The markets have rallied higher on a week-on-week basis with a major 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 before expiry. The outlook appears to be cautiously optimistic as the markets are trading below the short term resistance at the 2198 levels which points towards a possibility of 2218 / 2234 levels if more buying occurs. The Nifty near month futures trade at Rs 16 discount to cash - as against at Rs 15 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	6,015 870
Stock futures	11,671 650
Index options		1419 269	2128 479	(-) 709 210
Stock options		1636 44	509 192	1127 148
Total Futures	17,686 1520	Total options - net	418 358
Gross longs ( F+O )	20,741 1833	Net longs ( F+O )	18,104 1354

Observation - The net out-standings have risen approx 8 % as the above table indicates. This is a positive development before expiry. Click here to view previous weeks file.

Note - Previous weekend gross long positions Rs 18,908 crs, net long positions Rs 16,750 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 13,444 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 23, 2005. That indicates a buying bias in the near term. Purchases of Rs. 485.30 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 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	15,795	18,064	2,269
Stock futures	26,658	43,220	16,562
Totals - a	42,453	61,284	18,831
Index calls	1,600	2,301	701
Stock calls	2,165	3,337	1,172
Totals - b	3,765	5,638	1,873
Index puts	1,442	1,843	401
Stock puts	527	966	439
Totals - c	1,969	2,809	840
Grand totals ( a+b+c)	48,187	69,731	21,544

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.53 : 1	Previous week	1.46: 1
PCR - Stocks	0.29 : 1	Previous week	0.27 : 1
PCR - Total	0.37 : 1	Previous week	0.34 : 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
2150  CE	122	318	196
2100  CE	293	187	106
2050  CE	245	180	65
2200   CE	NA	168	168
2000   CE	158	120	38
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2000  PE	431	418	13
2050  PE	399	379	20
2100  PE	270	315	45
2150   PE	59	188	129
1950   PE	175	171	04

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 155 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. 137 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	1015	776	239
Tisco	1000	988	12
ONGC	392	441	49
Infosys	369	428	59
SBI	447	478	31

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
RELIANCE 600  calls	85	57	28
TISCO 370 calls	30	55	25
TISCO 360 calls	52	50	02
NTPC 90 Calls	43	45	02
NTPC 85 calls	47	42	05

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in some the stocks has fallen - a routine phenomena before 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 - 2200 on the long side and Hind Lever, 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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