The markets have rallied higher on a week-on-week basis with a minor jump in volumes as the players participated aggressively in intraday trades. The outstanding net long positions are up approx 8 % 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 2108 levels which points towards a possibility of 2135 / 2139 levels if more buying occurs. The Nifty near month futures trade at Rs 15 discount to cash - as against at Rs 19 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	5,145 244
Stock futures	11,021 408
Index options		1150 46	1649 331	(-) 499 285
Stock options		1592 243	509 119	1083 124
Total Futures	16,166 652	Total options - net	584 161
Gross longs ( F+O )	18,908 1686	Net longs ( F+O )	16,750 1236

Observation - The net out-standings have risen approx 8 % 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 17,222 crs, net long positions Rs 15,514 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 12,650 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 16, 2005. That indicates a buying bias in the near term. Purchases of Rs. 418 Crs are seen in the cash segment on that day.

Source - The National Stock Exchange.

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The traded volumes have jumped slightly. The traded turnover was higher in almost all the segments. This is a sign of higher retail participation as the rally was on increased volumes. 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	14,177	15,795	1,618
Stock futures	28,037	26,658	1,379
Totals - a	42,214	42,453	239
Index calls	1,544	1,600	56
Stock calls	2,067	2,165	98
Totals - b	3,611	3,765	154
Index puts	1,208	1,442	234
Stock puts	470	527	57
Totals - c	1,678	1,969	291
Grand totals ( a+b+c)	47,503	48,187	684

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.46 : 1	Previous week	1.22: 1
PCR - Stocks	0.27 : 1	Previous week	0.27 : 1
PCR - Total	0.34 : 1	Previous week	0.33 : 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. 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
2100  CE	298	293	05
2050  CE	254	245	09
2000   CE	176	158	18
2150  CE	81	122	41
1950   CE	93	90	03
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2000  PE	406	431	25
2050  PE	328	399	71
2100  PE	125	270	145
1950   PE	169	175	06
1900   PE	101	101	00

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 06 Crs - showing a preference for the 2150 strike. Our inference is - watch the 2098 / 2077 support levels in the coming days. The bears have increased Rs. 247 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	1087	1015	72
Tisco	998	1000	02
ONGC	361	392	31
Infosys	377	369	08
SBI	469	447	22

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
RELIANCE 600  calls	23	85	62
TISCO 350 calls	45	53	08
TISCO 360 calls	54	52	02
NTPC 85 calls	37	47	10
RELIANCE 580 Calls	44	46	02

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in some the stocks has fallen - a negative 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 2050 - 2150 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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