Adani Power Sees Sharp Open Interest Surge Amid Mixed Market Signals

Open Interest and Volume Dynamics

On 28 September 2026, Adani Power Ltd (symbol: ADANIPOWER) recorded an open interest (OI) of 99,665 contracts, up from 88,891 the previous day, marking an increase of 10,774 contracts or 12.12%. This rise in OI was accompanied by a daily volume of 62,412 contracts, indicating robust trading activity in the derivatives market. The futures segment alone accounted for a value of approximately ₹1,71,964 lakhs, while options contributed a staggering ₹28,696.83 crores, culminating in a total derivatives value of ₹1,74,366.94 lakhs.

The underlying stock price closed near ₹195, having opened with a gap down of 3.37% and touched an intraday low of ₹195.86, reflecting a bearish sentiment. The narrow intraday trading range of just ₹0.07 and a weighted average price skewed towards the lower end of the day’s range further underscore selling pressure.

Market Positioning and Sector Context

Adani Power’s recent open interest surge comes against the backdrop of a declining power generation and distribution sector, which fell by 2.41% on the same day. The stock underperformed its sector by 0.97%, with a 1-day return of -3.15% compared to the sector’s -1.86% and Sensex’s -1.59%. This relative underperformance, coupled with increased derivatives activity, suggests that traders may be positioning for further downside or hedging existing exposures.

Investor participation appears to be waning, as evidenced by a 44.02% drop in delivery volume to 47.05 lakh shares on 25 September compared to the five-day average. This decline in delivery volume indicates reduced conviction among long-term holders, potentially amplifying volatility in the near term.

Technical Indicators and Moving Averages

Technically, Adani Power’s stock price remains above its 200-day moving average, a long-term bullish indicator. However, it trades below its 5-day, 20-day, 50-day, and 100-day moving averages, signalling short- to medium-term weakness. This mixed technical picture may be contributing to the increased open interest as traders weigh potential directional moves.

The weighted average price leaning towards the day’s low suggests that sellers dominated trading, possibly triggering stop-loss orders and accelerating the decline. The narrow trading range, despite the price drop, indicates a consolidation phase where market participants are digesting recent losses and recalibrating positions.

Directional Bets and Investor Sentiment

The surge in open interest alongside a falling stock price typically points to fresh short positions being established or existing shorts being added to. Given the power sector’s recent weakness and Adani Power’s underperformance, it is plausible that market participants are betting on further downside or volatility ahead.

Alternatively, some investors may be using derivatives to hedge existing long exposures amid uncertain sector dynamics. The large notional value in options contracts suggests significant hedging or speculative activity, with traders possibly favouring put options to protect against further declines.

Adani Power’s current Mojo Score of 57.0 and a Mojo Grade upgrade from Sell to Hold on 24 August 2026 reflect a cautious stance by analysts. While the stock remains a large-cap heavyweight with a market capitalisation of ₹3,78,693.55 crores, the recent price action and derivatives activity highlight the need for investors to monitor positioning closely.

Liquidity and Trading Implications

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting a trade size of approximately ₹7.13 crores based on 2% of the five-day average traded value. This liquidity level facilitates active participation by institutional and retail investors alike, enabling efficient price discovery amid the current volatility.

Investors should note that the combination of rising open interest, falling prices, and declining delivery volumes often precedes heightened volatility. Market participants may want to consider risk management strategies, including the use of derivatives for hedging or tactical positioning.

Outlook and Strategic Considerations

While Adani Power’s recent upgrade to a Hold rating suggests some stabilisation, the derivatives market activity signals caution. The power sector’s ongoing challenges, including regulatory pressures and fluctuating demand, continue to weigh on sentiment. Investors should closely monitor open interest trends and volume patterns for clues on emerging directional biases.

Given the mixed technical signals and sector headwinds, a prudent approach would be to watch for confirmation of trend reversals or further deterioration before committing to significant positions. The derivatives market’s elevated activity provides valuable insight into institutional sentiment and potential price trajectories.

Summary

Adani Power Ltd’s 12.12% surge in open interest amid a 3.28% price decline highlights shifting market positioning and increased speculative or hedging activity. The stock’s underperformance relative to its sector and the broader market, combined with declining delivery volumes, points to cautious investor sentiment. Technical indicators present a mixed picture, with long-term support above the 200-day moving average but short-term weakness below key averages. Liquidity remains sufficient for active trading, but investors should remain vigilant to evolving derivatives trends and sector developments.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year Start at 33% Off →