Brent cracked again. Buy the dip continues. Long gamma

A very good morning guys. So I am sitting here at 8 AM in the morning looking at my screen and I am going to be honest with you guys. Yesterday I told you to buy the dip at 75,500 on Sensex. The dip went to 74,897. That is 600 points deeper than I said. The level broke. By close Sensex was trading at 75,200. If you bought 75,500 you were sitting on 300 points of loss this morning. I owe you the honesty before we go anywhere else.

This is The Tanmay Edge. Episode 45. Season 2. Let's go. But here is the part nobody is talking about. While Sensex was breaking 75,500 yesterday afternoon, the rupee was strengthening. 19. 82. On a day Brent went back up to 107. That should not happen. If oil rebounds the rupee should weaken. The rupee strengthened anyway. Which means the bid in the rupee is not coming from oil mechanics. It is coming from something else. And then I opened my laptop this morning. And Brent crude is at 104.

Last night at 9 PM it was around 108. 5%. 36, back below the 100 mark. And yesterday's bounce I thought the crack from Wednesday was done. It is not done. The macro story is doubling down while we sleep. And Asia is ripping again. 25%. 61%. 92%. 8% rally. Four major Asian tapes are all trading in green. US futures also in green. Dow up 139 points, S&P was up by 12, and Nasdaq was up by 22 points. Every chart on my screen this morning is green except for one.

And we will come to that as well. So GIFT Nifty at 8 AM is trading at 23,668. That is 14 points above yesterday's Nifty cash close of 23,654. Small gap up, not a giant one. Which is actually what I want, because a giant gap up gets faded by the writers. A 14 point gap up means today we are opening pretty much where we closed and the market gets to choose the direction on its own. Now I want to walk you through what the professional desks did yesterday.

Because if you read it as bearish, you are going to misread it today as well. Wednesday Pro flipped from short calls to long calls. I told you that yesterday as well. 1,55,000 contracts in one session. The biggest single session flip of the season. The bet was that the move was coming. The move came in. Sensex ran 949 points from open to low yesterday. That is the biggest intraday range of the May series. The bet got paid on the movement. Thursday Pro did what every desk does after a paid trade.

They sold the long calls and bought back the insurance. They cut 79,655 long calls. That is 69% of Wednesday's flip taken off the table. They added 96,000 long puts as well. That is the insurance against the weekend coming back in size. And they added 12,000 long futures on top of it. Read that one more time. They cut bullish calls. They added bearish puts. They added bullish futures. If you read the calls only, you would call this a bearish flip. If you read the puts only, you would call this a bearish flip.

But the futures stayed long. And the futures are the cleanest read. This is profit taking with a hedge stack. It is not a directional reversal that we are seeing. The desk paid for the move. The move arrived. They cashed the profit and bought insurance into a weekend where the news flow can be anything. And that is what a paid desk does. That is not a bearish signal. That is a tired bull taking a breather. Now here is what is interesting. On the same day the desk was trimming the bullish bet, the foreign desk was doing the opposite.

FII added 8600 fresh short futures. They added 24,718 fresh short calls. They added 40,196 fresh long puts. Three legs leaning the same way. That is a real bearish positioning. The foreign book has been short the index for a long time now while staying long the underlying stocks. Yesterday they doubled down on the index short. So we have a split. The Pro desk is taking profits and standing aside. The foreign desk is leaning short. And the retail crowd is doing the dumbest thing possible.

They added 33,000 long calls and they sold 44,000 puts. Buying calls and selling puts at the same time after a rally got rejected. That is a textbook late chase. When the desk and the crowd are on opposite sides, the desk wins, almost always. So here is what I am thinking for today. The macro just doubled down. 5% overnight. WTI is back below 100. 19 this morning even when Brent was already bouncing. Every condition that made me a buyer on Wednesday is still there, plus a fresh oil crack has happened.

The dip buy thesis lives. It missed the level by 600 points yesterday, but it got the direction the next morning. That is what overnight tape does. It corrects the day's overreaction. For Friday I want to buy the dip. Same trade. Different levels. On Nifty the line is 23,600. Yesterday's low was 23,584. So 23,600 to 23,700 is the buy zone. Above 23,800 we sit and watch. Above 23,900 we have a clean run at 24,000 by Monday's close. Below 23,600 we wait again and stay on the sidelines.

On the Sensex the line is 75,000. Above yesterday's low at 74,897. So 74,900 to 75,300 becomes the buy zone. Above 75,500 we are back inside the level that broke yesterday, and that becomes the ceiling on the retest. Below 74,900 we are in fresh territory and we stay outside. This is not a chase the open trade. The gap up is just 14 points. The institutions did not chase the open and you should not either. The buy is on the pullback in the first hour.

Use the noise. Do not give the noise your money. And buy with a hedge. 84 right now, which means the 23,500 put on the Nifty monthly is at a cheap cost. The hedge costs around 60 to 70 rupees. If you are wrong you could lose 70. If you are right you could make 200, 300 on the spot run. That is a 4 to 1 trade. That is the math you want at this volatility. So always buy puts while going long. Remember this when there is uncertainty.

The one thing on my screen that is red is gold. MCX gold is sitting at 159000, down another half a percent overnight. The duty hike is still digesting. If you own jewellery stocks you are still in the duty trap. If you are watching gold for an entry, 1,58,200 is the line to see if it holds. Below that we get a flush out. And cash flows from yesterday. Foreign desk sold around 1891 crore. Domestic mutual funds bought 2492 crore. Domestic absorbed around 140% of foreign selling.

Third session in a row. The pattern is intact. Domestic flows are the support under the market right now, and they have been here for weeks, months and years now. So the read for today guys. Pro took profits. Foreign desk lean shorter. Crowd chased late. 5% crack on Brent. Friday is positioning day for Monday Nifty, and Tuesday is Nifty monthly expiry, with Sensex weekly stacked on that. So buy the dip, not the open. Watch 23,600 level on Nifty and 75,000 level on Sensex for the levels the buyers come back at.

Hedge it with the 23,500 put guys. 30 by Friday's close the weekend math turns positive. 50, we reread on Monday morning. And before I sign off, two things guys. Number one, yesterday's honest grade. Four out of six testable calls hit. Brent under 110. Rupee strengthens. Avoid the open. Below 23,700 we wait. The two misses were the 75,500 level and the 24,000 next leg. The level missed by 600 points. The next leg path never activated. Macro right, levels have been extremely tight, but the direction at the close was different.

Number two. com. Day 4 alpha number prints today. So have a great Friday guys and buy the dip, not the open. This was The Tanmay Edge. See you all once again after the weekend. Have a very happy weekend and see you all once again on Monday morning.