The markets have rallied on a week-on-week basis with a slump in volumes as the players were skeptical of a sustained upmove. The outstanding net long positions are up approx 6 % on a week-on-week basis. This is a routine development on expiry. The outlook appears to be cautiously optimistic as the markets are trading above the short term resistance at the 1972 levels which points towards a possibility of 1988 - 2000 levels if more buying occurs. The Nifty near month futures trade at Rs 10 discount to cash - as against at Rs 20 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	3,929 108
Stock futures	7,627 571
Index options		771 339	840 462	(-) 69 123
Stock options		827 338	285 172	542  166
Total Futures	11,556 1286	Total options - net	473 43
Gross longs ( F+O )	13,154 1356	Net longs ( F+O )	12,029 722

Observation - The net out-standings have risen 6 % as the above table indicates. This is a routine development on expiry. Click here to view previous weeks file.

Note - Previous weekend gross long positions Rs 11,798 crs, net long positions Rs 11,307 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 9,954 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 May 05, 2005. That indicates a buying bias in the near term. Purchases of Rs. 123 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 poor retail participation as the rally was on low 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	19,713	13,320	6,393
Stock futures	35,005	21,312	13,693
Totals - a	54,718	34,632	20,086
Index calls	1,548	1,542	06
Stock calls	2,242	1,485	757
Totals - b	3,790	3,027	763
Index puts	1,516	1,475	41
Stock puts	878	482	396
Totals - c	2,394	1,957	437
Grand totals ( a+b+c)	60,902	39,616	21,286

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.11 : 1	Previous week	0.88: 1
PCR - Stocks	0.30 : 1	Previous week	0.22 : 1
PCR - Total	0.37 : 1	Previous week	0.27 : 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 hefty 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
1950  CE	141	254	113
1900  CE	121	173	52
2000  CE	62	139	77
2050  CE	32	46	14
2100  CE	29	31	02
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1900  PE	159	370	211
1950  PE	88	197	109
1870  PE	NA	66	66
1880  PE	38	58	20
2000  PE	20	45	25

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 258 Crs - showing a preference for the 1900 - 2000 strikes. Our inference is - watch the 1932 / 1945 support levels in the coming days. The bears have increased Rs. 431 Crs. That shows a tendency towards the 1900 - 1950 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	880	892	12
Tisco	841	888	47
NTPC	276	280	04
Infosys	328	352	24
SBI	324	357	33

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 85 calls	28	38	10
TISCO 350 calls	24	36	12
TISCO 360 calls	23	34	11
RELIANCE 540 Calls	17	27	10
RELIANCE 560 calls	18	26	08

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. 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 1900 - 2050 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

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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