The term “open interest” of a futures contract refers to the number of outstanding positions either long or short that are not squared off.
Basic concept of derivatives trading is that the sum of it results is always zero. That means for every outstanding long position there exist a corresponding short position in the same month futures contract & vice versa.
By gauging open interest and volume with technical indicators can provide important hindsight in underlying trend prevailing in the market. Prices increasing with increase in both open interest and volumes, indicates bullishness. Similarly prices decreasing with an increase in open interest and volumes, indicates bearishness. If both the open interest and volumes are decreasing with increase/decrease in prices, it signals a reversal of the prevailing trend.
A steady OI typically indicates a possible market top/ bottom, succeeding with trend reversal.
It is very important to use Technical indicators along with the OI & Volume analysis.
Tuesday, September 25, 2007
Friday, September 14, 2007
Gujarat State Financial Corporation - IFCI AGAIN?
Gujarat State Financial Corporation ( 532160 )
A public sector; finance term lending institution of Gujarat with just 2% of equity with public can be IFCI in making.
Its equity is 93 crores & the net asset is Rs 419 crores with 89114000 of shares (almost 9 crores ) that comes out to Rs.46/ share. Though this company is in red, so was IFCI a year back. At current value of Rs.9/- + , it has a bright potential with a good Risk/Reward ratio.
Almost shares of all projects of Gujarat Government have been issued at par to this company. The investment of 419 crores at current valuation turns out to be around 970 crores.
With Gujarat emerging as a favorite destination for investors as per the RBI data & the way this state is moving forwards with reforms, this financial company of the state cannot be left out.
Unlike other disinvestment process & with Gujarat Government efforts to march ahead on disinvestment, GS Fin Corp can be a dark horse within short span. Remember no body was ready to touch IFCI at Rs.10/- & now ….. !
Readers can draw their own conclusion about the promise and potential.
Please go through Disclaimer on this blog.
Disclosure: I may have position in above said stocks for myself/ family members / friends.
A public sector; finance term lending institution of Gujarat with just 2% of equity with public can be IFCI in making.
Its equity is 93 crores & the net asset is Rs 419 crores with 89114000 of shares (almost 9 crores ) that comes out to Rs.46/ share. Though this company is in red, so was IFCI a year back. At current value of Rs.9/- + , it has a bright potential with a good Risk/Reward ratio.
Almost shares of all projects of Gujarat Government have been issued at par to this company. The investment of 419 crores at current valuation turns out to be around 970 crores.
With Gujarat emerging as a favorite destination for investors as per the RBI data & the way this state is moving forwards with reforms, this financial company of the state cannot be left out.
Unlike other disinvestment process & with Gujarat Government efforts to march ahead on disinvestment, GS Fin Corp can be a dark horse within short span. Remember no body was ready to touch IFCI at Rs.10/- & now ….. !
Readers can draw their own conclusion about the promise and potential.
Please go through Disclaimer on this blog.
Disclosure: I may have position in above said stocks for myself/ family members / friends.
Monday, September 10, 2007
Very Imp International News & NFCL
International News which can affect the course of Indian Market too.
The unidentified investor has bought a total of 245,000 put options on the DJ Eurostoxx 50 index of 2,800 strike price of September series.
The trade will be profitable only when the market drops almost 40% before the expiry; else it’s a loss of over $1 billion J
The options expire on Sept. 21.
I would like to thanks some of my friends who have express the gratitude & have called to share the joy of there profit earned through the information on this blog. Specially two calls; Nagarjuna Fertilizer (dated 22 May 07) & GOLD ( dated 16th August)
Nagarjuna has almost doubled in three months & Gold has moved North from 880(16th August) to 930(10 september 07).
In my post of 22 may on Nagarjuna fertilizer(NFCL), I expected it to reach Rs.40 mark in a year. But only in span of three months it has doubled & is trading above the 40 level mark.
Now from this level the question arises whether the price is justified after the Reliance denial of taking a stake in it. So let’s recheck from fresh, discounting the Reliance story.
As stated in previous post, this company is located at strategic place of Kakinda port, which incidentally is the place where Reliance & others have found huge oil & gas supply. Natural Gas is the raw material for NFCL & the proximity to such a gas rich location will definitely boost the bottom line as transportation cost will be reduced significantly.
The land bank they are having at this location can easily fetch them 7000+ crore, this comes out to be almost Rs.155/ per share.
They are effectively using new media & internet be developing a portal for farmer which is getting popular in south.
The company has two loss making subsidiaries Nagarjuna Power Corporation in Mangalore & Nagarjuna Oil Corporation in TN which they are planning to sale the stake.
If Government goes on with the decontrolling of Urea & with international prices of Urea moving southward, we can expect better times for NFCL. Though when this decontrol plan will be implemented is anybody’s guess :-)
Overall the story is strong & the stock deserve quite a good attention.
Please go through Disclaimer on this blog.
Disclosure: I may have position in above said stocks for myself/ family members / friends.
The unidentified investor has bought a total of 245,000 put options on the DJ Eurostoxx 50 index of 2,800 strike price of September series.
The trade will be profitable only when the market drops almost 40% before the expiry; else it’s a loss of over $1 billion J
The options expire on Sept. 21.
I would like to thanks some of my friends who have express the gratitude & have called to share the joy of there profit earned through the information on this blog. Specially two calls; Nagarjuna Fertilizer (dated 22 May 07) & GOLD ( dated 16th August)
Nagarjuna has almost doubled in three months & Gold has moved North from 880(16th August) to 930(10 september 07).
In my post of 22 may on Nagarjuna fertilizer(NFCL), I expected it to reach Rs.40 mark in a year. But only in span of three months it has doubled & is trading above the 40 level mark.
Now from this level the question arises whether the price is justified after the Reliance denial of taking a stake in it. So let’s recheck from fresh, discounting the Reliance story.
As stated in previous post, this company is located at strategic place of Kakinda port, which incidentally is the place where Reliance & others have found huge oil & gas supply. Natural Gas is the raw material for NFCL & the proximity to such a gas rich location will definitely boost the bottom line as transportation cost will be reduced significantly.
The land bank they are having at this location can easily fetch them 7000+ crore, this comes out to be almost Rs.155/ per share.
They are effectively using new media & internet be developing a portal for farmer which is getting popular in south.
The company has two loss making subsidiaries Nagarjuna Power Corporation in Mangalore & Nagarjuna Oil Corporation in TN which they are planning to sale the stake.
If Government goes on with the decontrolling of Urea & with international prices of Urea moving southward, we can expect better times for NFCL. Though when this decontrol plan will be implemented is anybody’s guess :-)
Overall the story is strong & the stock deserve quite a good attention.
Please go through Disclaimer on this blog.
Disclosure: I may have position in above said stocks for myself/ family members / friends.
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