis with a major jump in volumes as the players rolled over trades from June to july series. The outstanding net long positions are down approx 19 % on a week-on-week basis. This is a routine development on expiry. The outlook appears to be cautiously optimistic as the markets are trading above the short term resistance at the 2198 levels which points towards a possibility of  2234 levels if more buying occurs. The Nifty near month futures trade at Rs 05 discount to cash - as against at Rs 16 discount to cash last weekend. The stocks of the week are likely to remain Reliance Inds, SBI & Tisco.

Outstanding positions - week on week

Market internals - outstandings - all Rs crores

Description	Rupees crores	Call options	Put options	Net position
Index Futures	4,361 1654
Stock futures	10,114 1557
Index options		584 835	805 1323	(-) 221 488
Stock options		608 1028	134 375	474 653
Total Futures	14,475 3211	Total options - net	253 165
Gross longs ( F+O )	15,667 5074	Net longs ( F+O )	14,728 3376

Observation - The net out-standings have fallen approx 19 % as the above table indicates. This is a routine development on expiry. Click here to view previous weeks file.

Note - Previous weekend gross long positions Rs 20,741 crs, net long positions Rs 18,104 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 10,890 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 purchased more futures than they sold on June 30, 2005. That indicates a buying bias in the near term. Purchases of Rs. 732.10 Crs are seen in the cash segment on that day.

Source - The National Stock Exchange.

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The traded volumes have jumped significantly. The traded turnover was higher in almost all the segments. This is a sign of higher retail participation as the traders rolled over positons. 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	18,064	22,359	4,295
Stock futures	43,220	52,914	9,694
Totals - a	61,284	75,273	13,989
Index calls	2,301	2,935	634
Stock calls	3,337	3,100	237
Totals - b	5,638	6,035	397
Index puts	1,843	1,994	151
Stock puts	966	926	40
Totals - c	2,809	2,920	111
Grand totals ( a+b+c)	69,731	84,228	14,497

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.40 : 1	Previous week	1.53: 1
PCR - Stocks	0.17 : 1	Previous week	0.29 : 1
PCR - Total	0.25 : 1	Previous week	0.37 : 1

Observation - The PCR shows a tilt towards the bullss as the ratios are showing a slight decrease in shorts on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have seen a small decrease. The individual stocks show a decrease in short positions. The reduction in shorts is below average on expiry. This ( PCR ) will be the one of the most reliable indicator of market trends. The total PCR has remained below 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
2200   CE	19	143	124
2150  CE	39	125	86
2100  CE	26	92	66
2250  CE	02	82	80
2050 AUG 25  CE	35	35	00
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2150   PE	63	264	201
2100  PE	76	174	98
2200  PE	06	141	135
2000  PE	49	54	05
1900   PE	42	43	01

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 356 Crs - showing a preference for the 2150 - 2200 strikes. Our inference is - watch the 2198 / 2152 support levels in the coming days. The bears have increased Rs. 440 Crs. That shows a tendency towards the 2100 - 2150 strikes. The undertone appears cautiously optimistic 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	776	835	59
Tisco	988	810	178
ONGC	441	303	138
Infosys	428	300	128
SBI	478	533	55

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 90 Calls	09	26	17
TISCO 350 calls	03	26	23
TISCO 340 calls	00	23	23
RELIANCE 660  calls	05	23	18
NTPC 85 calls	07	22	15

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 on expiry. 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 2100 - 2250 on the long side and Reliance Inds, 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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