The breakout the FIIs finally backed, into a weekend crude shock. Why the 24,000 gap down is a dip to buy

A very good morning, guys. On Friday we broke out. Over the weekend someone closed the Strait of Hormuz, and this morning crude is up by 4 percent and we are opening almost 200 points lower. Sounds scary, right? It is not. This is a dip you buy, not one you sell. And in the next few minutes, I will show you exactly why and exactly where. This is The Tanmay Edge. You are listening to episode 79. I am Tanmay Kurtkoti. Let's go. So let me give you Friday first.

02 percent, the first close above 24,200 in the last 10 days in this whole move. 08 percent. 25, a fresh low. 96 percent off the TCS beat. Out of the entire board, only FMCG closed red. Everything else was green. And here is what made Friday different from every update last week. The big money finally bought it with us. I have the NSE participation data. In the cash, the FIIs bought 2,603 crore, their first real buy in a while, and the DIIs added 2,020 crore on top of it.

Both hands buying. In futures, the FIIs covered. They were short 2,66,000 index contracts, they cut it to 2,54,000, they bought back almost 11,540 contracts, covered 37,617 short calls as well, and trimmed their puts. So every leg, they took the lid off. Now to be honest with you, they covered, they did not flip it. Remember this, guys, they are still net short 2,54,000 index contracts. But the direction is clear. The lid is coming off, not going on. Then the weekend threw a rock through the window.

Iran declared the Strait of Hormuz closed, the US struck for the third straight night, and Washington revoked the Iranian oil waiver. About a fifth of the world's oil moves through that strait, and crude was one of the three legs Friday's rally stood on. So this morning, that shock showed up on the screen. Brent jumped 4 percent to 79 dollars, WTI also the same. And GIFT Nifty is down about 205 points, pointing to an open near 24,000, roughly 180 to 200 points below Friday's close.

So yes, we are gapping down almost a percent. Now here is the whole episode in one idea. That gap down is a level the market is handing you, not taking away. Three things tell me to buy it, not sell it. One, crude jumped, but it stopped under 80. That is a contained spike, not a runaway. This market can digest 79 dollar crude. What it cannot digest is 100, 120, and 140. As long as Brent holds under that 80, 85 mark, the shock has a ceiling.

And people have started to understand that this war is not going to go away fast. Two, look at the gold. Gold fell this morning, down more than a percent to 4,072. When there is real fear, money runs into gold. Today it is walking out of gold. That is not panic. That is a positioning that we are seeing. Three, where does the gap down actually land you? Right on 24,000. And 24,000 is the single biggest put support on the board, 105 lakh puts are present over there.

It is where the FIIs covered on Friday, and it is where the clients are writing the puts. That is the buy zone by the book. The dip is delivering you the support, not through it. 25 and you have cheap insurance and a firm support that is present. And think about who is actually standing at 24,000. The clients are short 6,29,000 index puts, they are the put writers, and put writers defend the strike they sold. But clients are going to pay for it, the gap down is going to hit their stop losses.

Nobody who matters is leaning hard short into 24,000. So let me give you the chain and then the exact plan. This is the 14 July data from the BhavCopy. Tuesday, tomorrow, is the expiry, so max pain stands at 24,100 to 24,200, sitting right where Friday closed. Support stands at 24,000, has 105 lakh puts present, then 23,800. 41 crore calls, the heaviest on the board. 27, still positive, tilted to the put side, which is supportive. The straddle is around 197, so the market is pricing a move of roughly 23,970 on the bottom end to around 24,380 on the upside into the expiry.

So here is my plan, guys, and my view is very simple. Buy the dip. We open near 24,000, into the put support. I am a buyer of the 24,000 to 23,950 zone, which is the first level the market should hit, with a stop, looking for a reclaim of 24,200. Holding 24,000 and taking back 24,200, positive gamma kicks in and we grind towards that 24,300 level. That is my base case for the day, because 24,200 is your flip zone, so 24,150 to 200 is the gamma flip level.

Now the one thing that changes my mind, because a plan without an exit is just hoping the market bounces back, and that is not the case. A clean, sustained break below 23,950 is what I am watching for. That only happens if crude keeps running over 80 dollars or a fresh headline hits over the strait. So while going long, I am buying 23,800 puts as a protection. So if 24,000 goes on real volume, gamma flips negative, the move gets fast, and I stand aside.

I do not average down. The next shelf below is 23,800. So the line is precise. About 24,000, I am a buyer below it. On volume, I am out of the trade, and rather than being out, I am holding those insurances of the 23,800 put. So here is the tell that the dip is working. In the first hour, I want to see us reclaim 24,100, and I want IT holding green off the HCL number. Get both and the buyers are in control, the base case is on, we press towards 24,200 and 24,300.

If you are stuck under 24,000 for an hour in, with crude pushing higher, then respect the dip has become a trend, and you wait for 23,840 to 23,800 levels getting hit. The swing factors today are two. HCL Tech reports Q1 numbers, IT's second test after the TCS beat. A good number cushions the dip. And crude, keep one eye on whether crude stays under 80 or not. And keep the hedge on, guys. 25, protection is cheap, and there is a live crude event running.

Cheap volatility plus an open geopolitical risk is exactly when you hold your hedge, not when you sell it for a few rupees. Quick scorecard on Friday, guys. Episode 78, we called it clean. Gap up over 24,000, hold the level, grind to the 24,200 cap, and I told you IT was the swing that decides the break. All of it landed. 45 percent, so the index ground straight up to close 24,206, 7 points off the 24,200 target. Five out of five. com. Have a great week, guys.

One breakout the FIIs finally backed, one weekend crude shock, and one gap down that drops you right onto 24,000. Buy the dip, target 24,200 then 24,300, not without buying the insurance at 23,800. That is the put you buy only if you are going long, not a naked put. Contained crude and falling gold tells you the sellers do not have conviction. This was The Tanmay Edge. If you found value in this, guys, please share it with one trader friend who needs it right now.

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