01Cold open: 516 points gone and the big money still bought
The news first. Yesterday the Nifty fell 516 points, down 2.12 percent, to close at 23,882. Forty five of the fifty stocks were red. The 24,000 mark every desk watched broke, and we dropped all the way to 23,805.
Now the twist. On that red day, the big money did not sell. Foreign funds and domestic funds together bought almost 2,753 crore of stock in the cash market. Price crashed, and smart money added. That gap is today's whole story.
This is The Tanmay Edge, episode 77. Two big events land in one session today, Sensex expiry and TCS results.
02The grade: buy the dip was wrong, but IT holding kept the TCS trade alive
One honest line on yesterday's call. I said range bound, buy the dip. Wrong. Oil spiked and the market fell straight through it.
The one thing I got right, IT held up. And that is exactly what keeps the TCS trade alive into today.
03Yesterday's tape: VIX up 25 percent is the number that matters
Start with the damage. Nifty down 516, 2.12 percent. Sensex down 1,677, 2.15 percent. Only 4 green stocks out of 50.
Now the number that matters most. The fear index, India VIX, jumped almost 25 percent in one day to 14.54. All week it sat near 11. Now it is near 15. Simple meaning, option prices went up and the daily swings get bigger from here.
One quiet number that did not panic, the Indian 10 year bond yield, stayed at 6.68 percent. Barely moved. So this was not a banking or a debt problem. It was an oil and fear selloff in stocks.
04Why we fell: one word, oil
Why did we fall? One word. Oil. Brent jumped almost 5 percent to 78 dollars on an Iran and Hormuz scare. When oil spikes, the world sells, and India cannot sit it out.
Korea fell 5 percent, Japan fell 2 percent, and the rupee slipped to 95.56. The move came from outside, not from anything broken at home.
05This morning: a gap up open carrying a headwind
This morning looks better. GIFT Nifty is up 99 points, 0.41 percent, pointing to a gap up open near 23,975 on the Nifty. On the same math the Sensex should open up about 300 points, near 76,800.
Asia turned green, Japan up 2 percent and Korea up 1.7 percent after crashing yesterday. US futures flat to slightly up. The panic cooled while we slept.
One catch. Oil is still climbing, Brent 78.87, and the rupee is still weak near 95.56. So we open higher, but with a headwind.
06The options data: pros hedged long, the crowd short puts
Now the heart of it. This is where you see what the big players actually did, not what the news said.
The pros first, the sharpest desks. They are net long about 10,201 index futures, and they also bought put options as insurance. Careful, not scared. The foreign funds are short about 2,68,586 index futures, which looks bearish, but they are also long 5,77,555 single stock futures. That is more than two long bets in stocks for every one short on the index. So it is a hedge, not a bet on a crash.
Retail, the crowd, is long 1,87,155 futures and has sold 6,28,922 put options. If support at 23,800 breaks, those sold puts start losing, the crowd rushes to cover, and that pushes the market down faster. Big money is hedged and buying. The crowd is exposed.
07The tell: IT held alone into its own TCS result
Here is the clue for today. Yesterday almost everything fell, but IT barely moved, down just 1.37 percent. Infosys was down only 0.21 percent, nearly flat, while banks fell 2.5 percent.
And IT reports today. TCS first quarter results land this session. The market quietly kept its bet on IT even while it sold everything else. Today we find out if that bet pays.
08The expiry plan: sell 77,000, buy 76,000, let TCS lead
Today's main event is Sensex weekly expiry, so here is the exact plan, not a vague range. Sensex closed 76,503 and should open near 76,800. The biggest call selling sits at 77,000, that is resistance, with 77,500 above it. The biggest support is 76,000, and 76,500 in the middle is the magnet. The straddle is priced near 780 points, the swing the market expects either side.
The stance is the key. On a normal expiry you sell options and collect premium because price sticks to the magnet. Not today. With VIX up 25 percent into expiry, the magnet is weak and price can run. So do not blindly sell. Sell into 77,000, buy near 76,000, and skip the chop in the middle. Trade the edges.
On the Nifty the map flipped. 24,000 was support all week and is now resistance, with 24,200 above and support at 23,800, then a fast gap to 23,700. The plan is light and patient. If retail starts buying back those 6,28,922 sold puts while the pros stay long, that is the green signal for a push toward 24,100. TCS is the wild card, and oil near 79 is the leash. Do not guess before the number. Let IT lead.