The markets have rallied higher on a week-on-week basis with a slump in volumes as the players abstained from aggressive intraday trades. The rollover process also resulted in a higher volumes reading last week. The outstanding net long positions are up approx 17 % on a week-on-week basis. This is a positive development after expiry. The outlook appears to be cautiously optimistic as the markets are trading above the short term resistance at the 2073 levels which points towards a possibility of 2108 / 2122 levels if more buying occurs. The Nifty near month futures trade at Rs 18 discount to cash - as against at Rs 29 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	4,746 545
Stock futures	9,714 1409
Index options		863 253	1084 414	(-) 221 161
Stock options		982 491	264 155	718  336
Total Futures	14,460 1954	Total options - net	497 175
Gross longs ( F+O )	16,305 2698	Net longs ( F+O )	14,957 2129

Observation - The net out-standings have risen approx 17 % as the above table indicates. This is a positive development after expiry. Click here to view previous weeks file.

Note - Previous weekend gross long positions Rs 13,607 crs, net long positions Rs 12,828 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 11,116 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 02, 2005. That indicates a buying bias in the near term. Purchases of Rs. 125 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. This is a sign of lower retail participation as the rally was on decreased volumes. The rollover process was also responsible for a jump in volumes last week. 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	19,667	13,786	5,881
Stock futures	32,839	25,294	7,545
Totals - a	52,506	39,080	13,426
Index calls	2,046	1,498	548
Stock calls	1,905	1,837	68
Totals - b	3,951	3,335	616
Index puts	1,653	1,251	402
Stock puts	550	436	114
Totals - c	2,203	1,687	516
Grand totals ( a+b+c)	58,660	44,102	14,558

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.28 : 1	Previous week	1.12: 1
PCR - Stocks	0.25 : 1	Previous week	0.20 : 1
PCR - Total	0.33 : 1	Previous week	0.30 : 1

Observation - The PCR shows a tilt towards the bears as the ratios are showing an increase in shorts on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have seen an increase. The individual stocks show an increase in short positions too. 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
2050  CE	153	215	62
2100  CE	121	209	88
2000   CE	162	173	11
1950   CE	98	98	00
1900  CE	38	42	04
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2000  PE	210	344	134
2050  PE	103	266	163
1950   PE	151	166	15
1900   PE	86	99	13
2100  PE	44	90	46

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 165 Crs - showing a preference for the 2000 - 2100 strikes. Our inference is - watch the 2063 / 2034 support levels in the coming days. The bears have increased Rs. 371 Crs. That shows a tendency towards the 2000 - 2100 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	1079	1209	130
Tisco	886	918	32
NTPC	249	259	10
Infosys	320	366	46
SBI	430	463	33

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
RELIANCE 540 Calls	24	57	33
RELIANCE 560  calls	11	56	45
TISCO 360 calls	33	46	13
NTPC 85 calls	26	39	13
TISCO 350 calls	23	37	14

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in all 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 2000 - 2100 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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