The markets have rallied on a week-on-week basis with a slump in volumes as the players abstained from big ticket short term trades. The outstanding net long positions are up approx 6 % on a week-on-week basis. This is a routine development after expiry. The outlook appears to be cautiously optimistic as the markets are trading above the short term resistance at the 2254 levels which points towards a possibility of  2287 levels if more buying occurs. The Nifty near month futures trade at par with cash - as against at Rs 10 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	5,510 436
Stock futures	13,874 1054
Index options		1141 110	2115 476	(-) 974 366
Stock options		1799 153	617 153	1182 00
Total Futures	19,384 1490	Total options - net	208 366
Gross longs ( F+O )	22,324 1753	Net longs ( F+O )	19,592 1124

Observation - The net out-standings have risen approx 6 % 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 20,571 crs, net long positions Rs 18,468 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 14,218 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 21, 2005. That indicates a selling bias in the near term. Purchases of Rs. 299 Crs are seen in the cash segment on that day.

Source - The National Stock Exchange.

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The traded volumes have slumped significantly. The traded turnover was lower in almost all the segments. This shows a lower 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	19,308	16,077	3,231
Stock futures	50,313	44,701	5,612
Totals - a	69,621	60,778	8,843
Index calls	1,975	1,788	187
Stock calls	2,980	2,982	02
Totals - b	4,955	4,770	185
Index puts	2,371	1,994	377
Stock puts	639	736	97
Totals - c	3,010	2,730	280
Grand totals ( a+b+c)	77,586	68,278	9,308

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.89 : 1	Previous week	1.63: 1
PCR - Stocks	0.30 : 1	Previous week	0.25 : 1
PCR - Total	0.37 : 1	Previous week	0.32 : 1

Observation - The PCR shows a tilt towards the bears as the ratios are showing a significant increase in shorts on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have seen a quantum jump. The individual stocks show an increase in short positions too. 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
2250  CE	231	270	39
2200   CE	258	248	10
2150  CE	147	110	37
2250 29 SEP  CE	NA	66	66
2100  CE	99	63	36
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2150   PE	494	473	21
2200  PE	290	426	136
2100  PE	409	393	16
2250  PE	95	171	76
2250 29 SEP  PE	NA	66	66

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 22 Crs - showing a preference for the 2250 strikes. Our inference is - watch the 2218 / 2208 support levels in the coming days. The bears have increased Rs. 241 Crs. That shows a tendency towards the 2200 - 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	949	1048	99
Tisco	825	862	37
ONGC	341	340	01
Infosys	581	520	61
SBI	563	572	09

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
RELIANCE 680  calls	23	43	20
INFOSYS 2400 calls	43	41	02
NTPC 90 Calls	52	40	12
NTPC 95 calls	36	39	03
RELIANCE 700 calls	14	38	24

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 after 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 Reliance Inds, Satyam Computers & 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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