01Cold open: eP51 graded four out of five
At nine o'clock yesterday morning the screen was red and half the market reached for the exit. By half past three it was green, and price had walked all the way back to where the week began. That round trip is the whole story.
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This is The Tanmay Edge. You are listening to episode 52. I am Tanmay Kurtkoti. Let's go.
Five calls on EP51. 23,145 holds on the downside, the low was 23,229, hit. 23,600 stays a ceiling, the high was 23,557, hit. IT leads, the IT index closed up 3.83 percent, hit. The fear gauge stays above 15, it slid to 15 and kept falling, miss. And the homes keep buying, they bought 9058 crore, hit. Four out of five. The best card we have shown in weeks.
02Tuesday decoded: open was the low, close was the magnet
Nifty gapped down to 23,229 at the open, and that open was the low of the entire day. From there, every dip got bought. The high was 23,557 in the afternoon, and the close was 23,483.55, up 0.43 percent, right back on 23,500, the level the chain wanted all along. Thirty four stocks up, sixteen down.
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Sensex did the same thing, closing at 74,649.84, up 0.52 percent, and the bank index was barely positive, up 0.20.
03Under the bonnet: one engine, heavy train
One sector did everything. IT. TCS closed up 6.53 percent. Infy up 5.66. HCL Tech up 4.08. The IT index up 3.83 as a block, all of it imported straight from another record night on the Nasdaq.
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And against that, the rest bled. NTPC fell 2.89 percent. Axis Bank fell 1.88. ICICI down 1.06. Power Grid down 1.38. So the headline was green, but it was one engine pulling a very heavy train.
04The standoff: foreigners short, homes buying
On the flows, the foreign desks sold 7824 crore in the cash market and the homes bought 9058 and soaked it all up, the pattern that has held for weeks.
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But the tell most people miss is in the futures. Those same foreign desks are sitting net short the index, almost 2,80,000 contracts of bearish bets, even while they keep selling the cash. They are positioned for a fall. The homes are buying the dip. That standoff is the entire market right now.
A rally built on one sector is strong and fragile at the same time. If that one engine cools for even a single session, there is nothing underneath to catch the index.
EP52 in 11 topics
05The overnight: crude climbs into a rate decision
GIFT Nifty is flat at 23,487, no edge either way at the open. Asia is split, the Nikkei up 2.51 percent and Taiwan up 1.92, but Hong Kong down 1.30. Overnight both the S&P at 7609 and the Nasdaq at 27,093 sat at fresh records.
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The number that actually moved is crude. Brent has climbed to 96.76, up nearly 3 dollars in two sessions, and it is knocking on 97. WTI is at 94.60. Gold eased to 4478. The dollar index is steady at 99.21 and the rupee at 95.27. Crude is the one going the wrong way at exactly the wrong time.
On Friday the Reserve Bank gives its rate decision, and oil is the single biggest input into how much room it has. At Brent near 100 that room shrinks. The 10 year is already sitting right at 7 percent. Watch crude this week as a rate story, not just an energy story.
06The Sensex book: boxed in at 74,900
Today is the one day before the Sensex weekly settles. The Nifty weekly already settled yesterday, so the action sits in the Sensex, and the option book there is leaning supportive. For tomorrow's expiry there are eleven puts on the book for every ten calls, more downside protection than upside bets.
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Max pain sits at 74,900 and we closed just under it at 74,650, so there is a gentle pull upward into tomorrow. The heaviest pile of downside protection is at 73,000, almost 2 million contracts, with another 1.3 million at 74,000. The biggest wall of upside bets is at 76,000, 1.8 million. The book is boxed in, 74,000 below, 76,000 above, 74,900 the centre of gravity.
07The plan: lean with IT, respect 74,000
On the Sensex, 74,900 is the magnet, 75,000 the first ceiling, 74,000 the line that has to hold. On the Nifty, 23,500 is the centre, 23,300 the support where about 5 million contracts of protection sit, and 23,557 the ceiling.
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If IT leads again and the Sensex holds 74,900, lean with the grind toward 75,000, and only above 75,000 does 76,000 come into view. If 74,000 or 23,300 breaks and stays broken for fifteen minutes, step back, next stop 73,500 then 73,000.
Two trip wires. Brent above 97, already live at 96.76. And the 10 year above 7.05, near 7 this morning. Small account, do not pick a direction the day before expiry with a rate decision two days out. Buy one Sensex put below the market and one call above it for tomorrow, defined risk, and you own the move either way. Thursday the Sensex settles, Friday the rate decision lands. Keep it light.
