The Professional Ticker Reader TM

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Jan 17, 2004

Markets in reverse gear. Sensex sheds 173 points.

Nervous bulls set cat among the pigeons.

Weekly statistics

The combined BSE & NSE weekly value of  shares advancing was Rs. 19,149 crores and the value of shares declining was Rs. 27,494 crores. This indicates a broader selling bias. The total traded volume on the BSE was Rs. 15,583 Crores. The total traded volume on the NSE  was Rs. 31,606 Crores.

The week saw a reversal of sorts in the underlying trend as the markets reversed gears and retraced lower on relentless profit taking. The traded volumes were high and the market breadth was clearly bearish. The budget, sops to the markets and rationalisation of the F&O contract size were factors that were quickly discounted by the markets. The elections and the ensuing halt of reforms were the prime considerations for the markets. The Sensex  was boosted by HDFC Bank, ITC, Ranbaxy, Reliance and Telco . The Sensex  was dragged down by ACC, Bajaj Auto, Bharati Tele, BHEL, BSES, Cipla, Dr Reddy, Grasim, Guj Amb Cem, HDFC, Hero Honda, Hind Lever, HPCL, Hindalco, ICICI Bank, Infosys, L&T, MTNL, ONGC, Satyam Computers, SBI, Tata Power, Tisco, Wipro and Zee Telefilms . The rupee ended the week at 45.42 levels (+ 00.08 ) against  the US $. Overall, the week was in line with our expectations as advocated in the previous edition. click here to view our previous weeks report

Changes in outstanding futures positions.

Stars of the week

Stock	Open interest	Stock price	Outlook
Reliance	Up	Up	Accumulation
Satyam Comp	Up	Down	Short selling
Tata Power	Up	Down	Accumulation

 

Note - +++ signifies higher open interest in the January & February simultaneously.

The put call ratio is at 0.22 : 1 ( previous week 0.24 : 1)

The value of outstanding long positions (gross) is Rs 12 ,836 crs. ( previous week Rs 18,145 crs )

The markets are in a tailspin as the signals emanating from the F&O segment point towards a falling open interest in stock futures - refer above table. Our investors will recollect that we had advocated a nervousness at higher levels in the previous weeks edition click here to view our previous weeks report. We had categorically stated that the indices being in virgin territory, the volatility factor would be high and the first sign of profit taking would result in a cascading sale of long positions. The nervousness on front line counters which was pointed out in the last edition, continued to show on the charts and therefore the markets are likely to be under pressure. The FII's have slowed down their investments and the figures have actually turned negative on Jan 13 & 15. That will continue to hound the sentiments in the coming week. The declaration of elections is the major reason for the markets to be nervous. The results season will see some action on counters due to announce their numbers, but the sentiments are clearly cautious.

The overseas markets are positive and the domestic markets are likely to see a feel good factor percolate to the sentiments and the downsides being cushioned by the overseas rally. Overall, our guidance is that of a consolidation phase as advocated in the previous week.

The weekly bar chart of the Nifty shows a reversal after 7 successive weeks and that too at a significant high point of the rally. The momentum oscillators are at overbought levels and that makes this correction a significant one. The Nifty is currently 12 % over it's short term SMA which is the highest in recent times. The price retracement theory suggests that a short term support is likely at the 1878 levels and a more meaningful support exists at the 1822 levels. Traders need to watch that level in the coming week. The immediate resistance levels will be 1944 and the 1982 in the week ahead. Only above a conclusive closing over the 2010 hurdle, that too with high volumes and a positive market breadth, will the next upmove be seen. Our investors will recall that we had forecast a support on the Nifty at 1855 levels last week and the index has seen a low of 1887 levels !! click here to view our previous weeks report

Our outlook on the Nifty is that of caution as the upsides will prove to be selling points for nervous bulls. Avoid aggressive fresh positions.

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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