Weekly market view
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Jan 10, 2004 |
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The NSE & BSE combined weekly value of shares advancing was Rs. 28,054 crores and the value of shares declining was Rs. 23,083 crores. This indicates a broader selling bias. The total weekly traded volume on the BSE was Rs. 17,136 Crores. The total traded volume on the NSE was Rs. 34,088 Crores.
The markets saw a historic trading pattern as both the indices hit new highs and milestone levels were achieved in more ways than one. The week saw the traded volumes hit a new high, the derivatives segment recording one of the highest turnover and gross outstanding open interest and new highs in individual stocks in the erstwhile specified list. The positive triggers were the margin trading norms, stock lending, mini budget and pruning the derivatives contract size to a realistic level of Rs 2 lacs. The Sensex was boosted by ACC, Bharati Tele, BHEL, BSES, Grasim, Gujarat Ambuja Cements, HDFC Bank, Hero Honda, HPCL, Infosys, ITC, L&T, SBI, Telco, Tata Power and Zee Telefilms . The Sensex was dragged down by Bajaj Auto, Cipla, Dr Reddy, HDFC, Hind Lever, Hindalco, ICICI Bank, MTNL, ONGC, Ranbaxy, Reliance, Satyam Computers, Tisco and Wipro . The rupee ended the week at 45.48 levels ( + 00.22 ) against the US $. Overall, the week was in line with our expectations of a short and sweet correction as advocated in the previous edition. click here to view our previous weeks report
Changes in outstanding futures positions.
Stars of the week
The markets are in bullish hands and seeing higher volatility on the back of shares changing hands from weaker bulls to stronger hands and institutional players. The positive triggers from a friendly budget and sops in the nature of stock lending, margin trading, lower contract size in F&O are a major boost for markets. The results season will continue to be a major trigger as well. That will limit the downsides if any, due to profit taking at higher levels. The indices are in virgin territory and likely to see nervousness from short term traders who are preferring to bail out of long positions at the slightest hint of profit taking. The major signals are emanating from the derivatives segment which shows major profit taking on frontline stocks - especially on those that have run upwards significantly. The action is now shifting to second rung F&O counters due to lack of buying conviction in frontline counters in the near term. This phenomena leads us to advocate caution at higher levels. The Nifty is again showing higher short positions as compared to the longs as players are hedging their longs in stock futures by short selling the Nifty futures. The put / call ratio (PCR) is stagnant at 0.24:1 since a fortnight. The forward guidance by Infosys is encouraging and should see bullishness in the software sector in the coming weeks. The bullishness in the Nasdaq is likely to percolate down to the domestic technology stocks. The overseas markets too have seen profit taking at higher levels, and that may see limited upsides in our markets. Overall, we expect a firm undertone with a consolidation phase ahead in the near term.
The weekly bar chart of the Nifty shows a continued pattern of rising tops and bottoms formation which is indicative of a typical bull market. The Nifty has touched the 2010 level which was indicated by us frequently in the last week. Our investors will also recollect that we had advocated that all the significant tops in the ongoing rally were showing a fixed pattern and according to that in-house computation, we had forecast a level of 2115 as the immediate target for the Nifty. Though this forecast was made 3 weeks ago, it has been justified by the markets. click here to view our previous weeks report. The oscillators are showing an overbought reading since an extended period of time ( routine in bull markets ) but the index heavy-weights are signalling short term bar reversals. The overall scenario seems to point towards a period of profit taking at higher levels. On the lower side, expect good support at the 1850 levels in the worst case scenario in the coming week. As long as the markets are above this level, the bullishness is still intact.
Our outlook on the Nifty is that of optimism, barring caution at higher levels from weaker bulls. Avoid fresh aggressive purchases.
For stock specific recommendations, please refer to our special edition - "Flavours of the week". Click here to view previous editions of "Flavours of the week" Your feedback is important ! Please click here to let us know your views. Click here to inform a friend about this page on our website.
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.
Legal notice :- The Professional Ticker Reader is a trademark of Bhambwani Securities (P) Ltd. and any un-authorised replication / duplication in part or full will be infringing our trademark and will result in legal action being enforced on the infringing persons / parties. |
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Your feedback is important ! Please click here to let us know your views. Click here to inform a friend about this page on our website.