The markets have stagnated on a week-on-week basis on higher volumes growth as the players seem to have pared positions on the last day of the week. The Outstanding net long positions are up approximately 1 % on a week-on-week basis. This is a positive development as bulls have enhanced their positions. The outlook appears to be cautious as the markets are gearing for expiry in the coming week. The Nifty is trading above a short term support at the 1866 levels which if violated during the week,  will see 1830 - 1835 levels. The Nifty futures trade at Re 1 discount to cash. The stocks of the week are likely to be Reliance Inds, TCS & Tisco.

Outstanding positions - week on week

Market internals - outstandings - all Rs crores

Description	Rupees crores	Call options	Put options	Net position
Index Futures	2,090 07
Stock futures	7,724 181
Index options		909 134	1078 186	(-) 169  52
Stock options		1674 153	700 144	974  09
Total Futures	9,814 188	Total options - net	805 43
Gross longs ( F+O )	12,397 475	Net longs ( F+O )	10,619 145

Observation - The net out-standings have increased as the above table indicates. This is a positive development. Click here to view previous weeks file

Note - Previous weekend gross long positions Rs 11,922 crs, net long positions Rs 10,474 crs.

Source - The National Stock Exchange.

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It maybe noted that FII's now hold approximately Rs 6,555 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 sold more futures than they have bought on Nov 18, 2004. That indicates a selling bias in the near term. Purchases of Rs 216 Crs are seen in the cash segment on that day.

Source - The National Stock Exchange.

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It maybe noted that a substantial portion of outstanding long positions are still in the November series as the above table indicates. That means a squaring up pressure may ensue if the markets fail to pick up. The rollover figures need to be watched carefully in the coming days. 

The traded volumes have improved. The traded turnover was higher in all the segments. That is a sign of concern as the markets are gearing up for expiry. We want the volumes 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	6,379	7,226	847
Stock futures	19,301	22,965	3,664
Totals - a	25,680	30,191	4,511
Index calls	824	1,114	290
Stock calls	2,204	2,749	545
Totals - b	3,028	3,863	835
Index puts	624	757	133
Stock puts	602	795	193
Totals - c	1,226	1,552	326
Grand totals ( a+b+c)	29,934	35,606	5,672

Source - The National Stock Exchange.

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Nuts and bolts - week on week

Put call ratios

 

PCR - Index	1.21 : 1	Previous week	1.17: 1
PCR - Stocks	0.37 : 1	Previous week	0.32 : 1
PCR - Total	0.42 : 1	Previous week	0.37 : 1

Observation - The PCR shows a tilt towards the bears as the ratios are showing degeneration on a week-on-week basis. The Nifty PCR remaining outright bearish, the shorts have risen faster than the longs. The individual stocks show a marginal increase in short  positions. 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
1800 CE	217	155	62
1840 CE	127	84	43
1890 CE	05	83	78
1880 CE	50	77	27
1870 CE	50	57	07
Puts	Previous week Rs Crs	Current Rs crores	Change Rs Crs
1800 PE	251	258	07
1750 PE	146	145	01
1840 PE	80	73	07
1850 PE	53	60	07
1880 PE	23	56	33

Observation - The index contracts show which way the players are tilting. The outstanding positions seem to have increased marginally in the previous week. The bulls have added Rs 07 Crs. Our inference is - watch the 1850 support levels in the coming days. The bears have added Rs 39 Crs. That shows a tendency towards building up shorts at the 1850 - 1880 strike prices. The undertone appears 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
Tisco	866	839	27
TCS	476	488	12
Reliance	763	768	05
Infosys	433	391	42
SBI	362	386	24

Options	Previous week Rs Crs	Current Rs. Crores	Change Rs Crs
NTPC 80 calls	59	56	03
NTPC 75 calls	45	53	08
Reliance 560 Calls	61	64	03
Reliance 540 calls	42	63	21
Tisco 310 calls	38	39	01

Observation - The action remains polarised around the same big counters - Tisco, Reliance, TCS & SBI. Outstanding open interest in most of the stocks has stagnated - a routine phenomena before 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 1880 - 1900 on the long side and Satyam Computers, Reliance, TCS & Tisco in individual stocks.

 

Source - The National Stock Exchange.

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This segment is for paid subscribers only.

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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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