The Professional Ticker Reader TM

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Dec 20, 2003

Markets at 46 month highs. Sensex zooms 226 points.

Our post diwali prediction of 1800 on Nifty almost reached.

Weekly statistics

The value of  shares advancing was Rs. 24,863 crores and the value of shares declining was Rs. 12,327 crores. This indicates a broader buying bias. The total traded volume on the BSE was Rs. 12,140 Crores. The total traded volume on the NSE  was Rs. 25,132 Crores.

The week saw a bullish trading pattern as the Sensex zoomed to 46 month highs and the Nifty 50 hit a lifetime high. The traded volumes were higher as compared to week ago and the market breadth remained positive. The overall indications were that of bullishness and sentiments were distinctly upbeat. The govt announcement of permitting offloading of cross holding in oil & gas PSU's was greeted with euphoria and ignited bullish passions. The impeding end of the derivatives cycle in December and the year end for the FII's seemed not to affect the buying momentum. The news of Saddam Husseins capture was hailed by the US markets which led to a feel good factor percolating down to the domestic markets also. The Sensex was boosted by ACC, Bajaj Auto, BHEL, BSES, Cipla, Dr Reddy, Grasim, Hero Honda, Hind Lever, HPCL, Hindalco, Infosys, ITC, L&T, MTNL, ONGC, Ranbaxy, Reliance, Satyam Computers, SBI, Telco, Tisco, Wipro and Zee Telefilms. The Sensex  was dragged down by HDFC. The rupee ended the week at 45.52 levels ( + 00.02 ) against  the US $. Overall, the market trended in line with our expectations click here to view the previous weeks file

Changes in outstanding futures positions.

Stars of the week

Stock	Open interest	Stock price	Outlook
Arvind Mills	Up	Up	Bullish
L&T	Up	Up	Bullish
MTNL	Down	Up	Profit taking
Reliance	Down	Up	Profit taking
Tisco	Down	Up	Profit taking

 

Note - ++ signifies a higher position created in January in the session as compared to December trades.

+++ signifies higher open interest in the December & January simultaneously.

The put call ratio is at 0.34 : 1 ( previous week 0.30 : 1)

The value of outstanding long positions (gross) is Rs 12,006 crs. ( previous week Rs 9,528 crs )

The markets are in bullish hands and the bulls are unlikely to relinquish the initiative gained by them after a 3 year bear market. The FII inflows have been robust and the domestic mutual funds have also been buying ahead of the Q3 NAV computation which was accurately forecast by us - contrary to market expectations of selling by institutions to book profits. The action is likely to be broader based as the sentiments are strongly in favour of the bulls. The coming week is a crucial one for the markets as the derivatives series of December expire, the week itself is a short one due to the Christmas holidays and the year end will see lower volumes. In such a scenario volatility is likely to be higher. We feel that the technology sector will return to the limelight temporarily due to a pre-result speculative buildup and boost the indices on the basis of their sheer weightage alone. The US $ is showing signs of stabilising and that is a healthy sign.

The US markets have been bullish on improved manufacturing, consumer spending and employment data. The Dow Jones Industrial average has closed above the 10,200 mark for the first time in 19 months and the feel-good-factor is likely to percolate down to the domestic markets too. Overall, we feel the markets are likely to be cheerful in the coming week.

The weekly bar chart of the Nifty shows a rising tops and bottoms formation and that signals a continued uptrend in the markets. The previous weeks support level specified at the 1622 levels in a worst case scenario ( click here to view the previous weeks file ) were not tested and that implies a possibility of a further upmove. The oscillators are displaying a robust sentiment and the overbought readings for an extended period of time are a typical sign of a formative bull market which is a further confirmation of the bullishness. As our investors will recollect, we had made a forecast on the Nifty levels after Diwali of 1800 levels by calendar year 2003 ending. That has been proved correct. The same was based on the computation of tops which were atleast 15 % higher than the previous top. On the lower side, expect strong support at the 1680 levels. The next target for the Nifty in the coming week will be 1820 on a conservative basis as the possibility profit taking is significant.

Our outlook on the Nifty is that of bullishness, barring profit taking at higher levels.

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.

SEBI disclosure -  The author has no positions in  the stocks mentioned above.

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