The Professional Ticker Reader TM

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Nov 16, 2003

Markets tailspin again. Sensex slips 60 points.

Higher volumes, positive breadth as old economy stocks rally.

Weekly statistics.

The value of  shares advancing was Rs. 16,358 crores and the value of shares declining was Rs. 18,703  crores. This indicates a marginal buying bias. The total traded volume on the BSE was Rs. 5,858 Crores. The total traded volume on the NSE  was Rs. 22,975 Crores.

The market saw a choppy trading week as the markets sought a clear direction. The traded volumes were marginally lower due to technical problems and nervousness in the undertone. The extra margins demanded by the authorities caused nervous unloading by the weaker bulls and brokers. FII inflows also showed signs of flagging marginally. The nervous undertone was palpable as buyers lacked conviction at higher levels. Fears of FII buying slowing down ahead of christmas holidays also played a part in causing nervousness. The Sensex was boosted by Bajaj Auto, BSES, Dr Reddy, Grasim, Hero Honda, Hind Lever, HPCL, Hindalco and MTNL . The Sensex  was dragged down by BHEL, Gujarat Ambuja Cements, HCL Tech, Infosys, L&T, ONGC, Ranbaxy, Reliance and Satyam Computers . The rupee ended the week at 45.41 levels ( - 00.13 ) against  the US $.

Derivatives highlights of Saturday Nov 15, 2003

Note - The put call ratio is at 0.18 : 1.

Outstanding long gross positions stand at Rs 6,520 crs

The markets are likely to await announcements from SEBI regarding the ongoing margin imbroglio. The current weakness in the markets is caused by lack of conviction from buyers at higher levels, as well as the high cost of initiating long positions. There will be a relief rally if any one of these two impediments are removed. The ongoing mutual fund scam in the US markets seemed to have little or no effect on the domestic markets. The outstanding long positions have tapered off sharply as the operators have unwound large positions on Thursday and Friday. That is a healthy sign as the weaker hands are exiting positions at these levels. Once the supply is absorbed, the next upmove can commence.

The overseas markets have turned brittle as profit taking is impeding the upsides. The FII's continued to buy unabated till the 13 th of November 2003 and that has limited the downsides in the markets. Overall, expect the consolidation to continue in the coming days. Await a breakout before buying afresh.

The weekly bar chart of the Nifty shows a lower bottom and top as compared to the previous week. The 1630 level is proving to be a formidable resistance in the near term. Only above this level will the market show a secular rally, that too with higher volumes and positive market breadth. Till then, any upmove should be treated as a dead cat bounce. The RSI oscillator is indicating a possibility of pressure on the upsides and needs a confirmatory rally to restore confidence in the upmove. On the downsides, expect support at the 1540 and the 1522 levels as supports in the coming 5 sessions. Below these levels, take a re-look in the near term.

Our outlook on the Nifty is that of caution and trades should be initiated on very small volumes.

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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