The markets have consolidated higher on a week-on-week basis with a jump in volumes as the players participated in the intraday trades. The rollover process also resulted in a higher volumes reading. The outstanding net long positions are up approx 6 % on a week-on-week basis. This is a positive development ahead of expiry. The outlook appears to be cautiously optimistic as the markets are trading below the short term resistance at the 2004 levels which points towards a possibility of 1966 levels if more selling occurs. The Nifty near month futures trade at Rs 05 discount to cash - as against at Rs 12 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	4,896 502
Stock futures	8,918 389
Index options		1061 157	1414 256	(-) 353 99
Stock options		1267 177	597 156	670  21
Total Futures	13,814 891	Total options - net	317 78
Gross longs ( F+O )	16,142 1225	Net longs ( F+O )	14,131 813

Observation - The net out-standings have risen approx 6.10 % as the above table indicates. This is a positive development ahead of expiry. Click here to view previous weeks file.

Note - Previous weekend gross long positions Rs 14,917 crs, net long positions Rs 13,318 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 11,916 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 19, 2005. That indicates a buying bias in the near term. Purchases of Rs. 63 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 all the segments. This is a sign of higher retail participation as the rally was on increased volumes. The rollover process is also responsible for a jump in 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	12,355	17,138	4,783
Stock futures	19,408	24,503	5,095
Totals - a	31,763	41,641	9,878
Index calls	1,310	1,795	485
Stock calls	1,515	1,765	250
Totals - b	2,825	3,560	735
Index puts	1,418	1,883	465
Stock puts	528	757	229
Totals - c	1,946	2,640	694
Grand totals ( a+b+c)	36,534	47,841	11,307

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.36 : 1	Previous week	1.30: 1
PCR - Stocks	0.36 : 1	Previous week	0.33 : 1
PCR - Total	0.44 : 1	Previous week	0.40 : 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 an 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	262	238	24
2000  CE	188	215	27
1900  CE	169	140	29
1950 JUN 30  CE	34	91	57
2000 JUN 30  CE	15	76	61
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1900  PE	414	413	01
1950  PE	312	374	62
2000  PE	97	117	20
1950 JUN 30  PE	20	99	79
1900 JUN 30  PE	43	66	23

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 92 Crs - showing a preference for the 1950 - 2000 strikes. Our inference is - watch the 1966 / 1974 support levels in the coming days. The bears have increased Rs. 183 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.

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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	950	1005	55
Tisco	919	965	46
NTPC	296	276	20
Infosys	426	389	37
SBI	384	484	100

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
TISCO 360 calls	47	61	14
NTPC 90 calls	56	56	00
NTPC 85 calls	50	47	03
RELIANCE 540 Calls	36	45	09
TISCO 350 calls	38	42	04

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in most of the stocks has risen - a positive phenomena ahead of 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 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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