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 10 % 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 1972 levels which points towards a possibility of 2004 - 2016 levels if more buying occurs. The Nifty near month futures trade at Rs 12 discount to cash - as against at Rs 10 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	4,394 465
Stock futures	8,529 902
Index options		904 133	1158 318	(-) 254 185
Stock options		1090 263	441 156	649  107
Total Futures	12,923 1367	Total options - net	395 78
Gross longs ( F+O )	14,917 1763	Net longs ( F+O )	13,318 1289

Observation - The net out-standings have risen approx 10 % 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 13,154 crs, net long positions Rs 12,029 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 10,973 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 12, 2005. That indicates a buying bias in the near term. Sales of Rs. 45 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 almost 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	13,320	12,355	965
Stock futures	21,312	19,408	1,904
Totals - a	34,632	31,763	2,869
Index calls	1,542	1,310	232
Stock calls	1,485	1,515	30
Totals - b	3,027	2,825	202
Index puts	1,475	1,418	57
Stock puts	482	528	46
Totals - c	1,957	1,946	11
Grand totals ( a+b+c)	39,616	36,534	3,082

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	1.11: 1
PCR - Stocks	0.33 : 1	Previous week	0.30 : 1
PCR - Total	0.40 : 1	Previous week	0.37 : 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	254	262	08
2000  CE	139	188	49
1900  CE	173	169	04
2050  CE	46	60	14
1950 JUN 30  CE	26	34	08
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1900  PE	370	414	44
1950  PE	197	312	115
2000  PE	45	97	52
1870  PE	66	73	07
1880  PE	58	58	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 75 Crs - showing a preference for the 2000 - 2050 strikes. Our inference is - watch the 1966 / 1974 support levels in the coming days. The bears have increased Rs. 220 Crs. That shows a tendency towards the 1900 - 2000 strikes. The undertone appears cautiously 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	892	950	58
Tisco	888	919	31
NTPC	280	296	16
Infosys	352	426	74
SBI	357	384	27

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 90 calls	20	56	36
NTPC 85 calls	38	50	12
TISCO 360 calls	34	47	13
TISCO 350 calls	36	38	02
RELIANCE 540 Calls	27	36	09

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. 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 - 2000 on the long side and NTPC, Reliance Inds, Satyam Computers, 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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