01Cold open: the buyers are sitting in the chair
On Friday foreigners sold us a billion dollars worth.
On Monday morning the Sensex was 1135 points underwater by 10 AM. And then the same foreigners came back and bought us 2813 crore in cash. The Nifty climbed all the way back to 23,649.
Today is Nifty weekly expiry. The buyers are sitting in the chair.
This is The Tanmay Edge.
02The scene: a V inside a flat number
Here is the picture you are walking into on Tuesday morning. The Nifty closed Monday at 23,649. Six points above where it closed Friday. Flat. But hidden inside that flat number is one of the wildest sessions of the year.
The Sensex opened at 74,807. By 10:05 in the morning it was 1135 points lower. Brent crude was 111 dollars. The rupee touched 96.40, the first ever print above 96 to one US dollar. Bitcoin lost 80,000 dollars for the first time this month. Three macro warning lights on at the same time.
And then nothing got any worse. The Sensex climbed every single point of those 1135 back. The Nifty went from a low of 23,317 to a close of 23,649. A 332 point range. A 6 point change. The shape of the day is a V.
03Why the buyers came: the foreigners flipped
Why did the buyers come in? Because the foreigners flipped.
For weeks, foreign institutional desks were the heaviest seller in the market. Year to date they have sold roughly 52,753 crore. On Monday they bought 2813 crore in cash. The domestic institutions added another 2682 crore.
Combined, 5495 crore of buying. Landing exactly when the index was at its low. That is what powered the V.
04The trade structure: the biggest desk paid twice
The biggest desk in the market, what NSE calls the proprietary trader, bought both sides on Friday. 1,17,000 calls and 1,13,000 puts at the same time. They paid for movement, not direction. On Monday they got their movement. The 332 point range delivered.
And then they did it again. On Monday close, the same desk added 2,26,000 calls and 1,48,000 puts. Same structure. This time leaning a little more bullish on the call side.
So the biggest desk has paid twice for the same idea. The market is going to move, and now they are tilting toward the upside.
Foreigners are still hedging with put protection. Retail clients are positioned bullish, both in futures and in short puts. Today is expiry. Today the chain decides whose bet wins.
05What the chain says: support migrated down
The biggest call position in the chain is at 24,000. 12.62 million contracts. That is the ceiling. The market cannot reach 24,000 today. That is mathematically too far. Above 23,800 the air gets thin.
On the support side, here is what shifted. Last week the heaviest put support was at 23,700. On Monday the put writers at 23,700 unwound 2.07 million contracts. They walked away from that level. And they re stacked their support lower.
The biggest put support today is at 23,400. 11.91 million contracts, up 6.71 million in one day. The second heaviest is 23,500. The support migrated down. The 23,700 level that pulled the V recovery Monday is weaker today than it was last week.
Expected range 23,444 to 23,856. That comes from the option premium at 23,650. Call 104 plus put 101 equals 206. Add or subtract that from where we are and you have today's runway.
06What changed overnight: one light went dim
What changed overnight changes the bias. Brent crude dropped 2 percent in the international session. It is now 109.81 dollars. One of those three warning lights from Monday morning has gone dim.
The rupee closed at 96.35. Still above 96. But the Reserve Bank defended once and will defend again. The American markets closed mixed. No panic. Europe was strong, DAX up nearly 1.5 percent.
Asia this morning is split. Japan slightly down. Hong Kong slightly up. But Korea, the KOSPI, is down 5.24 percent. That is a separate Korean story. Watch if it spreads.
GIFT Nifty at 7:45 this morning was up 23 points. A tiny gap up. Almost flat.
07The plan: two trades, one expiry
Here is how I am playing today. Two trades inside one expiry day.
First half, buy on dips. If the Nifty drops toward 23,500 in the morning, that is the buy. The chain is telling us the buyers stand there. The biggest desk paid for movement, so if there is going to be a dip, expect it early. Long options work here. Or just long cash.
If instead we open and quickly trade up to 23,750, switch sides. Sell premium. Do not chase a breakout. The chain wants the magnet, not a fresh high.
Second half, the afternoon comes back to the centre. Whatever the morning prints, the afternoon fades. By the close, the option market wants to settle between 23,650 and 23,750. That is the magnet zone. Sell stretched moves both sides as the day winds down.
Your protection is at 23,400. If overnight Brent flips back above 112 or the rupee opens past 96.50, the 23,400 put is what protects the cash. Otherwise you do not need it. About 31 rupees on Monday close. 1500 rupees per lot of 65. Less than a coffee.
Net plan, buy options in the morning, sell options in the afternoon. One day. Two trades. The same expiry.
08Tanmay's read: nvidia tomorrow, defensives held Monday
One more thing to watch. Tomorrow night, Wednesday US time, Nvidia reports earnings. That is the biggest single stock event globally this week. The American chip story has been the tail wagging Indian IT. Tech Mahindra and Infosys led the rebound at home Monday. If Nvidia surprises Wednesday night, IT in India will move on Thursday morning. Plan for that.
Sector tape Monday. IT up 2.43 percent. Pharma quiet but bright at the top, with Gland Pharma up 15 percent. Bharti Airtel strong. Down side, Auto, PSU Bank, Metal, Power, Media. The defensives outperformed. That is the market's flight to safety on a wild day.
On RupeeCase, the Nifty Momentum 10 strategy held steady through Monday's V. Track it live on rupeecase dot com. Next rebalance mid June.