01Cold open: resistance held but the buyer is back
A very good morning, guys. Yesterday this market walked straight up into resistance, and resistance did not break. We opened at 23,984, touched 24,011 in the first few minutes, then spent the entire day sliding back to close at 23,853.90. Up 231 points, almost a percent, green on the screen, but a long way below where we opened.
That is not a market breaking out. That is a market running into resistance. And yet, underneath that quiet fade, the one thing I have waited two weeks for finally happened. The foreign desk that would not stop selling turned around and bought.
Today is expiry, the line is 24,000, and the buyer is back. You are listening to episode 61.
02Scorecard: eP60 graded 3 of 5
Episode 60 came in 3 out of 5. The 24,000 resistance call was the cleanest read of the week. I told you that level caps the first test and you sell a piece into it, and price tagged 24,011 and got rejected to the tick.
Where I leaned too hard was buying the dip for a push through 24,000, because the day faded instead. Full breakdown is on rupeecase.com.
Hold that in your head, because today it matters.
03Yesterday's tape: a gap up that faded
We gapped up 360 points into the round number, and the sellers who defend 24,000 went to work. By the close we had given back 158 points off the high. The Sensex did the same, ran to 76,821 and settled at 76,264, up 0.97 percent.
The strength sat where it has all week. Autos led, Trent ran 5.35, Maruti and Mahindra both over 3, Larsen close behind, banks and the capital goods names firm. The laggards were the defensives and a tired power pack, with NTPC down 1.64.
So the rotation is still risk on, just exhausted at resistance.
04The turn: the foreign seller finally covered
Here is the part that changes the story. For two weeks the foreign desk was the only seller in the building, short two and a half lakh index futures and refusing to cover. Yesterday it blinked.
In the cash market the foreigners turned net buyers of 143 crore, the domestics added another 2875, and in the futures the same desk bought back 23,371 contracts. The trapped short is finally covering.
And a short that covers is not a seller, it is a buyer in disguise, it has to buy to get out. That is the fuel under this tape, and it is exactly why my read has not changed. You still buy the dips.
05Overnight: Wall Street rips, crude stays quiet
The overnight tape agrees. Wall Street ripped while we slept, the Nasdaq up 3.07 percent and the S&P up 1.65, a clean tech led surge. Crude, the thing that started all of this, has gone quiet, Brent sitting at 83, no fresh war headline, no spike, peace holding for now.
The rupee is firm at 94.71 and the US 10 year is at 4.48. GIFT Nifty points to an open near 23,930, right back under 24,000 for a third straight run at resistance.
And one thing to watch, our IT pack was the lone red sector yesterday, and the Nasdaq just jumped 3 percent overnight. That laggard could be today's surprise buyer.
06The board: record calls at 24,000, support flips up
So lay it on the expiry board. The big resistance is still 24,000, and the call writers did not blink, they piled another 87 lakh contracts onto it yesterday, and it now holds a record 1 crore 92 lakh written calls, by far the heaviest block on the board. That is the people who lose if we climb, parked right above us.
But underneath, the old sellers keep flipping to support, 23,800 and 23,700 are support now, not resistance. And the real support is far below at 23,500, where the put writers sit on 1 crore 8 lakh contracts.
The futures still hold an 18 point premium, a 4.7 percent annualised carry, which means the bulls are still paying up to stay long.
07The numbers: straddle 168, switch at 23,900
Now the numbers that matter most on expiry. The at the money straddle is near 168 points, and that straddle is the market's own bet on today's move, about 168 points either way. Lay that on the close and the implied band runs roughly 23,686 to 24,022, that is where the option market expects this to settle by 3:30.
Inside that band sits the switch, the gamma flip level, near 23,900, just above us. Above that line the big option desks pin the tape and dampen the swings, below it the moves get amplified. So 23,900 is the hinge the whole day turns on.
And because it is expiry, that 168 of premium melts as the clock runs. This is a sell the premium session, not a buy the option one.
08The plan: buy dips, three steps
The plan is still a buy dips plan, three steps. One, do not chase the open. Yesterday the open was the high of the day, and a same day expiry punishes the chaser. Let the first excited candles settle and buy the pullback into 23,800 down to 23,750, on the sellers who flipped to support, with 24,000 as the first target.
Two, 24,000 is where you take something off, because a record 1.92 crore of written calls does not step aside on a third knock. Only a clean 15 to 30 minute hold above 24,000 opens the next leg to 24,100 and then 24,150. Three, if the open fades harder, the real buy zone is 23,700 down to 23,500, on the put writer support, and that is where strong hands add.
The continuation is only dead if we lose 23,700 for half an hour, because that breaks the switch and hands the day back to the sellers. The honest risk is 24,000 itself, freshly reinforced, a market that already failed there once can fail again and pin us back to 23,800. Trade the level, not the opinion.