The Professional Ticker Reader TM

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May 22, 2004

Markets spook traders. Sensex loses 108 points.

Lower volumes, positive breadth as volatility hits all time high.

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	5020	5073	4227	4961	108.30
BSE - 200	651	662	536	650	06.89
NSE - 50	1582	1591	1292	1560	22.20
Dow  Jones	9967 46	Nasdaq	1912 8	FTSE	4431 10
Advances	6275	Declines	5600	Put / Call trades - 28205 : 76384
FII Investments	Rs  3109 Crs May 1 - 20		Domestic Funds	Rs  1362 Crs May 1 - 20

The value of shares advancing was Rs. 20,105 crores ( previous week Rs 12,290 crs ) and the value of shares declining was Rs. 13,691  crores ( previous week Rs. 27,316 crores ). This indicates a broader buying bias. The total traded volume on the BSE was Rs. 10,764 Crores ( previous week Rs 12,518 Crores ). The total traded volume on the NSE  was Rs. 23,256 Crores ( previous week Rs 27,148 Crores).

The markets saw a volatile trading week as the trading pattern spooked out the players due to the sheer magnitude of the volatility. The fall witnessed on manic monday created chaos and the investor sentiments hit a new low. Traded volumes were marginally lower and the breadth was positive as institutional players supported the markets at lower levels. The PSU pack continued to shed capitalisation as the traders pared their exposure to these counters. The Sensex  was boosted by Bharati Tele, Dr Reddy, HDFC Bank, HDFC, Hero Honda, HPCL, Hindalco, ICICI Bank, MTNL, Telco, Tata Power, Tisco and Zee Telefilms . The Sensex  was dragged down by ACC, Bajaj Auto, BHEL, BSES, Cipla, Grasim, Guj Amb Cem, Hind Lever, Infosys, ITC, L&T, ONGC, Ranbaxy, Reliance, Satyam Computers and Wipro . The rupee ended the week at 45.29 levels ( 00.33 ) against  the US $. Overall, the markets were entirely in line with our expectations. Click here to view the previous weeks file

Top I Derivatives guide I Likely triggers I Technicals I Reco's I

The markets are likely to remain news driven as the announcement of the portfolio's to the coalition ministry will have a bearing on the market moods in the near term. The common minimum programme is mentioning market friendliness and FII conducive environment. However, the undertone is likely to remain cautious due to the sharp fall on Monday, May 17, 2004. The FII investments continue to be negative and the domestic funds are net buyers in the market. The international crude oil price will keep the finance markets worried worldwide. The coming week will also see the impeding expiry of the May series derivatives contracts. That is likely to see unwinding at higher levels as nervous bulls bail out of positions. The F&O segment has seen lower volumes and falling outstanding open interest. The outlook remains cautious.

The overseas markets continue to remain under pressure and are unlikely to exert undue influence on domestic sentiments. Overall, the markets were entirely in line with our expectations. Click here to view the previous weeks file

Top I Derivatives guide I Likely triggers I Technicals I Reco's I

The weekly bar chart of the Nifty shows shows a fall below the downward sloping channel, the moving averages and a continued lower tops and bottoms formation as the outlook weakens. As we has pointed out in the previous weeks edition, ( Click here to view the previous weeks file ) the momentum oscillators are pointing downwards and the bulls are likely to continue offloading long positions on all major advances. The impeding expiry of the May derivatives series will also prompt unloading. On the higher side, we expect resistance at the 1650 levels in the near term and 1686 thereafter. Beyond these levels, take a re-look on the market outlook. On the lower side, we feel that the high volatility may see the 1400 - 1450 levels being tested again.

Our outlook on the Nifty is that of absolute caution and trades must be executed in very small lots only.

Top I Derivatives guide I Likely triggers I Technicals I Reco's I

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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