Pro bought the dip. Sensex expiry trades the 75,000 resistance

A very good morning guys. Yesterday Sensex closed at 74,610. Up 49 points. The most boring close of the week that we saw. But underneath that boring close, three things happened that changed the whole map for today. This is The Tanmay Edge. I am Tanmay Kurtkoti. Season 2, Episode 39. Let's go. 92 percent on Sensex. Wednesday it closed flat. From outside it looked like the bleeding stopped and nothing else happened. From inside, Wednesday was the day the trade flipped. Now let's look at some data points.

Proprietary desks made three moves on the same session. They covered 1 lakh 13 thousand short calls. They sold 45 thousand long puts. They added 5 thousand long futures contracts. Three moves, one direction. Each move makes the next one safer. When one desk makes one bullish move on a session that is noise. When the same desk makes three bullish moves on the same session, that is a posture shift that we saw yesterday. We saw this exact signature on 28th and 29th of April as well.

Pros had flipped. Four sessions later the market was higher. That is the reference trade for this week as well. So that is the first thing guys. The second thing is the chain. Sensex weekly expiry is today. The 14 May option chain tells you where the trade is built. The 75,000 strike is the wall or the resistance. Call open interest over there is 1 crore 30 lakh contracts. Wednesday alone added around 4 lakh 58 thousand contracts over there. That is a 65 percent buildup in one session at one strike.

The wall did not just exist. The wall got built yesterday. Below us at 74000, that is your support, sits the floor. Put open interest is 1 crore 80 lakh over there. Wednesday added around 9 lakh puts on that strike. And below that at 73,000 sits the deepest single strike of any chain we have looked at this season. Put open interest at 22 lakh 40 thousand plus another million added on Wednesday. So we have a resistance at 75000, a support at 74000, a reinforced floor at 73,000.

The chain itself is telling you the range. Roughly 1000 points wide between the support and the resistance. Roughly 2000 points wide if you stretch to the outer floor. But we are not going to look into that. So 1000 point is that range. That is the second thing to remember. The third thing. GIFT Nifty this morning is up 109 points at 23,533. 47 percent. 64. 70. US futures are green. Asia is mostly all green. GIFT has voted up. Pro has bought the floor.

And the wall sits 400 points away. That is the third thing to remember. And those three things together are why today trades the wall. So now, here is where it gets interesting. Pro flipped bullish on options, FII did the opposite. FII held 2 lakh 54 thousand short call positions. They held 4 lakh 44 thousand long put positions. They sold options worth 5752 crores net. So we have one desk leaning long, another desk leaning short. Different exposures. But here's the thing. Both the desks added options selling on top of their core positions.

Pro covered shorts but sold more options as theta plays. FIIs held short and sold options for premium. The market chain aggregate said the same thing. 7 million put open interest contracts. 3, two point three to one. So when more puts get written than calls on the same session, the option sellers are saying they do not expect prices to fall further. That is the quietest bullish signal in the book. Two desks, different bets on direction, same bet on volatility. The volatility cracked yesterday.

15 percent in one session. Straddle premiums have crushed. The sell volatility signal that has been waiting for a window finally got one. So here is the trading plan for today guys. First the dip. The dip yesterday was the buy. Sensex 74,134 was the intraday low. That is 475 points below today's close. So the floor is stacked at 74,000. That is your support. Plus 73,500. Plus 73,000 strike makes that level a buy zone. If we see Sensex test 74,100 to 74,300 intraday today, that is your second chance of doing an entry.

Hedge it with 73,500 depending on how aggressive you want the protection. Second, the wall is the short. Sensex 75,000 is the inner wall. 75,500 is the outer wall. 76,000 is the mega wall with almost 1 crore 94 lakh calls open over there. If Sensex tags 75,000 intraday today without the chain trimming its call open interest, that is the sell the rally trade. Sell call options at 75000, hedge it with 76,000 call or 75,800 calls. Third, the pin is at the ATM.

Sensex 74,600 is the joint pin. Both calls and puts added almost 2 lakh 50 thousand plus contracts there yesterday. That is the expiry magnet. If we run sideways into the close, the pin pulls towards 74,600. Fourth, the wing as a hedge stays on the book. Anyone running a long basket today should hold a 73,500 put or 74,000 put. Anyone running a short basket should hold a 75,500 or 75,800 call. Premium is small. Insurance is the real thing. Fifth, volatility is still above the high wall zone.

43. Until VIX prints below 17 on daily close, premium selling stays a tactical trade, not a strategic one. We sell into rallies. We do not sell into fear. Third, and this is the third week in a row that the wing as a hedge has paid something. Episode 36 the 23,800 put protected the floor. Episode 38 75,000 mega call sat at the ceiling. Today 74,000 put protects again. Same put, two jobs. Sometimes three jobs as well. 86 percent yesterday. 21 percent. 73 percent.

61 percent. 9 percent. JSW Steel almost 2 percent. 30 percent. The Wednesday 11 May rebalance brought Coal India back into the basket. Adani Enterprises moved out. The new 10 holdings showed up at the right time on the right day. 03 percent. Annualised CAGR is still trading around 26 percent. The next rebalance is scheduled on 8 June. The strategy keeps doing its job through every regime. The pin trade weeks. The wing trade weeks. The metal rotation is happening through different weeks. Discipline holds, guys.

So to recap, pros have bought the dip. Chain has built up the resistance. The chain has built up the support as well. So GIFT voted up overnight. Today trades inside the 1000 point range. That is 74,000 to 75,000. Buy the dip. Hedge the ceiling. Hold the wings. Stand down on premium until VIX cracks below 17. com slash podcast. You will get all the details over there. com right now. The podcast is streaming live as well. So if you like this podcast guys, share it with one trader friend who needs it right now.

And you have just got an alpha edge, guys. I will see you all tomorrow. This was The Tanmay Edge. Have a happy trading expiry.