The Professional Ticker Reader TM

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Nov 01, 2003

Markets in see-saw mode. Sensex gains 104 points.

Rapid correction ends as bulls take charge.

Weekly statistics

The BSE & NSE combined weekly value of  shares advancing was Rs. 21,862 crores and the value of shares declining was Rs. 14,530 crores. This indicates a marginal selling bias. The total traded volume on the BSE was Rs. 11,240 Crores. The total traded volume on the NSE  was Rs. 25,215 Crores.

The week saw a sharp correction as shares changed hands from weaker to stronger bulls. The fact that the BSE index failed to cross the 5000 mark unnerved the weaker bulls who resorted to profit taking at all levels. The expiry of the derivatives contracts of October exacerbated the situation and exerted downward pressure on the prices. The traded volumes were higher and the market breadth was a pointer to the nervousness in the undertone. It was the institutional support that saved the market from the blushes and reversed the downtrend. Of the entire traded volumes on both the exchanges, on 45 % were transacted on bullish market breadth days - Thursday and Friday. The Sensex  was boosted by ACC, Bajaj Auto, BHEL, BSES, Cipla, Dr. Reddy, Glaxo, Grasim, Gujarat Ambuja Cements, HCL Tech, Hero Honda, Hindalco, ICICI Bank, Infosys, L&T, Ranbaxy, Reliance, Satyam Computers and Tisco. The Sensex  was dragged down by Castrol, Colgate, Hind Lever, HPCL, ITC, MTNL, Nestle, SBI,  Telco and Zee Telefilms. The rupee ended the week at 45.32 levels ( 00.00 ) against  the US $.

Note - ** = signifies lower levels as compared to the previous session.

The put call ratio is at 0. 16 : 1.

Outstanding long positions ( Gross ) total Rs. 9,465 crs. The action is seen shifting from stock futures to options. Watch this phenomena closely for directions.

The results season is drawing to an end and the numbers so far have been a bullish confirmation from corporate India and enthused the fund managers. The derivatives figures are pointing to a shift from individual stock futures to the options route. Though a part of this reduction in futures is attributed to expiry of the October series, the sharp fall in outstanding positions should be monitored closely in the coming weeks. The steady inflow of FII money in the markets is likely to see local players drawing comfort and enlarging their commitments. The markets should derive a boost from the automobile, cement, steel, telecom and power stocks in the coming days. The software sector will also participate in a limited way in the upmove. The market breadth will also be a useful indicator of the bullishness and it's sustainability in the coming week.

The overseas markets are firm on a week-on-week basis and should provide a bullish impetus to the markets. Overall, expect a firm undertone, especially once the previous high of 1574 is surpassed on the Nifty.

The weekly bar chart of the Nifty shows a rally from the intra-week lows and the index itself staying above the short term moving average. It should be noted that the higher bottoms and tops formation remains intact and the momentum oscillators are still in a bullish mode. That makes the larger picture bullish. However, the confirmatory signal is the crossing of the previous high of 1574 which will indicate the ultimate test of the upmove. That breakout should be accompanied by heavy volumes and a highly positive market breadth. It will mark the beginning of the next phase of the rally and take the Nifty upto 1616 levels and beyond. On the lower side, expect the support to be strong at the 1488 and 1522 levels.

Our outlook on the Nifty is that of bullishness - barring unforeseen circumstances, the previous top should be overcome.

Have a profitable day.

 

Vijay 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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