The markets have rallied 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 down approx 9 % on a week-on-week basis. This is a routine development after expiry. The outlook appears to be cautiously optimistic as the markets are trading above the short term resistance at the 2073 levels which points towards a possibility of 2034 levels if more selling occurs. The Nifty near month futures trade at Rs 29 discount to cash - as against at Rs 05 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	4,201 695
Stock futures	8,305 613
Index options		610 451	670 744	(-) 60 283
Stock options		491 776	109 488	382  288
Total Futures	12,506 1308	Total options - net	322 05
Gross longs ( F+O )	13,607 2535	Net longs ( F+O )	12,828 1303

Observation - The net out-standings have fallen approx 9.20 % as the above table indicates. This is a routine development after expiry. Click here to view previous weeks file.

Note - Previous weekend gross long positions Rs 16,142 crs, net long positions Rs 14,131 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 10,593 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 26, 2005. That indicates a buying bias in the near term. Sales of Rs. 185 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. 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	17,138	19,667	2,529
Stock futures	24,503	32,839	8,336
Totals - a	41,641	52,506	10,865
Index calls	1,795	2,046	251
Stock calls	1,765	1,905	140
Totals - b	3,560	3,951	391
Index puts	1,883	1,653	230
Stock puts	757	550	207
Totals - c	2,640	2,203	437
Grand totals ( a+b+c)	47,841	58,660	10,819

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.12 : 1	Previous week	1.36: 1
PCR - Stocks	0.20 : 1	Previous week	0.36 : 1
PCR - Total	0.30 : 1	Previous week	0.44 : 1

Observation - The PCR shows a tilt towards the bulls as the ratios are showing a decrease in shorts on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have seen a decrease. The individual stocks show a decrease 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
2000   CE	76	162	86
2050  CE	17	153	136
2100  CE	02	121	119
1950   CE	91	98	07
1900  CE	04	38	34
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
2000  PE	47	210	163
1950   PE	99	151	52
2050  PE	01	103	102
1900   PE	66	86	20
2100  PE	00	44	44

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 382 Crs - showing a preference for the 2000 - 2100 strikes. Our inference is - watch the 2034 / 2045 support levels in the coming days. The bears have increased Rs. 381 Crs. That shows a tendency towards the 1950 - 2050 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	1005	1079	74
Tisco	965	886	79
NTPC	276	249	27
Infosys	389	320	69
SBI	484	430	54

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
TISCO 360 calls	10	33	23
NTPC 85 calls	04	26	22
RELIANCE 540 Calls	05	24	19
TISCO 350 calls	02	23	21
TISCO 370  calls	02	21	19

Observation - The action remains polarised around the same big counters - Tisco, Reliance & NTPC. Outstanding open interest in most of the stocks has fallen - a routine 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 - 2100 on the long side and NTPC, Reliance Inds & 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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