The markets have rallied on a week-on-week basis with a jump in volumes as the players participated in short term trades. The outstanding net long positions are up approx 11 % 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 2208 levels which points towards a possibility of  2239 levels if more buying occurs. The Nifty near month futures trade at Rs 10 discount to cash - as against at Rs 8 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	5,074 325
Stock futures	12,820 1276
Index options		1031 105	1639 282	(-) 608 177
Stock options		1646 431	464 143	1182 288
Total Futures	17,894 1601	Total options - net	574 111
Gross longs ( F+O )	20,571 2137	Net longs ( F+O )	18,468 1712

Observation - The net out-standings have risen approx 11 % 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 18,434 crs, net long positions Rs 16,756 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 12,916 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 July 14, 2005. That indicates a selling bias in the near term. Purchases of Rs. 177 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 shows a 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	19,807	19,308	499
Stock futures	43,641	50,313	6,672
Totals - a	63,448	69,621	6,173
Index calls	2,071	1,975	96
Stock calls	2,736	2,980	244
Totals - b	4,807	4,955	148
Index puts	2,628	2,371	257
Stock puts	570	639	69
Totals - c	3,198	3,010	188
Grand totals ( a+b+c)	71,453	77,586	6,133

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.63 : 1	Previous week	1.50: 1
PCR - Stocks	0.25 : 1	Previous week	0.23 : 1
PCR - Total	0.32 : 1	Previous week	0.30 : 1

Observation - The PCR shows a tilt towards the bears as the ratios are showing a slight increase in shorts on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have seen a small increase. The individual stocks show an increase in short positions. The reduction in shorts is below average after 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	242	258	16
2250  CE	183	231	48
2150  CE	160	147	13
2100  CE	100	99	01
2050 AUG 25  CE	35	35	00
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2150   PE	423	494	71
2100  PE	354	409	55
2200  PE	230	290	60
2250  PE	50	95	45
2050   PE	74	67	07

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 50 Crs - showing a preference for the 2200 - 2250 strikes. Our inference is - watch the 2198 / 2152 support levels in the coming days. The bears have increased Rs. 224 Crs. That shows a tendency towards the 2100 - 2250 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	995	949	46
Tisco	847	825	22
ONGC	330	341	11
Infosys	364	581	217
SBI	551	563	12

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 90 Calls	55	52	03
TISCO 360 calls	33	43	10
INFOSYS 2400 calls	18	43	25
RELIANCE 660  calls	36	41	05
NTPC 95 calls	22	36	14

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in most of the stocks has risen - 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 2150 - 2250 on the long side and NTPC, Reliance Inds, & Tisco in individual stocks.

 

Source - The National Stock Exchange.

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This segment is for paid subscribers only

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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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