The markets have jumped on a week-on-week basis with a rally in volumes as the bulls re-gained their initiative. The outstanding net long positions are up approx 12 % on a week-on-week basis. This is a positive development as the bulls show a higher risk appetite. The outlook appears to be optimistic as the markets are trading above the short term resistance at the 2120 levels which points towards a possibility of 2170 - 2190 levels if more buying occurs. The Nifty March futures trade at Rs 4 discount to cash - as against at Rs 5 discount to cash last weekend. The stocks of the week are likely to be 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	2,957 232
Stock futures	9,578 1204
Index options		1007 244	1273 499	(-) 266  255
Stock options		1527 637	472 274	1055  363
Total Futures	12,535 1436	Total options - net	789 108
Gross longs ( F+O )	15,069 2317	Net longs ( F+O )	13,324 1544

Observation - The net out-standings have risen as the above table indicates. This is a positive development as the bulls show a higher risk appetite. Click here to view previous weeks file

Note - Previous weekend gross long positions Rs 12,752 crs, net long positions Rs 11,780 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 9,157 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 bought more futures than they sold on Mar 03, 2005. That indicates a buying bias in the near term. Purchases of Rs. 368 Crs are seen in the cash segment on that day.

Source - The National Stock Exchange.

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The traded volumes have jumped. The traded turnover was higher in almost all the segments. That is a positive development as the rally was on higher 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	18,876	21,697	2,821
Stock futures	42,537	40,748	1,789
Totals - a	61,413	62,445	1,032
Index calls	2,096	2,532	436
Stock calls	3,537	3,461	76
Totals - b	5,633	5,993	360
Index puts	1,873	2,160	287
Stock puts	845	848	03
Totals - c	2,718	3,008	290
Grand totals ( a+b+c)	69,764	71,446	1,682

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.30 : 1	Previous week	1.05: 1
PCR - Stocks	0.29 : 1	Previous week	0.22 : 1
PCR - Total	0.36 : 1	Previous week	0.28 : 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 a slight 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 above 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	198	329	131
2100  CE	263	321	58
2050  CE	200	154	46
2000  CE	37	42	05
2120  CE	07	40	33
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2050  PE	291	401	110
2100  PE	92	286	194
2000  PE	217	244	27
1950  PE	88	89	01
2150  PE	16	70	54

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 181 Crs - showing a preference for the 2100 - 2150 strikes. Our inference is - watch the 2084 support levels in the coming days. The bears have added Rs. 386 Crs. That shows a tendency towards selling at the 2050 - 2100 strikes. The undertone appears optimistic for now. Click here to view previous weeks file.

Source - The National Stock Exchange.

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

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	763	854	98
Tisco	1042	1132	141
NTPC	479	480	47
Infosys	354	442	88
SBI	568	654	11

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 95  Calls	51	83	32
NTPC 100  calls	45	61	16
RELIANCE 560 calls	24	54	30
ONGC 860 calls	23	51	28
ONGC 840  calls	36	51	15

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in all the stocks has risen - a positive phenomena after expiry. Infosys is the new kid on the block. 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 NTPC, ONGC, 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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